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The Food Retail Landscape

All Rights Reserved.© 2017 METTLERTOLEDO

A look at where the food retail industry is and where it is going

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For internal use - Confidential

Agenda

1 A look at the Consumer Landscape

2 The Food Retail Industry Response

3 More Mindful Eating and Awareness

4 New Technologies In and Out of Stores

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For internal use - Confidential

A look at the Consumer Landscape

Generational decision making and outlooks

50% of current retail sales

Most likely to create grocery lists

Price focused

Baby Boomers . Generation X. .

Spend most $$ monthly on groceries

53% tried a new product on their last shopping trip

Most frequent shoppers once they join a loyalty program

Millennials .

"Generation Y" Product freshness,

fiber and whole grain content

Shop organic and more aware of GMOs

79% are on social media

Largest group of consumers worldwide by 2020

Online research before purchases

Socially conscious Experiences >

material items

Generation Z .

Source: Statista

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For internal use - Confidential

A look at the Consumer Landscape

How attitudes and demographics are shifting

50% [of people in the U.S.] have said their diet could be healthier

28% want minimal processing of their food

25% want a shorter list of ingredients

Demographic Shifts expected to continue:

"…task of grocery shopping is being divided among various family members. Nearly 60% of households share shopping responsibilities." –FMI

Ethnic supermarket revenue in 2014 was $30.4 billion and should grow to $35.2 billion in 2018

According to the 2015 Supermarket Guru Grocers Association Consumer Survey:

5A look at the Consumer Landscape

As consumer attitudes change, so do their priorities

For internal use - Confidential

• Fresh, less processed foods• Transparency in labelling• Online and mobile shopping

gaining momentum

What are they looking for? 3 in 4 shoppers are actively switching to healthier versions of at least one type of food in 2016 -FMI Survey

81% of shoppers will purchase something not on their list, at least occasionally

The Halo Effect

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For internal use - Confidential

Agenda

1 A look at the Consumer Landscape

2 The Food Retail Industry Response

3 More Mindful Eating and Awareness

4 New Technologies In and Out of Stores

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For internal use - Confidential

The Food Retail Industry Response

How stores in the Food Retail industry are responding to market shifts

Average super- market square footage since 2006

"According to…Prosper Insights' & Analytics'

November 2016 survey, 7.7% of U.S. consumers

shopped online for groceries in the past 30 days, up from 5.7% two years ago." –Retail

DIVE

What does this mean for grocery stores?

Figuring out the last mile

Retailers are fighting the online giants by introducing food delivery & in-store

pickup.They have also been merging and

acquiring other companies to improve their success.

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For internal use - Confidential

The Food Retail Industry Response

New competition from smaller and European markets

Lidl Largest discount grocery chain

in Europe Coming to east coast in 2018 Aldi is top competitor

Farmers Markets Promote sustainability On the rise in cities and

small towns

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For internal use - Confidential

Agenda

1 A look at the Consumer Landscape

2 The Food Retail Industry Response

3 More Mindful Eating and Awareness

4 New Technologies In and Out of Stores

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For internal use - Confidential

More Mindful Eating and Awareness

Changes in stores as the Organic and Prepared Foods industries grow

$45 billion spent on organic food

annually in the U.S.

Stoc

k Pr

ices

Whole Foods Sprouts Fresh Market

76% of consumers'Fresh Prepared dollars are spent at their primary Fresh Prepared store.

Source: FMI

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For internal use - Confidential

More Mindful Eating and Awareness

How is Sustainability defined in 2017?Sustainability

Most important trend of 2017

Definition continues to evolve in regards to how

our food is produced, where it comes from, how much is wasted and what we can do

to improve processes.

Recycled

Donated

Disposed of

Destination of Food Waste (in pounds),Retail/ Wholesale Respondents 2016

1,172.3M 597M

391M

Source: FMI

54.3%

27.6%

18.1%

Augmented transparencyFood waste reductionShared responsibility of environmental goalsWonky produce

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For internal use - Confidential

Agenda

1 A look at the Consumer Landscape

2 The Food Retail Industry Response

3 More Mindful Eating and Awareness

4 New Technologies In and Out of Stores

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For internal use - Confidential

New Technologies In and Out of Stores

How companies are responding to new attitudes through technology

Urban Farming

Enhanced Foods

Cellular Agriculture

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For internal use - Confidential

New Technologies In and Out of Stores

New in-store technology solutions

Kroger Technologies Blue Yonder Replenishment Optimization

• Machine learning solution to provide higher levels of control in managing fresh assortments in the stores

• Utilizes multiple influencing factors in creating predictions

• METTLER TOLEDO has been working with Kroger to implement a check-out free solution in all stores

• Digitally enabled shelves now in testing phases

• ClickList allows customers to avoid the shopping experience all together with order-ahead and in-store pickup.

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For internal use - Confidential

Thank you!