Kroger Looks to Natural Brands for Innovation

in , , ,

Project Nosh reported on Kroger’s first natural innovation summit last month. The U.S.’s largest grocery retailer with 2,778 locations is looking to growing natural brands for innovation. The summit brought 50 of the best up and coming natural brands to their headquarters in Cinncinati, Ohio.

Kroger Natural Innovation Summit

The summit was held during the first week of October with a presentation from Jill McIntosh, VP of Merchanding for Natural Foods at Kroger, to kick off the first day.

“I thought of the idea because I wanted to bring a Natural Foods show to our Kroger category managers and invite some new and innovative brands to Cincinnati…Bringing the mountain to Mohammed, I guess.”
– Jill McIntosh

After Jill’s presentation, the summit featured 50 of the natural brands in a mini-trade show format. The natural brands were hand picked by VMG Partners, Harlow, and 84.51 degrees. For this first summit, Kroger wanted to focus on brands in water, fitness, yogurt, and packaged snacks.

“The brand selection committee prioritized high growth emerging wellness brands that have a proven sales velocity track record outside of Kroger, that were under-indexing in sales at Kroger. The event wasn’t focused on brands that don’t yet have a track record of sales velocity success elsewhere. The goal is help Kroger maximize their batting average as it relates to wellness emerging brands.”
– Wayne Wu, Managing Partner of VMG Partners

Key Takeaways From the Summit

The summit’s goal is the benefit both the brands and Kroger’s category managers. By bringing the brands to one place, this enables all of their buyers to be able to meet with the top brands and have more one on one discussions. The brands love the opportunity to connect with a specific retail customer in a more calm environment that trade shows like Expo West, Fancy Food Show, etc.

Kroger knows its business is moving towards more organic and natural foods, so the summit is an excellent fit in helping them push their “Restock Kroger” initiative. Kroger is leading the way in integrating their natural aisle with the conventional aisles so that both types of buyers become one.

“We have basically combined our natural with our conventional category management. Which makes sense as we want our category managers, when it comes to looking at a category, to know everything about it, not just the natural side or the conventional side but to be the subject matter expert over the total category. The customers are shopping that way more and more and we want to make it easy for our customer. So we’re mixing it up… As we integrate teams we’re able to integrate sales planning, ad, display and store formats.”
– Jill McIntosh

It will be interesting to see how the summit impacts the growth of innovative brands into Kroger’s massive retail chain.

Inspired by www.projectnosh.com

The Evolution of Nutrition Facts Labeling

in , , , ,

According to the U.S. Food and Drug Administration, the nutrition facts panel is one of the most widely recognized graphics in the world. Food Dive recently published an article on the origins and evolution of nutrition facts labeling. Our post hopes to detail some of the key points from their report.

The History of the Nutrition Facts Label

FDA Historian, Suzanne Junod, told Food Dive that the nutrition panel has been appearing on food packages since 1994, but mandatory labeling dates back more than 100 years. Junod says,”The modern U.S. food-package label has evolved steadily throughout the 20th century, and its content and format are regularly revised to reflect and apply new knowledge in the fields of medical, nutritional and regulatory science.”

However, minimal changes have taken place within the past 20 years except for the addition of Trans Fat in 2006. If you looked back 100+ years ago, the Pure Food and Drug Act of 1906 established the FDA and was the first significant consumer protection law passed in the 20th century. The law intended to stop adultered and mislabeled products to improve consumer trust in the food and drug industries. Packaged foods started to grow at the turn of the 20th century as these goods were more convenient that bulk or boxed products.

 

From there, low-cost competitors jumped in to sell short-weight packaging meaning they put less food in packages and sold them for less. In 1913, Congress passed the first mandatory food labeling law with the Gould Net Weight Amendment. The amendment required all packaged foods to have the quantity of their contents marked on the package regarding weight, measure or numerical count.

The next significant change took place in 1938 in the Food, Drug, and Cosmetic Act which required all artificial flavoring, coloring, or chemical preservatives to be listed on the product label.

“We didn’t know that much about vitamins until the ’20s. A lot of them weren’t even discovered until then. And no one was really clear about the role they played in human nutrition,” Junod said. “But scientific studies began. That was pretty much when [the FDA] started getting into the nutrition business and taking a really hard scientific look at nutrients and what role they play in the diet.”
Suzanne Junod
FDA Historian

In 1940, the FDA accepted a standard for enriched flour that established the levels for enrichment with vitamins and minerals. The formula was adopted for white bread and later standardized for other food products. Nutrition facts labels would not change for decades.

Nutrition Labeling Activity From the 1970s to the 1990s

In 1973, the FDA published the first regulations that required nutrition labeling for foods. The foods included those with added nutrients for which a claim was made on the package or in advertising.

