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Period: December 15, 2016 to January 1, 2017
Comment & Opinion or Companies, Organizations or Consumers or Controversies & Disputes or Deals, M&A, JVs, Licensing or Earnings Release or Finance, Economics, Tax or Innovation & New Ideas or Legal, Legislation, Regulation, Policy or Market News or Marketing & Advertising or Other or People & Personalities or Press Release or Products & Brands or Research, Studies, Advice or Supply Chain or Trends

Restaurant Goers Want Natural, Local, Sustainable, And Delicious

A market research survey has found that 60 percent of restaurant diners who choose meat or poultry say the “all natural” claim is important to them. All natural covers a lot of ground, but for the most part it includes concerns about animal welfare and sustainability, and whether the animal is fed a grass or vegetarian diet. In this respect the concern is linked to the impact of the animal’s diet on the quality, taste and healthfulness of the dish. Local sourcing is very important these days as well. The researcher says the percentage of consumers who make an extra effort to buy local should crack 50 percent in a couple of years, in the face of widening concerns about where food comes from. Locally grown meat and poultry, for example, are at the top of consumer priority lists.

"Food Transparency and Knowledge: 2 Trends Shaping Meat & Poultry Market", News release, Packaged Facts, November 21, 2016

CPG Companies Reap Major Benefits By Managing Complexity

Consumer packaged goods (CPG) companies need to constantly launch new SKUs to keep up with changing consumer preferences and new retail formats. But introducing new SKUs inevitably leads to increased complexity in the whole business, and that’s not a trivial challenge. Complexity among food-and-beverage manufacturers, for example, costs as much as $50 billion in gross profit in the U.S. alone. But, according to McKinsey & Co., controlling complexity in CPG doesn’t have to be a long-term or even difficult job. It can be done in three or four months. Companies need to assess the situation and identify relevant “complexity-management levers.” They need to prioritize, plan and implement initiatives. The results? A simpler supply chain system that leads to better financial performance, faster innovation, and greater customer satisfaction.

"Simpler is (sometimes) better: Managing complexity in consumer goods", Report, McKinsey & Company, December 01, 2016

Customers Of Vegan Bakery Don’t Care About The Missing Butter Or Eggs

Vegan Treats Bakery in Bethlehem, Pa., attracts customers from hundreds, even thousands, of miles away. Owner Danielle Konya says she’s had visitors from Europe and Israel. She started baking vegan treats for herself at home in the late 1990s, and now employs 40 people in a 1,600-square foot shop. Instead of eggs, butter, and milk she uses potato starch, tapioca starch, silken tofu, and pureed fruit (e.g., applesauce or mashed pumpkin). Konya says the only thing that matters is the flavor of the treats she bakes. “No one takes a bite of the Chocolate Peppermint Dream cookies and asks where the butter is.”

"The Secrets of a Vegan Bakery that Entices Customers to Drive Across the State", The Washington Post, December 05, 2016

Cronut Creator Partners With Baileys To Invent A New Dessert

Dominique Ansel, famous as the creator of the hybrid Cronut a couple of years ago, has collaborated with Baileys to create a sweet dessert dubbed Baileys Bakeout Noodles. It looks like ramen but is actually bread pudding noodles – made with kataifi shredded dough – soaked in Baileys Original Irish Cream and covered with a passion fruit "egg" and a coconut marshmallow "fish cake." A packet of "hot sauce" – actually cherry jam – comes with the dessert.

"The Creator of the Cronut Made a Ramen-Like Holiday Treat With Baileys It's Mother's Latest Project", AdWeek, December 05, 2016

Whole Foods Market Experts Predict Flavor, Ingredients Trends

The global buyers for Whole Foods Market have pooled their observations on flavors, ingredients and consumer food preferences to create a trend forecast for 2017. Look for, for example, more wellness tonics, tinctures and beverages beyond fresh-pressed juices. The drinks and tonics will make use of botanicals with roots in alternative medicine and global cultural traditions. Exotic ingredients include kava, Tulsi/holy basil, turmeric, apple cider vinegar, medicinal mushrooms, and adaptogenic herbs. Products leading the trend include Kor Organic Raw Shots and Suja Drinking Vinegars. Other trends: products from byproducts (e.g., leftover whey from yogurt); coconut everything; Japanese food, beyond sushi; creative condiments; and five more.

