Picture a train that's left the station and is picking up speed. That's my analogy for how the health and wellness trend is impacting supermarkets.
Health merchandising is an important trend for all retail channels, but it's particularly crucial for the grocery channel. How it’s playing out will be the focus of this ongoing blog.
Supermarkets are being disrupted. There are familiar categories in the center aisles of stores that are under pressure from the growing demands of a new breed of consumers seeking healthier products. Many are looking to options in store perimeter departments, from produce to prepared foods. These fresh products aren’t always healthier, and packaged food manufacturers are improving their acts, but consumer perception is what counts.
How is the supermarket industry responding? It has made notable progress so far. Innovative supermarket retailers are reimagining their experience with reformulated products. Many are hiring registered dietitians to lead the education charge for shoppers. Shelves are blanketed with labels that rate items on various health scales. Pharmacies are offering a wider range of services. There are even a growing number of offerings that deepen the experience, from healthy cooking classes to gyms.
The changes are evident at big and small retailers alike, from giant chain Kroger to smaller, family-operated independent supermarkets.
Many grocery stores are trumpeting change through their private label lines, clearly an area they have a lot of control over. Wakefern Food Corp, which runs ShopRite stores, just launched a line called “Wholesome Pantry,” which not only tells shoppers the included ingredients, but more importantly what’s not included. It is free from 110 ingredients, ranging from artificial colors to preservatives. And you can see a list of all 110 here.
The dollars at stake in health and wellness merchandising are huge, with one estimate putting natural and organic product sales across retail at more than $100 billion, which doesn't even account for other types of wellness categories.
Supermarkets and their retail cousins are gathering lots of information about what works and what doesn't. Many grocers have already decided, for example, that integrating natural and mainstream products together on shelves makes more sense than having segregated aisles. It took a long time to come to this conclusion, and not all retailers are on board yet. These are valuable lessons learned about consumer preferences.
In this highly competitive retail environment, supermarkets will need to keep reading shoppers in real time and responding quickly. How will this story develop? Stay tuned.
David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries.