OPINION

How grocery retailers can capitalize on convenience

AUTHOR

John Stranger

PUBLISHED

June 1, 2017

John Stranger is vice president, group account supervisor at EvansHardy+Young, a marketing and communications agency specialized in servicing food, wine, restaurant and casino brands. John has managed accounts such as Safeway Markets, Dole Foods, Robert Mondavi Winery, Nestlé USA and Sara Lee. He currently heads up California Walnuts, Avocados from Peru and Hi-Chew. 

Convenience food was once a pejorative, but not anymore. Today, it’s practically a requirement  for food brands to provide convenient products, even when delivering “clean,” gourmet or vegan options. As A. Elizabeth Stone stated in the Institute of Food Technologists’  “Top 10 Food Trends” report in April 2017, “Despite the recent media preoccupation with clean labels and free-from foods, the food industry remains driven by convenience.” 

Here are some ways retailers and food manufacturers are responding to consumer demand for greater convenience, and tactics they can use to further capitalize on the trend.

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1. The new from-scratch cooking

The IFT report cites Food Marketing Institute, Harris and Management Systems International data that illustrates the depth of consumers’ demand for convenience. Fifty-three percent of shoppers used partially prepared items when preparing dinner at home, with only 35% of people cooking mostly from scratch. Nearly half (45%) of shoppers buy heat-and-eat poultry or meat at least once a week, and 40% buy pre-cooked ready-to-eat products. Fifty-six percent of adults bought deli prepared meal items last year.

John Stranger

 

Credit: EvansHardy+Young

 

Younger demographics are demanding convenience more than older age groups. One-third of consumers under 45 use packaged meals or stir-fry kits, and 20% use refrigerated heat-and-eat potatoes or pasta.

Opportunity: Nearly half of all users of these prepared products doctor them with seasoning or added ingredients. There is a need gap for prepared or semi-prepared items with more variety, more ethnic options and more gourmet offerings.

2.  Meal kits

Supermarkets are waking up to the challenge of meal kit delivery services like HelloFresh and Blue Apron. These services have grown into a $1.5 billion market in the last five years, and are expected to double in the next five.

Kroger recently announced that it is testing a line of meal kits in four stores in the Cincinnati area. The line, called Prep + Pared, offers ingredients to prepare a meal for two in 20 minutes. Prices start at $14, with dishes like Moroccan-inspired spring vegetables, and creamy chicken and bacon alfredo.

Publix has introduced meal kits in two stores, one in Orlando and one in Tampa. Their kits come in three levels of difficulty, Simple (up to six steps), Simpler (four steps) and Simplest (heat and eat). Giant, Whole Foods and Peapod are among others to expand into the meal kit business.

Opportunity

With the size of this category exploding, food marketers have a huge new opportunity for growth, especially food commodity groups offering unprocessed raw materials.

3. Online ordering for pick-up (or delivery) is picking up

Jewel-Osco became the latest supermarket chain to enter the online ordering fray in an announcement at the beginning of May. Hy-Vee also has a plan on the drawing board to open a small market in West Des Moines that will feature a drive-thru coffee shop on one end and a drive-up lane on the other for customers picking up groceries they have ordered online.

Instacart has aggressive growth plans as well, and expects to be available to 80% of U.S. households by the end of 2018. Instacart uses independent drivers to shop at its grocery partners and deliver to customers, providing chains an easy way to offer their customers delivery without the cost of their own operation to do it.

Opportunity

Instacart partners with packaged foods brands to reach customers who are ordering online. Promoting a brand through Instacart is a different way to reach customers at the most valuable “point-of-purchase” moment.

 

Credit: Megan Poinski

 

4. Fast fresh formats and grocerants are growing

Kroger recently opened Fresh Eats MKT, a new 12,000 square foot convenience store concept, in Blacklick, OH. Jeff Parker, president of Kroger Convenience Store Division, called the store “a new way to shop,” and he’s not exaggerating.

