IDDBA Releases What's In Store 2017 Retail and Market Trends Report

BY LINDSEY WOJCIK

Published: 10:26 AM November 21, 2016
 

The International Dairy-Deli-Bakery Association (IDDBA) has released its What’s in Store 2017, the latest edition of the annual trends publication, and What’s in Store Online, a collection of over 150 downloadable graphs and tables, as well as white papers. With over 30 years of credible reporting, What’s in Store is an essential dairy-deli-supermarket foodservice-bakery-cheese resource providing vital data on the retail and market trends, growth, and category changes shaping the food industry.

The What’s in Store research report features exclusive expert interviews and third party sourced content, infographics and key insights, and graphs and tables that provide readers with insightful commentary on retail fresh trends.

Five themes help readers gain new insights and learn about marketplace influences and shopper buying habits: The economy and retail trends, channels and competition, consumer lifestyles, eating trends, technology and marketing.

This themed narrative is also reflected in each of the product chapters: bakery, cheese, dairy, and deli/retail foodservice.

What’s in Store 2017 helps members understand how retail and manufacturer go-to-market strategies continue to transition to best-in-class shopper-centric food and merchandising solutions, according to Mary Kay O’Connor, vice president education at IDDBA. “Customers are at the helm now and clearly in control,” O’Connor says. “Their ever-evolving needs and palates seek convenience, value, freshness, and culinary innovation. Competition is intense. How one proactively engage with shoppers’ desires, lifestyles and trip missions is critical toward ensuring a prominent role in today’s changing food roadmap.”  

Top highlights of the Economy & Retail Trends chapter include:

• Top hurdles facing retailers include vulnerability of regional supply chains to natural and external disasters like drought; continued growth of e-commerce; continued consolidation that creates competitive dynamics; adapting to rapidly changing behaviors; and Amazon’s expansion into online grocery.
• Traditional retailers continue to lose market share to non-traditional channels; traditional grocery commanded 46 percent of grocery and consumable product sales in 2015, compared to 90 percent in 1988.
• E-commerce is the fastest growing retail channel, projected to grow 23.1 percent by 2020. Other fast-growing channels include fresh format (8.6 percent) and limited assortment (7 percent).
• Transparency, social responsibility, and traceability will continue to grow in importance in consumer shopping behavior.

Top highlights of the Channels and Competition chapter include:

• Store growth continues to be driven by non-traditional channels like convenience stores, warehouse clubs, supercenters, and dollar stores. 
• Fresh perimeter represented 36.8 percent of grocery sales, up from 35.6 percent in 2013 and 36.5 percent in 2014. Center store sales dropped to 63.2 percent, down from 63.5 percent in 2014 and 64.4 percent in 2013. 
• Food retailers outpace restaurant delivery food and online meal/ingredient kit channels for convenient meal solutions. 
• Seventy percent of U.S. consumers say their food preferences are driven primarily by what they encounter in restaurants. 

Top highlights of the Consumer Lifestyles chapter include:

• Income polarization in the United States is as wide as it has ever been. The top 20 percent of households are making 50 percent of the income, while the bottom 20 percent are making 4 percent. The middle class is shrinking, and it’s shifting where money is being spent in the store.
• Millennials are more likely than other generations to incorporate a customized eating approach—such as a paleo, gluten-free, or vegan diet—with 44 percent doing so within the past year. Unlike past generations that have made a commitment to these eating approaches, Millennials seek out these diets simply to try them and are not 100% committed.
• The annual and per-trip basket rings ($6,935 and $54, respectively) of Hispanic Americans are higher than other shopper demographics.
• The number of households in which both males and females shop is increasing, resulting in more shared shopping. But, a growing percentage (29 percent) of households are also single.

