Supermarket Wellness Watch: Kroger takes a stand against hunger, food waste
When you think of health and wellness in the retail setting, what often comes to mind are better-for-you products, in-store health services, and other high-profile topics.
However, there are other health-related subjects that don’t get as much exposure, but are still highly important. These include anti-hunger programs, and efforts to reduce food waste.
Supermarket giant Kroger is taking a big stand on both of these issues in a major new corporate commitment. It launched a “moonshot” initiative called Zero Hunger| Zero Waste back in September aimed at “ending hunger in the communities Kroger calls home and eliminating waste across the company by 2025.”
More recently, the Cincinnati, Ohio-based retailer unveiled television and radio ads in some 191 media markets nationwide to build awareness of the campaign during the holidays. This is being supplemented by store-level customer giving programs benefiting local food banks and hunger-relief organizations, and “Kroger’s year-round, industry-leading, fresh food donations program,” the company said.
“We understand nutrition plays a critical role in wellness, and we want to make sure our program contributes to people having balanced meals,” Kristal Howard, Kroger spokesperson, said in an interview for this blog.
In the U.S., some 42 million people struggle with hunger, and roughly 72 billion pounds of food are placed into landfills each year, according to the company. The challenges of large amounts of food being unconsumed while people face hunger are linked. Discarded food can be donated for anti-hunger efforts.
“As America’s grocer and one of the largest retailers in the world, we are committing to do something about it,” said Rodney McMullen, Kroger chairman and CEO, in a recent statement.
Kroger’s program includes the following goals and activities:
- Create a $10 million innovation fund as part of The Kroger Co. Foundation to address hunger and food waste.
- Expand food donations to provide some three billion meals by 2025 in Kroger market areas.
- Donate “more balanced meals” through Kroger’s fresh food donation efforts.
- Partner with Feeding America and World Wildlife Fund on efforts.
- Advocate for public policy solutions to tackling hunger, which include pushing for continued funding of federal hunger relief programs.
- Eliminate food waste by 2025 and develop transparent reporting on this effort.
- Push for public policies that support waste prevention and diversion of waste from landfills, including with recycling , composting and other sustainability efforts. Kroger aims to achieve the “Zero Waste 2020” goals contained in its sustainability report.
Health and wellness drives a plethora of activities across Kroger’s wide-ranging portfolio. This includes organic, natural and better-for-you foods; sustainable packaging; pharmacy; specialty pharmacy, clinics, and other areas.
The food industry as a whole has addressed the waste challenge through the Food Waste Reduction Alliance, a joint initiative of the Grocery Manufacturers Association, the Food Marketing Institute, and the National Restaurant Association. Its stated goals are to reduce the amount of food waste generated, increase the amount of food donated to those in need, and recycle unavoidable waste to divert it from landfills.
Having Kroger’s muscle behind efforts to combat hunger and food waste will boost industry-wide achievements. Already since its initiative was launched just a few months ago, Kroger donated nearly 3 million meals, Howard said. This indicates the momentum is growing for successful attacks on these challenges in the near future.
HealthBeacon’s prescription for adherence
An elderly patient comes home from a doctor visit with a new set of prescriptions to manage her high blood pressure. The new meds are added to her already crowded daily regimen, but the first week is fine, in part because the patient has family members in town who help her adjust to the new medications.
But then the family leaves, and the patient struggles to remember the correct dose of her medication and when to take it. Not long after, she suffers a mild stroke and is rushed to the hospital.
The scenario may be a fictitious one, but it’s also one that’s a real possibility when patients fail to take their medications as prescribed. One study found that people with high blood pressure who don’t take their medications when they should have a higher risk of stroke — and of dying from it — than those who adhere to their prescription schedule.
In fact, medication noncompliance has huge implications on not only people’s health, but on health care and the costs associated with it. It’s a growing challenge, but one that a new wave of innovators and entrepreneurs are looking to get a handle on.
“Despite the remarkable advances in medications, patients still are struggling to take their medications on time and as needed,” said Jim Joyce, CEO and co-founder of HealthBeacon, a medical technology company based in Dublin, Ireland, that’s working to improve medication compliance. “It’s a huge problem in the healthcare industry and in people’s lives, but it’s one that technology and innovation is helping us get our arms around.”
Innovation in action
Joyce had spent 10 years helping patients with chronic medical conditions when he and co-founder Kieran Daly came up with the idea for HealthBeacon’s main technology, which helps address medication compliance issues. The HealthBeacon device is a smart sharps bin for patients who self-inject medications at home. It is digitally connected and programmed with personal medication schedules, and uses customized reminders to help patients stay on track.
Not only does the technology help improve patient outcomes, but also it is on track to help lower clinical costs and make improvements in how pharmaceutical costs and resources are directed.
“We saw a real need for patients to benefit from technology when it comes to medication management,” Joyce said. “But these technological innovations go far beyond that and will help disrupt the entire industry.”