The store is a confluence of fresher, healthier offerings than is typical, and gives new meaning to the word convenience. It includes mobile and online ordering; made-to-order food with indoor and outdoor seating; a large assortment of fresh produce, meat, bakery and dairy; and bulk nuts, mixes and candy. It also features a drive-thru pharmacy, a Starbucks, Coke Freestyle machines and fuel pumps.

Similarly, Alberstons’ Star Market in Boston reopened four remodeled stores in the first week of May. The stores now feature expanded prepared meals and hot foods. These include fresh-made pizza, grilled chicken and a noodle bar, as well as fresh cut fruits and vegetables and bulk nut displays.

Whole Foods opened its fourth 365 branded store in Austin in late April, which features not one but two full service eat-in locations. Easy Tiger is a bakery and a beer hall, while Juiceland offers a full line of juices and smoothies.

Big Y recently remodeled its Amherst, MA store so it includes a ready-to-eat chicken wing bar, a stir-fry station and a café area with a coffee house feel.

Wegmans and H-E-B were early adopters in the grocerant business.

Opportunity

Grocery retailers are clearly aware that traditional formats are giving way to new options that provide more convenient, faster ways for customers to get the food they want. Food manufacturers are going to have to be equally nimble in providing products that are adapted to the “new food chain.”

With customers demanding more convenience than ever, there is no doubt that new business models for food delivery systems will be developed. Food and beverage producers must be adept in providing products that will supply these formats.

Why Wal-Mart Is Winning In A Losing Industry

Louis Efron , CONTRIBUTOR

May 31, 2017 6:23 PM 4,291

Wal-Mart’s PurposeThe retail sector overall is showing a 0.8% negative price performance, propped up only by the success of Wal-Mart, Target, and Home Depot. It is a dismal picture of a major industry, and the fallout could severely damage the economy as stores continue to close their doors and people lose jobs.Recently, Wal-Mart reported earnings per share of $1.00 versus expectations of $.96, according to Thomson Reuters analysts; revenue of $117.5 billion; 1.4% growth in U.S. same-store sales; and digital sales that were up 63%.

Photo by Scott Olson/Getty Images

Wal-Mart employs 1% of America, 2.2 million people worldwide. The largest retailer in the world, its employee head count is larger than the population of several small countries.While Wal-Mart is celebrating, other major retailers are struggling. Macy’s, the nation’s second-largest department store, had its share price plummet 17% after weak Q1 earnings. For fiscal 2017, the retailer is projecting a 3.2 to 4.3% decline in sales. J.C. Penney saw a 15.3% decline following its poor earnings report. And Nordstrom, revered for its customer service practices, saw an 11.3 % drop after its Q1 results, while Kohl’s slumped nearly 8% after disappointing financials.

Why is Wal-Mart winning when most of the retail market is tanking? Two reasons:

1. The company has stayed true to its core purpose.

2. It continues to effectively execute to fulfill its purpose.

Sam Walton started Wal-Mart in 1962 with one simple goal: to “help people save money so they could live better.” Despite its current size and history, the organization has never lost sight of this purpose. Even today, helping its customers save money is central to everything the retailer does, 24 hours a day.

While many other retailers and businesses may be focusing on how they can improve their profit-and-loss statements (P&Ls), Wal-Mart is obsessed with how it can save more people money. Its focus is laser sharp and unwavering. But for most businesspeople, this simple yet powerful shift in focus is uncomfortable. It means moving away from the safety of what they learned in business school or management books. It requires shifting from managing a P&L to managing a business.

Wal-Mart improves its P&L every time it is able to save a customer money. If the store does this consistently, patrons are able to put their savings toward other areas of their lives that are important to them — a child’s education, a family vacation, retirement savings, or a rainy-day fund. Because of Wal-Mart’s ability to effectively fulfill its purpose, customer loyalty is strong and personal.

Customers don’t walk into Wal-Mart expecting to find assistance in every aisle, employees who will carry their shopping bags to their cars, or expensive artwork on the walls. They expect to find the lowest prices on products they can grab off the shelves quickly. That is Wal-Mart’s purpose and its brand promise — nothing more, nothing less. It is simple and unique to Wal-Mart.

