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Forecast: Top 10 Industry Trends

WMU food conference panel

Trends compiled from an annual consumer panel conducted by Supermarket Guru Phil Lempert have been released. The top 10 industry trends were presented by National Grocers Association (NGA) President and CEO Peter Larkin, filling in for Lempert, during the 48th Annual Food Marketing Conference earlier this week in Kalamazoo, Mich.

“I think (if Phil were here) he would tell you that it is a snapshot, the pulse of people that he has within this consumer panel that he uses,” Larkin said.

“(These trends) should not be taken as gospel; as a matter of fact, don’t be surprised if as I go through these you’re not going to shake your head at some of them or wonder about where did that information come from or why is this a trend? Some of this may be old news to you but I think, when taken as a whole, it will be very thought-provoking.”

Larkin moderated a discussion panel following his review of the top 10 industry trends, which include:

• No. 1: We need to stop wasting food.

The National Resource Defense Council estimates that 40 percent of the food in the United States goes uneaten; $165 million worth of food is wasted each year. For a family of four, that translates into an economic cost of between $1,300 and $2,300 annually.

“Those are big numbers and very, very important numbers,” Larkin said. “But as some of our waistlines continue to grow, and we all know the issues that we have with obesity in this country, the amount of food we waste also continues to increase. It seems like those two lines should not be going in the same direction, but unfortunately they are.”

“When you ask the American public about environmental, sustainable issues and you line up food waste in there with issues like recycling and how can I be green, food waste is one of those things that is very high on the radar screen,” Larkin added. “Thirty-nine percent of Americans say they have green guilt for the amount of food they are wasting. That’s another high number right there.”

Larkin noted that, as one study indicates, food waste can be reduced by as much as 20 percent if the industry keeps careful checks of expiration dates and use-by dates.

A program in the U.K. called “Love Food, Hate Waste,” started by 150 leading food retailers and CPG companies, is trying to combat food waste.

“I’m sure a lot of it is going to be education,” Larkin said of the program. “The EU Parliament gets involved in these. I think in the United States we would prefer to try to address this issue as an industry voluntary program as opposed to having something legislated or regulated, but in the EU they are looking at regulations to try to tackle this issue.”

Larkin pointed out that data shows that the food waste issue is one that is “about to explode and one that is going to take center stage for our industry.”

No. 2 Snacking is taking the spotlight.

While snacking has a negative connotation for some, the Journal of the Academy of Nutrition and Dietetics recently performed a study in an attempt to associate how snacking compares to a quality diet.

“There is a very high correlation between snackers and having quality food and quality diets,” Larkin said. “It is not associated with a poor diet. Snackers do indeed have healthier diets, and fruit, whole grains, oil, sodium, milk, all have positive associations with snacking.

“In 2013, smaller bites, more frequent meals, are on a trend line. You see how that matches up with this emphasis and this explosion of snacking.”

Millennials are craving more flexible meals, more frequent meals and more variety. Additionally, Hispanics, the fastest growing population in the U.S., is 23 percent more interested and more likely to be snackers.

“If you’re not thinking about meals, or if you are thinking about meals in the old traditional fill-up-the-plate, eat three times a day, you may be missing opportunities,” Larkin said.

No. 3: Baby Boomers.

Baby boomers will control 50 percent of the dollars spent on grocery by 2015; that equates to $706 billion.

“As a group, we are interested in healthy and nutritious meals, “ said Larkin, a Baby Boomer himself. “That is something that is very, very important to us as we age. We’re looking for how do we eat healthier, how do we eat a more nutritious diet? We are twice as likely to follow the food guidelines as in the pyramid or the plate than those outside our group. We’re more concerned, for obvious reasons, about fiber, less fat, cholesterol and certainly, fewer fried foods.

Larkin revealed that 8.3 percent of the population today, children to adults, has some form of diabetes. Moreover, 79 million Americans over age 20 have pre-diabetes. One-third of the adults in the U.S. have high blood pressure.

This health issues are being addressed, particularly later in life, through diet and nutrition, according to Larkin.

No. 4: The new proteins.

Twenty percent of the human body weight is made up of proteins.

“The variety of functions in our bodies that require proteins to build tissue and create enzymes for immune cells, they’re all very, very important…These amino acids that are created through a high-protein diet are not produced by the body but come from some of these external sources in the food that we eat.”

Complete proteins are sources of amino acids—meat, poultry, fish—but as food prices continue to increase for those commodities, consumers are going to be looking for alternate forms of protein to enhance their diets, Larkin said.

“So it’s not just the traditional complete proteins but things like peanuts and chickpeas and yogurt and tofu,” he said.