“Then in 1977, a Senate committee came out with a report called Dietary Goals for the United States. That was a landmark report. [It] said that Americans should be cutting down dramatically on sugar, salt, and saturated fat, and eating more fruits and vegetables, whole grains, beans, and healthful foods”
Michael Jacobson
Sr. Scientist at CSPI

The Department of Agriculture, would soon after published the first Dietary Guidelines for American which agreed with Senate findings: eat more fruits and veggies, eat less salt and sugar.

Mandatory nutrition labeling and the first nutrition facts label were introduced in the Nutrition Labeling and Education Act of 1990. The FDA spent a lot of time developing the nutrition facts label with an outside branding firm to be flexible for scientific advances in nutrition.

Where the Nutrition Facts Label is Going…

The new nutrition facts label is undergoing its first significant overhaul in almost 20 years. In the new version, the FDA requires added sugars, essential nutrients like vitamin D, potassium, calcium, and iron. The label was initially set to be active in 2018 but has now been pushed back to 2020. Many believe they are trying to line this up with the Department of Agriculture’s Non-GMO labeling law. It will be interesting to see how this all plays out over the next few years.

Inspired by www.fooddive.com/

Mazars’ Food and Beverage Industry Study Indicates Increased Sales

in , , ,

Mazars, a leading accounting, tax, and consulting services firm, released its annual Food & Beverage Industry Study Results Report. The report indicates that food and beverage companies are predicting a significant sales increase in 2017 for the second year in a row. Study participants included manufacturers, distributors, restaurateurs, and retailers with sales between $1 million or less and $500 million or more.

What are Companies Projecting for 2017?

Participants in the survey are expecting some significant increases in sales and profits for 2017 with an increase of 21% over 2016 sales numbers and a 16% increase in net profits. Of the 200 companies surveyed, most attributed growth to industry trends favoring private label and healthy/nutritious foods.

 

The study provides executives in the industry with a ton of information on performance, planning, and challenges facing food and beverage companies. The study also took a deep look at changing consumer trends, proposed regulations, emerging companies,  and new products.

Mazars Report Projects Increased Sales Due to Changing Consumer Trends

One of the biggest drivers of increased sales in 2017 is changing consumer trends. Consumers are starting to settle into a more healthy lifestyle, so nutritious foods are going to be critical for growth. Companies have been adapting to these changes over the past few years, and believe they have finally caught up.

It will be interesting to see if sales meet the expectations that executives are projecting in the Mazars Report.

Inspired by www.prnewswire.com

Mom’s Sweet Tooth May Be to Blame for Child’s Allergies

in , , ,

The World Health Organization reports that around 235 million people suffer from asthma and children lead the list. To make matters worse, the number is predicted to increase to 400 million by the year 2025.

Asthma is a global health threat, and reports indicate that 50% of children are more sensitive to one or more allergens. This respiratory epidemic has been rising over the last 50 years, and the unlikely cause is the change in diet.

If your child is suffering from allergies, then chances are that the culprit is your sweet tooth. In a study published in the European Respiratory Journal, women who consume sugary foods during pregnancy may increase the risk of their baby developing allergies.

According to the lead author of the study, Annabelle Bedard from the Queen Mary University of London, there has been a rise when it comes to the intake of free sugar in the form of high fructose corn syrup over the last five decades. Free sugar is not found naturally in fruits and vegetables, and these include syrups, honey, sweeteners, and table sugar to name a few.

How the Study Was Conducted on Children’s Allergies 

The researchers used data obtained from 9,000 mother and child pairs in the Avon Longitudinal Study of Parents and Children. This is a long-term and ongoing research study that tracks the health of families with children who were born between April 1991 and December 1992.

To investigate the connection between the diet of the mother and the allergies of their children, the researchers calculated the number of free sugars consumed by women during their pregnancy through questionnaires. The researchers then looked into the sugar consumption and the allergies of their children.

The Sugar-Allergy Relationship

The study shows that 62% of children in the study do not suffer from any allergies, but the rest suffered from common allergies (22%), eczema (16%), and asthma (12%). On the other hand, the researchers looked into the sugar consumption of moms during pregnancy.

Children from moms who had a high sugar intake have a 38% increased risk of developing allergies compared to those who are born from moms who consumed less sugar. The researchers calculated that kids from moms who consumed more sugar are also likely to suffer from two or more allergies such as asthma, hay fever, and eczema. For instance, the risk of allergic asthma increased by 101% for kids born from moms with high sugar consumption group versus the low sugar group.

Although there is a strong link, researchers emphasized that the results are inconclusive such that there are other factors that can lead children to suffer from allergies. Allergies are complex diseases that are associated with different factors such as genetic defects, pollutants, and many others.