Outside of the slight brand edge Nordstrom has been able to garner, other retailers of Wal-Mart’s size are interchangeable for most customers, who tend to buy the products they need from the store located closest to them. Contrary to that tendency, people go to Wal-Mart because of they see a specific value.

Adding value for customers or clients creates meaning for employees. The more people working for an organization understand how the company contributes positively to customers, their communities, and the world, the more they are engaged to help. This same principle applies for customers, too. Communication is key.

To ensure that people around your business are aligned with your organization’s core purpose, communicate a clear, simple, and undeniable reason it exists, beyond making money. If you are struggling to determine what your organization’s purpose is, ask:

What void would be left for customers or the community if my business were to disappear today?

A simple, meaningful, and well-communicated purpose is core to Wal-Mart’s success, and its purpose serves as the company’s north star, aligning organizational execution and ensuring that the retailer continues to drive in the right direction.

 Wal-Mart’s Execution

Every action Wal-Mart takes — at every level of the organization — supports the retailer’s purpose. From the no-frills corporate offices to its requirement that all employees, even executives, empty their own trash, Wal-Mart makes a point of keeping its costs down so it can sell products for less. Stores resemble warehouses, outfitted with only what is needed to hold and sell products. Extra trimmings are simply not part of Wal-Mart’s formula.

When I speak about Wal-Mart in my keynotes, I frequently get comments about how difficult vendors find it to deal with the company. Whether they are being beat up on price or held to strict delivery and quality standards, few vendors are singing Wal-Mart’s praises. But strict vendor management is critical to Wal-Mart executing in line with its purpose. Every additional cost it incurs must be passed on to customers so the retailer remains profitable.

High prices and inventory, excessive product returns, and disruption to the supply chain all increase the cost of goods sold. This, in turn, impacts Wal-Mart’s ability to fulfill its purpose, and if it fails to fulfill its purpose, it becomes like every other retailer. Customers begin to shop elsewhere, sales and profits decline, and Wal-Mart joins the list of retailers struggling to keep their heads above water.

Wal-Mart’s purpose requires tightly controlled costs and executional excellence from every employee and every partner. Running smooth and lean is the only option. If pennies matter to customers, they need to matter even more to Wal-Mart and its employees.

 

Because Wal-Mart has a clearly defined purpose and a culture that supports that purpose, employees, job candidates, and customers all know what to expect when they arrive. This expectation helps drive the right people to the business. If you are looking for a high-end shopping experience or posh working environment, you won’t be knocking on Wal-Mart’s door. However, if you want to save money or are passionate about helping others do so, Wal-Mart is a good fit.

Creating genuine alignment in any business comes down to effective marketing to customers and job seekers alike. At Wal-Mart, for example, if new recruits are personally cost-conscious and frugal, they will stay focused on what is important to them and ultimately to Wal-Mart and its customers. If they are not, they will quickly stray when the opportunity arises, execute on the wrong things, hold Wal-Mart back from its true potential, and experience less success than those who are properly aligned within the business.

Believing what the organization believes is key. This translates into honest and personal connections and a sincere interest in helping fulfill the intended purpose. From an execution standpoint, fulfilling Wal-Mart’s purpose means selling more products to more people for less, becoming more profitable, and continuing the cycle.

Walton’s Legacy

Sam Walton rallied his employees with, “If we work together . . . we’ll give the world an opportunity to see what it’s like to save and have a better life.” This is meaningful to people — both employees and customers. When I think back to my high school and college days of working in retail stores, I can only remember the mantra of “sell more.” It is not surprising that none of these retailers — large or small — are still in business.

 

Walton changed the face of retail through his commitment to balancing purpose and execution in his business. If Wal-Mart promised low prices but ran a poor business with substandard execution, the brand promise would be worthless. Customers would fail to believe in or trust the business and start shopping elsewhere. Wal-Mart leads the pack because of its focus and commitment to its purpose and its ability to out-execute its competition in line with that purpose.

