Fresh - IRI€¦ · A good Fresh Prepared department can bring in new, loyal shoppers 31% Of Fresh...

Fresh Top Trends in

Fresh Prepared February 25, 2016

Copyright © 2016 Information Resources, Inc. (IRI). Confidential and proprietary. 2

FMI is the trade association that

serves as the voice of food retail.

We assist food retailers in their role

of feeding families and enriching

lives.


ASSET PROTECTION

EDUCATION RESEARCH

FOOD SAFETY & DEFENSE

GOVERNMENT RELATIONS

SUSTAINABILITY

SUPPLY CHAIN

HEALTH & WELLNESS

PRIVATE BRANDS

FRESH FOODS INFORMATION SERVICE

CENTER STORE CONSUMER &

COMMUNITY AFFAIRS INDEPENDENT

OPERATOR

COMMUNICATION WHOLESALER

TECHNOLOGY

The Association:

Our members are food retailers, wholesales and

suppliers of all types and sizes

FMI provides comprehensive programs,

resources and advocacy for the food, pharmacy

and grocery retail industry


Fresh @ FMI

Fresh Foods

Emphasis on fresh

• Produce

• Meat

• Seafood

• Deli/In-store, fresh prepared foods and

assortments

FMI is committed to the growth and success of fresh

companies and their partners. FMI provides resources

and networks that support the interests of member

companies throughout the global, fresh produce supply

chain, including family-owned, private and publicly

traded businesses as well as regional, national and

international companies.

Rick Stein Vice President, Fresh Foods

Food Marketing Institute

[email protected]

202.220.0700


FMI Fresh Foods

Research and Education

In-depth information, trends and

insights to foster innovation,

take advantage of new

opportunities and help develop

winning strategies

Networking

Share ideas, explore best

practices and develop business

relations

Advocacy

Understand what is going on in

Washington and make your

voice heard


FMI Fresh Executive Committee John Ruane (Co-Chair)

Ahold USA

Rick Steigerwald (Co-Chair)

Lund Food Holdings, Inc.

Tom DeVries (Past Chair)

Giant Eagle, Inc.

Jason Anderson

Affiliated Foods Midwest Cooperative, Inc.

Bill Artman

Giant Eagle, Inc.

John Beretta

Albertsons, LLC

Dave Bornmann

Publix Super Markets, Inc.

Scott Bradley

Target Corporation

David Bridges

Publix Super Markets, Inc.

Jerry Chadwick

Lancaster Foods, LLC

Alex Corbishley

Target Corporation

Chris Darling

Albertsons, LLC

Jerry Edney

Associated Wholesale Grocers, Inc.

Mary Fuhrman

Hy-Vee

John Grimes

Weis

John Haggerty

Burris Logistics

Mark Hilton

Harris Teeter LLC

Christopher Lane

Wakefern Food Corporation

Mike Malone

Brookshire Grocery Company

Dan Murphy

Unified Grocers, Inc.

Pat Pessotto

Longo Brothers Fruit Markets Inc.

Jerry Suter

Meijer, Inc.

Geoff Waldau

Delhaize America

Blaine Bringhurst*

Price Chopper Supermarkets

Steve Mayer*

Schnuck Markets, Inc.

Nicole Wegman*

Wegmans Food Markets, Inc.

* Silent members(*)

The FEC seeks to

• identify areas of

collaboration across all

fresh foods departments

• promote understanding

and cooperation

throughout the industry

and with sister fresh

associations

• maximize common

learning’s between fresh

categories and to create a

vision of leadership for the

entire fresh category

Fresh Foods


FMI Fresh Foods Leadership Council John Ruane (Co-Chair)

Ahold USA

Rick Steigerwald (Co-Chair)

Lund Food Holdings, Inc.

FEC Members

FMI Fresh Executive Committee

Glen Dolezal

Cargill

Chris DuBois

IRI

Michael Eardley

International Dairy-Deli-Bakery Association

Jim Ethridge

National Cattleman's Beef Association

Sherry Frey

Nielsen Perishables Group

Paul Mastronardi

Sunset Grown Produce

Michael Higgins

Hussmann

Henry Pellerin

Hill Phoenix

Jeff Oberman

United Fresh Produce Association

Janet Riley

North American Meat Institute

Tristan Simpson

Ready Pac Foods, Inc.