"Whole Foods Market Serves up Top 10 Trends for 2017", News release, Whole Foods Market, December 06, 2016

Aldi Competitor Lidl To Plant Its Retail Grocery Flag On U.S. Soil In 2017

Fast-growing German discount supermarket chain Lidl is laying the groundwork for expansion into the U.S. retail food market. The company, a competitor of highly successful discount grocer Aldi, has begun recruiting store managers at hiring events in North Carolina and Virginia. Aldi operates 1,600 stores in the U.S. and is expanding rapidly. Lidl has 10,000 stores in 27 countries in Europe, and expects to open 120-150 stores on the East Coast by the end of 2017. The increased competition will put pressure on conventional grocery retailers like Kroger and Wegmans.

"German discounter Lidl starts hiring for U.S. stores launch", Reuters, December 13, 2016

The Drone Delivery Era Begins With Amazon Test In U.K.

Amazon launched a drone delivery test in the U.K. on December 7 that involves only two customers. The test will be expanded to several dozen, and then eventually several hundred, customers who live close to its first Prime Air fulfillment center near Cambridge. Drones are loaded with packages up to five pounds and then rolled out on rails for takeoff. The goal is to ensure that all deliveries arrive within a half an hour. The first Amazon drone delivery – it took 13 minutes from online order to drop off – was an Amazon Fire TV and a bag of popcorn. The drones only fly during daylight and optimum weather conditions.

"Amazon starts Prime Air drone delivery trial in the UK — but only with two beta users", Tech Crunch, December 15, 2016

Carrefour Expands Speedy Delivery Service In Paris Area

French retailer Carrefour announced expansion of its “ultra-fast delivery service” of about 2,000 daily-use products for the Paris and Neuilly-sur-Seine areas. Products are delivered within an hour, though there is also a 30-minute option. The delivery cost is €4.90 ($5.11). Customers need not subscribe to use the service and there is no minimum purchase. The service was tested for two months in Paris before the launch.

"Carrefour extends its express one-hour delivery service", News release, Carrefour, December 15, 2016

Metro Group AG Spins Off Independent Companies In Food, Consumer Electronics

Germany’s Metro Group is spinning off two independent companies as part of a “demerger” in the wholesale food and consumer electronics markets. The wholesale food spinoff will be called simply Metro AG, and the electronics company will be known as Ceconomy. Metro AG will specialize in wholesale and food retail; primarily comprising Metro Cash & Carry and Real, in addition to delivery specialists and other companies. Metro is already operating in 35 countries with local wholesale companies and delivery specialists (Classic Fine Foods, Rungis Express, Pro à Pro, Midban). Metro Cash & Carry gives entrepreneurial freedom to the individual countries, allowing for greater customer focus. For 13 consecutive quarters, like-for-like sales at Metro have increased and profits have “improved substantially.”

"Metro Group: The launch of two strong companies", News release, Metro Group AG, December 15, 2016

Planned Gold Rush-Theme Ohio Eatery Will Feature Biscuits, Bourbon

Two restaurant veterans plan to open a new bar/eatery in Pendleton, Ohio, next June that will “tell the story of the gold rush and westward expansion through frontier food and drink,” primarily biscuits and bourbon. An example of the cuisine to be served at the Boomtown Biscuit Bar is the Pick and Shovel open-face biscuit sandwich, including the Yukon with its buttermilk fried chicken, sawmill gravy, fried egg, smoked cheddar and thick-cut bacon. Also on the menu are Prospector Plates, like the Hidalgo: gluten-free corn griddle cakes topped with a poached egg, house chorizo, verde salsa and cilantro. The beverage menu will also stick to the “westward expansion” theme, centering on bourbon, “a favorite drink of prospectors.”