Revisiting the third grocery sector: the rise of the grocerant trend

2017-05-30

 A recent Wall Street Journal article connected food retailers’ increasing emphasis of store perimeters with flatlining sales of iconic center store CPG brands and underscored that the emerging concept of supermarkets as “grocerants” is maturing into the mainstream. This is hardly a startling new revelation to us or to many across the food and beverage industry. For more than a decade now, here at The Hartman Group, we’ve been telling the tale of the fresh revolution and the redefinition of quality away from packaged and processed food products that led to the center store migration.

For the past twenty years we’ve observed a single, overarching theme encompassing the vast cultural shift in the food world: namely, the pursuit of all things real — expressed here primarily though cultural distinctions of “fresh.”

Fresh is the most salient cultural distinction in the food world. It is an indicator of quality, healthfulness and taste, and such a distinction often affects consumer shopping behavior in critical directions. We find that products in refrigerated sections always score high marks in terms of freshness perceptions, the operative logic being that refrigerated areas are reserved for the most perishable of products.

The move toward fresh implies the gradual replacement of traditional CPG products with “fresh” counterparts, on a category-by-category basis. From CPG products to grocery retail to quick service and fast casual restaurants and even local farm economies, the growing and evolving consumer interest in quality fresh products and offerings is transforming the food and beverage marketplace. And nothing is more evident of this transformation than the prepared foods sections of the supermarket, or what we referred to six years ago in an issue of our Hartbeat Exec as the “third grocery sector.”

The third grocery sector is about redefining quality on low-stakes occasions while also minimizing the harsh comparison between higher-quality restaurant meals we used to, and still want to, consume — even on low-stakes eating occasions. Restaurants have been in a tug of war with supermarkets for share of the consumers’ food dollars for years.

Traditional supermarkets, specialty grocery and convenience stores have had to elevate their fresh prepared offerings due, in no small part, to the popularity of fast casual restaurant brands like Panera, Chipotle and sweetgreen. Much of the success of fast casual formats stems from the fact that fresh food experiences — which the chains specialize in delivering — are the essence of consumer evaluations of quality in restaurants today. Not only has the rise of the fast casual channel disrupted food retailing, it has altered consumer perceptions of eating out.

As with any industry, there are savvy players who read the tea leaves correctly and get out ahead of the herd. Food retailers like Wegmans, Whole Foods Market, Mariano’s and H-E-B’s Central Market have emerged as talented grocerant operators bridging the gap between restaurants and supermarkets with high-quality fresh prepared food offerings.

While shoppers are flocking to both dine-in and takeout from prepared foods sections staged by grocerants, we believe there is much to be learned from fast casual restaurants for food retailers trying to distinguish themselves with shoppers through their prepare foods and in-store dining programs and offerings.

Food retailers should be mindful that over the past decade or so, consumer expectations of restaurant chains have evolved beyond seeing them as sources of fast, cheap, familiar and convenient comfort foods.

Innovations in fast casual formats have helped bridge the convenience of eating out with consumers’ aspirations for healthier diets. The Hartman Group’s Dining Out 2016 report finds that consumers now list “freshness” as a key marker of quality in restaurants. Across the four restaurant channels we surveyed (QSR, Fast Casual, Coffee Shops and Casual Dining/Full Service), when consumers talk about food that tastes “fresh,” they describe the experience of eating food that is made with simple, “real” ingredients (simple, fresh vegetables, fruit, whole grains, all natural/no artificial ingredients) and is minimally processed (cooked to order, open production, not sitting under heat lamps), all natural, free from artificial ingredients, more nutritious and has not sat around (thus less prone to food-borne pathogens).

It is important for food retailers to understand that restaurants have become fully woven into the fabric of American’s daily food lives and consequently consumers have become very savvy diners. Though many are regulars at restaurants, it is the rare consumer who visits only one restaurant channel and they do, in fact, seamlessly visit various restaurants for different occasions.

