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Retail Business Insight Alert Archive

Have a look at some of our recent alerts. These give broad coverage of the industry - if you want something more specific create your own here.

<<12345678910>> Total issues:161

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March 01, 2017, to March 15, 2017

Pop-Up Restaurant At Selfridges To Offer Meals Created From Surplus Foods

U.K. department store Selfridges is operating a rooftop pop-up food waste restaurant for a month featuring “reinterpretations” of classic British foods like cabbage cores, cover crop sprouts and pork from waste-fed pigs. The restaurant, sponsored by U.S. consumer electronics firm Sonos and digital music provider Spotify, follows a format created by Manhattan chef Dan Barber. The temporary eatery will take surplus foods from farmers, fishermen, distributors, butchers, artisanal producers and retailers to create a full menu with daily specials. It will also serve special cocktails and offer a “tea experience” created by pastry chefs.

German Grocery Store Sells Only Wonky Produce, Expired And Surplus Foods

A grocery store that sells only ugly or surplus food products, from vegetables to beer, has opened in the German city of Köln (Cologne). The founders of The Good Food grocery store are dedicated to the idea of eliminating food waste in the world. It is the first such store to open in Germany, and the third in the EU. The store is unusual for a couple of reasons. The food it sells was otherwise bound for landfills because it may be misshapen, or too large or too small, or past its sell-by date. This includes non-perishable products from big manufacturers. And there are no fixed prices: consumers decide how much the products are worth.

Tesco Tests Program To Feed Bees With Discarded Sugar

British supermarket chain Tesco is testing a program to donate unmarketable split bags of sugar from stores in Cornwall and Devon to a beekeepers group. The stores are also donating surplus sugar from in-store bakeries. Since 2007, the bee population has declined by 33 percent in the U.K. because of pests, diseases and fewer wild flowers. Bees have a difficult time making enough honey to feed themselves during the fall and winter. Commercial beekeepers supplement the bees’ diet with a feed made from dissolved sugar. The waste sugar donated by Tesco stores will be used to help feed bees bred and reared by a bee improvement program based in Cornwall.

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February 15, 2017, to March 01, 2017

Restaurants React To Demand For Gluten-Free Menus

The demand for gluten-free foods continues to rise in the restaurant sector and, in fact, is spreading to segments like quick-service sandwich and other fast casual eateries. Demand is driven by the increase in the number of people diagnosed with gluten-related disorders. It is expected that gluten-free menu items among U.S. restaurants will double over the next three years to $24 billion, up from $1 billion in 2006 and $11.6 billion in 2015. Also of note: the gluten-free trend has spawned some interesting innovation, for example, the growth of rice and potato flour producers. Smart Flour Foods has used food history to find and produce food sources for gluten-free doughs sing ancient grains, such as teff. 

A Closer Look At Major Food Retailer, Restaurant Chain Clean Label Policies

A consumer watchdog organization has analyzed the clean label initiatives of four big restaurant chains and nine supermarket chains finding that all have committed to excluding additives, such as synthetic food dyes and artificial sweeteners like aspartame. Except Whole Foods, the supermarket chains have limited their commitments to one or more lines of their house-brand products, according to the Center for Science in the Public Interest (CSPI). Other findings: none of the clean label lists limit sodium or added sugars; all exclude many artificial ingredients that CSPI considers safe; and restaurant policies do not include “riskiest” beverage ingredients such as added sugars, artificial sweeteners, and synthetic food colors. One interesting CSPI observation: “clean label products are not necessarily healthful.” 

Amazon's Fourth Quarter Profit Up, But Sales Disappoint

Amazon's decision to focus on revenue growth and investments rather than on heavy promotions led to a 55% jump in profits for the fourth quarter. But sales hit only the midpoint of the company target, with revenue up by $43.7 billion, a less-than-expected 22% increase from the previous quarter. CFO Brian Olsavsky says the company continues to focus and made great progress on "things we can directly control", referring to price, selection and customer experience. While many retailers turned to heavy promotions during the holidays, Olsavsky said promotions weren't a major factor in fourth-quarter revenue. Amazon continue to dominate online sales, commanding an estimated 42% of total holiday online spending growth in 2016, with Apple Inc. in poor second at 5%.

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February 01, 2017, to February 15, 2017

Whole Foods Closing Last Three Regional Kitchens

Whole Foods Market (Austin, Texas) will close three East Coast regional kitchens that employ about 500 people. The affected workers in the facilities in Everett, Mass.; Landover, Md.; and metro Atlanta were given 60 days’ notice of the impending closures, which are part of an ongoing consolidation strategy. The company hopes to shift as many of the employees as possible to other jobs. The kitchens – they prepared a variety of ready-to-eat foods – are the last to be shuttered. Similar items are prepared in stores in other areas of the country or are supplied by vendors. 

