Thursday, March 31, 2016

Amazon Launches New Dash Buttons, Tripling the Amount of Products Offered

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Amazon has expanded its Dash Button portfolio to include fish oils, razors and pita chips

31 MARCH 2016
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From one-click payment to drone delivery, Amazon has cemented its standing as theinnovator of seamless and timely shipping. With the inclusion of Dash Buttons for Prime members, which offer a physical asset with which to restock on household favorites, the A-to-Z supplier is proving that quicker paths to purchase and distribution equate to larger influxes of cold, hard cash. In fact, Amazon Dash Buttons have proved so successful that Amazon Prime has just announced the availability of more than 100 new ones, ‘giving Prime members the easiest way to order thousands of products.’

For those unfamiliar, Amazon Dash Buttons are Wi-Fi-connected, push-button devices which empower users with a physical version of a one-click purchase. And given that each button is only capable of ordering one pre-determined product, say, a roll of paper towels or some Tide pods, it isn’t uncommon for users to own more than one.

With the expansion of the lineup to include roughly 80 more brands, Amazon notes that overall sales have increased by over 75 percent in the last three months, averaging over one purchase per minute via Dash Buttons alone. Whereas previously the offerings were limited to consumer packaged goods (CPG), the overwhelmingly positive statistics generated by the buttons have persuaded the food and beverage industry to hop aboard the bandwagon as well.

“PepsiCo is always looking for new and innovative ways for shoppers to engage with our brands…the Dash Button was one of those unique opportunities,” says David Orr, Global Customer Lead, PepsiCo. “We have been very pleased with shopper feedback and engagement since the launch and look forward to expanded learnings moving forward.”

Available for $4.99 USD, Amazon promises to make your first purchase with the Dash Button free. Whether you’re ordering diapers in a sleep-deprived stupor or restocking on cat litter in a frenzy, you’ll have some peace of mind knowing you don’t have to remember your password.

So what do you need? Slim Jims? Shampoo? Condoms? Having tripled the assortment of products open to one-click, free two-day shipping, order the Dash Button of your choice and Amazon will take care of the rest.

Americans are eating less of one fruit, and it could signal a bigger problem in our diets

Lydia Ramsey

Francisco Antunes on Flickr

America isn't eating its fruits and veggies the way it once did.

In a recent US Food Commodity Consumption report, researchers found that Americans are eating fewer fruits and vegetables, in part because we're not drinking as much orange juice.

Biing-Hwan Lin, one of the authors of the report, pointed to oranges — and orange juice in particular — as a main factor in the decline in fruit consumption per year.

Among young people under 20, orange juice consumption was down 10.5 pounds per year since 1994. Among adults, it was down 6.1 pounds. In contrast, apple juice consumption slightly rose during the same time period.

This chart lays it out: orange juice vs. apple juice

USDA

Why have we turned away from orange juice, the quintessential American breakfast beverage?

Flickr/Jeremy Keith

In particular, Lin theorized that it could be because of rising orange juice prices, which most recently hit $1.418 per pound, up from 93.40 cents per pound in May 1994. (It's important to keep in mind that the price of orange juice fluctuates quite a bit each year). More importantly, the relationship between orange juice's decline and the decline in fruit consumption overall suggests a reliance on oranges (consumed mainly as orange juice) in the American diet that's not necessarily being replaced by a new favorite.

As for veggies, kids in particular ate about 20 pounds less per year in 2007-08 than they did the decade before, and men about 10 pounds less. In women, however, vegetable habits remained pretty consistent.

But our fruit and veggie habit isn't the only dietary pattern that's shifting. When it comes to meat, we're eating more chicken overall and eating slightly less beef and pork.

Lin said the next step is to figure out why women in particular have managed to eat the same amount of vegetables per year, while men and children have not.

U.S. retailers better prepared for Aldi, Lidl threat: Report

Mar 31, 2016Jon Springer

Aldi’s rapid expansion and Lidl’s pending U.S. arrival aren’t likely to have as devastating an effect on top U.S. grocers as they had for counterparts in Europe, but their invasion will likely prove especially problematic for smaller operators and those focused on lower-income shoppers, an analyst said in a report Thursday.

And though their overall share of the U.S. market is not especially significant today, both Aldi and Lidl have demonstrated the ability to improve their offering as they grow, representing a threat over the longer term to a wide range of retailers.