The rise of fast casual formats tracks the broader cultural shift away from highly processed foods and toward fresh, real and simple foods. While still meeting the demand for speed and convenience, these formats trade on evolving notions of freshness and quality offering:

• Open production and customizable, made-to-order food
• A focus on higher-quality, sometimes unique, menu items, ingredients and flavors
• Enjoyable yet healthier, better-for-you menu options
• Attributes of purity, sustainability and transparency
• Clean, modern design — including light, natural and reclaimed materials — combined with fun, playful décor.

Food retailers looking to capture some of the magic of fast casual restaurants for their grocerant offerings might consider these key points:

• Understand your value proposition. Price represents a potential hurdle for trial, and one of the biggest opportunities for increasing customer satisfaction in the fast casual segment. Various fast cCasual chains tap different aspects of modern food culture through cues of freshness, quality, indulgence, discovery, experimentation, health and sustainability. Consider what the appropriate mix and emphasis on these attributes are and how those are connected to the value proposition of your brand. Ultimately, retailers should not lose sight of the notion that value, speed and convenience are important priorities for consumers and areas of competition with restaurant operators.
• Make freshness a continuous line across all consumer touchpoints. The fast casual channel has already taken the lead in innovating around freshness via open production, customizability and made-to-order food.
• Ensure that atmosphere and design around in-store dining and serving areas are fully integrated into the eating experience. Among fast casual's many disruptive innovations has been the ability of such restaurants to integrate design, décor and atmosphere into their brand identity and narrative. Successful fast casual operators delight consumers with touches such as clean, modern design and the use of light as well as natural, reclaimed materials to evoke an emphasis on quality and freshness and distinguish themselves from the uniform, impersonal experience of a wide array of outdated dining experiences ranging from QSR outlets to aging grocery cafe's.

ALIBABA AGREES TO BUY 18% STAKE IN LIANHUA SUPERMARKET SUSAN WANG | JUNE 2, 2017

ALIBABA AGREES TO BUY 18% STAKE IN LIANHUA SUPERMARKET

SUSAN WANG  |  JUNE 2, 2017

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Alibaba Group has agreed to purchase 18% stake in Hong Kong-listed Lianhua Supermarket from online fresh fruit and vegetable retailer Shanghai Yiguo E-Commerce, making it the second-largest shareholder of China’s leading supermarket chain.

The investment deepens Alibaba’s collaboration with Bailian Group, a retailing conglomerate that is Lianhua’s parent company. It’s also in line with Alibaba’s larger efforts to transform traditional commerce into a new model, one the group calls “new retail.” The new retail model taps into consumer demands across multiple channels by harnessing data and offering a seamless online and offline experience.

Alibaba first forged a strategic partnership with Bailian in February. Its goal was to leverage both companies’ consumer data to integrate offline stores, merchandise, membership programs, logistics and payment tools to deliver a better overall shopping experience and enhance overall business efficiency.

At the end of 2016, Lianhua Supermarket had 3618 outlets nationwide in 19 provinces and municipalities, including hypermarkets, supermarkets and convenience stores. Alibaba said in a statement that the deal will “redefine retail by delivering consumers a unique shopping experience that they have never seen before.”

Under the new retail model, information Alibaba and its merchants collect on consumers can be used to better identify, reach, analyze and serve the more than half-billion users on Alibaba’s platforms.

Alibaba has this year taken steps to remove the seams between vendors and brands on its Tmall and Taobao online shopping sites and bricks-and-mortar stores.

In January, Alibaba offered to privatize Chinese shopping mall operator Intime Retail. The deal involved Alibaba operating stores that featured Tao brands selling apparel and home products that had only been available online before.

Alibaba also teams up with merchants in the automotive and furniture categories to offer car maintenance and home-furnishing services, helping to drive more traffic to physical stores.

The Reimagining of Cumberland Farms

MARCH 29, 2017 | BY AL URBANSKI

Cumberland Farms, a convenience store fixture in New England and central Florida for half a century, once fielded more than 1,000 stores. Today it has pared down to 600 stores as it transforms itself from a strip-center and gas station dairy store to a chain of freestanding, modern C-stores providing food service and gasoline, along the lines of Quik Check and Wawa.

