Trends, Predictions & Prognostications – Steal Share From Restaurants

\"\"Trends, predictions and prognostications seem to flow like water this time of year, however my question is always, “How can we apply predictions from other channels to grow and evolve Private Brands?” In this instance the report is “Five foodservice trends from Mintel set to shape restaurant menus in 2012” from the Mintel Menu Insights group. How will you leverage these trends to create Private Brands that solve for consumer needs and steals share from restaurants. According to the press release from Mintel:

Competition in the foodservice industry is always fierce and restaurant chains are constantly jockeying for your business, money and attention in an overcrowded marketplace. However, in 2012 five trends outlined by Mintel Menu Insights will shape how operators appeal to their customers with regional and imported menu options, double-sided menus, customization and time-intensive preparation methods.

Eric Giandelone, foodservice director at Mintel notes the following: “Our trends are designed to give both restaurant operators and food suppliers a thorough understanding of what’s coming in the foodservice industry. Our trends are based on original consumer research, developments among restaurants and trends observed in other industries. Our goal with these trend predictions isn’t merely to identify what’s going to happen, but to deliver a roadmap on how to take advantage of these trends.”

Here are five trends that will impact the foodservice industry in the coming year:

  1. American regionalism
    Consumers are not only more aware of global cuisine, they are also more aware and interested in the regional specialties that define American cuisine. Whether it’s Kansas City or Memphis barbecue, New England Chowder or Low Country grits, more consumers and restaurants are looking at the regions and cities in the US to identify the \”Best of\” cuisine.
    American grocers are ideally positioned to take advantage of and potentially own this trend. Whether you build a new “Flavors of America” brand or work the regional recipes into an existing brand, own this space. And take it to the next level, how can you teach and engage your customers, perhaps cookbook signings by regional chefs or in store cooking lessons. Shrimp & Grits Anyone?
  2. Double-sided menus
    It\’s unlikely that consumers are going to start demanding absolutely healthy menus in the near future and even less likely that restaurants are going to solely list these absolutely healthy options. However, consumers want choices, and the Double Sided Menu trend illustrates that choice. Menus will continue to feature widely indulgent options, but will be balanced with healthier, better for you options. Additionally, this goes beyond healthy and indulgent to include premium and value pricing. Operators understand it’s not either or, it\’s both, so we\’ll continue to see both high priced and low priced options on the same menu.
    This is all about balancing the healthy with the indulgent, do you have the products and brands that give your customers the options they need.
  3. Consumer control
    Consumers expect that their voice will be heard and that their wants and needs will be met. And the surest way to listen to the customer and ensure their needs are met is to give them the ability to control their dining experience. Customized ordering systems will continue to flourish, as will greater flexibility in menu design.
    Customization has always been the core of the grocery business, however are you selling ingredients or solutions?
  4. Slow it down
    Quick service restaurants are able to drive margins through their standardized efficiencies, but more and more we are seeing fast food restaurants return to more time-intensive preparation methods. As such, items described as \”handmade\” or \”home style\” are popping up on restaurant menus as consumers recognize that they want more from their dining experience than efficiency.
    Whether you are providing “homestyle” home meal solutions or actually teaching customers how to create homestyle meals Private Brands must authentically own the experience.
  5. Importing ideas
    For many restaurant chains, growth lies elsewhere, in international markets. And for those companies already with an international presence, menu concepts and product testing is taking place overseas. From there, good ideas are making their way to the US market, as was the case with McDonald\’s recent McBites, which first started in Australia before entering the US market. Given the importance of international markets for growth, this is one trend that will continue to growth beyond this year.
    You may not own stores in Europe or Asia however you can still learn from the likes of Tesco, Carrefour, Sainsbury and Marks & Spencer. Take a trip, visit stores, there is a lot to learn just across the ocean.

Private Brand: Prices, Promotions, Recessions & Recoveries

\"\"This past week the United States Department of Agriculture Economic Research Service (ERS) released a new report on Private Brand written by Richard Volpe titled, The Relationship Between National Brand and Private Label Food Products: Prices, Promotions, Recessions and Recoveries. ERS is a primary source of economic research and analysis from the U.S. Department of Agriculture, providing timely information on economic and policy. I am not sure why the government decided to invest our tax dollars in this research, despite the fact that it is mildly intriguing it does little more than validate what America’s retailers already knew

What Is the Issue?
One of the most striking changes in U.S. food retailing over the past two decades has been the rise of Private Brands, also known as private labels (PLs) or store brands. Retailers have expanded PL product offerings across the supermarket, and PLs have increased in popularity, as measured by both dollar sales and shares within product categories. Since promotional competition between PLs and national brands (NBs) has the potential to benefit consumers through lower prices and expanded product choices, this report quantifies the magnitude and dynamics of PL price discounts and then tests for NB/PL strategic promotional interaction. Particular attention is paid to how the 2007-09 recession and subsequent recovery affected NB/PL interaction, showing how price dynamics evolved from recession to recovery.