Repulsive Smelling Durian Fruit May Be The Next Big Fad In N.Y. Eateries

A Michelin-honored Malaysian restaurant in Manhattan is serving up a new dessert based on a “spiky, odiferous fruit” known as the durian. The problem with the fruit, found in Southeast Asia, is the smell, which has been compared to rotting garbage and even kerosene. But despite that, several N.Y. restaurants, cafes and bars are adding the fruit to their menus because of its flavor, which is sweet with hints of melon and onion. Salil Mehta, owner of Laut restaurant, says it is like a mix of mango and jackfruit.

Kroger Hires Supply Chain Services Company To Manage

Grocery retailer Kroger (Cincinnati, Ohio) has contracted with McLane Co., a supply chain services firm, to supply its 787 convenience stores, which include Loaf ‘N Jug, Turkey Hill Minit Market, Tom Thumb, Kwik Shop, and Quik Stop. McLane maintains a cold chain network, an expanded fresh foods program, and category management expertise.

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January 15, 2017, to February 01, 2017

Burger King’s Parent Company Promises To Get Rid Of Antibiotics In Chicken

Restaurant Brands International, parent company of Burger King and donut chain Tim Hortons, has announced plans to reduce antibiotic use in its chickens. The company, which has been under pressure for months from public health advocates, has now updated the “responsibility” page of its website to explain the new commitment to curbing the use of antibiotics “deemed by the World Health Organization as ‘critically important’ to human medicine." The changes will be implemented in the U.S. this year and in Canada next year.

Starbucks Puts Food Waste To Good Use In New Line Of Lattes

Starbucks has introduced a new latte line that not only tastes good but is eco-friendly. The new espressos are flavored with a syrup made from the husks of coffee cherries that are normally discarded when the beans are harvested. The company uses the syrup to flavor the Cascara line – the Spanish word means “husk” or “shell” – that is subtly sweet with hints of maple and brown sugar without being fruity. 

Amazon Making Progress With Prestige Skin Care, Provides Rich Content To Engage Consumers

Amazon continues to build out its offering across new categories and its Amazon Luxury Beauty store shows it will be a contender in premium segments. The company recently added a page targeted at prestige shoppers - Amazon Professional Skin Care -that provides a range of ‘tools and kits to help you develop a complete daily care regimen.’ Amazon offers simple to use filters (shop by concern, expert advice…) along with videos and educational features that engage consumers. Color cosmetic players have for a while offered rich and engaging content but skin care brands have lagged and Amazon is moving to plug the gap - content on the Amazon page exceeds what is available at retailer websites and many beauty blogs.  It also looks to be winning over large brands that were previously dismissive. Elizabeth Arden recently became an official distributor on Amazon’s Luxury Beauty store, a move that will give the online retailer credibility.

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January 01, 2017, to January 15, 2017

Premiumization Driving Sales In Many Categories Worldwide

A Nielsen report highlights the strength of the premiumization trend that is driving sales around the world and looks set to continue as powerful underlining shifts play out. Rising income and a desire for exceptional quality (cited by 54% as a factor in premium purchases) and superior performance (46%), are core drivers. Interestingly, Nielsen finds that products with social or environmental benefits have premium potential. Some 42% of global respondents say they’d be very willing to pay a premium for products made with organic or all-natural ingredients, while nearly the same proportion (39%) say they’d pay extra for sustainable or environmentally friendly products.
Premium is well established in many markets – it already accounts for about 25% of dollar sales in both the personal-care category in the U.S. and Southeast Asia and is growing faster than other segments.  In Southeast Asia, for example, the premium segment grew 21% from 2012 to 2014, over double the rate of the mainstream and value tiers (8% and 10%, respectively). Strong and growing levels of consumer acceptance indicate the segment will continue to expand. Nielsen states that over 25% of global respondents say they’ll consider buying premium personal-care product:  hair-care (27%), body-care (26%) and oral-care (26%).
More: we previously looked at prestige strategies in India.

Online Grocery Deliverer Fulfills Orders Using Advanced Warehousing, Robotics

British online grocery delivery firm Ocado is applying an array of advanced technologies to speed grocery purchases to consumer homes. The company maintains a 350,000 square-foot warehouse near Birmingham that beats Amazon at automated order fulfillment. Most of the 48,000 lines of products it sells are perishable, many chilled or frozen. The complex, time-sensitive optimization challenge is handled by sophisticated technologies like swarm robotics – teams of robots that cooperate to find, lift and grab products from shelves – as well as autonomous delivery vehicles, and machine-learned preferences. The company is expanding its warehousing and robotics capabilities to be able to handle and deliver more products even faster in the future.