 

The chain’s transformation was explored during a session at Chain Store Age’s 53rd annual SPECS conference, held March 12- 14, at the Gaylord Palm, in Kissimmee, Fla.  

 

Fran Sheflin, Cumberland Farms’ director of planning and construction, recounted the family-owned chain’s decade-long journey of rebranding, reimaging, and remodeling at the session. 

 

It started with an appeal from Cumberland Farms CEO Ari Haseotes to The Moseley Group in 2007, a Franklin, Massachusetts-based retail food and beverage consultant. Haseotes recognized a new, customer-service-oriented trend developing in the C-store industry and desired to take part. 

 

Moseley surveyed consumers and found that, along the way, Cumberland Farms had lost its original connection customers as a local, family-owned farm store. The response was a simultaneous downsizing and upscaling of the chain based on a reinterpretation of core principles unearthed by Mosely. Customers said the brand was about community, farm fresh foods, and energy, but that they would like to see more choice and innovation in foodservice and more green energy sources in stores.

 

REBUILD: The only way to communicate such values, Moseley argued, was to tear down the current Cumberland Farms model and rebuild it. A new mission statement was crafted, new leadership was put in place, and new store designs and products were to follow. The company engaged the services of the architectural and design firm HFA, which happened to located in same Franklin office park as Moseley, and the transformation was underway.

 

Larger, more open space was devoted to foodservice inside the stores, which themselves were crafted in two varieties — sleek boxes for urban areas and colonial-style buildings for suburban locations. HFA architect James Owens said that Haseotes insisted on using the colonial-themed stores in Florida as well as up north to give the chain a point of difference in the Sunshine state. 

 

“He said he wanted the stores to look like they dropped in out of the sky from New England,” Owens said.

 

A white-green-and-blue palette was chosen for new Cumberland Farms branding to convey the milk-store and ecological energy concepts. That brand dress and an updated logo were applied to everything from drink cups to gas pumps. But that was easier said than done. While the Haseotes family accepted all the changes being proposed by Moseley and HFA, they insisted that the logo had to remain intact.

 

It wasn’t just that the blue-and-white Cumberland Farms logo with a tree blossoming out from the “l” had become instantly recognizable among Floridians and New Englanders over the decades, it was the meaning the logo held for the Greek immigrant family who founded the chain.  

 

“Throughout this whole process, one thing was made clear by the family,” said Sheflin, who has worked at the company since the Seventies. “The logo was not to be touched.”

 

That tree sprouting from the logo was not just any tree, but the Greek “Tree of Life.” The shade of blue in the logo came directly from the Greek flag. But the image that the old logo brought to the mind of consumers was that of the old Cumberland Farms, and the family was finally won over to a newer, greener version that featured a more organic representation of the Tree of Life while still retaining the Greek blue.

 

Between 2009 and 2013, 141 Cumberland Farms stores were remodeled in the new style and 28 new stores were built. Since then, new builds have been working harder to convey the new image, with 105 going up against 34 remodels.

ONE-QUARTER OF FOOD AND DRINK LAUNCHES IN GERMANY IN 2016 CARRIED AN ORGANIC CLAIM

 

Published on May 31st, 2017

 

 

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The market for organic food and drink products in Germany is now one of the most innovative globally according to Mintel, as it hosted the highest proportion of organic launches globally in 2016.

Research from Mintel Global New Product Database (GNPD) shows that a quarter (25%) of all food and drink products launched in Germany in 2016 carried organic claim, the highest percentage globally. This is up from just 18% of launches in 2012.

While Germany is currently the leading market for organic food and drink innovation, as many as one fifth of all launches in Sweden (22%), the Netherlands (20%), Czech Republic (20%), Denmark (19%), and Austria (19%) also carried an organic claim in 2016. In contrast, only 14% of launches in the US and 6% in the UK were organic. Globally, one in six launches (16%) of organic food and drink occurred in Germany in 2016.