“All retailers need to treat Aldi (and at a later date Lidl) as a meaningful threat — and to be dismissive will likely prove to be a tactical/strategic error,” the report, authored by Deutsche Bank retailing analyst Karen Short and colleagues, said. “All retailers — irrespective of income demographics — need to keep an eye on Aldi’s evolution, particularly given the success they have had in the U.K.”

The report argues that top U.S. grocers like Kroger and H-E-B are better prepared than European conventional supermarkets to withstand price-focused competition, having already adjusted to a significant threat from Wal-Mart Stores in part by becoming more competitive on price themselves and adjusting to operating under narrower margins.

Photos by Getty Images

The “Big 4” grocers in the United Kingdom, by contrast, were caught raising prices when Aldi and Lidl attacked, and the market’s relative dearth of smaller competitors left them more vulnerable than a fragmented U.S. market would, the report noted.

Those players — Tesco, Morrisons, Sainsbury’s and Asda — have all seen their market share and margins drop significantly, while Aldi and Lidl have grown store counts by around 7% annually since 2004, and today control around 8.3% of the U.K. between them. That share has come almost entirely from the “Big 4,” which have seen combined market share decline from nearly 70% in 2011 to 64.2% today, the report said, citing internal research and Kantar Retail figures.

Both Aldi and Lidl are German-owned, limited assortment discounters with similarly efficient structures enabling them to offer significant price advantages, primarily on private brands. Aldi has operated in the U.S. since 1976 but is in the midst of a plan to build 500 new stores before 2019. Lidl has said it would enter the U.S. no later than 2018 with sources expecting as many as 100 stores in the Mid-Atlantic states.

According to the report, smaller food retailers with low market shares are likely to be most vulnerable to the discount competition — a threat that could trigger additional consolidation among food retailers seeking to boost share.

“We think smaller, weaker conventional grocery chains are very vulnerable to Aldi’s and Lidl’s expansion,” Short wrote. “The most at-risk would be the grocers that lack scale and do not have leading local market shares (i.e., outside the top 4 in any market). So at the end of the day, the rise of the hard discounter will ultimately accelerate consolidation in the U.S. in our view.”

In the near term, stores servicing the most price-sensitive customers are most at risk, Short added, citing Aldi’s leading pricing in proprietary market studies in New Jersey and Nashville. In Nashville, Supervalu’s Save-A-Lot chain was closest on price to Aldi — and scored better in meat, a key traffic driver — but “we believe that [Save-A-Lot] may also be the most exposed to Aldi’s expansion given the demographic overlap – both grocers target value-focused consumers who shop for low-priced private label products in a smaller box format.”

A 2015 study of 12 U.S. markets where Aldi operates stores by consultant Oliver Wyman cited in the report, noted that more than half of Walmart Neighborhood Market shoppers also shopped occasionally at Aldi. Hy-Vee and Save-A-Lot shoppers were in the mid-40% range. Stores with more appeal to higher-income shoppers including Whole Foods (15% of primary shoppers also Aldi shoppers) Wegmans (12%) and BJ’s Wholesale Club (10%) were least likely to have primary shoppers who also shopped at Aldi, the report added.

However, a track record of improving its offer as it grows could signal longer-term threats to a greater field of competitors, Short noted, citing Aldi’s expansion of natural and organic goods and expanded fresh offering.

Kroger expands online ordering to two major markets

Mar 31, 2016, 2:10pm EDT

Steve WatkinsStaff ReporterCincinnati Business Courier

Kroger Co. is building on the success of its ClickList online ordering and customer pickup service by adding it to two of its major markets.

Cincinnati-based Kroger (NYSE: KR), the nation’s largest operator of traditional supermarkets, will expand the service known as ClickList to its Houston and Dallas markets this summer. It expects to offer the service at more than 20 stores in each market by year-end, a Kroger spokeswoman told me.

Kroger has expanded its ClickList online ordering and customer pickup service to 46 stores and plans to add more than 40 in Texas.

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Kroger has expanded its ClickList online ordering and customer pickup service to 46… more

THE KROGER CO.

That would nearly double the number of stores where Kroger offers ClickList. It currently offers the popular service at 46 stores in seven of its divisions. That includes 12 stores in Greater Cincinnati, where it began offering the service last summer.