New Lidl Tagline Hammers Home Emphasis On Quality And Price

German discount grocer Lidl is launching a new strapline to further emphasize its focus on lower prices but not at the expense of quality. The strapline – an easily remembered subheading or phrase – is “Big on Quality, Lidl on Price.” It is not clear whether the new strapline represents a broader brand repositioning, or will replace the old #LidlSurprises tagline, or run alongside it. The idea of the new strapline is to emphasize to skeptical consumers that Lidl’s product lines do indeed have a quality provenance. The company’s sales rose 5.7 percent in the 16 weeks ending December 4, representing a growth rate that is slowing somewhat, but still far outpacing the grocery market’s 0.7 percent.

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December 15, 2016, to January 01, 2017

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.

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.

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.”

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December 01, 2016, to December 15, 2016

In-Person Shopping Way More Important Than Online For Cosmetics And Grooming Products

A recent Harris Poll found that in-person purchases remain dominant for cosmetic and grooming products, and especially so for trialing and first time purchases.  The research underlined the importance of in-person channels, finding that around 90% of purchasers shop in-person for a range of personal care items, including hair styling products, shampoos and conditioners, cosmetics, non-sunscreen products with SPF protection, and sunscreen.  “Big box” retailers continue to be the preferred purchase location. Online channels are more popular for smaller items, with 40% of purchasers shopping online for cosmetics and 34% for facial/skin care products. They are less likely to shop online for bulkier items, likely reflecting shipping costs: just 17% shop online for shampoo/conditioner and 22% for sunscreen.  In all this, price remains the most important determinant of where consumers will purchase: 87% say they’ll buy a product wherever they can get the best deal.

Walgreens CEO Sees Positives In Consolidation Of US Drug Store Market, Seeks Geographic Expansion

Stefano Pessina, Walgreens CEO, sees large benefits from market consolidation, arguing that unified control brings efficiencies and the chance to deliver affordable care: “If there are many services are under the same head it’s easier to coordinate the dynamics and lead in an efficient way.” Walgreens Boots Alliance is currently working to close a $17 billion merger with Rite Aid, a combination that would bring together the world’s largest drugstore operator, Walgreens Boots Alliance, with its 13,000 stores in 11 countries, and Rite Aid that operates about 4,600 stores around the US, mainly on the East and West Coasts. Pessina seeks to expand geographically to become a truly national player with “an even presence everywhere in the U.S.”

Machine-Learning Offers Significant Benefits For Grocery Retailers

Fresh foods account for about 40 percent of a grocery retailer’s revenue, and 33 percent of cost-of-goods sold. So it is imperative that stores have neither an excess or shortage of fresh food in stock. It’s a complex problem for a variety of reasons. But it can be mostly solved – with significant financial and logistical benefits – using machine-learning. The technology is based on algorithms that allow computers to “learn” from data while significantly boosting forecast and order accuracy. Some retailers using machine-learning have reduced out-of-stock rates by as much as 80 percent and cut write-offs and days of inventory on hand by 10 percent. They have also seen gross-margin increases of up to nine percent.

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November 15, 2016, to December 01, 2016

The Cruffin Debuts In Philadelphia, Where Budino Thrives

Philadelphians love the sweet Italian custard known as budino, usually served like pudding in small jars or ramekins, and chefs have been experimenting with variations on it for years. At first there was salted caramel budino, then frozen budino pops (on a stick), and budino-stuffed doughnuts rolled in salted caramel crunch. The latest incarnation is the salted caramel budino-stuffed cruffin from Barbuzzo's. Similar in concept to New York's famous cronut, it is a hybrid of the croissant and the muffin, stuffed with caramel budino pudding, topped with dark chocolate cookie crumbs and some fleur de sel (sea salt), all rolled in sugar.

Brexit, Pound Value, Put Pressure On Retail Grocery Prices

Food retailers in the U.K. may be using Brexit and the drop in the pound to justify price hikes. Data collected by Mysupermarket.com show that U.K. supermarkets are charging a lot more for Unilever products than a year ago, and the trend is not slowing. Stores whose prices have risen include Asda, Sainsbury’s, Morrisons, and Tesco. But there is less evidence that Asda’s prices on Unilever products have risen very much, mainly because Asda, owned by Walmart, benefits from the U.S. retailer’s massive buying power. For its part, Unilever, which has consistently warned that Brexit would lead to price increases, said raising prices for retailers is “never done lightly” and it is absorbing most cost pressures itself.