HealthBeacon has already made strides in the industry and has been growing rapidly. The company raised 1 million euros in a 2016 seed round and, with the backing of Enterprise Ireland, a government agency that helps Irish companies expand into global markets, opened an office in Boston earlier in 2017.
HealthBeacon is not alone in taking on medication compliance. With the rise of the smartphone, countless apps have come about that help patients adhere to regular medication schedules. Such companies as Medication Management Systems offer comprehensive, technology-backed services that ensure patients are taking their prescriptions when they should, while other firms offer automated reminders, counseling lines and other tools to keep people on track.
Such companies as Dose Guardian take a more analog approach with advanced pill-box options, which include at-home packaging systems that ensure patients get the right dose at the right time.
“I think there’s a lot of room in the industry to address the challenges of medication compliance,” Joyce said. “In the end, the goal is largely the same: to eliminate the issue and, in the process, help more people live healthier, longer lives.”
Donal Cummings is the vice president of digital health and life sciences at Enterprise Ireland.
Engaging the new shopper
Who is today’s shopper? It’s a simple question with a very difficult and complex answer. The fact is that shoppers are difficult to pigeonhole these days. They have access to more information than ever before, and their expectations are changing constantly.
Ever-changing consumer needs make it harder for retailers to keep pace and are forcing merchants to do everything in their power to understand who they are dealing with. This means developing strategies to figure out ways to not only get them to return to their stores, but keep walking out with purchased merchandise.
Some say that retailers just need to embrace the new culture and cater to their customers’ needs. For example, one of the biggest changes. Bill Bishop is noticing among retailers is a shift toward consumer advocacy. Bishop, the chief architect and co-founder of the Barrington, Ill.-based food industry advisory website Brick Meets Click, points to the new advertising campaign launched by Longo’s, the Canadian supermarket chain based in Toronto.
In an attempt to attract younger shoppers, the campaign stresses Longo’s family standards and emphasizes the grocer’s desire to offer millennials food they would not hesitate to serve to their own family members. The campaign’s objective is to show that Longo’s wants to meet consumers’ high standards and promote trust in its brand.
To illustrate his point, Bishop tells how a bakery might offer a well-behaved child a free chocolate-chip cookie. The cookie is a reward for the child, and it shows the store notices and advocates for good behavior.
“People will go out of their way, in my experience, to work with a retailer who they think understands them,” Bishop said. “That is not a normal tactic for bringing people into the store. It has nothing to do with price or item or promotion.”
This marks a shift and highlights the new role of shoppers-as-advocate, as Daymon emphasized in its global retail study, “From Shopper to Advocate: The Power of Participation,” released in June. Among the insights on the new consumer that the Stamford, Conn.-based retail strategist’s report offers is the fact that a large group of consumers now are interested in co-creation — having their ideas and feedback incorporated into the business strategy of a retailer they frequent. Keeping apprised of what shoppers want from their stores, the report says, is the key to innovation.
“The whole advocacy idea, I think, is rooted in a cultural shift that’s taking place where there’s increasing distrust of institutions, whether it’s the big medical establishment or government or big business,’’ Daymon’s director of thought leadership Carl Jorgensen said. “People feel that they really need to take matters into their own hands, whether it’s their personal health or whether it’s a change they want to see happen at their retailer, so you get this advocacy or activist mentality.”
The Daymon study points out that the new shopper expects “greater engagement with and personalization from retailers and brands.” It notes that segmenting shoppers by such traditional demographics as age, gender and nationality, is no longer enough, and that they must focus on shopper values, attitudes and lifestyles must be emphasized. To attract the new shopper retailers should make the store into a destination; stretch the concept of “fresh” to include prepared meals and local products; use technology to communicate and inform; and somehow, the study said, streamline and simplify the shopping experience.
“We’re fond of saying here that the pace of change has accelerated,” Jorgensen said. “As the consumer changes in ways that were unimaginable a few years ago, retailers and brands need to adapt with equal speed. Standing pat is no longer an option.”
Nicole Peranick, Daymon’s senior director of thought leadership, added that digital empowerment is not the only factor driving shoppers’ higher expectations. The pervasiveness of health-and-wellness trends, as well as more information about what constitutes a good diet, are also influencing consumers. The result is that shoppers look for new and better over-the-counter health and beauty products, as well as different foods and beverages to try.
“When you add to it just the overall economic uncertainty and skepticism, it’s really important for retailers and brands to take a stronger position on topics and be a catalyst for change to make a more positive impact on shoppers and their in-store experiences,” Peranick said, adding that although the economic indicators are positive, people are spending strategically and have new perceptions of value.
John Stanton, a professor of food marketing at Philadelphia’s Saint Joseph’s University, said supermarkets must focus on the shopping experience because it is something online competitors can’t duplicate. In his study, “The Changing Retail Environ and the Impact On Produce Marketing,” Stanton noted the increase of in-store restaurants. Kroger, for example, is opening comfort food restaurants in or near its stores, and West Des Moines, Iowa-based Hy-Vee is revamping its Hy-Vee Market Grille restaurants to cater to on-the-go consumers while offering a full-service bar for those who want to stick around. Hy-Vee also is set to soon open the first of 26 Wahlburger restaurants.
