The year 2017 was big for the grocery industry especially after Amazon’s $13.7 billion acquisition of Whole Foods and its 460 plus stores. The purchase gave the e-commerce giant access to cost structure, business practices, and spending practices of consumers inside the store to marry with their digital channels.
Last year, the grocery industry also saw the convergence of online and offline channels. Business Insider reported on how average consumers would shop at five different types of stores to fulfill their grocery needs. The article also cited a Deloitte 2013 American pantry report that the trend grew stronger in 2017 with the arrival of more online stores and delivery options.
Consumers are now more discerning and are armed with more spending power along with ways to research and buy products. They no longer settle for less when it comes to things that they want. They hunt for both large and private-label companies that have a wide selection and have value-for-money products.
Here some of the biggest Grocery Trends for 2018 that are changing the industry:
1. The Intelligent Shopper Who Reads Ingredient Lists
According to Innova Market Insights, mind-body connection has a great influence when it comes to introducing new food products to the supermarket. This is because 70% of UK and US customers want to know and understand the ingredient list of the foods that they consume.
Apart from wanting to know what’s inside a box of food, items that have ethical claims on the box have also been experiencing a seven-fold increase in sales since 2010. Consumers now want to know where their food comes from, how it’s made, and the route it takes before it arrives at the grocery shelves.
2. Fresh Produce is King
In a recent Packaged Facts survey, 75% of shoppers said the produce department is the most important section of the supermarket. This is followed by meat, poultry and seafood at 60%. Store band products and farm foods ranked third and fourth at 36% and 35% respectively, while the in-store bakery was deemed least important at 29%.
This survey clearly shows that grocery stores and retail outlets need to offer more fresh produce to retain more customers. The public has waned away from packaged, frozen, and heavily frozen food and now want fresh and healthier options. In the online store setup, the challenge is how to keep fresh food in the inventory without the high supply chain costs associated with carrying perishable goods.
3. More Farmers’ Markets and Artisanal Products
Farmers’ markets have also become in demand because people are now willing to spend for premium, hand-made items. They’re also interested in personally knowing the people who raised the pig or cattle that they eat. There are plus points for those who prepare their own products. Farmers’ markets offer a wealth of produce and products ranging from wild honey, mushrooms, organic eggs, chickens, sausages and hams.
The fresh and home-made stamp is more appealing to consumers now rather than buying canned or processed products laden with preservatives and chemicals that they do not understand. The beauty of the farmers’ market is that consumers can directly ask producers details about their products. . This gives buyers the satisfaction that they’re bringing home honest food which they know are good for them and their families.
4. Multi-Sensory Experience
Another practice that will become increasingly popular this year is tactile or the sense of touch. If you think about it, there is nothing more hands-on than being a chef or a home cook. The new in-thing when it comes to food products and packaging is making it multi-sensory.
In recent years, we have seen an increase in visuals when it comes to our food just like the multi-colored unicorn drink or the pure black food. There are now rainbow-colored Doritos that are definitely more appealing to the eyes. There are also a lot of desserts in the market that are hard to pass up because of how they’re presented on the display stand.
When it comes to beverages, juices with bits of aloe or tapioca balls are a hit because they add a different flavor and sensation to the tongue.
All of these are meant to enhance the dining experience by making the food more than just one-dimensional.
Moreover, 3D printing is now possible and the technology is picking up. This bold development has opened up a new world of possibilities in the food retail and grocery industry.
5. Ordering via Technology
Technology and food used to be worlds apart but bold innovations and ideas have made them fit perfectly together.
Thanks to Artificial Intelligence, home-based assistants such as Alexa, Sonos, and Google Home. They provide new ways to order and buy food and other home essentials. Recently, one of America’s biggest chain of convenience stores and coffee Shops, Sheetz, announced that their made to order food offered in all of their 564 stores can now be ordered via Alexa.
Experts predict that there will be over 55 million smart devices in homes across America by 2020, and this will make each phone or tablet a component that forms the largest supermarket or grocery chain on the planet.
The Internet of Things will soon pave the way for functional smart refrigerators and pantries that can order or re-stock needed supplies before they run out. Consumers will never experience running to the convenience store because they’re out of shampoo or toothpaste.
6. Smaller Stores, More Personalized Service
Packaged Facts also reported the average size of supermarkets in the US has been shrinking since 2006. The current average is 46,000 square feet, with more smaller-format stores opening. Walmart and Kroger are leaning heavily in the small stores market. For example Kroger’s Turkey Hill Market has an average size of only 6,800 square feet. The contents are more limited to everyday items and produce intended for people who shop every day or on a fairly regular basis.
This is a stark contrast to the S n R’s and Costco’s which encourage shopping for the long haul.
The smaller stores also give shoppers a sense of community and personalized service. The products are curated and recommended to shoppers with consideration of their previous purchases. For example, a store employee won’t recommend a new organic peanut butter brand to a person known to have allergies or push chicken thighs on sale to a vegetarian.
This may be considered trivial but consumers feel more comfortable shopping at a place where sellers understand their needs.
Times have indeed changed. Supermarkets are no longer just about what’s instant and readily available. Consumers are once again king and they are not afraid to wield their purchasing power to get the things that they want – whenever and wherever. Cost is only consequential to good quality, freshness and convenience. These trends will only expand and continue in the years to come.