Katya Witham, Senior Food and Drink Analyst for Germany at Mintel, comments:

“In keeping with the German nation’s love for healthy, natural products, the organic market has been flourishing in recent years. The rise in organic product innovation comes as consumer health awareness continues to grow alongside a higher environmental conscience. Combined with an increasing disposable income, this fuels the uptake of organic products across food and drink categories in Germany. “

Indeed, Mintel research shows that German consumers are increasingly interested in organic food and drink. Over one in five (22%) German consumers claim to be purchasing more organic food and drink in 2017, compared with only 17% in 2016. What’s more, the share of German adults willing to pay more for organic food and drink has risen from 18% to 24% in this time period. This compares to 22% of consumers in France saying they’re willing to pay more for organic products, with this figure falling to 17% in Poland, 16% in Italy and as little as 14% in Spain.

German parents are especially likely to be looking for products with organic credentials. One quarter (25%) of German households with children say that they buy more organic food and drink, compared with only one fifth (21%) of those without children. Similarly, German consumers’ willingness to pay a higher price for organic food and drink is higher among families with children. For 27% of German households with children, organic fare is worth paying extra for, compared to 23% of respondents without children. Furthermore, Mintel research shows that 71% of all launches carried an organic claim in 2016.

Looking to the future, it seems that the organic boom is also catching on in products targeted at adults, including alcoholic drinks. Mintel research highlights, however, that organic wine still remains under-penetrated in German households, compared to other organic food and drink categories. In 2016, only 7% of German adults reported buying organic wine, with the participation rates increasing slightly among more mature consumers aged 35-54 (9%).

There are opportunities to boost consumption, as Mintel’s research shows that over half (57%) of German wine buyers are prepared to spend more on a ‘craft’ wine, while almost one in three (30%) claim to be more likely to buy a wine brand with an interesting and authentic back-story.

“Given consumer demand for natural ingredients and reassurances about provenance, organic wine makers could benefit from promoting their authentic, artisanal and ethical credentials. Organically grown wines will also resonate well with the locavore, farm-to-table movement, as well as with the rise of sustainable consumption. But in order for organic wines to move out of their niche, producers will need to educate German consumers about the credentials that make organic wines worth buying.” Katya concludes.

Aldi and Lidl UK market share hits 12 percent

By

Nicole Jeary

-

May 31, 2017

Aldi and Lidl continue to demonstrate strong growth in the UK.

The popularity of German budget supermarkets Aldi and Lidl has continued to grow, with latest figures revealing their market share has hit 12 percent in the UK.

According to data from Kantar Worldpanel, sales at Aldi grew by 19.8 percent and at Lidl by 18.3 percent in the 12 weeks to 21 May. Conversely, the UK’s four largest supermarkets, Tesco, Sainsbury’s, Asda and Morrisons, collectively grew by just 1.6 percent.

This means that both Aldi and Lidl are demonstrating their fastest levels of growth in two years, as concerns over price rise and inflation continue to motivate the supermarket choices of shoppers.

Chris Hayward, consumer specialist at Kantar Worldpanel, commented: “Consumers are starting to feel the pinch as prices continue to rise, with the average household spending an additional £27 on groceries during the past 12 weeks.

“That may not seem like much, but if inflation continues at its current rate over the course of a year that would mean an extra £119 spent on groceries per household.

“Overall sales in the supermarket sector grew by 3.8 percent year-on-year to £25.5 billion – the strongest increase since September 2013.”

Inflation has been of particular concern in recent months, with sterling continuing to sharply devalue following the Brexit vote back in June last year.

In response to currency movements and higher importation costs, supermarkets have steadily begun to increase grocery prices, driving consumers to select more purse-friendly alternatives such as Lidl and Aldi.

Back in November, a survey conducted by MyMoneySupermarket and The Guardian revealed that prices had risen as much 5.7 percent since the referendum in supermarkets such as Sainsbury’s (LON:SBRY) and Morrisons (LON:MRW). 

The UK’s largest supermarket Tesco (LON:TSCO) is currently awaiting the verdict of an investigation by the UK competition authority into its proposed merger with Booker (LON:BOK) foods.

Should the authority deem it appropriate, Tesco may have to offload several of its supermarket locations to ensure continued choice and competition within the industry.