“…If your company, whether you’re a manufacturer, supplier or retailer, if you’re not aware of this and you’re not dealing with it, you’re not understanding what your consumer wants. This is a trend you want to pay attention to.”

No. 5: Breakfast is not just for breakfast anymore.

Breakfast remains the most important meal of the day. Countless studies show that children do better in school, have fewer behavior issues, have more normal weight, more energy and improved memory and mood by consuming a nutritious breakfast each day.

“So nutrient-rich breakfast items should be and will be eaten all day, including yogurts and veggie omelets and smoothies and nut butters, which stabilize blood sugar and reduces the risk of diabetes,” said Larkin.

No. 6: Frozen foods that evolve into foods that are frozen.

The frozen food aisle is not the most trafficked aisle in the supermarket these days.

“It has been difficult to create new products; it has been difficult to create the excitement and it’s difficult to really generate traffic in the frozen food aisle,” Larkin said. “Sales are down, but is this about to change? Perhaps.”

Younger shoppers are not particularly likely to buy frozen because it’s viewed more as processed than it is prepared.

“But food makers believe that if they just start changing the dialogue—this isn’t just a meal that was frozen, but this is real food that was prepared differently in a way to encourage people to take advantage of this natural way to preserve foods—that could start changing,” Larkin said.

It’s forecast that more ethnic and a la carte offerings will take over this category.

Millennials, Hispanics and other groups trend strongly toward smaller, more frequent meals. The Hispanic community especially will buy a lot of traditional foods and prepared traditional foods but, at the same time, buy certain frozen items that will be added to the family meal, according to Larkin.

No. 7: Men in the supermarket and in the kitchen.

In 2012, 41 percent of the cooking was led by Dad. Fifty-two percent of fathers are primary grocery shoppers. Thirty-one percent of grocery shoppers are men, a percentage that has doubled since 1985.

Men also are remaining single longer so they cook alone to a later age.

“Dads more than moms are more likely to plan the meal for a week ahead of time,” Larkin said. “More husbands are working at home, whether that’s because of the economic conditions, taking care of children while mom is working. But the reality is that more men are working at home. Some supermarkets are creating man aisles.”

No. 8: Mobile gets more interesting.

Some retailers use mobile technology as an advantage; others as a threat, as it empowers the consumer with information that they might not otherwise have had.

“It provides transparency in the pricing in terms of the product, the ingredients, where the product came from,” Larkin said. “And there are some retailers that just can’t understand what that means and they’re afraid of it. Half of the phones in the United States today are smartphones, and (people are) not just using them to check their email. There are more apps, more ways to use mobile, and it’s definitely getting more interesting.

“Think ahead if you will; it wasn’t that long ago that we would talk about apps for an iPhone and we couldn’t imagine what some of those apps are capable of doing today. Try to challenge yourself and look ahead at what some of those apps may do in the future. Can they help determine whether or not fruit is ripe? Can they trace the product back to the farmer who grew the product? Any number of different things.”

No. 9: It’s all about the Millennials.

Millennials will be 75 percent of the workforce by 2025. The most common jobs for them right now are retail clerks.

“What opportunity does that provide for our industry and how are we going to change the experience of what it means to work for, whether it’s a CPG company or a retailer?” Larkin said. “I think there are many retailers out there who are rethinking the whole relationship between their company’s needs in the labor force and how they recruit, how they develop jobs.”

Larkin’s 27-year-old daughter works at Trader Joe’s.

“One of the reasons she enjoys working for Trader Joe’s is when she walks in the door, every day she’s not sure what it is she’s going to do. She may be stocking shelves, she may be making signs, she may be at the register, she may be doing any number of different things. She may be in charge of ordering for the GM/HBC department on any given day. And that flexibility (is) combined with a very fair pay scale.”

No. 10: Transparency about where our food comes from.

The number of farmers markets is increasing all over the country. In fact, there’s been a 17 percent jump in the number of farmers markets in the past few years.

“Customers are asking for information; they view the farmer’s market as a place where some guy in overalls has just come off the farm and put it in a truck and brought it to them and can answer all their questions,” Larkin said.

“I think in reality we know that a lot of those people at the farmers markets aren’t the ones who produced it. They may be selling it, but they may not have any better information about the product than other retail outlets where there is a perception that there is less of a connection to the food. I think we need to work on that in our industry and help provide more information to our consumers, not be afraid of it because it’s not going to go away. It’s not a trend that is going to stop, so we have to embrace it,” Larkin said, mentioning Whole Foods Market’s recent commitment to full GMO transparency by 2018.

 

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Suburban Collection Showplace
Novi, Michigan
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