Trends and Insights

No slowdown in sight for gluten-free offerings

The popularity of gluten-free foods shows no signs of waning, and according to a recent study from global market research firm Mintel, it’s not just the gluten-intolerant who are filling their carts with gluten-free products. In fact, 65 percent of consumers who eat (or used to eat) gluten-free foods do so because they believe such products are more healthful, and 27 percent eat them because they believe the products aid in weight loss efforts.

“It’s really interesting to see that consumers think gluten-free foods are healthier and can help them lose weight because there’s been no research affirming these beliefs,” said Amanda Topper, food analyst at Mintel. “The view that these foods and beverages are healthier than their gluten-containing counterparts is a major driver for the market, as interest expands across both gluten-sensitive and health-conscious consumers.”

Mintel forecasts sales of gluten-free foods and beverages to reach $10.5 billion in 2013, growing 44 percent between 2011 and 2012.

“When looking at the top 10 gluten-free food product claims in Mintel’s Global New Products Database, after gluten-free and low/no/reduced allergen, there also are product claims associated with being natural and free of additives or preservatives,” Topper added. “The positioning of gluten-free products as having multiple health benefits such as low fat or no animal ingredients may be leading to consumer perceptions that gluten-free products are healthier than products that contain gluten.”

Topper told Private Label ⇨ Store Brands that the bread products, cookies and snacks segment holds the largest market share (at 23.9 percent) and saw the greatest sales growth between 2011 and 2013, so the segment represents a store brand product development opportunity.

“The prepared foods segment is largely dominated by sales of Amy’s Kitchen products, which has 30 percent market share,” she added. “Store-branded products would provide shoppers with a nice lower-priced alternative.”

Also presenting a “key opportunity” are pasta and rice products, which currently hold only a 1.8 percent market share, Topper said. — K. Canning

Inflationary times spurring consumers to shop for private brands

Rising food prices are impelling U.S. consumers to look for ways to stretch their budgets and find the best value for the money. And 48 percent of U.S. respondents to a new global survey from New York-based Nielsen said they would shop more frequently for private brands as food prices rise.

The survey revealed that Americans are feeling the pain of rising food prices: Only 9 percent of respondents reported being able to spend freely — the lowest percentage globally, Nielsen said. Moreover, only 39 percent of Americans said they are living “comfortably,” despite the fact that the U.S. respondent base has the highest percentage (46 percent) of households earning an income above $50,000 (compared to the global average of 22 percent).

Shopping during inflationary times takes a beating — 4 percent of respondents said they are increasing the number of shopping trips they make, and 9 percent indicated they are increasing dollars spent per trip. Discount stores, destocking/clearance retailers and warehouse club stores are poised for success during these inflationary times, Nielsen said, while convenience stores, family-owned stores and specialty retailers are most vulnerable.

Besides opting for store brands more often, Nielsen said American consumers pointed to money-saving shopping strategies that include stocking up on regular-use items when they are sale, especially unbranded cereal/grains, fruit and vegetables (48 percent); purchasing on-sale items exclusively when prices rise (48 percent); looking for deals online (44 percent); and cutting back on dining out (68 percent), buying new clothes and accessories (56 percent), snacking (50 percent) and travel (40 percent).

Consumers shopping differently in ‘new normal’ economy

In its September Competitive Edge newsletter, Barrington, Ill.-based Willard Bishop notes that the “new normal” economy — expected to remain challenged for quite some time — is compelling shoppers to shop differently than they did pre-recession. Shoppers now are more actively seeking out “strong values” and are frequenting stores that help them in this area.

“Supermarket retailers now need to face the new normal in pricing to ensure their offerings are in line with current shopper expectations,” the publication — titled “The New Normal in Pricing” — notes, “or risk losing business to competitors that do.”