"Cincinnati's First Biscuit Bar Coming to Pendleton", American City Business Journals, December 16, 2016

Supermarket Trends Will Stress Gaining, Maintaining, Shopper Loyalty

A supermarket analyst says the top trends of 2017 will improve customer loyalty to stores and lead to better informed shoppers. Trends include greater use of digital technologies, faster checkout, greater variety in the produce department, more meal kits, and the availability of more detailed product information. One way to maintain shopper loyalty, according to John Karolefski, is for stores to increase emphasis on digital marketing. Grocers will embed beacons in shelves shelves, signs and product displays. The sensors interact with smartphones to provide coupons and other discounts. In addition, look for more mobile apps as a way to offer discounts and specials to shoppers. Lastly, expect online grocery ordering and delivery to grow as shoppers become accustomed to the convenience.

"Top Trends in Grocery Shopping for 2017 Announced", News release, GroceryStories.com, December 16, 2016

A Busy Year For Sephora

2016 has been a busy year for Sephora. Online, it has two new bot-powered beauty tools for Facebook's Messenger. The new Sephora Reservation Assistant allows customers to book appointments for makeovers at Sephora stores, and Color Match is a shade matching extension for the Sephora Virtual Artist bot. It has also been working to provide more of an ominchannel experience for shoppers, and is also rumored to be looking to expand its physical footprint too, with a store outlet in London’s Westfield shopping center. Further afield, it has see growth in India and opened a new distribution center in Poland. In Brazil, it is expanding distribution by rolling out its products in El Corte Ingles stores.  

"2016 in review: Sephora – the digital disruptor", Global Cosmetics News, December 19, 2016

Sephora To Revamp Underperforming Fragrance Category Using Education and Engagement

Sephora is looking to revamp its fragrance business, building its strategy around engagement and education. Fragrance is an underperforming category at Sephora where it accounts for about 10 percent of sales, lagging behind beauty and skincare. CEO, Calvin McDonald, recognizes that Sephora’s current offering fails to differentiate and that the category generally has been “commoditized by discounts.” Working on the insight that buying a fragrance is both a bewildering and personal experience, Sephora is looking to engage and educate consumers so they feel empowered to buy. Online it has buying guides to help consumers clarify their perfume profiles and in-store it has set up demonstrations.  “We know that finding a fragrance is a personal experience, but it needs to be simplified and smart as it can be an overwhelming selection process,” said Brooke Banwart, VP of fragrance merchandising at Sephora. The company has been experimenting with “InstaScent” stations (previously called “Poof” ...  More

"How Sephora is Revamping its Fragrance Category", Glossy, December 21, 2016

Is The Contrary Consumer Simply Frustrated With Marketers?

The job of marketing is being complicated by contradictory consumer behavior. Consumers say they want a slower life but make quick purchase choices, and that health and wellness is a key priority for them, yet sales of products with unhealthy ingredients are still growing. The author wonders if the consumer is simply cynical of the marketers’ messages, and maybe that’s just a part of a broader feeling of distrust of a range of institutions, including government. Promises are made, and then broken. Trends help create the assumptions on which marketers base their approach to reaching the consumer, but those assumptions are increasingly being questioned. They are too general, unsophisticated and often flawed. There have always been “contrary consumers”, but now there is also a growing band of consumers that don’t like to be told what to do and like.  