The Houston and Dallas markets include a total of 214 stores in Texas and Louisiana. They made up Kroger’s third-largest division before they split into separate markets last year.

Kroger has 2,775 stores in 35 states and the District of Columbia.

Customers pay $4.95 per order to select groceries online and drive to the store to pick them up later at a pre-set time.

Kroger has said it won’t add the ClickList service in every store. It decides where to offer it based on the likelihood that customers will use the service on frequently traveled routes, such as between home and work.

Kevin Dougherty, Kroger’s group vice president of digital and Vitacost, said at the company’s investor conference late last year that the service is working well.

“We’re seeing continued customer enthusiasm,” he said. “We continue to like what we’re seeing.”

UNFI acquires California produce distributor

The acquisition spree by United Natural Foods continued Thursday, when the distributor announced a deal to acquire California produce distributor Nor-Cal Produce for $68.6 million in cash.

UNFI, Providence, R.I., has made several acquisitions of specialty and fresh food companies in recent months to assist a rapid diversification of its dry grocery capabilities. The deal for Nor-Cal, a West Sacramento, Calif.-based distributor of conventional and organic produce, gives UNFI "a national presence in produce," it said in a release.

UNFI has made specialty and perimeter products a priority to better service a natural-food retailer base that's seen its share attacked by conventional supermarkets in recent years. Its recent acquisitions include specialty distributor Haddon House Foods, Florida-based fresh supplier Global Organics/Specialty Source, both announced earlier this month.

“We are excited to expand the breadth of our fresh perimeter product assortment and distribution network with the acquisition of Nor-Cal,” Steven Spinner, UNFI’s president and CEO, said. “This acquisition further illustrates UNFI’s growth into fresh and we look forward to working with Todd Achondo, president of Nor-Cal, who will remain at the company in a leadership role, and their entire team.”

Founded in 1972, Nor-Cal is a family owned and operated distributor of conventional and organic produce, floral and other fresh products. According to its website, it services more than 235 retailers in Northern California, Southern Oregon, and Northern Nevada. Annual net sales for Nor-Cal for the twelve months ended Feb. 29, were approximately $151 million.

“The entire Nor-Cal team is excited to be a part of UNFI. We look forward to working together to grow the combined company and better serve our customers nationwide,” Achondo said.

UNFI said the transaction is expected to be accretive to fiscal 2017 earnings. UNFI financed the purchase price with a combination of available cash and borrowings under its revolving credit facility.

Harnessing Indoor Agriculture To Ensure Global Food Security

by guest

24 mar 2016

The Edenworks Farmstack is an automated, vertical, indoor aquaponic farm.

Guest post by Jason Green, CEO & Cofounder at Edenworks. The views expressed here are solely those of the author and do not reflect the views of Food+Tech Connect.

Securing the world’s food supply is of critical concern to all of us, even in the developed world. Getting beyond the rote stats on an increasingly populous and urban world, it’s worth examining what happens when we don’t confront food security head on.

Let’s take the Middle East as a case study. Syria, Iraq, and western Iran are losing groundwater at a rate second globally only to northern India. Syria, not long ago the salad bowl of the Middle East, has been in a drought since 2006, forcing the mass migration of farmers into cities, and leading to massive urban concentrations of underemployed, undernourished, agitated citizens. By 2007, Syria had already received 1.5 million refugees from Iraq, then 4 years into its own drought.

Where are refugees headed now? Turkey, which has reduced water flow to Iraq by 80 percent and Syria by 40 percent over the past 40 years via dams and hydroelectric plants. Where might crisis be headed next? Follow the water. Saudi Arabia is buying up farmland in Arizona, exporting fodder as proxy water to keep its dairy industry alive.

Historically, increasing food production has caused high levels of deforestation, eutrophication and soil degradation; while we desperately try to increase farm yields, the world loses 5-7 million hectares of farmland annually to soil loss. To avoid turning the world into Mad Max, we need a multitude of approaches to balance ensuring enough food (calories), the right food (macronutrients, vitamins, and minerals), without borrowing against future agricultural viability.

