SUMMARY: (Washington Post) Many companies operate in a “conscious capitalism” model, where they strive to balance social responsibility with financial success. Rather than solely focusing on taste, they also promote their interest in animal welfare, waste reduction, fair wages, and sustainability. Really?
The average number of product offerings in grocery stores declined more than 7 percent during the four weeks ending June 13, according to Nielsen. When you see data like this you should be asking “what does this mean for our brand/category?”.
According to the Washington Post article ” shoppers are rethinking how they buy their food, how it got to the store and what goes into the products. “Consumers are demanding transparency”. “They want to know where the carrots in that frozen dinner came from and what the name of the farm was. Companies are understanding that, and are adding more transparency in their manufacturing processes.”
Really? I don’t think so.
Consumers are unpredictable, and I don’t believe that they will scrutinize every product/brand they buy to ensure that it came from an environmentally responsible company. Sure, when the media spotlights bad corporate behavior, the brand will pay the price but is someone really going to give up their favorite frozen pizza brand because the tomatoes come from South America?
The lack of growth in new brands can be traced directly to companies that hold back new products until the pandemic is just a bad memory. In fact, most CPH companies have been doing very well during the pandemic as consumers latch on to trusted brands.
What I do expect to happen is:
1ne: Retailers narrow their assortment of brands. If your product doesn’t meet minimum sales for the assortment, you’ll lose shelf space.
2wo: While it’s true that consumers are trying more new brands and products, brands that meet their expectations will continue to sell.
3hree: Food retailers will optimize their store layouts to leverage hot consumer trends such as organic.
4our: FSI’s will continue to be a valuable sales tool
- 142 million Americans will use coupons in 2020.
- 80% of consumers are more likely to shop from a new brand if it has a discount coupon on offer.
- 97% of buyers look for deals before they make a purchase.
- 85% of American adults used coupons in 2014, and this figure grew to 93.75% in 2019.
- 18% of global online shoppers use online and mobile coupons while they are shopping in stores.
- 38% of couponers buy something they do not need, discount statistics reveal.
- In 2017, 52% of US adults redeemed a digital coupon via their mobile devices or computers.
5ive: Online grocery shopping will be a tiny percentage of grocery sales as consumers like to pick out what they purchase.
6ix: Consumers will continue to shop at their favorite grocery stores. Food retailers who change the layout of the stores too often will see a dip in sales.
7even: Grocery shopping is as much about self-satisfaction as the concern about social responsibility.
8ight: I expect that mass-market grocers will begin adding more wellness brands to their assortments as smaller health food retailers close their doors.
9ine: Brands that are “caught” by media stories WILL pay a price but if they have good products that consumers like it will only result in a temporary dip in sales.
10en: Consumers WILL punish brands/companies that support an unpopular political ideology. Goya and My Pillow have both paid a huge price for supporting Trump.
The biggest challenge for food retailers is separating temporary hot trends from permanent, long-lasting trends. They need to respond quickly to hot product categories while at the same time ensuring they don’t stock too much when the trend disappears.