Food Storage: Aligning Consumer Health and Retail Profits
COLORADO SPRINGS, CO--(Marketwired - March 15, 2017) - A host of diverse factors are converging to shine the spotlight on the food storage category as an important source of sales and profit growth for retailers -- and for supermarkets in particular.
Global Market Development Center (GMDC) -- an association that advances innovation in the marketplace, and enables members to connect, collaborate, create and drive commerce -- explores the dynamics that are taking place, and the evolving consumer attitudes that are driving the category in their latest whitepaper: Food Storage: Aligning Consumer Health and Retail Profits.
"At a time when food price deflation is squeezing grocery retailers' top lines, general merchandise overall is looming large as a source of growth," said Patrick Spear, president and CEO, GMDC. "Food storage has clearly demonstrated its value and is one of the fastest growing GM categories in the industry."
According to Nielsen data, sales of food storage items rose 3.1 percent in the food channel and 8.4 percent in drug in the most recent reporting season. Food and liquid containers are outpacing other important nonfood products and is driving shoppers to the center store aisles.
Retail executives contributed insights and experience in the whitepaper that reinforce the trend, noting strong sales growth and higher margins from food storage as a contributor for total store profits. "Last year, we saw sales of food storage grow tremendously as an item our shoppers were looking for," said Steve Davis of Weis Markets. "It achieved close to a double-digit increase."
Feel Good. Do Good
Consumers are seeking healthier food options, more fresh items, and they are eating more at home. They are also concerned about their environmental footprint and are seeking solutions to food waste and the amount of non-recyclable materials that are ending up in landfills.
Lead the Consumer Trends
The food storage shopper spends 21 percent more than the typical supermarket customer and the growth will continue to lead category sales for many years to follow. "Projections indicate that food storage containers will add an astonishing $2 billion in incremental sales between 2015 and 2020 to reach $3.7 billion," added Mark Mechelse, director of insights and communication at GMDC. "So not only are these positive growth trends sustainable, they also present unique opportunities for retailers as they meet consumer needs and drive a case to design the store of the future."
Macro trends re-shaping the behavior of the food storage shopper include:
- Complex Lifestyles: People need food and beverage containers that can travel without leaking.
- Rising Expectations of Experiences: Consumers show a desire for more fresh foods and gourmet items.
- Navigating Well-Being: The growing concern with health and wellness is being expressed in part by increased interest in controlling what we eat and how it's prepared.
- Changing Face of the Consumer: A diverse public has varied food tastes, many of which are being adopted by the general population. New family structures and meal occasions are creating different needs for preserving food.
- Living With Tensions: More people are aware of the cost and impact of waste and the need for sustainable practices and attitudes toward products.
"The time is right to take a fresh look at the sales and profit potential of important categories in the center store," said Dennis Bruce, vice president sales, Newell Brands. "Food storage is showing high-value to shoppers -- it has consistently beaten total store sale increases by a wide margin year-over-year across all channels of trade."
Next Practices
GMDC offers the following next practices for retailer food storage innovation:
- Engage shoppers by creating aisles without borders.
Identify high traffic zones and natural adjacencies to create secondary locations that tie food storage items in with related food categories, such as produce and bakery, to create "shopper solutions." - Tap into consumer trends and the impulse potential of food storage
Cross-merchandising food storage items with related food items builds impulse sales and connects with consumer concerns about freshness, nutrition and reducing waste. - Plan and monitor promotions closely to ensure optimal execution. Work out details prior to implementation and monitor the in-store to make sure sale items are in stock and properly merchandised.
- Don't miss out on seasonal promotional opportunities. The major holidays are obvious dates on the calendar, but there are additional periods that should be considered.
- Be Bold! As Steve Hensley of Hy-Vee says, "Being bold is important. The most important factor is having the courage to bring in the extra inventory."
For a comprehensive look into the social and economic factors, generational differences and the changing lifestyles driving the growth of the food storage category, view the white paper executive summary at: https://www.gmdc.org/content-library.
About GMDC
Global Market Development Center (GMDC) energizes members and the marketplace by advancing a culture of Connect-Collaborate-Create-Commerce. As the leading GM and HBW trade association, GMDC is dedicated to serving its ecosystem of more than 600 General Merchandise and Health Beauty Wellness retailers, wholesalers, suppliers and service/solution member companies by enabling consumer-facing innovation and retail reimagined. GMDC's combined member volume represents more than 125,000 retail outlets and more than $500 billion in sales. To learn more, visit gmdc.org.
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