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    LEMPERT REPORT: Tops in 2010

    The Supermarket Guru peers deep into his crystal ball to see what trends this coming year will bring for the food industry.

    By Phil Lempert

    The Supermarket Guru peers deep into his crystal ball to see what trends this coming year will bring for the food industry.

    There’s little doubt that grocery shoppers are yearning for optimism after the past 20 or so months of this faltering economy. Brand credibility is more important than ever, and both retailers and consumer packaged goods (CPG) brands understand that without consumer trust, the future will be bleak.

    There’s a new consumer reality: people eating more meals at home, with homemakers evolving from being merely food assemblers; switching brands based on sale prices; and discovering new store formats like Save-A-Lot, Grocery Outlet and Aldi, and making them part of regular shopping trips.

    The most recent Supermarketguru.com Consumer Panel Survey, sponsored by ConAgra Foods, focused on how shoppers were planning for the 2009 holiday season. It found that 47 percent of shoppers planned on not holding a holiday party this year, and 23 percent said they would contribute money or food to the parties they attend to “ease the financial burden of the host.” Clearly, the prevailing sentiment is “we’re all in this together.”

    The Private Label Evolution

    Consumer acceptance and purchasing of store brands are at an all-time high, which has made some CPG brands sit up and take notice as their market shares decline. Retailers are threatening to drop established brands from their shelves and add SKUs in private label. And while many shoppers are satisfied with the quality and price of their store brands, look for a radical shift in strategy. “Me-too” is out, and CPG shopper insights are in — look for the major brands and retailers to develop co-branded private labels that will feature key ingredients and build ongoing partnerships, which will in turn fuel innovation. For example, a retailer’s private label macaroni and cheese could boast on the front of its package that it’s “made with real Kraft cheese,” or a store-brand pasta sauce could highlight that it contains Hunt’s crushed tomatoes. Brand collaboration is a well-established model, and the next evolution is about to begin.

    Food Sense

    People want to know where their foods come from, and through country-of-origin labeling, shoppers are learning more than they ever expected, especially in the meat case, where labels that list more than one country are prompting more consumer questions than ever. The hot trend for 2010 will be the re-emergence of the local butcher — both within supermarkets as well as free-standing establishments — where shoppers will go, select the cuts of meat they prefer and have them ground on demand.

    The ’60s Are Back

    It started with “Mad Men.” Brooks Brothers was the first brand to capitalize on the yearnings of 76 million baby boomers when it introduced a line of men’s suits inspired by the hit cable television drama. Now iTunes offers a special “Mad Men” mix. Classic ’60s food brands like Jell-O, Banquet and even Funny Face drink mix have huge opportunities, armed with new health profiles and more intense flavors to meet the nutrition needs and age-diminished taste buds of boomers. Expect fewer carbonated soft drinks and more vitamin-enriched everything. In 2010, 25 percent of the U.S. population will be 55 and older — enough said.

    From Comfort Foods to Relaxation Foods

    Instead of relying on the “psychology” of comfort foods, brands are coming out with “relaxation” beverages containing herbs and other ingredients actually designed to calm consumers or help them sleep. Brands like Drank, iChill and RelaxZen may replace VitaminWater and Gatorade. Look for this trend to quickly move to other categories, including “anti-energy” bars and snack foods, and even to spawn a resurgence of calming after-dinner drinks that can be enjoyed at home.

    2010 will be challenging, as weather conditions affect the cost of raw materials and are likely to increase commodity (and retail) prices, and new smaller-store footprints continue to expand geographically as well as within established retail banners. Health care reform may well provide opportunities for food retailers to establish themselves as key resources for consumers, in addition to fueling new food categories backed by bulletproof nutrition-based science. In any case, the coming year promises change, which prompts the question: “Are we prepared?”

    VALUE-ADDED CONTENT

    Power of the Collective

    It’s a new world of “word-of-mouth” recommendations made using the latest technologies: mobile devices, blogs, Twitter and house parties. The “2009 Women and Social Media Study,” conducted by BlogHer.com iVillage.com and Compass Partners, reports that 75 percent of women visit social networks such as Facebook and MySpace, while 55 percent, or 23 million, publish blogs, read them or post to them. Look for “boomer bloggers,” “daddy bloggers’ and “grandma bloggers” to expand the circle. The shopper is depending less on advertising and more on social networking, and killers apps to help them make their decisions on where to eat and what foods to buy. Walmart has announced its intention to become a triple threat in electronic communications, delivering targeted savings messages via social networks on the Internet, cell phones and its growing in-store media network. According to Apple, there are currently more than 85,000 apps available to over 50 million iPhone and iPod touch users worldwide.

    Cute and Cleavage is Out

    The Food Network might have built its following showcasing the hottest-looking female and male chefs, but this run seems to be over. With the success of the film ”Julie & Julia” and the closing of Gourmet magazine, we’re now seeing a move back to substance over glitz. The signal is clear: death to the foodie and long live the “anti-foodie,” as we encounter fewer self-absorbed discussions on the perfect truffle or overpriced wine. By contrast, much food programming today includes competitions, dramatic conflict, intimidating personalities, lots of glitz, sexy camera angles and high energy. The food is part of the presentation, but it doesn’t always come across as the star element — which today’s shoppers believe it should be.

    Less is More

    The food industry has woken up and discovered that by using a shorter list of “real food” ingredients, not only are their products healthier, but also, consumers are buying them up. Brands proving the trend include Haagen-Dazs 5, Healthy Choice All Naturals, Peter Pan Peanut Butter (the only major peanut butter brand with no high-fructose corn syrup), and Campbell’s select Harvest and Healthy Request soup lines.

    By Phil Lempert
    • About Phil Lempert

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