Hot Food Trends: Part 2 – It’s a Small Food World After All
No one knows with certainty what the hottest food trends
will be over the next several years, but The Hartman Group has focused on the
“why behind the buy” to look at four that may have a significant impact on the
business. RetailWire explores each of these in this and upcoming Discussions.
American consumers have always loved to have choices and they’ve never had more than they do today as a world of food comes right to their door.
According to Jarrett Paschel, Ph.D., Americans’ whole idea of choice is being transformed on a daily basis. He writes: “We’ve always enjoyed lots of choice in the marketplace – new colors, new shapes, more interesting flavors, new sizes – our more complex, flexible, global economy ensures more diverse, more authentic and higher quality choices. Who cares about Coke, Tab or Diet 7-UP when you can choose between many hundreds of specialty beverages, many of which have themselves grown out of authentic cultural traditions (San Pelligrino, Orangina, etc.)?”
A particularly interesting aspect of what consumers choose to eat is the generational differences that arise. Older consumers, as might be expected, are set in their dietary habits and some report, for example, that they have never tried Chinese or Thai foods.
Americans in the thirty- and forty-something segments have sampled a broader array of foods from around the world but mostly see these items as something to be consumed outside the home or delivered to it.
Younger consumers, those in their twenties and teens, have been eating so-called ethnic foods all their lives. According to Dr. Paschel, “To these consumers, global styles and cuisines are almost second nature. Today’s teenage consumers, for example, are as comfortable indulging in Japanese candy or sushi after school and cooking Pad Thai for dinner as they are meeting their friends for Dim-Sum on a Saturday afternoon.”
Dr. Paschel sees no going back. The food industry in the U.S. will be forever changed. “Tomorrow’s consumer will never be content with conventional staples such as potato chips, cookies, gum or soda – or the typical flavor extensions common to those products. Remember, in 2006 every product or brand is, by definition, a global brand.”
Discussion Questions: What does the growing globalization
of the food industry mean for retailers? Specifically, how do you see this trend
affecting the store environment (display, store layout, foodservice, etc.)?
Will (do) the growing number of immigrants to this country have the same global
view of foods or are they more limited to the cuisine of their home country?
Globalization will create a continuing wave of experimentation in food selections, particularly by native-born Americans under 45. New Americans, however, seem more inclined to prefer their native foods even though many enjoy our fast foods.
If there is a paradox in this trend, might it be this? Many flexible (vs. traditional, status quo) consumers, even though they enjoy experimenting, do not permanently reject what their established pallets have cultivated a taste for. As a result, this expanding, fluid and diverse situation directs today’s retailers to focus more on timely customer specific programming for the growing number of consumer segments emerging in today’s marketplace.
And here’s a random thought: If diversity and segmentation continue to expand our global food choices, could a parallel arise in our political selection process thereby expanding our two-party system into a multi-party system? And if that should occur, what would that foretell for the retail environment as well as our nation’s future politics?
Globalization and the strategy of merchandising a larger ethnic variety will be a “hot trend” very soon, in my opinion. This does not necessarily mean that the retailer has to be everything to everyone. It means that retailers have to be very smart when it comes to merchandising planning as a whole and space optimization. I’m a believer that a variety of global offerings is essential to compete these days.
Look at Albertsons, for example. When we purchased Shaws, we took their ‘shop the world’ module and began re-merchandising stores immediately to accommodate a ‘store-with-in-a-store’ concept in order to improve our offerings. The key is each store’s module was different in terms of section size and sku’s based on a variety of measures; i.e.: demos, sales projections, space, strategy, etc. In some cases, we added additional sets to the module that were not part of the national module – for example, in Boise I partnered with a local Bass supplier to insert a 4′ Bass set. Boise was the only market in Albertsons’ 2,500+ stores that had this set, but it meant something to the consumer (and we sold a lot).