In fact, senior lecturer in immunology at the University of Manchester, Sheena Cruickshank, noted that more studies should be carried out to determine the cause of the relationship between sugar consumption of mothers and the allergies of their children.

Inspired by www.cnn.com

27% of People in the U.K. Use Sports Nutrition Products

in , , , ,

Sports drinks were once reserved for bodybuilders and athletes, but the recent Mintel report on sports nutrition revealed a different story in the U.K. Published in the Attitudes Towards Sports Nutrition 2017 report, results showed that 3 out of 10 or 27% of Brits use sports nutrition products. The report also noted that 2 out of 5 (39%) of the UK’s population exercise more than once a week.

Men Are the Main Users of Sports Nutrition Products

Young men in Britain have the strongest affinity to sports nutrition products. Around 61% of men between 16 and 34 confessed that they use sports nutrition products and also follow a rigid exercise program. In fact, 35% of this demographic say they exercise four times a week.

While men showed a high propensity for sports nutrition products, there is also a growing demand from the females.  The study indicated that 40% of women between 16 and 34 years old consume sports nutrition products. There is also an increase of intake of protein powders among young women from 7% in 2015 to 18% in 2017.

Popular Sports Nutrition Products in the United Kingdom

The top three products according to the reports include protein bars at 11%, protein powders at 10%, and energy bars at 9%. According to Anita Winther, research analyst at Mintel, the sports nutrition industry is proliferating.  The reason for this is that people are changing their perception of beauty. In fact, even the fashion industry is embracing the mantra “strong is the new skinny” thus models are often required to have athletic and toned bodies.

The embrace of these nutrition products among Brits is good news for manufacturers. But while the demand is high for these products, 63% of consumers find it difficult to determine whether a particular product is right for them or not. 72% of the customers demand industry-wide certification to ensure the quality of the ingredients used.

 

Consumers are more critical with the types of foods that they consume, and this scrutinizing behavior extends to sports nutrition. Around 64% of the users read the ingredients list before deciding to buy a particular product while 46% avoid those that contain sugar. With this consumer behavior, the industry can benefit by revamping their products to include more natural and sugar-free products to meet the demands of people.

Current Problem

While the sports nutrition industry is growing, it is facing fierce competition from mainstream food companies that are also embracing the high-protein trend. It seems that there is an overlap between the two and that mainstream food companies are providing products that have more competitive prices and more beneficial ingredients.

The thing is that there is a booming interest in health and sports products in the United Kingdom and the broad aspect of healthy living. The trend gives manufacturers opportunities to develop new products to cater to different types of consumers.

Inspired by www.mintel.com

CPG Brands Experiencing Growth in New Retail Platforms

in , , , ,

The primary theme of the consumer packaged goods (CPG) industry is growing sales. In the IRI Channel Performance Report, growth is present but limited. According to Vice President of Thought Leadership for IRI, Susan Viamiri, the reason for this is that shoppers are now more demanding and are spending their money on products that can deliver on their needs and expectations.

In the previous year, the industry amassed total sales of $760 billion where 41% was accounted for in the grocery channel. Another platform where consumer packaged goods are doing well is online. Most people still purchase the items that they need in grocery stores. The reason why grocery stores accounted for higher sales than any other platforms is that many people make quick trips to purchase their items. In 2016 alone, the number of grocery trips rose by 1.3%.

Strategies to Stay Ahead of Competition

As a result, many grocery stores have experimented with their store format to increase margins and survive the stiff competition with other retailers. Other strategies that they are using include subscription-based programs and promoting their CPG brands to millennials. The new formats embraced by CPG retailers will continue to transform the retail market for years to come.

As mentioned previously, e-commerce stores are also instrumental in driving the sales today. E-commerce is responsible for 8% of all CPG revenue. Market analysts are forecasting that the sale is faster because of the convenience it provides to consumers. This has many brick-and-mortar retailers scrambling to become more competitive.

The consumer packaged goods industry is eyeing different types of shoppers. The generational shoppers include the Millennials, Generation X, and Baby Boomers. These kinds of generational shoppers have different shopping attitudes. For instance, both millennials and generation Xs shop in mass markets and look into the price of goods more than anything else. Baby boomers, on the other hand, spend on convenience while seniors often pay more in bulk for drugstore purchases.

Social Media: How it Helps CPG Brands and Retailers

Too much competition is one of the biggest problems right now. Even big retailers find it hard to infiltrate densely-populated areas, so they create a downsized version of their retail stores. To be able to attract more people, they use loyalty programs and technology to let their customers know about their different offerings. They go to social media to interact with their customers and attract more potential clients.

The consumer packaged goods industry is fast-paced, and personalization is essential in breaking through the tough marketplace. By offering customization, customers feel important as they know that retailers can deliver their needs using the best solution possible.