Bakery Waste Is A Major Problem In The U.K.

One of the biggest sources of food waste in the U.K. is the baking industry. Waste is not only costly, it generates a lot of negative publicity. The country’s Waste and Resources Action Program (WRAP) estimates the bakery, cake and cereals manufacturing sector generated 90,000 tons of avoidable waste in 2014 and 2015. That's about 10 percent of food manufacturing's total avoidable waste. Baked goods manufacturers are developing ways to cut waste. For example, foodservice and own-label supplier Fosters Bakery reworks a percentage of leftover dough back into the next batch, sells unsold bread loaves as breadcrumbs, and turns food waste into animal feed at £40 a ton. Nevertheless, the bakery still generates about £100,000 a year of food waste.

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November 01, 2016, to November 15, 2016

Food Delivery Firm Just Eat Adds Former P&G Exec To Board

Online food delivery company Just Eat has named former P&G marketing exec Roisin Donnelly to its board of directors. Donnelly, 54, spent 31 years at P&G, most recently as chief marketing officer for Northern Europe. She left the company in June and was replaced by Stefan Feitoza de Oliveira. Just Eat, which operates a global marketplace for online food delivery, has 15.5 million active users in 13 countries.

Retail Grocers Need To Stay Focused On The Importance Of Innovation

Many big food companies are working hard to innovate, constantly refreshing their product offerings, hoping to satisfy consumer appetites for new and exotic foods and flavors. Kraft Heinz, for example, recently added Aioli Mayonnaise and Korean Barbecue Sauce to its product line. But the problem, according to the Kraft Heinz Europe president, is that grocery retailers are putting limits on the array of products they offer shoppers, to the point that supermarkets are “in danger of becoming too ‘manicured’ and reminiscent of ‘libraries’.” Matt Hill said retailers should not lose focus on the need to innovate in the food industry.

Starbucks To Expand Investment In Super-Premium Coffee Bars

Starbucks is in a fight to dominate the emerging super-premium coffee shops market, dubbed the “third wave” coffee movement. It just announced plans to add Reserve coffee bars in up to 1,000 of its cafes over the next year. Over time it plans to open 1,000 cafes that would sell only the Reserve brand coffees. Its two biggest competitors in the market are Blue Bottle, known for exotic micro-lot coffees, and Intelligentsia, owned by a German holding company.

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October 15, 2016, to November 01, 2016

Blue Apron’s Meal Kit Facilities Throw Away Far Less Food Than Grocers

The Blue Apron meal kit delivery company is managing to keep food waste to a minimum at its prep facility, according to a study by a nonprofit sustainability advocate. BSR found that Blue Apron trashed only 5.5 percent of its food, compared to the to the 10.5 percent thrown out by grocery stores. The organization also found that buyers of Blue Apron kits threw away only 7.6 percent of the meals, instead of the 24 percent usually thrown away after home cooking. The key reason for the company’s lower waste generation is the fact that it knows exactly how much food it needs for each kit.

American Economy Braces For Onslaught Of Older Millennials, And Their Kids

The fact that Millennials are procreating is having a major impact on almost all industries, from foodservice to auto sales to home buying. There are 70 million Millennials (aged 18 to 35 years), and over the next decade 60 million of them will become parents. They will spend $200 billion annually beginning next year (up from $170 billion) and $10 trillion over their lifetimes. Despite opinions to the contrary, they will begin buying homes and cars, eat out at more healthful restaurants, and begin shopping for kid stuff. The impact is already being seen in restaurants and retail chains. McDonald's, Chick-Fil-A, Wendy's, etc., are getting rid of unwanted ingredients; Target, Walmart, and Kroger are changing their stores to appeal to Millennial moms.

Ten Trends Expected To Drive Western Europe's CPG Market In 2016-2030, Report Says

Ten trends are expected to drive Europe's consumer packaged goods industry from 2016 to 2030, according to McKinsey & Company. Data from the market research firm's report, “Western Europe's Consumer Goods Industry in 2030,” revealed changes in consumer behavior, stagnating mass market, and fragmented niches of growth will force CPG companies to rethink their business and marketing strategies. Also expected to play important roles in determining the market's future directions are the increase in cross-channel shopping and continued growth of discounters, growing importance of online grocery and competition for digital placement, and changes in industry dynamics. Vertical integration and new business models, widening adoption of digital technology, cost leadership and consolidation, and external influences are also factors that CPG companies will have to deal with during the period covered by the report. To top it all, market stakeholders will also see an increase in government regulation of the industry.
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