Progressive Grocer

2017 Category Management Handbook

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52 | Progressive Grocer | 2017 Category Management Handbook | December 2016 In the second quarter of 2016, organic sales at SpartanNash, which operates several retail banners as well as distributing to independent grocers and military commissaries, saw 29.9 percent growth in the company's wholesale business and 18.6 percent growth across its corporate-owned stores. Industry observers also note shoppers' focus on the perimeter. e Hartman Group, in Bellevue, Wash., finds that many shoppers focus their wellness priori- ties there. Within the perimeter, priorities show some slight differences, but the bottom line is that custom- ers are placing a higher value on simple, natural foods with as little processing and additives as possible. According to a Hartman Group report: "Bakery shoppers prioritize having no artificial ingredients, no preservatives and no high-fructose corn syrup; dairy shoppers seek low fat, 100 percent natural and fat-free; deli and prepared foods shoppers look for natural, no artificial ingredients and low sodium; specialty cheese shoppers seek natural and no artificial ingredients or preservatives; specialty meat shoppers prioritize having no artificial ingredients or preservatives, and minimal processing." e challenge for many stores is to build a bridge between the perimeter and other sections of the store, especially the center, and one way to facilitate that is to ensure that packaged foods have labels that match fresh food attributes. Hartman's "Engaging the Evolving Shopper" report notes that "natural" and "no artificial ingredients" top the list across all specialty departments, and encourages grocers to look for ways to cue these qualities throughout the store. Using Wellness Ambassadors Sometimes, written cues aren't enough to lead shop- pers to healthful choices, and that's where store staff comes in. "Customer interaction is everything," says Alex Strauss, chef at Hy-Vee Market Grille, in West Des Moines, Iowa. Just as chefs go out into dining rooms and interact with diners during peak dinner hours, Strauss likes to wander around his store and stop and chat with shoppers. Often, the conversations are about eating for health and wellness. "I get questions like, 'Why doesn't my quinoa taste like yours?' 'What are other supergrains should I try?' and 'What's the best gluten-free pasta?'" he notes, adding that such queries help him stay on top of what the concerns and issues are. Strauss also sees his cooking in the store and in the community as a way to educate people about better- for-you choices, like using silken tofu as a way to add creaminess to dressings and dips. "Sometimes you have to convert people into becoming salad eaters," he notes, "and that's why I like heftier salads with lean pulled meat, edamame and creamy dressings." Supporting New Wellness Shopping Patterns Grab-and-go is another eating and shopping pattern that influences wellness choices. Consumers who once relied on the drive-thru and other fast-food ven- ues for convenience are now turning to grocery stores for quick, clean food. "e rise of the fresh-to-go trip is becoming increasingly popular and is grounded in a need for convenience," notes Pam Basciani, group director for retail channel strategy and commercialization at e Coca-Cola Co., in Atlanta. "It's a shift led by the younger generation to make wellness a priority in their lifestyle. Sales of prepared or bundled-ingredient meals have grown 30 percent since 2008, and 17 per- cent of store trips now include a fresh-to-go purchase. As a result, prepared food is growing four times faster than the total store. Additionally, 37 percent of these trips include a ready-to-drink (RTD) beverage pur- chase, representing a great opportunity for incremen- tal beverage sales." Basciani encourages retailers to cross-merchan- dise cold beverages like bottled teas and premium still and carbonated water with complete meal solutions to increase basket size and profits. Snack- ing is another wellness opportunity with bundling potential. Coca-Cola cites studies showing that 45 percent of all eating occasions are snacking, and that more than 52 percent of all snacking occasions include a beverage, according to the 2014 "Study of American Snacking Behavior." "We also are starting to see more snacking op- tions throughout the supermarket. e continued expansion of fresh fruits, vegetables, and protein- based meals and sides is key," says SpartanNash's McAdow. "ere are lots of customers now that just snack throughout the day as opposed to eating full meals. ere are also a lot of people that supplement their diets through the day by snacking. I think this is a category [where] we will continue to see significant growth." "We are starting to see more snacking options throughout the supermarket. The continued expansion of fresh fruits, vegetables, and protein-based meals and sides is key." —Jeremy McAdow, SpartanNash Need States

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