Article originally appeared on Forbes.com, here.
By Phil Lempert
The 2016 Trends
This year, more than ever before it is critical to take a look at just how consumers and retailers are changing the food world as the battle for the American Meal heats up.
Trend #1. Agnosticism:
Whose customer is it anyway? Consumers are becoming brand agnostic. Retailer agnostic. Daypart agnostic. Amazon started it all as they own the customer experience and the brands they offer have little or no relationship with the buyer. Brands like Hilton or Starwood know less about you than Expedia or Kayak.
Because of the sophisticated online tools, consumers no longer care which hotel brands they book. Their preferences are stored and become richer in data and proactively make suggestions to insure each experience is successful. This is the trend you should be most worried about as retailers lose their relationships with food shoppers to brands like Instacart and Uber Eats who are making the retailer or restaurant practically invisible as they continue to offer choices from multiple outlets. They own the customer. For supermarkets to win back the relationship they must become a one-stop “eco-system” similar to Yelp’s Eat 24: offering reviews, recipes, selection, ordering, ePayment, tracking and delivery. It’s time to fight for that shopper relationship
Trend #2. Have it your way:
This trend goes well beyond the Burger King TV slogan as segmentation and personalization continue to grow in importance. Shoppers want retailers to recognize and inspire them. Every shopping trip. Every product. Hartman predicts that by 2020 mid-market consumers will become more selective and continue to upgrade their culinary and healthy eating skills. Not just for food seeking Millennials, or the top 1% – personalization will become pervasive; finally bringing to reality the concept that Martha Rodgers and Don Peppers first wrote about in The One-to-One Future back in 1993. Food retailers will need to curate their offerings, and understand what all of their customers’ wants and desires truly are if they will remain in business and grow and compete with online sellers who continue to hone their algorithms and offerings based on purchase history. Preemptive distribution will begin to take hold as shoppers become more familiar with the same price, hand delivery, expert benefits from retailers like enjoy.com. Personalization moves from being a plus for some to a must-have for all.
Trend #3. Bioregions:
“Local” has been one of the biggest trends in the supermarket aisles for almost ten years. It is an unsustainable trend as weather conditions and climate change force changes to the sourcing of foods. Thinkbioregions. Nature defines the regions for what crops and livestock grow and thrive best in which climates, and we will see changes accordingly. Think about this: California farmers moving to Georgia because of the cost of water, and more wines coming from South Carolina. Produce growers moving to Peru.
A recent study by A.T. Kearney found that women and children – are willing to pay more for locally produced food. The ultimate in local? Growing lettuces, herbs and yes even kale in your own kitchen year-round without herbicides. Perhaps the ultimate in bioregions? TheUrban Cultivator and Grove are coming to your home very soon.
Trend #4. Micro-stores:
Far from the everything-and-the-kitchen-sink hypermarkets, look for smaller, neighborhood grocers to spring up. These stores, such as ALDI (with over 1,400 locations in the U.S. and counting), Bfresh in Boston,Green Zebra in Portland are more relaxed, attentive and curated, with a heavy emphasis on products that Millennials yearn for, and buy. Excellent private and exclusive brands with prices that this generation can afford. Think about how Lund’s & Byerlys’ Kitchen with 17,000 square foot that includes a 4,000 square feet sit-down restaurant and scores of local beers on tap. The grocerant trend will continue as more supermarkets look to share of stomach vs. market share against their traditional competitors. These retailers are proactive offering benefits to their shoppers to build that relationship across many touch points. One example is how ALDI announced their decision to remove certified synthetic colors, partially hydrogenated oils and MSG from all its exclusive brand foods by the end of 2015.
Trend #5. A new way of eating:
Beware of Dr. Google. Your shoppers now rely on search engines to find out about diets, health issues, nutrition and what they should be eating. According to the 2015 SupermarketGuru National Grocers Association Consumer Survey, the internet is the number one source for nutrition information and as almost 50% of people in the U.S. say their diet could be healthier, this trend will continue – unless your store can disrupt the pattern by offering retail dietitians, health fairs and a 24/7 source of unbiased food and health information. In 2016 we will see new kinds of proteins that are more sustainable and affordable than animal sources. Algae, nuts, vegetable, yeast and even insects will be used as ingredients to up the protein punch and we will see development of new healthier profiles such as Thrive – a cooking and salad oil made from algae that has 75% less saturated fat than olive oil and has the highest level of monounsaturated fat.
Look for an emphasis on “less is more” – fewer ingredients, and many more products touting their “free from” claims – free-from growth hormones, free-from GMOs and even stoic brand like Kraft Mac & Cheese and kids’ breakfast cereals highlighting their free-from “artificial” claims. 28% of shoppers want minimal processing and one-quarter say they want a short list of ingredients. IFIC’s Annual Food & Health Survey reports that 36% of shoppers say they worry about chemicals in their foods; and foods labeled with a health attribute have enjoyed a sales increase of 13% in the last year, vs. overall flat sales throughout the store.
Trend #6. Evolution of the millennial generation:
There are now more Millennials than Baby Boomers and although they got a late start in their careers they are now earning dollars, getting married and moving out of their parents homes. Millennials garner a lot of attention, and they buy very differently. There is no difference to buying online or in a store. They buy 24 hours a day. Nine out of 10 prepare dinner at home three or more times per week. Nearly three-fourths say they want to be a better cook, but they’re not following Betty Crocker recipes. They’re checking out Instagram photos for inspiration and then experimenting. Only 56% feel confident in the kitchen offering supermarkets a great opportunity to build a relationship with cooking classes, online videos and information.
A third of millennial shoppers consider environmental concerns when buying foods, over 50% back brands and companies that support their local community and 47% avoid buying from companies that have poor labor practices. They shop in 9 different food retailers over a three-month period as compared to just over 6 for Boomers. They are spontaneous, flexible, contradictory and adventurous. It’s all about collaboration, connection, community and conversation.
Trend #7. A delivery shift:
It already feels as though you can order any food at any time and have it delivered in a flash, and that trend will only increase. One major change is that people of all age groups are willing to pay extra for that service. While still in its infancy, Amazon, Google, Instacart and Uber are leading the way as over $500 million was invested in food delivery start-ups in 2014. On demand everything is here, as meal delivery kits offer no waste, portion-controlled meals for healthier balance, more excitement and on trend recipes. Look for 2016 to add another layer as celebrity chefs brand the offerings and consolidation begins and one or two major brands, like Blue Apronbecome the Amazon of meal kits. Supermarkets will begin to use driverless vehicles to deliver fresh, refrigerated, frozen and dry goods to homes. A text alert will show the vehicle location and a PIN code to open your locker and retrieve your foods. No tipping. Up next annual concierge fees like Amazon Prime and Instacart Express that include unlimited delivery fees.
Trend #8. Technology to the rescue:
In every way, from supply chain to point-of-sale systems to loyalty and more, technology continues to affect the food retail industry, and there’s no chance of that stopping. But as so many technologies flood the market, some of them aren’t that reliable. Retailers should be certain they have accurate and relevant information on their websites and apps, so shoppers don’t have to go to other sources – that may mislead. We cherish our mobile devices, and believe everything that is on the screen. The opportunity to retain a shopper relationship will come through information, service and empowerment. Now more than ever we need to equip store level personnel with information and technologies that can answer the questions that shoppers have. To create a food experience like no other with tastings and classes. To truly be the center of a community.