Supermarket Wellness Watch: Grocery retailers boost health strategies
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.
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Kroger excited about new presidential administration
CINCINNATI — Will President-elect Donald Trump be good for Kroger’s business? The retailer’s stock has enjoyed a sharp rise since Trump was named the 45th president.
“Well, so far it certainly looks that way,” Kroger CEO Rodney McMullen said during an interview on CNBC. “We look forward to working with the administration and getting the growth again and more jobs started, so it’s exciting.”
McMullen said job growth is what he is looking forward to the most when the new administration gets to work in January. “One of the key things is creating stability and confidence to spend and invest for the future.”
However, there is one headwind standing in Kroger’s way. Food deflation, or a decline in the price of products, is a near-term challenge, McMullen said.
“If you look at the last 25 or 30 years, we’ve had three periods of deflation in grocery,” he said. “This is the third time. Typically it lasts three to five quarters and we’re in the middle of that process right now.”
McMullen added going through a period of food deflation is “no fun,” but Kroger will get through this period and continue to grow.
McMullen was also asked to comment about e-commerce in the grocery business.
“Online has been something that has been really important to us,” said McMullen. “We now have 531 stores with ClickList [an online ordering, pick-up-in-store service]. “We’ve had tremendous growth. It’s one more thing for customers to determine how to shop with us.”
In addition, McMullen was questioned about the competitive landscape, with a particular focus on whether Amazon’s previous announcement that it plans to enter the grocery and convenience store business is a threat to the Cincinnati-based retailer.
“We are so focused on understanding our customers and their needs and making sure we deliver against their needs,” responded McMullen. “Competitors will do all kinds of different strategies but what’s most important and what our associates do a great job of is focusing on that feedback from the customer and making sure we are delivering what they need.”
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Fear and loathing along the consumer path to purchase 2016
President Donald Trump — nobody saw that coming.
Except maybe one man Drug Store News interviewed for our January 2011 cover story: Stewart “Stewie Rah-Rah” Rahr, the free-wheeling billionaire-philanthropist and former owner/founder of Kinray, the largest privately held drug distribution company at the time he sold it to Cardinal Health for some $1.3 billion.
“[Trump] would be an amazing president,” Rahr told DSN in an interview about the deal and what life after Kinray held in store for the self-made tycoon — among the 400 wealthiest people in the U.S., according to Forbes magazine. “He possesses the attributes the country needs. He’s intelligent and a tremendous negotiator. He’s a leader in every sense of the word, and he loves America.”
True to his word, Rahr played an important, albeit quiet, behind-the-scenes role during the election. According to published reports, a Donald Trump promise to veterans last March was paid for with a check from the Stewart Rahr Foundation, and rumors are that Rahr could be rewarded for his loyalty with an ambassadorship.
All that said, back in 2010 — hell, even just a week ago — a lot of people thought he was crazy. In a December 2010 DSN online poll, 74% of users believed that a Trump White House would be bad for the industry.
Fast-forward to 2016, and a series of DSN polls about the Presidential race would play out very much like the actual election: 58% of users believed a Trump presidency would be better for business; 50% believed it would be better for health care, and 51% said they planned to vote for Trump.
Who would have known that a DSN online poll could be more accurate than any pollster in America in the weeks and days leading up to Election Day?
"The key takeaway is that Americans today feel disenfranchised, disillusioned and disappointed — conservatives as much as liberals. That is why the election turned out as it did. Voters — consumers — want to feel connected to something, something that is meaningful. Half of America felt that they were not.”
There is no question that our country is more deeply divided now than any time since the Vietnam War. Certainly, millennials — which retailers and brand marketers spend so much time trying to reach these days — have never experienced anything like this. If you were watching the demonstrations that broke out in cities across America on the day after the elections, you saw a lot of young faces in the crowd.
The key takeaway is that Americans today feel disenfranchised, disillusioned and disappointed — conservatives as much as liberals. That is why the election turned out as it did. Voters — consumers — want to feel connected to something, something that is meaningful. Half of America felt that they were not.
That message is as true for retailers and CPG companies as it is for political candidates. More than ever, purpose matters. What your brand stands for matters. Authenticity matters.
And complacency kills. Just ask Hillary Clinton and the millions of her supporters that got a big surprise last Tuesday.
Rob Eder is Editor in Chief/Associate Publisher of Drug Store News.
MedPage Today also had Trump by 51%. Pharmacists and Doctors for Trump. I'd been pointing that out to people and telling them they'd better not be to certain of Hillary.
Dear Rob, As a consumer, Millenial, and member of the DSN community, I found your opinion piece interesting with the exception of your concluding statement, And complacency kills. Just ask Hillary Clinton and the millions of her supporters that got a big surprise last Tuesday. As a Hillary Clinton supporter pre and post election, I have to argue that her supporters were not complacent, and because we are not complacent, this country is now experiencing the protests you mentioned in your article. If complacency kills, surely you can not reference Clinton supporters as being complacent. We're in the streets, not dead.
I am almost speechless as to how to respond to your article. When DSN did their little 'vote-thing', a very large percentage of pharmacy-oriented people voted for Trump. When you announced your conference, you indicated that you were having a 'guest speaker' from Fox. The stats seem to lean to the fact that those in the pharmacy world wanted Trump and everything that he brings with him. Now you are surprised at the fact that many are disgusted at the sexist, racist and bigoted President that was elected?