Top highlights of the Eating Trends chapter include:

• Top food and culinary trends include chef-drive casual concepts; locally-grown and–sourced produce, meat, and seafood; more “free-from” products; plant proteins; drinkable foods; open-flame cooking; and natural food processing (fermentation). 
• Snacking occasions continue to increase, with 83 percent of consumers snacking daily in 2016, compared to 76 percent in 2014. 
• Consumers continue to view health and wellness in two ways: fresh, less-processed (i.e., clean labeling, inherently nutrient-dense, organic); and “premiumization” (i.e., high quality ingredients, storytelling, transparency).
• Sales of all categories of gluten-free food are increasing, totaling approximately $11.6 billion. The largest sales growth has been in the snack category.

Top highlights of the Technology and Marketing chapter include:

• While still a small percentage of overall online sales, food and beverage purchases will exceed $50 billion by 2020. 
• Over half of U.S. retail grocers have an online sales strategy, while Amazon is capturing 48 percent of all online grocery trips. 
• Digital intermediaries—applications like Google, Yelp, and Uber—are becoming increasingly more relevant to food retail for engaging with shoppers. 
• Retail food purchases using a physical credit card will become obsolete in the future, as more convenient and more secure mobile payment systems and smartphone technology will become the preferred payment choice among shoppers.

Top highlights of the Bakery chapter include:

• Top bakery trends for 2016 include: growth of organic products and clean labeling; more “free-from” claims (e.g., gluten, lactose, preservatives); more flexitarian options (e.g., egg, butter, milk alternatives); and more natural processing. 
• Health and wellness claims sought by bakery shoppers include: no preservatives; no artificial colors or flavors, chia, quinoa, presence of grain; and no high fructose corn syrup. Trendy bakery product ingredients include functional flours, sprouted grains, and organic attributes. 
• While bakery sales are increasing, sales of bakery bread have remained flat and, in some instances, have declined. IDDBA’s latest research, Total Store Connectivity: Revealing New Pathways to Win with Bakery Breads, illustrates the natural correlation bakery bread has with other store products, providing retailers with cross-merchandising opportunities for pairing bread with other items. 
• Signature and individual portion sizes are growing in importance in bakery products.

Top highlights of the Cheese chapter include:

• Per capita natural cheese consumption in the United States increased 27 percent between 1995 and 2014, with Americans eating over seven pounds more, for a total of 34 pounds per year. The largest growth is in Mozzarella, while consumption of Swiss and processed cheeses has decreased.
• Hispanic influence is driving cheese sales; In 2015, more Queso Fresco was sold at retail than Brie, Feta, and Goat cheese combined.
• Simple and clean ingredients are cheese purchase drivers, with over half of shoppers preferring cheese with no additives or preservatives, and 30 percent desire organic choices. 
• Natural cheese sales and volume have risen since 2010, while processed cheese sales and volume have remained flat.

Top highlights of the Dairy chapter include:

• Among the current trends in dairy products are bold and spicy flavors, as consumers seek out new taste experiences; athletic tie-ins highlighting the recovery benefits of protein; greater interest in dairy as a snacking option; and renewed interest in fat’s wellness attributes.
• U.S. per capita dairy consumption increased 6 percent between 1994 and 2014, despite a 22 percent per capita drop in milk consumption.
• Globally, dairy products are purchased about three times per week; in the United States, the average household purchased an item from the dairy department slightly less often than once per week at 43 times per year. 
• Families, specifically larger households, spend 40 percent more than expected on dairy products during shopping trips.

Top highlights of the Deli chapter include:

• Deli is the fastest-growing perimeter department, with convenient, innovative products continuing to be key elements of the department’s success and growth. 
• Deli meat trends include “clean” and “clear” labels; stories behind specialty meats; and merchandising through pairings and tastings. 
• “Charred” and “burnt” food preparation is growing in popularity, with 7 percent of menus listing such options. 
• All generations—not just the younger ones—want more natural, organic, antibiotic-free, and non-GMO foods, as well as proper labeling. 

The purchase price of What’s in Store 2017 is $99 for members and $399 for nonmembers.