"The Contrarian Consumer", Adworld, December 22, 2016

Grocers In Kentucky Cooperate With Gleaners To Reduce Food Waste, Feed The Poor

A Kentucky organization has enlisted the cooperation of Costco and other grocery merchants in its efforts to glean unsold foods – usually perishable goods pulled from shelves before the sell-by date – and donate them to charities that distribute them to the needy. GleanKy volunteers pick up the unsold products and cart them to local shelters, soup kitchens, churches and other organizations that operate food pantries. GleanKy says it has gleaned anywhere from 200 to 1,200 pounds of unsold food in a day: sometimes 500 pounds of potatoes, sometimes 400 pounds of bananas, etc. Besides Costco, volunteer gleaners gather produce from grocers like Lucky's, Good Foods Co-op, Fresh Thyme, Fresh Market and Whole Foods Market.

"400 Pounds of Extra Blueberries? No Problem; GleanKy gets Food to those Who Need It", Lexington Herald Leader, December 22, 2016

Fast-Food Restaurants Hope To Match Success Of Pizza Delivery Chains

Competition from supermarket food, sluggish traffic, and even the grueling presidential election have all dampened restaurant sales. But not pizza chain sales, which are booming. The demand for pizza has pushed share of Domino’s Pizza up 45 percent, and Papa John’s up 60 percent. Analysts point to several key reasons for this: pizza is first of all cheap and fast. And thanks to smartphone apps and ordering technology on sites like Facebook, Twitter and Apple TV, pizza is increasingly easy to order. These factors together have insulated pizza chains from the woes afflicting restaurants that rely on walk-in or drive-through traffic. But that may be changing. McDonald’s and other fast-food eateries are testing delivery service, and may soon develop the kind of customer loyalty programs that have worked so well for Domino’s and Papa John’s.

"Nobody Is Eating Out Anymore, They're Just Ordering Pizza", Bloomberg Pursuits, December 22, 2016

Discount Stores, Drugstores, Grocery Stores Favorite Sources Of Health And Beauty Aids Of Almost Three-Fourths Of US Consumers, Report Says

In the US, discount stores, drugstores, and grocery stores combined are the top store formats, with 73.8 percent of consumers purchasing health and beauty care products as of November 2016, according to Fung Global Retail & Technology. Data from the market research firm's report, “US Health and Beauty AIDS Consumer Survey” revealed online stores account for 4.2 percent, significantly higher than the 1.0 percent recorded in November 2011. About 42 percent of respondents said they purchased some or all of their health and beauty aids online, while online retailers accounted for 8.7 percent of value share in the segment.

"US Health and Beauty AIDS Consumer Survey: Amazon is Not Only Competitive in Price, but Also in Customer Satisfaction", Fung Global Retail Tech, December 23, 2016

Premium Frozen Entrees Are A Smash Hit In The U.K.

Frozen food companies in the U.K. are finding that so-called “upmarket” frozen entrees are catching on among consumers who are concerned about wasting fresh food. Research by Unilever determined that fresh food equal to about four million Christmas dinners was tossed in the rubbish this holiday season, including 17.2 million Brussels sprouts, 11.9 million carrots and 11.3 million roast potatoes. Available now from companies like Iceland are premium frozen versions of gourmet king prawns, sweet potato chips, quinoa, Canadian lobster tails (220g), en papillote sea bass fillets, luxury rack of lamb, potatoes, and desserts. They are “flying off the shelves,” according to trade magazinet The Grocer.

"Posh Frozen Meals Winning Over Waste-Conscious Middle-Class Families", The Telegraph, December 25, 2016

Amazon, Target Were Only Retailers To Boost TV And Digital Holiday Advertising

It almost seems as if the big retail companies got out of Amazon’s way this holiday season, at least when it came to advertising on TV. Bucking the trend away from TV advertising – Target was an exception – Amazon aggressively boosted its ad spending on TV by 76 percent, at the same time increasing digital ad spending by 224 percent. Meanwhile, Walmart cut television advertising by 10 percent, Sears by 53 percent, and Nordstrom by 45 percent. Target was the only retailer to boost ad spending across every medium, including print, TV and online. Its spending on print ads went up four percent, while TV spending rose 54 percent.

"Amazon increased holiday TV ad spend in a big way", Chain Store Age, December 29, 2016

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