The publication outlines five responses food retailers could embrace to help ensure they stay relevant and grow in this new normal environment:

• Actively manage price gaps to ensure they are charging a premium only where a premium is sustainable, and that price gaps overall are not excessive.
• Adopt a more sophisticated approach to identifying known-value items, “the subset of items that disproportionately impact[s] price image.”
• Assess the short-term and long-term impacts of promotional activities.
• Provide “trade-off options such as national-brand-equivalent store brand items in a variety of categories to help shoppers stretch their grocery budgets.
• Adopt price communication strategies and tactics that are advanced and effective, for both in-store and digital efforts.

To read the publication, visit www.willardbishop.com/PDFs/201309CE.pdf.

Most ‘healthy snackers’ are weight-conscious

According to a new survey-based study from Chicago-based market research firm Lab42, 86 percent of people who self-identify as “healthy snackers” (22.3 percent of the 3,390 people initially screened for the survey) said they snack to help lose weight or maintain their weight. Despite all the focus on weight, however, the healthy-snacker respondents indicated that taste (66 percent), low sugar content (37 percent) and high protein content (35 percent) are the most important factors in snack selection, ranking above low calorie content and low fat content (33 percent and 30 percent, respectively).

In addition, 70 percent of the healthy-snacker respondents said that the word “organic” on the front of the package indicates the snack is more healthful than a traditional snack, Lab42 said, while 64 percent believed the same about the words “all natural.”

Healthy snackers also expressed a willingness to pay more for snacks they perceived to be more healthful, the market research firm noted. Specifically, 87 percent of respondents said they would pay more for all-natural snacks, and 83 percent said they would do the same for organic snacks. And more than half of respondents said they were willing to pay more for prepared snacks such as pre-cut carrot sticks (61 percent) and proportioned snacks such as 100-calorie packs (55 percent).

Retailers wanting to connect with healthy snackers on the store brand side will want to consider the wants and needs of this segment. But they also might want to rethink merchandising and marketing efforts here. Gauri Sharma, CEO of Lab42, told Private Label ⇨Store Brands that grocery displays are the No. 1 source for healthy snackers to learn about healthful snack options. And social media also provides an opportunity to encourage trial of such snacks.

“Snackers are most likely to snack healthily in the summer and least likely to snack healthily in the winter,” Sharma added. “This could present a good opportunity for retailers to promote store brands seasonally with grocery store displays.” — K. Canning

Time for a fight with foodservice?

In addition to competing for a larger share of food and beverage spending in the consumer packaged goods (CPG) arena, CPG marketers and retailers, through their store brands, need to cast a “broader net” and grab shoppers’ attention across all eating occasions — not just home-based occasions, but also those away from home.

“How America Eats: Capturing Growth with Food on the Run,” the latest Times & Trends report from Chicago-based Information Resources Inc., says restaurants account for about 47 percent of total food and beverage spending in the United States — expected to total roughly $660 billion in 2013 — and the industry is growing at a healthy pace.

“According to the National Restaurant Association, restaurant industry dollar sales have grown at a compound annual growth rate of more than 4.5 percent since 2000,” the report states. “In contrast, during the past several years, the CPG industry has grown at a compound annual rate of less than 1 percent. Clearly, bolstering CPG sales by winning share of stomach — and wallets — from the restaurant industry is an opportunity.”

The report explains that the timing for implementing a strategy in this area is prime. A recent IRI MarketPulse survey found that 50 percent of consumers are preparing and consuming food at home more frequently today than they were before the economic downturn began. Capturing these consumers, even if only for a fraction of occasions, could constitute a “sizable revenue boost” for CPG marketers. For example, winning just half of a 1.5 percent share would translate into more than $900 million for the CPG industry and retailers.

Susan Viamari, editor of Times & Trends, explained that retailers with a well-rounded assortment of private label foods and beverages are well-positioned to compete for a share of stomach across all occasions.

“For these players, it’s about building awareness and strong brand equity,” she told Private Label ⇨ Store Brands. “Think about samples; think about setting up areas within the store that allow consumers to quickly come and go — almost a QSR within the store environment. Make it simple and safe — not a risk of spending on something that doesn’t meet your taste/quality expectations.”

For more information visit www.iriworldwide.com.
— R. Hofbauer

Grocery displays are the No. 1 source for healthy snackers to learn about healthful snack options.