Food retailing is changing fast. Supermarkets look more like restaurants. Discount stores look more like supermarkets. Convenience stores look like all of the above.
In the supermarket channel, prepared-foods offerings are one of the fastest-growing areas of the store. In a presentation at the International Foodservice Manufacturers Association Presidents Conference last November, Jason D. Whitmer, president of market research at Cleveland Research Company, projected that sales of prepared foods would grow almost 16% in 2015.
Other major trends impacting retail operators include increasing demand for natural and organic products. Sales of organic products hit $39.1 billion in 2014, up 11.3% over the previous year, according to a survey on the organic industry from the Organic Trade Association.
In addition, technology and the Internet have added new dimensions to the way consumers and retailers interact with each other, both in terms of marketing and in the ordering and delivery of product. Online grocery sales expanded 14.1% annually from 2009 through 2014, and growth is expected to continue to be robust for the next five years, according to IBISWorld’s Online Grocery Sales market research, as more retailers and suppliers expand their online-ordering capabilities and web-only specialists like Amazon step up their efforts.
Amid this evolving environment, food retailers increasingly need access to timely insights from experts who can help them adapt. And the organizations and suppliers who serve them are stepping up to accommodate.
This year’s FMI Connect, which took place in June in Chicago, was a great example. Sessions were heavy on crossover education designed to help grocers understand what it takes to move into restaurant — or “grocerant” — territory. The International Dairy-Deli-Bakery Association recently published Serving the New American Appetite and offers training about marketing to millennials and using digital merchandising. IFMA has expanded its focus by rolling out training sessions with titles like, “Blurred Lines: Navigating Foodservice Opportunities in C-stores.”
Beyond trade associations, food retailers are turning to the suppliers they work with every day for guidance about emerging trends and consumer expectations.
Manufacturers whose training once focused only on the equipment they sell are using their view into a variety of environments to help food retailers understand what’s happening in the broader marketplace. With employees on the ground in stores across the U.S. and beyond, these suppliers are uniquely positioned to see what’s emerging, what’s working — and what isn’t. Those insights can be invaluable to food retailers who are moving quickly to capitalize on consumer trends, but still want to mitigate risk.
“Because of intense competition for the food dollar, increased segmentation and the proliferation of food programs, retailers are looking for new ideas. These ideas need to incorporate a holistic vision for a store or department, taking into consideration things like shopper traffic patterns, lighting and workers’ skills,” said Henry Pellerin, vice president of marketing at Hillphoenix. “We have a broad view into what’s happening in food retail, and we’re leveraging it. At the end of the day, manufacturers like us can’t be just be equipment providers; we have to help our customers sell more food.”
Hillphoenix’s effort to transform internal expertise into strategic intelligence led to the creation of the Hillphoenix Learning and Design centers, as well as an Ideation showroom — opened at the company’s new Conyers, Ga., headquarters in 2014. The spaces enable one-on-one expert consultations for retailers seeking to solve design and merchandising problems or to generate fresh ideas for engaging shoppers. The company also uses the facilities for multi-participant educational programs, such as the upcoming Supermarket Sense.
This year’s event, scheduled for Sept. 22-23, not only features sessions led by Hillphoenix experts, but also by well-known industry adviser Harold Lloyd, Datassential’s Mark DiDomenico and others. Sessions will cover everything from designing small-format stores to a chef’s take on challenges and solutions for grocerants.
Over the past decade, nearly 25,000 people have gone through Hillphoenix training courses offered at the Conyers facility, at customer locations and online. In recent years, other industry players have joined the educational effort. For example, Emerson is building a training center in Dayton, Ohio.
“Food retailing is transforming rapidly,” Pellerin said, “and we as an industry have to get ready.”.