McCormick’s Sales Increase From Demand For Healthy Food

McCormick just announced its first earnings report since completing the acquisition of Reckitt Benckiser’s food division. The transaction added iconic brands like French’s mustard, Cattlemen’s, and Frank’s RedHot to their extensive portfolio of spices and condiments.

The company is repositioning itself to be more than just spices. This fall, they plan to add new trending products like bone broth, slow-cooker seasonings, and Asian noodles. All of their new products are targeting busy people who are looking for flavorful, healthy convenience.

Quality Ingredients Talk to Health-Conscious Consumers

McCormick posted $1.19 billion in revenue during its third quarter, which is up by 9% from this time last year. The company credits the increase to pricing, volume, product mix, and the recent acquisition of Reckitt Benckiser. However, net profits were down from $127.7 million to $108.2 million this year.

 

The CEO, Lawrence Kurzius, is motivated by the growth. In a statement, he said, “We are continuing to capitalize on the global and growing consumer interest in healthy, flavorful eating, the source and quality of ingredients, and sustainable and socially responsible practices. We are aligned with the increased demand for great taste and healthy eating and are confident in our plans to drive growth.”

McCormick Plans to Capitalize on Millennials

The company plans to take advantage of millennials’ interest in ethnic flavors and home cooking. Home cooking and using spices to reduce the consumption of sugar and salt have led to an increase in sales of spices.

Innovative products and active repositioning seem to be steering McCormick in the right direction. It will be interesting to see how their leadership team continues to capitalize on consumer’s interest in healthy eating without losing the taste and flavor they crave.

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Mazars’ Food and Beverage Industry Study Indicates Increased Sales

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.

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CPG Brands Experiencing Growth in New Retail Platforms

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.

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Germany Takes Second Lead in Superfood Market Launches

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 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.

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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.

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Ingredients and Formats adapts for Healthier, Portable Candy and Snacks

Snacking is popular among consumers, but with increased health awareness and wellness education, snack companies are now changing their format to adapt to the needs of shoppers. Brands are focused on clean-label snacks, organic, gluten-free, and non-GMO products to meet these new requirements.

Emphasis For Healthy Snacks

With the rise of health-conscious consumers, it is no wonder why snack companies are clamoring to fill this new niche. For instance, aside from using clean labels, companies are designing snacks made from fewer natural ingredients without the use of artificial coloring and flavors.

Consumers are now following different diet restrictions. People who suffer from celiac disease, for example, can now find snacks that are made without the presence of gluten. Other companies have specialized in making healthy snacks without the use of genetically modified ingredients.

Why Focus on Candy Bars and Snacks?

So why are companies focused on making healthy candies and snacks? The smaller serving size is perfect for people who are always on the go. According to Millennial, a US-based research company, consumers are looking for bite-sized snacks that are not only easy to consume but that offer portion control in a re-sealable format. This format is being adopted by food brands like Snickers, Milky Way, and Twix by producing 100 calorie sticks.

 

Aside from the portion sizes, the packaging of candies and snacks is changing. The change in the packaging is aimed at improving the shopping experience for consumers. Candy companies are also focused on changing the ingredient list. For instance, the infamous Mars bar uses gluten-free ingredients such as whole nuts, fruits, and dark chocolate for those who have gluten restrictions.

Better Opportunities for Snacking Companies

The strategies implemented by snack companies have resulted in a huge revenue of $13.7 billion this year, which is a 2.4% increase compared to the previous year. The increase provides real motivation to snack companies when it comes to innovating their products.

Most consumers are actively shopping for healthier food items, so the merchandising of healthy snacks often involve placing the snacks near the produce section. This is to give the consumers the idea that the snacks are healthy. On the other hand, the store that receives a high amount of traffic can also place their snack products on visual shipper displays to provide appealing storage.

The thing is that the snacking industry will be big given a few years’ time as more people demand products that contain healthier ingredients. With the steady increase in revenue as well as popularity, the category of healthy snacks will continue to grow.

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Grocery Stores Carry 40,000 More Items Than They Did in the 1990s

Grocery stores have been around for a long time. It was only after the post-war era that self-service grocery stores became popular as more people especially women became liberated from domestic duties and started going to work.

Today, grocery stores are big enterprises that provide people whatever their household needs. According to author Michael Ruhlman, the evolution of grocery stores is remarkable. Today, there are more than 38,000 supermarkets across the United States that earn billions of dollars yearly.

The Evolution of Grocery Stores

According to the Food Marketing Institute as well as the US Bureau of Labor Statistics, there is a growing need for grocery stores in the country and this growth is reflected in the rising stock prices of publicly-owned grocery enterprises. Aside from brick-and-mortar stores, grocery stores have also expanded to deliveries to accommodate all types of consumers.

But perhaps the biggest change attributed to the evolution of supermarkets is that modern groceries offer more diversity regarding their products. During the 1990s, there was an average of 7,000 items sold in a grocery store. Now, it has ballooned to over 40,000 items.

The Evolution of Shoppers

Parallel with the development of grocery stores is the evolution of shoppers. Over the past ten years, shoppers’ food preferences have drastically changed. For instance, you would never have been able to find gluten-free food a decade ago. Today, those kinds of products are prevalent and important many people’s diets.

The thing is that the taste and desires of ordinary consumers have also changed through time. It is important to take note that we are now becoming more conscious of our food choices and we tend to read labels more compared to 20 years ago.

Aside from reading food labels, consumers are also opting for organic foods especially if they can afford them. More than 50% of American consumers believe that organic foods are more nutritional than those grown using conventional farming techniques.  To supply the needs of consumers for organic products, many grocery stores also dedicate a section in their store for organic food products.

The Future of Grocery Stores

The future of grocery stores is very predictable. With the rising demand and food preferences of American consumers, grocery stores will get even bigger and will carry more diverse items. But then variety can also have its downsides. Ruhlman believes that too much variety sends consumers the wrong message that they can rely on grocery stores to get instant food instead of learning how to cook their meals from scratch. After all, cooking is an age-old skill everyone must learn, and that ability allows you to control the number of ingredients that you put in your food.

Inspired by www.marketwatch.com