Forget what you thought you knewabout supermarkets. How Americans buy food is changing, says Phil Lempert, the self-styled “Supermarket Guru,” a food industry analyst who runs a website by the same name.
Not only will produce departments shrink, the frozen food section will shrivel to about one-third its current size, he says. Checkout procedures will be geared to consumers’ needs. More product information will be available, with everything from recipes to nutritional details made easily accessible with smart phones.
“It’s all about the consumer,” he says. “They’re saying, if you pay attention to me and reward me, I will come back. Quality is where it’s at. Consumers are demanding more excellent service than ever, too.
“That started with the recession. Surveys show that 53 percent of consumers say they dislike supermarket shopping; 14 percent say they hate it. What they hate most is their experience at checkout.”
Lempert spoke to about 1,500 rapt potato farmers and industry representatives at the National Potato Expo at Orlando, Fla.
Smart retailers know their customers and use demographics to identify products that most interest them, he says. For one example, Austin, Texas-based Whole Foods Market understands its market niche well, leading the supermarket sector in stock performance in 2011, with a share-price gain of 37.54 percent. That’s three consecutive outstanding years for Whole Foods, Lempert says — coming in an economic recession, no less.
“Who is your consumer?” Lempert asks, urging the potato industry to indentify who buys its products, and why. “You can break it down into psychographic groups, but here’s what I say: visit stores. Go up to consumers standing in front of a beautiful potato display, and ask how they make buying decisions.”
Research shows 88 percent of consumers say taste is the number one factor when buying food products, Lempert says.
“Enjoyment is the key — make it fun for people. Consumer panel research shows that people love potatoes. They get passionate about potatoes; they think potatoes are really cool. So, take advantage of it.”
Food retailing is evolving quicklyas consumers demand better-tasting, higher quality products. Farmers need to stay on top of the trends. “How do we get to the future faster?” Lempert asks. “What’s the next big trend? What’s the next big elephant you’ve got to get in front of? What are three things you’d like to know about consumers? Get in the stores and find out — you’ve got to always be in front of the elephant if you’re going to succeed,” Lempert says.
Lempert urges farmers to figure out what they can do to help consumers have a better, more enjoyable supermarket experience. “What role do you as farmers have in the supermarket? Get in there with lectures and tours. Talk to the people buying your product. Supermarkets want farmers to help add sexiness to the marketplace,” he says.
In 2012, the food world will see at least 10 game-changing trends, Lempert says.
1. Food prices will increase.“There is little doubt that in the coming years, we’ll continue to see food prices rise, based on environmental conditions as well as offsetting higher production costs,” Lempert says.
“Many savings tactics most shoppers deployed in 2007 as the recession began are still being used each time they shop for groceries — using coupons, frequent shopper cards, shopping lists, shopping at non-traditional food stores and trading down to less expensive brands are part of their regular routine. Look for consumers to shave costs by augmenting their recipes by decreasing the amount of the more expensive meats and seafood and adding more non-meat proteins that are filling and less expensive – pasta, tofu, brown rice and vegetables.’
Supermarkets will begin offering layaway plans, with a 10 percent store bonus to attract customers to some more-expensive items. In addition, more consumers will use smart phones to calculate per serving portion food prices.
2. More people will shop and eat in groups.The rise of food blogs is building interest in food. They provide a conversation and sense of community as it relates to food. Food trucks now popular in many urban areas familiarize people with exotic ethnic dishes they have never experienced.
“Coordinated through smart phone apps, communities will emerge based on specific channels of food interest, like Greek food, beef, vegetarian and gluten-free, versus the old communities built around similar demographics or socio-economic traits. Expect the next app updates to include social rewards for these groups that shop together, much like the original concept of warehouse clubs — offering steep discounts for members,” Lempert says.
3. Baby Boomers hold the key to marketing success.“The generation of 76 million who started turning 65 last year will control 52 percent of the total $706 billion spent on groceries by 2015, making them the largest food influencers and purchasers. Nostalgia is important for this generation.
“What do we do to appeal to this generation? They’ve been in the spotlight since Day 1. They’re seeking health benefits. Expect supermarkets to cater to them, not only by offering foods, beverages and services to satisfy their growing interests and need for health, but to take a good look at the physical shopping experience — make sure the aisles are wide, the shelves are lower, and most importantly, make them feel welcome and respected.”
