I am asked with some regularity about whether e-commerce will obliterate the grocery store as we know it. I wouldn’t bet on it. It is true that food retailers have not (yet) seen the same kind of disruption owing to convenience seeking and showrooming behaviors that other types of merchants face. Meal kit services have made a big splash and gotten more folks cooking, but I wonder if people keep the training wheels on once they become comfortable in the kitchen.
So long as most people still can’t answer the question, “What’s for dinner?,” I give the advantage to our favorite grocery stores-- whose scrappy merchandising and theatrical flair have always made us hungry, and whose aisles often serve as de-facto community centers.
Other trends are having a transformative impact on food retailers. One intriguing development is shoppers’ fascination and embrace of all things fresh. In bottled juices and drinks, fresh pressed, cold brewed and fermented options abound, as does an apparently unending thirst for novel drinks with benefits. It’s no longer enough for beverages to whet our whistles. Today’s offerings should also be loaded with antioxidants, contribute to gut health, and, ideally, be calorie free, or close to it. Organic producers are responding with myriad new products, which goes a long way toward explaining the nearly 22 percent growth in the Fresh Juices and Drinks recorded in OTA’s 2018 Organic Industry Survey.
The fresh trend extends far beyond the drinks category. The perimeter of the store is where all the excitement is, and the battle for shelf space in or near produce and the cold cases is, well heated. The NPD Group reports that eight out of every ten meals are consumed at home. That’s great news for the organic industry, and even better for its shoppers, because meals prepared at home tend to be healthier than those from restaurants. But, shoppers still need help wrestling that head of cauliflower into supper. Thus, organic spices and blends, which grew at an astonishing 33 percent last year, have found their way into produce sets, and onto the meat case. Salad dressings, sauces, salsa, and condiments--which once all resided center store--have been reimagined as perishables.
With shelf-stable products evolving into fresh and spices cozying-up with the celery, you could forgive a shopper’s vertigo. But there are also signs of hope: Bread is back! The Breads & Grains category has begun to recover from our long, national time of carb-shaming. Leading the charge in this category is, you guessed it, frozen and fresh baked breads. The frozen part of the category is where many specialty products (such as gluten-free and sprouted) are stocked, while in-house fresh baked breads continue to draw shoppers--generally all the way to the back of the store, no-doubt acquiring a few more staples in their baskets along the way. Together, frozen & fresh baked breads achieved 13.5 percent growth - more than double the rate of the overall organic food industry, which posted a gain of 6.4 percent in 2017.
It’s easy to spot further evidence of the fresh trend in your own stores, whether you are a shopper, retailer or marketer. But because everything is cyclical, I think it’s more fun to imagine the turn of the tide. What interesting new categories, ingredients, delivery mechanisms will draw us back to the center of the store? Perhaps retailers will double down on the trend, rethinking their stores to bring more fresh items into the grocery aisles. Whatever comes next, you can be sure that organic brands will continue to drive the trends, reshaping the supermarket, local co-op, and online retail world.
Angela Jagiello, Associate Director for Conference & Product Development for the Organic Trade Association, writes about organic trends (email@example.com)