Tom Super

National Chicken Council

Jarrod Sutton

National Pork Board

Joe Watson

Produce Marketing Association

Joe Weber

Smithfield Foods Inc.

Art Yerecic

Yerecic Label

The FFLC is..

Comprised of FMI Member

companies, industry trade

association and fresh

focused knowledge partners

Fresh Foods


Our study focused on finding the keys to high performance

Objective

industry interviews primary data analysis secondary research

Inputs

Define the major trends that are driving Perimeter sales outperformance and

will directly impact long-term success of retailers and suppliers over the next 3-

5 years


Consumer Demands

Industry Response 5

Trends


Major Conclusions

Trends are still in the early stages of growth Embracing these trends drives sales outperformance Requires strategic perspective across categories and departments Will set foundation for next generation of retail business success


Fresh Prepared 2


The Perimeter is

becoming:

The fulcrum point for maximum retail

differentiation

Base for deeper and more engaging

customer experiences

Focus for space expansion


Leaders are using

Fresh Prepared to:

Compete with restaurants and

specialty channels

Create stronger emotional linkages

with customers

Create dominant franchises and

separate from competitors

Gain bargaining power with

suppliers

Photo Courtesy: Ravings by Rae


Fresh

Prepared is

the fastest

growing

Perimeter

Department


Fresh Prepared - Accelerating Growth

$8.5 $9.1

$9.9 $10.8

$4.88 $4.95 $5.05 $5.13

2012 2013 2014 2015

Revenue $B $/lb Growth %

Source: IRI FreshLook POS data, MULO, 52 weeks ending 11/29/2015

6.7% 7.4% 8.0% 9.8%

Fresh Prepared Annual Sales Trends


The Greatest Untold

Story in Food Retail

Larger Than

Growing Faster Than

US Supermarkets

Foodservice sales are:

vs.


Entrees and Appetizers continue to dominate

Total Fresh Prepared

$10.8B

% Dollar Change

9.8%

$1.5B

+9.0%

Appetizers

$210M

+34.9%

Dips & Sauces

$4.0B

+10.1% $384M

+9.2%

Entrees Sides Soups

$74.7M

+23.3%

Salads

$1.5B

+9.0%


Within Fresh Prepared, there are pockets of enormous growth

+66% +51% +37% +32%

+24% +14% +10%

Meatloaf Guacamole BBQ Chicken Pulled Pork

Pasta Entree Breakfast Entree Mexican


East Coast is well developed, and growth is strong in all regions

+15% 9-12% 6-8% 5-7% <5%

16.8%

$1.1B

12.1%

$1.4B 8.1%

$1.2B

7.3%

$2.2B 8.6%

$857.5M

6.5%

$893.7M 9.2%

$2.1B

12.1%

$1.2B

% Growth Sales


$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

% Growth

RM

A D

olla

r S

ale

s

Dollar Sales and Growth by Market

Even retailers with large Fresh Prepared Foods categories can grow fast


19 29 36 53 66

9% 14% 18% 26% 33%

23% of Retailer Market Areas are growing faster than 15%

2015 Fresh Prepared Sales Growth Composition

25%+ 15%-25% 10%-15% 5%-10% 5% & less

Growth is surging as some retailer programs gain traction

Sales

Growth

Number of

RMA’s


% Total


Retailer offerings can be segmented into 4 models

Sit Down

Restaurants

Ltd. table service

Multiple dayparts

Sophisticated

Stations

Refined options

Café seating

Easy Meals

Takeout or

home meal

replacement

Limited

Offerings

Simple meals or daypart

occasions


Leading practices typically

include a portfolio of

concepts that can be

tailored to individual stores’

needs


Making Shopping an Experience


Making Shopping an Experience


12%

One Approach Need Not Fit All…

Fast Growth/

Sophisticated Fresh Prepared

Large Fresh Prepared/

Less Sophisticated

Large Fresh Prepared/

More Sophisticated

19%

49%

10%

12%

12%

17% 43% 59%

10% 12%

% of Total Fresh Prepared Sales by Category (Examples from Leading Chains)



24 24 21

39

32

0

5

10

15

20

25

30

35

40

45

0

2

4

6

8

10

12

14

16

18

20

Top 20% 20%-40% 40%-60% 60%-80% 80%-100%

Av

g.