Inspired by www.iriworldwide.com

Germany Takes Second Lead in Superfood Market Launches

in , , , , ,

Consumers all over the world are fueling the growth of superfoods. In new market research released by global agency Mintel, Germany has overtaken Australia and UK regarding the superfood market launches. In the Global New Products Database published by Mintel, it revealed that 9% of new superfood launches in 2017 occurred in Germany.

The UK’s market launches dropped from 9% to 7% from June 2016 until the end of the year. Australia has fallen in third place with only 5% launches since June 2016. While Germany’s love of superfoods has grown, the United States still tops the list. But recent statistics show that the superfood launches in the US fell to 19% this year. This is a far cry lower from last year’s, 25%.

Why Is Germany Shifting to More Superfoods?

According to Katya Witham, senior analyst for Germany at Mintel, noted that the country is moving up in its ranks due to the growing demand of superfoods from consumers. The country is experiencing an increasing number of consumers who are interested in health and wellness.

So, what pushed Germany to have this huge embrace for superfood? The growing aging population and rise of health-related problems have driven the demand for the consumption of healthy superfoods. The country is experiencing health issues like heart disease and obesity. As a result, it is also increasing the health-care costs in the country.

 

Initially, superfood launches in Germany included a simple line of products from quinoa, chia, and amaranth. Recently, there is a growing demand of lesser-known superfoods, and this has led food manufacturers to harness the whole food goodness of other superfood ingredients to boost the quality of their food products.

The Launch of Supergrains

Specifically, Germans are interested in ancient grains such as millet and spelt.  In fact, 30% of German adults aged between 25 and 34 want to consume baked goods that are made from these grains. Also called super grains, spelt and millet appeal to the German market because they are deemed healthier than other grains. These ancient grains have a special place in the German kitchen as people have been using them in a variety of home-baked products over the years.

Today, German food manufacturers have incorporated the supergrains in products like breakfast cereals, energy bars, and snacks to boost the nutritional value of their products. Supergrains contain high amounts of fiber, omega-3 fatty acids, protein, and antioxidants.

The Future of German Superfoods

The agency also forecasted a stable future for superfoods in Germany.  In fact, retail sales of superfoods have amounted to €3.2 billion since 2016. The rising consumption of super grains and other healthy foods will result in a growth of 20% within the next five years.

Inspired by www.mintel.com

Brick-And-Mortar Stores Still Here to Stay Amid Online Grocery Platforms

in , , , , ,

In the digital age, people have the luxury of buying whatever they need online. However, there are still many consumers who prefer to shop the traditional way. In a report released by The NPD Group, only 7% of consumers in the United States shop online for their groceries.

The Rise of Online Shopping Platforms

Consumers are not willing to adopt the online grocery shopping platform for various reasons, and one of them is that they want to pick out fresh items by themselves. There remains a significant number of the US population who prefer shopping in brick-and-mortar stores.

 

For instance, Amazon recently purchased the popular grocery chain Whole Foods to extend the online shopping experience of their Amazon Prime members. The acquisition is a big step for online shoppers including young professionals and urban consumers. The NPD Group predicts that online shopping will also expand faster due to the convenience factor appreciated by most shoppers.

In the same study, around 20 million of consumers who are new to online grocery shopping increased their virtual shopping activities, particularly on foods and beverages. The reason for this is that many online groceries offer a variety of unique products that traditional grocery stores do not carry. The diversity of products is another selling point of online grocery stores. But even if this is the case, it is a far cry to the hundreds of millions who still prefer to shop at brick-and-mortar grocery stores.

Why Are Traditional Grocery Stores Still Popular?

So why are brick-and-mortar stores here to stay? While one of the strongest points of online shopping is the convenience, there are still many barriers that they need to address. Aside from the fact that many people want to check and pick out food themselves, many people report the nostalgia that shopping in brick-and-mortar grocery stores provides. Another barrier to shopping for food online is higher costs.

amazon online grocery shopping

Most consumers believe that online stores do not maintain high overhead costs so they can offer lower prices. However,  it is the consumers who have to suffer from paying delivery charges or even membership fees. Consumers, in a nutshell, simply want to get their food fresh and now!

What Should Brick & Mortar Grocery Do?

While online grocery stores are becoming popular among the millennials, brick-and-mortar stores are here to stay. But to improve the shopping experience for their customers, they need to step up their strategies. According to Darren Seifer, industry analyst of the NPD Group, B&Ms need to market unique needs of consumers so that they can compete with online groceries that are offering a wider variety of products that brick-and-mortar stores do not usually carry.  By doing so, they can keep up with the pressure of time and the demands of their customers.

Inspired by www.npd.com