Technology can mean very different things. In the developing world, technology and globalization have already increased average daily calories consumed to 2,850, not far behind the global average of 2,940. Even Sub-Saharan Africa is doing alright (2,360)–equivalent to the global average 50 years ago. Much of this improvement is the result of disseminating high yield, and often drought or disease resistant seeds for maize, wheat, rice, and soybean, crops that provide the bulk of the world’s calories.

There’s still work to be done–more than 800 million people remain chronically hungry. In an increasingly mobile and data-driven world, we can translate the most advanced climate projections or satellite images into a simple SMS with instructions on when, what, and how to plant, fertilize, irrigate, and harvest. In the developed world, calories are definitely not the problem. What we’re missing are vitamins, minerals, and phytonutrients–the things that make fruits and vegetables healthy. There are really three challenges here.

The first is a genetic one–we’ve bred the nutrients and flavor out of food in favor of yields and calories. The difference here is extreme, with some identity-preserved ingredients having 100x the nutrient density of conventional counterparts. Chef Dan Barber is championing the fight to develop new, delicious, and nutritious varieties of the veggies we love. Second, decades of fertilizer and pesticide abuse have left our soils stripped of minerals and biologically inert. How can we expect our vegetables to contain nutrients if their growing environment doesn’t? Third, even with refrigeration, produce starts to degrade and lose nutrition almost immediately. A week in transit can rob a vegetable of 50% of its nutrition.

Taking the latter two together, we need nutrient rich farms closer to market. Indoor agriculture is the rational solution, where farms can be deployed where produce is needed and, with technology like aquaponics, can recreate healthy ecosystems to grow a fresher, more delicious, more nutritious product.

Indoor agriculture has a number of unexpected benefits as well. It’s impervious to weather and climate change. Water and energy use is conserved by 90% over conventional farming. Environments can be tightly controlled enabling experiments between environment, seed, and yield. Crop cycles are shorter, for higher throughput and faster experimentation. In the case of aquaponics, sustainable seafood is cultivated as well, important for a world demanding more animal protein.

This is only scratching the surface. There is no one-size-fits-all solution, but what we can do is support technologies that improve efficiency and productivity for market-specific challenges.

Smart Cities Need To Get Smart About Local Food

by guest

30 mar 2016

Guest post by Dr. Robyn Metcalfe, Director of Food+City. The views expressed are are solely those of the author and do not reflect the views of Food+Tech Connect.

At a time when Britain was eyeing Germany and Bismarck as potential threats to the balance of power in Europe, a British writer known for books about fly fishing wrote in 1897, “War, Famine, and our Food Supply,” fraught with concern about England’s ability to feed itself. The author, Robert Bright Marston, was beside himself, calling attention to England’s reliance on Russia and America for wheat and corn. Noting how Napoleon’s army starved on the steppes of Leningrad, Marston wanted another flavor of protectionism — the construction of grain storage buildings that would enable England to live for three months if a war cut the country off from its main source of food supplies in Russia and the U.S. He wanted to buy time for British farmers to build local capacity to fill the missing imports from Russia and America. Marston knew food was critical to the health of their nations, both for social stability and to enable economic progress for all its citizens.

Anxiety and concern about the impact that wars have on cities’ food supplies continues today. New Orleans and New York City are keenly aware that disruptions — whether war, hurricanes or other breakdowns of the food supply chain — have received only improvised protections. Cities routinely talk about their three- to five-day food supply, not the luxurious three-month supply Marston was angling for. But whether or not a city needs enough food for three days, three months or three years — is a question that deserves more attention by urban planners and food systems experts..

Syrians are happy to have three minutes to consume a hastily provided meal from the World Food Program. After five years of conflict in Syrian, the UN and the World Food Program were finally able to restore full rations to Syrians after a lack of funding in December 2014 stopped the delivery of food to refugees in Syria. While the media talks about casualties caused by weapons, little is said about deaths caused by famine and poison through the food systems in countries now at war. Few are aware of the destruction of livestock and cropland, or the contamination of soil and water, over the long duration of some modern conflicts.

The ripple effect of the disruptions caused by wars is difficult to imagine. The most obvious is the breakdown of the infrastructure, especially in the transportation of food. In Syria, even the perception of a disruption in the delivery of food causes an increase in black market activity, rising food prices and higher incidences of hoarding. Pita bread, animal fat and potatoes quickly disappear into personal storerooms, and Syrians freeze and dry food for longer-term storage. As it becomes more and more difficult to transport food to Syria, Syrians are looking for more localized food sources. As commodities like fuel and flour diminish, people worry about being able to produce flatbread, a simple yet essential element of their diet. With the potential breakdown of Syria’s government comes the loss of state control of bread prices and ingredient supplies.