Peri

mete

r S

ala

d B

ar

Ais

le F

oo

tag

e

2015 A

vg

. S

ala

d B

ar

Sale

s (

$M

M)

…And more space doesn’t always create more sales

Quintile Comparison of Top Retailer Market Areas for Salad Bar

sales compared to Salad Bar Linear Footage

Less space;

higher sales velocity

More space;

Lower sales velocity


Fresh Prepared shoppers have distinctive characteristics

Young Singles

Older Couples

Asian

Accul. Hispanics

$100K+ Income

HH 3 or Less People

Pacific Coast

Middle Atlantic

A Counties

Older Singles

Young Couples

$45K-$99K Incomes

North Central

South

B&C Counties HH Kids 0-6 yrs

HH 35-45 yrs

White

HH w/4+ people

New England

Mountain D Counties

Do

lla

rs p

er

bu

ye

r c

om

pa

red

to

US

ave

rag

e


A good Fresh Prepared

department can bring in new,

loyal shoppers

31% Of Fresh Prepared buyers

have a different primary chain

for Fresh Prepared than Total

Grocery

76% Shoppers spend 76% of their

Fresh Prepared dollars at

their primary Fresh Prepared

chain


Fresh Prepared trips create additional sales in the store

$47 Other Items Avg. $7

Average

Prepared

Foods

When Fresh Prepared

foods are in the basket,

what’s the value of the

other items purchased?

21%

$0-$10

16%

$10-$20

23%

$20-$40

28% $40-$100

12% $100+

% of Baskets and $ Value


Fresh Prepared 3-5 Year Outlook:

Continued 2x perimeter growth

Accelerated separation of high

performers

Continued refinement in concept

sophistication

Expansion of Fresh Prepared in

small format stores


Specialty

Foodservice

Transforms the

Perimeter

Specialty Foodservice

refers to the expansion of

traditional perimeter

departments that typically

offer more prepared or

more upscale offerings


Supermarkets continue to

add/expand departments that

reinvent the perimeter

Key Benefits Capture new occasions/trips

Enhance brand/market image

Create new experiences for customers

Increase customer loyalty to retailer


Produce

Fresh squeezed juice,

infused water and smoothies

+22% Over last year

+105% Over 3 years


Bakery

Individual Desserts

+18% over previous year

Emerging Trends:

Personalization

Entertainment

Customization

(breads/cakes, etc)


Deli

Specialty Cheese

Key Takeaways:

Store within store on island or

linked to other modules

Significant cross-selling benefits

(wines, breads, specialty meats)

Dedicated, trained department

staff


Deli

Charcuteries

Key Takeaways:

Both store w/i store and in-

line stations emerging

Strategic focus on winning

new trips and occasions

Platform for basket building


The winning recipe

• Set big goals – growth is fast

• Use store-level insight into current

and potential shoppers to identify customize by store

• Develop new approaches to talent acquisition, training, and retention for foodservice professionals

• Create capabilities that both manage costs and deliver a superior customer experience


2016 Individual Trend Launches + Education Plan

Jan 28 Feb 25 Mar 31 Apr 28 May 26 June

Food

Transparency

Fresh

Prepared &

Specialty

Foodservice

Next:

New Supply

Chains

Convenience

Connected

Consumer

Chris DuBois Steve Ramsey Chris DuBois

FMI Connect

Refresh/Update

Content Plan

Communication

Plan

Sally Lyons Wyatt

Webinar

Webinar

Webinar Webinar Webinar

Larry Levin


Thank You! Chris DuBois, Principal

[email protected]

(312) 342-8916

Rick Stein, VP of Fresh Foods

[email protected]

(202) 220-0700

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Fresh - IRI€¦ · A good Fresh Prepared department can bring in new, loyal shoppers 31% Of Fresh...

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