Stanton also pointed out that one Philadelphia supermarket he recently visited offers a series of upscale fast-food type restaurants to customers as they enter the store. “If you look at some of the successful companies like Costco, there are tons of sampling places,” he said. “It’s just kind of fun to go there and try this and try that. You know what else? You never know what’s going to be there on sale. They might have coats one week. They might have Mandarin oranges the next week. It’s like a treasure hunt when you go there.”
In its study, Daymon mentions several examples of in-store innovations that enhance the shopping experience.
- CVS Pharmacy has “discovery zones” inside its stores that take a holistic healthcare approach, product assortment and education addressing health, sleep/mood and immunity problems;
- Peranick pointed out that Walgreens’ New York City banner Duane Reade offers a sushi bar, a juice bar, hair salon, nail salon and complimentary beauty services at its Wall Street flagship store;
- Hy-Vee has a program that enables various customer groups to use store kitchen equipment to prepare a recipe together, and then divide up the meals they’ve made and take them home;
- Lowes Foods, based in North Carolina, invites shoppers to its community table to try locally produced food products and attend cooking classes offered by local chefs; and
- With a nod to customer advocacy, Peranick cited the Dutch grocer Marqt, which has a bulletin board on which customers can post comments and have store employees respond for all shoppers to see.
Private brands are another way retailers can separate themselves from the competition. As David Rogers, president of DSR Marketing Systems in Northbrook, Ill., pointed out, private-brand penetration in Europe is more than 50% — a much higher percentage than it has in the United States.
“With private brand, they make a better margin to support their costs, and they’re supporting themselves rather than some other firm,” Rogers said of European retailers. “I’ve always found it a little bit nuts that these (U.S.) retailers want to carry these big brands because they should be promoting their own name wherever possible with a product that’s just as good.”
Dave Harvey, Daymon’s vice president of thought leadership, stresses that private brands are not limited to products. They can be store services, as well. As an example, he said a grocer could offer a fruit and vegetable cutting service to customers who shop in the produce section.
“Carrefour in Italy was branding their own section, which hooked up shoppers with local electricians and plumbers and other types of trustworthy services they could utilize in their community,” Harvey said. “It’s a way to connect the shopper to the community through an exchange service provided by the retailer, which is private brand.”
Another way Harvey sees retailers trying to promote interaction is through innovation centers, which allow consumers to provide product-development feedback. He said shoppers are increasingly interested now in taking a hands-on approach. “We’re starting to see more interactive merchandising displays or ways they can customize — whether it’s picking a customized assortment of products or the way they’re able to pick their own promotions,” Harvey said. “They can form a collection of items and pick which ones they want their discounts on by using their loyalty cards.”
Digital technology has revolutionized the shopping experience, and savvy retailers can take advantage. One such innovation is Apple’s iBeacon, which allows users to receive promotions for items near where they are in the store. Bishop noted that the iBeacon isn’t as pinpoint precise as it needs to be, but that progress is being made with proximity marketing. As the iBeacon is perfected, Bishop noted that in-store screens can be used to influence shoppers.
“There’s a little company called Channel 3 that, instead of using the beacons and the phones, actually has 20 screens scattered throughout the store,” Bishop said. “You can stop by in any particular aisle and see promotions. What you do is key in the last four digits of your phone number, and then you get a personalized set of promotions.”
Kroger is working on digital shelf-edge technology that, through interaction with a Kroger app, can highlight products and offer shoppers personal prices. The high-pixel display allows prices to be changed with the flip of a switch, which is a labor savings.
“I believe when we talk about integrating digital communications, ideally the integration should be operational to the point where it saves money,” Bishop said.
Consumer advocacy, unique product offerings, in-store restaurants, services and clinics, shopper interaction, targeted promotions and digital shopping enhancements are all tools the retailer can use to attract customers.
But one element not in the mix — and one that’s traditionally preferred by most retailers — is lowering prices.
“Take a look at the really successful chains — they generally are the more expensive chains,” Stanton said. “There is an obsession with low price in supermarkets.”
In Stanton’s opinion, by stressing low prices — but not going low enough to match the prices at discounters like Aldi, Lidl or Walmart — most supermarkets give away margin.
“The everyday low price offer of Aldi and Lidl — that is the cutting edge,” Rogers said. “Everyone has Amazon fright, but I think much more serious for the grocery industry is Aldi and Lidl. Drug stores need to keep an eye on what Aldi and Lidl are carrying because they’re not just carrying food — they’re carrying cosmetics and a lot of general merchandise.”
Rogers added that Aldi and Lidl are involved in a discount war, and that the two are lowering their prices as their battle ground shifts from Europe to the United States. That price war, in turn, pressures Walmart into lowering its prices and starts the dominos tumbling across the industry.
By being less price conscious, finding other ways to attract customers, and separating themselves from the competition, retailers can stay above the fray.