Time will tell. If I were still in retail, I would take this trend seriously. Retailers need to plan for the future. A lot of the planning starts with the “box”. As retailers build new stores and remodel, they really need to rationalize how space is utilized. One thing I would do now is look at the feasible size of backrooms and office space in order to gain more sales floor space to prepare for the future.
We’ll see. I’ll definitely stay tuned…
All industries, including the food industry, face new challenges with globalization. If retailers thought making choices among line extensions and new products was a headache when determining the best assortment of products for their stores, the new challenges will only create more pressure. Retailers need to know their consumers well or risk losing them. Having the same selection available in each store that is part of the same chain will not be the formula for success. The challenge to continue decreasing costs by increasing efficiency while responding to consumers’ needs at individual stores is here to stay. Successful managers will find a way to manage the paradox.
Globalization in the food industry (as with globalization in any business) will require both U.S. retailers (and manufacturers) to work even harder at communicating with an exploding English-second-language population. These folks not only shop within the store, but also work in these locations as well. While researching what value a product image can bring at the shelf, Gladson found that there are 330 different languages spoken in the U.S. today representing 12% of the population (and growing). On a separate note, we also learned that 23% of the adult U.S. population reads below a 4th grade level.
If today’s retailers don’t find a way to communicate with them at the point-of-purchase, someone else will…and that’s a large market! Tactics will include product images on signs and tags, multi-language messages and pinpointed marketing campaigns geared toward specific cultures.
The globalization of foods and meals isn’t new. It is at least 15 years old.
Just note how well all supermarkets are doing in this vein! It has been an essentially poor effort by our industry.
Even the stellar Publix, Wegmans, Roches, Ukrops, Ball’s, old Dominicks, HEB, etc. have been ‘in and out’ of fusion foods.
And, these operations are the best in offering meals, foods ready-to-eat.
So most consumers will continue to “go out of the supermarket” arena for such delicious offerings. Another opportunity to capitalize on… if only our industry had the patience and consumers in mind. Hmmmmmmmmmmmmm.
Greater menu choice diversity means supermarkets have to analyze each location’s assortment more carefully. One location’s Asian specialties might not be profitable in other locations. And it isn’t easy to communicate a consistent store brand if location assortments vary significantly, since people generally appreciate predictability. If Kroger has some locations with outstanding Indian assortments and other locations with no Indian specialties, what will “Kroger” mean to people?
My crystal ball tells me that retailers will have to choose who they want to be, and what consumer(s) they wish to attract and serve. You can’t be the organic, home meal replacement, Asian, Hispanic, kosher, gourmand, etc. retailer… you have to pick your passion.
In many ways, I am hoping that it will “force” retailers to differentiate a bit more and become unique in the market vs. others. Become “known” for something other than being like all the others.
In terms of the actual store… I think it will lead to more cooking and tasting stations as people need to be educated about the new foods/preparations. I think it will likely lead to more interesting uses of loyalty card data (we see you bought our Joyce Chen Asian sauces…perhaps you would like to try out). I believe it will force the deli counter/prepared foods areas to make a decision to either stick with barbecued chicken as the big “draw” or expand to other areas.
It will be the traditional foods brands that will need to supersize their efforts to familiarize and popularize their offerings to the nueva shoppers from different cultures and countries if they want to grab a sizable share of the now nearly $2 trillion purchasing power of the ethnic consumer.
Creativity at this level will need to go far beyond language and appeal to the oral, olfactory, visual and other senses very aggressively. The ethnic foods brands on the other hand, will need to find a way of appealing to the general market in a successful way and need to jump out of their “ethnic boxes” and find a way to get onto the regular shopping list of the general market shopper.
Therein lies the successful application of the principle of cross-border marketing within the border…The magic lies not in telling “Desi or South Asians” to pick up their Texmati Rice from the aisles but in getting them to buy a three pack Dannon Plain Yogurt with a promo based on the consumer insight that this segment literally guzzles down plain yogurt.
Conversely, getting the family in Iowa to check out the new ready to eat lines including a Thai range might actually spark increased interest in the entire Asian cuisine aisles.