Food Insight: Keeping pace with what consumers want

Step into your local grocery store and you may start seeing the signs that a new era in retail food marketing is taking hold.

Step into your local grocery store and you may start seeing the signs that a new era in retail food marketing is taking hold. The changes are being driven by consumer demand, and it will continue to be key for industries like the beef sector to pay attention, recognize opportunities and adapt to survive.

One example of today’s changes: in Myrtle Beach, South Carolina, grocery chain Piggly Wiggly has designed a store to fit the way people instinctually shop. For example, when shopping for cereal, a customer will intuitively search for milk. In most grocery stores, milk and cereal products are located in different sections. In the new Piggy Wiggly store, however, milk and cereal are positioned side by side. Beverages, like coffee, wine and beer, are featured together.

This is possible through new technology that makes it efficient energy-wise to place refrigeration cases throughout the store. Fifty years ago, on the other hand, stores were only designed with refrigeration around the store perimeters. These new developments in modern technology have enabled Piggly Wiggly to position things like different forms of fruits and vegetables together. Now, fresh, canned and frozen corn can all be found in the same aisle – a real time-saver for customers.

In addition, the new store features four one-stop stations where consumers can find all the ingredients they’ll need to prepare a full meal, complete with recipes and instructions. An on-site “Dream Dinners” franchise allows shoppers to prepare a week’s worth of meals for the entire family in just a few simple steps. Shoppers on the go can call ahead and order a chef prepared meal for dinner. They’ll even bring it to your car.

For the beef industry, these changes might mean opportunity – so long as the industry is prepared to adapt to this new concept and is able to deliver the convenient, tasty products consumers seek.

Brand Connections
The trend in branded products also continues to be big. While branded beef has been part of the industry for nearly two decades, consumers are now looking for more information about the producers behind the brand.

Colorado State University meat scientist Gary Smith, PhD, speaking at the 2008 Beef Improvement Federation’s Annual Research Symposium in Calgary, Alberta, this summer outlined some of the latest trends in value-added and branded beef production. Smith believes consumers increasingly want a closer connection to their food and its production.

He notes that Safeway, Kroger and Super-Value have developed their own brands of “natural” or “organic” beef, but their sales of such products have been disappointing. Smith believes it is because consumers who purchase and eat natural, organic or grass-fed beef want to feel connected to the source of that beef – like the rancher who personally raised that animal.

To that end, Smith says the idea of “story beef” includes new elements, with consumers asking whether the people who grew the cattle live nearby, properly care for the animals, treat farm and ranch workers fairly, practice environmental stewardship, operate sustainably and receive a fair price.

Smith also notes that while demand for natural and organic beef has grown substantially in recent years, the current downturn in the economy is slowing the market for these high-end products. Retailers, he says, are asking some branded companies to back off on some “never-ever” requirements to keep production costs — and retail prices — in line.

Socially Conscious
A final trend shaping food for the future, is the focus on health, social responsibility and the environment. As one example, in late July Los Angeles city officials voted unanimously to place a moratorium on new fast-food restaurants in an impoverished area of the city. The yearlong moratorium aimed at South Los Angeles is intended to give the city time to attract restaurants that serve healthier food. The action, which the mayor must still sign into law, is believed to be the first of its kind by a major city to protect public health. Research suggests 30% of adults in the South Los Angeles area are obese, compared to 19% for the metropolitan area. A report by the Community Health Councils found 73% of South Los Angeles restaurants were fast food, compared to 42% in West Los Angeles.

On the environmental front, in Seattle, the mayor has proposed implementing a 20-cent “green fee” on disposable shopping bags at Seattle grocery and convenience stores. He also wants to ban foam containers from the local food service industry. Environmental groups have applauded the initiative, which could take effect January 1, 2009.

According to Seattle Public Utilities (SPU), roughly 360 million paper and plastic shopping bags are used in Seattle each year. That’s the equivalent of about 8,500 tons of greenhouse gases. SPU would collect roughly $10 million annually from the fee and about $2 million would help Seattleites make the transition to reusable bags. The rest would be used to promote waste prevention and environmental education in the city.

It is a brand new world out there. Take a look around your grocery store and see which trends stand out.