4. Farmers will get more fans.“People want to know who grows their food. The time of the celebrity chefs is gone. Celebrity farmers are in. This will give the industry a new face. Last year we saw sales flourish among grocery retailers who jumped on the movement among consumers to ‘buy local.’ In this age of transparency, interest in the farm-to-fork journey has grown. Part of that is the food scares people have experienced, and part of it is a desire to know more about how the food we serve is being produced,” Lempert says.
“More farmers are leading the conversation by using blogs and social media sites to tell their story. In September, the United States Farmers and Ranchers Alliance launched an $11 million program designed to open the dialogue with consumers. Expect to see more advertising and television programs starring these real food experts.”
5. Bye-bye, checkout lane.“We will see mobile checkout apps for smart phones,” Lempert says. “Supermarket retailers are faced with a problem — the GS1 DataBar standards are impending, and barcode scanners need to be updated, which is a huge investment.
“At the same time, chains including Wal-Mart and Macy’s are pushing suppliers to add RFID chips to individual items. And then there is Google Wallet and other mobile device apps that will allow shoppers not only the opportunity to find out nutritional, allergy and country of origin information on individual products, but also allow them to receive special offers, electronic coupons, flash sales and to checkout themselves.
“For many shoppers, high-tech adds to personalization, with suggested purchases and targeted offers based on their histories in the store, which is typically delivered in a functional way.”
In this case, high-tech will make for a friendlier shopping experience. With many consumers saying they are unhappy with checkout services, Lempert thinks retailers will change that routine.
“What gets to me is the express lane, the lane for people with 10 or 20 items, or a gallon of milk and some dog food. Why give them an express lane? They’re rewarding people they lose money on with the best service. If I owned a supermarket, express lanes would be for full carts only and I’d put the best cashiers in that area.”
6. Ethnic food revolution continues.“Food trucks offer new food experiences with all kinds of ethnic foods and give them credibility. We’re going to see more and more ethnic food in 2012. They’re replacing gourmet and specialty stores and helping people experiment and discover new food experiences.”
Food trucks are often staffed by cultural members of the foods being sold, adding to the authenticity of the experience for consumers. As a result of this new market building, Lempert expects food companies and retailers to begin selling authentic ethnic dishes, recipes and ingredients.
7. Men expand their new role.“Men are sharing shopping and preparing food,” Lempert says. “A Bureau of Labor Statistics shows that 41percent of men now do the food preparation. The Wall Street Journal reported that men who spend more time in the kitchen have better family relationships.”
8. More people eat at home.“We’re seeing extreme home cooking because of the economy. They’re saving money but what they’re doing is trying to make the most for the least. You could call it ‘value meals.’ It’s more than just saving money — it’s a focus on price and taste instead of convenience.”
9. How sweet it isn’t. New federal dietary guidelines urge Americans to reduce sugar usage, and that’s just what they’ll do. “I hope we’re seeing the evolution of the American palate. If we cleanse our palate over the next couple of generations, we all win,” Lempert says. “Look for reduced sugars to be the biggest health claim, along with a revised nutrition fact panel.”
The new panel will explain whether sugars are added, occur naturally, or are a combination of the two. “Sugars are sugars in terms of the caloric significance, but whether it’s naturally-occurring or added is the actual game changer,” Lempert says.
10. Listening for food sounds.“What does biting a potato chip mean? We’re going to see more ultrasensory principles than before. Multisensory perception will be one of the new food sciences in 2012.
“Research is now under way at the Crossmodal Research Laboratory at Oxford University to understand how our brains process information from our different senses to form our food experiences. That will no doubt add yet another dimension to shoppers’ decision-making process as to which foods to choose,” Lempert says.
All things considered, consumers now pay closer attention to food than ever before, Lempert says.
“We’ve gone through a very strange year in 2011 when you think about the food recalls, the weather disasters, the gas prices, the economy, and so on. Because of the combination of all that has happened, attention to food is higher than ever at the consumer level.”
His advice for turning that interest into new marketing opportunities: “Cater to health and wellness. Create convenience and a ‘Wow!’ taste experience. Celebrate food and its preparation. People want more information about foods, sogive it to them.”