While not as long term and uncertain as the Syrian crisis, natural disasters like Hurricane Sandy bring home how food supply disruptions can upset the stomach of an entire region. In the aftermath of the hurricane in 2012, gasoline was scarce, transportation broke down and food logistics professionals trucking in food from around the world struggled to keep New Yorkers supplied with pizza and bagels. New York wants more than three days of food to keep it afloat in the future — twelve months would be nice. But who decides, and how do we ensure at least enough food for a country to adapt and find new sources of sustenance, as Marston argued for?

We need food to enter the conversations of urban designers, especially those engaged in creating smart cities. After all, it was the journalist Alfred Henry Lewis, who said in 1906 that “the only barrier between us and anarchy is the last nine meals we’ve had.”

Leading Sales & Marketing Firm Finds Diminishing Returns on Trade Promotions

Acosta Hot Topic Report: Reversing the Diminishing Returns of Trade Promotion. (Graphic: Business Wire)

March 30, 2016 03:02 PM Eastern Daylight Time

JACKSONVILLE, Fla.--(BUSINESS WIRE)--As the U.S. economy continues to improve, consumer confidence has been on the rise, which would typically indicate growth for consumer packaged goods (CPG) manufacturers as well. However, according to a new Hot Topic Report from Acosta — a full-service sales and marketing agency in the CPG industry — unit sales are flat across most categories, and trade promotions continue to decline as a key factor in driving incremental volume. This decline leads to more unprofitable sales for manufacturers. Despite this, CPG manufacturers continue to allocate an average of 15-20 percent of gross sales to trade promotion.

Acosta research reveals the state of trade promotion in new Hot Topic Report.
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“Trade promotion is weakening as a mainstay of shopper marketing as it’s not delivering the results manufacturers had come to expect,” said Colin Stewart, Senior Vice President at Acosta. “As such, a promotional hamster wheel has been created, in which many CPG manufacturers tend to repeat an old strategy, but see less resulting gains. The wheel continues to spin and spin … until manufacturers adapt their strategies to the reality of today’s shopping landscape.”

Acosta’s Hot Topic Report, Reversing the Diminishing Returns of Trade Promotion, outlines the three factors keeping the hamster wheel spinning:

Weakening Promotional Value

Over the last five years, the everyday price of items has been on the rise, and consequently, promoted prices have been as well. Thus, higher average prices, coupled with shallower promotions, have resulted in lower promotional lifts.

Promotional lift is at its lowest level in five years, averaging just 75.4 percent — a 3.1 percent decrease from 2014-2015 alone, according to IRI Reviews.

Promotional Saturation

Because of the lower returns on trade promotion spending, manufacturers are only exacerbating the problem — and the hamster wheel — often earmarking more trade dollars for everyday low price strategies.

Thirty-six percent of shoppers rank paper circulars at the top of the list for impacting their shopping trips and what products they purchase, despite younger generations preferring digital to print, and newspaper deliveries continuing to decline.

Shopper Behavior

Today’s savvy shoppers will channel surf, wait for the next promotion, check a price online or even switch to private labels before spending more than they expect on a product.

Sixty-four percent of shoppers said they will shop elsewhere for competitive pricing and hold off on purchases until certain products are on sale.
Sixty-seven percent of shoppers reported that at least half of their basket is filled with products that are on promotion.

“It’s clear that shoppers are not reacting to traditional trade promotion as they have in the past,” Stewart said. “Rather than perpetuating the hamster wheel, CPG manufacturers should focus on establishing a new promotion playbook, and maximize investment in trade promotion through a renewed focus on the fundamentals that drive base sales: collaborative planning; shopper-centric promotions; integrated sales and marketing; and trade optimization.”

Reversing the Diminishing Returns of Trade Promotion was compiled using research conducted by Acosta, as well as the company’s experience working with the nation’s largest CPG manufacturers and retailers. To access the full Hot Topic Report, visit www.acosta.com/hottopicreports.