What Did the Study Find?
Retailers promote private label products (offer price discounts) strategically in response to national brand pricing promotions to protect PL sales during NB promotions. However, the extent of the retailer response varies widely across supermarket departments and is also affected by both the density of food stores and the market share of supercenters within a market area.

  • On average, PLs are priced about 23 percent lower than NBs, both with and without promotions. This gap is smaller than that found in previous analyses using older data, suggesting that these items may have become more comparable in price and quality over time.
  • NB/PL promotional interaction was strongest among processed, storable products, but much weaker for produce, fresh meat, and seafood.
  • In general, as market concentration increased within an area, the intensity of within-store NB/PL promotional interaction also increased.
  • NB/PL promotional interaction lessened, however, as the market share of supercenters increased, which may be due to supermarkets focusing on everyday low prices generally, rather than on promotions, when competing with supercenters.
  • Promotional activity for NBs changed very little during the recession, while PL promotional activity increased.

How Was the Study Conducted?
This study used 2008-10 data on prices and promotions for two major supermarket chains that operate primarily in the Western United States. The data were gathered directly from the corporate web sites of the chains. The broad scope of the data, covering thousands of the products available in each supermarket and over 250 product categories in every major department, allowed for the study of NB/PL interaction across a wide range of product dimensions. The intrastore promotional interaction between NBs and PLs was analyzed using contingency tables and then regression analysis was used to identify key determinants of NB/PL promotional timing. Because the time series included a part of the recent recession as well as the subsequent recovery, the analysis allowed for NB/PL interaction to vary across these economic phases.

In this report …
Chapters are in Adobe Acrobat PDF format.

Charts and graphs (in .png format) from this report are available in the .zip file listed below. The .zip file also contains a document (readme.txt) that lists the name and title of each chart or graph file.

Research and Markets

The State of Private Brand Coffee

\"\"Given the circumstances created by an open market, it has become increasingly easier for people to gain direct access to green coffee, an important step in maximizing the profitability of Private Brand. Furthermore, Private Brand seems to be pretty recession-proof, and it is also one of the key ways in which everyone, from local roasters to the big commercial coffee companies, can cash in on the consumer\’s desire to buy specialty coffee – something unique and/or associated with a prestigious name. What this all adds up to is approximately a 20% share of specialty coffee sales. By all means, private label is going to remain a significant movement in the coffee industry.

A new research report Private Label in Coffee provided by Euromonitor International has been recently published by Market Publishers Ltd. The 33 page report is aimed at identifying the role private label plays in respect to global coffee sales, the factors behind its success or lack thereof by region, as well as key strategies for meeting the ongoing challenge that private label will pose to brand manufacturers over the period 2010-2015.

Report Scope:

  • detailed picture of the hot drinks market;
  • granular analysis of growth sectors and factors driving change;
  • in-depth overview of the competitive environment, the markets top players and leading brands
  • elaborate five-year forecasts illustrating the markets likely development.

Product coverage: coffee, other hot drinks, tea.

Data coverage: market sizes (historic and forecasts), company shares, brand shares and distribution data.


How will Private Brands Respond to 12 Crucial Consumer Trends for 2012?

\"\" This 2012 trend report comes from, a London-based, independent trend firm who scans the globe for the most promising consumer trends, insights and related hands-on business ideas. Although its examples focus on national brands, I can’t help but wonder what we as retailers can do with our Private Brands if we address even of few of these trends.

In 2012, much as in previous years, some brands may be staring into the abyss, while others will do exuberantly well. And while we can’t offer any help to defaulting nations or bankrupt companies, we do believe that there are more opportunities than ever for creative brands and entrepreneurs to deliver on changing consumer needs. From Canada to Korea. Hence this overview of 12 must-know consumer trends (in random order) for you to run with in the next 12 months. Onwards and upwards:

  1. Red Carpet
    In 2012, department stores, airlines, hotels, theme parks, museums, if not entire cities and nations around the world will roll out the red carpet for the new emperors, showering Chinese visitors and customers with tailored services and perks, and in general, lavish attention and respect. Read RED CARPET in full (including examples from Hilton, Starwood and Harrods)
  2. DIY Health
    Expect to see consumers take advantage of new technologies and apps to discreetly and continuously track, manage and be alerted to, any changes in their personal health. Read DIY HEALTH in full (including examples from Jawbone, Ford and Lifelens)
  3. Dealer Chic
    In 2012, not only will consumers continue to hunt for deals and discounts, but they will do so with relish if not pride. Deals are now about more than just saving money: it’s the thrill, the pursuit, the control, and the perceived smartness, and thus a source of status too. Read DEALER-CHIC in full (including examples from American Express, Nokitum and Daitan)
  4. Eco-cology
    Brands will increasingly take back all of their products for recycling (sometimes forced by new legislation), and recycle them responsibly and innovatively. Read ECO-CYCOLOGY in full (including examples from Dell, Nike and Garnier)
  5. Cash – Less
    Will coins and notes completely disappear in 2012? No. But a cashless future is (finally) upon us, as major players such as MasterCard and Google work to build a whole new eco-system of payments, rewards and offers around new mobile technologies. Read CASH-LESS in full (including examples from Google, PayPal and Square)
  6. Bottom of the Urban Pyramid
    The majority of consumers live in cities, yet in much of the world city life is chaotic, cramped and often none too pleasant. However at the same time, the creativity and vibrancy of these aspiring consumers, means that the global opportunities for brands which cater to the hundreds of millions of lower-income CITYSUMERS are unprecedented. Read BOUP in full (including examples from PepsiCo, NCR and Aakash)
  7. Idle Sourcing
    Anything that makes it downright simple- if not completely effortless- for consumers to contribute to something will be more popular than ever in 2012. Unlocked by the spread of ever smarter sensors in mobile phones, people will not only be able but increasingly willing, to broadcast information about where and what they are doing, to help improve products and services. Read IDLE SOURCING in full (including examples from Street Bump and Waze)
  8. Flawsome
    Why to consumers, brands that behave more humanly, including exposing their flaws, will be awesome. Read FLAWSOME in full here.
  9. Screen Culture
    Thanks to the continued explosion of touchscreen smartphones, tablets, and the \’cloud\’, 2012 will see a SCREEN CULTURE that is not only more pervasive, but more personal, more immersive and more interactive than ever. Read SCREEN CULTURE in full (including examples from Sky, 8ta and Huawei)
  10. Re-Commerce
    It’s never been easier for savvy consumers to resell or trade in past purchases, and unlock the value in their current possessions. In 2012, ‘trading in’ is the new buying. Read RECOMMERCE in full (including examples from Decathlon, Amazon and Levi’s)
  11. Emerging Maturialism
    While cultural differences will continue to shape consumer desires, middle-class and/or younger consumers in almost every market will embrace brands that push the boundaries. Expect frank, risqué or non-corporate products, services and campaigns from emerging markets to be on the rise in 2012. Read EMERGING MATURIALISM in full (including examples from Diesel, Johnson & Johnson and Sanitol)
  12. Point & Know
    Consumers are used to being able to find out just about anything that’s online or text-based, but 2012 will see instant visual information gratification brought into the real and visual world with objects and even people. Read POINT & KNOW in full (including examples from Starbucks, eBay and Amazon)

Private Brands Grow as European Shoppers Demand Value

\"\"Consumers are turning to Private Brands as opposed to national brands as they become more discriminating across Europe and demand greater value for money, according to new research from SymphonyIRI Group.

According to the latest report ‘Retail Private Label Brands in Europe’, shoppers now consider many Private Brands to be as good as national brands, and in some countries, better.

In fact, the value share of Private Brands has increased in every country, except the United Kingdom, and is now an average of 30% across the region. For consumers, a typical European Private Brand shopping basket costs on average 30% cheaper than one filled with national brands.

The position varies from country to country. In the United Kingdom, the value share is 49.2% of all fast moving consumer goods sold, compared to 16.1% in Italy. And, in USA, this figure is just 18.5%. The greatest increase in Private Brand was in Spain, where the leading retailers have continued to invest in developing multi-tier ranges, recognizing that shoppers are turning ‘back to basics’ to save money.

The United Kingdom is the only country with a decrease in market share reflecting the high-level promotion activity on national brands. France sees its value share remain flat at 31.0%, a result of national brand manufacturers stepping up their marketing activities while private label promotional activities decreased.

Rod Street, vice president of International Consulting at SymphonyIRI Group, said: “European shoppers are becoming much more inclined to assess the quality and value of the products that they buy. With rising unemployment and a major economic crisis in Europe, it’s understandable that the consumer will want to budget for the overall price of their weekly shop and secure maximum value for money.

“Consumers often perceive private label brands to be ‘real’ brands in their own right. As retailer own-label products continue to raise their game, national brands will need to focus on where and how to defend their share of wallet.

“As well as innovating at the product level, retailers have developed clear branding and assortment strategies and leverage their control of shelf space and pricing to drive profile. This presents a real threat to national brands. However, national brands are fighting back, developing new products and technologies to bolster differentiation and becoming more aggressive with pricing and promotional strategies.”

Source: SymphonyIRI Group