TradeUSA Newsletter

Food companies that take notice of consumers’ growing interest in fresh, natural, and organic products continue to do better, according to the American Customer Satisfaction Index’s  Nondurable Products Report 2018. Two big factors in the rise of customer satisfaction are food quality improving and food prices rising slower than anticipated. Hershey, which removed artificial ingredients from many of its core products and made nutritional information more accessible, held its top spot in food manufacturing with an ACSI score of 86. However, it barely held the lead as Dole leaped 4 percent to 85, having the biggest increase among food manufacturers. General Mills rose 2 percent to 84 for third place thanks to investments in organic products, tying it with Quaker and Mars.

As customers continue to choose bottled water and other healthy beverages over sugary sodas, customer satisfaction with soft drinks fell 2.4 percent to 82. Customer satisfaction was up with other beverage producers such as La Croix and Kombucha, according to the report.

Source: Specialty Food Association

Amazon and Whole Foods Market today launched delivery of natural and organic products from Whole Foods Market through Prime Now in Ann Arbor, Detroit, Jacksonville, Madison, Milwaukee, Omaha, Orlando, St. Louis, Tampa and Tulsa as well as additional areas of New York City and Seattle. Starting today, Prime members in those cities can shop through Prime Now for thousands of bestselling items including fresh produce, high quality meat and seafood, everyday staples and other locally sourced items from Whole Foods Market. Now available in 48 cities, the service launched earlier this year with plans for continued expansion across the U.S. throughout 2018.

Today also marks the first expansion of grocery pickup from Whole Foods Market, another convenient option for grocery shopping. Grocery pickup launched last month and is now available in Ft. Worth, Kennesaw, Richmond, Sacramento and Virginia Beach, with continued plans for expansion. To enjoy grocery pickup, Prime members place their order via the Prime Now app and choose the pickup option at checkout. Customers can choose free pickup in as little as an hour on orders of $35, or in 30 minutes for $4.99. After arriving at the Whole Foods Market store, customers park in a designated pickup spot and a Prime Now shopper will place groceries into their car within minutes. For customers who tell us they are on their way to the store in the Prime Now app, groceries will be ready as they arrive.

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Source: Business Wire

Dive Brief:

• U.S. consumers between the ages of 11 and 22 have already started shaping food and beverage trends because of the healthier influences they grew up with, according to a Mintel presentation at IFT2018 reported by Food Navigator.
• Many kids and teens tend to see soda as unhealthy after their parents nixed sugary food and drink options, Mintel research showed. One-quarter of teens between 15 and 17 years of age said they’re concerned about remaining healthy, and almost half (49%) believe that drinking sodas is not healthy.
• “Generation Z has come of age at a time when health and wellness is a major consideration. Many younger members of Generation Z follow their parents’ healthy ways and it seems health-consciousness only gets stronger as they approach adulthood,” according to Dana Macke, Mintel’s associate director of Lifestyles and Leisure Reports.

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 Source: Food Dive

Amazon captured 18 percent of online grocery sales in the U.S. in 2017, and as of the second quarter, 2018, this product group continues to grow at a rate of 40 percent year-over-year, according to One Click Retail.

Coffee has always been a top seller for Amazon, as it continues to grow by 40+ percent annually. In the second quarter, coffee was worth an estimated $135 million in sales and was responsible for seven of the top 10 best-selling grocery items. The leading coffee item (which is also Amazon’s best-selling grocery item overall) continues to be The Original Donut Shop Regular Medium Roast Coffee in a pack of 72 single-serve coffee-pods.

The second most popular grocery item of Q2, 2018 was Soylent’s ready-to-drink Meal Replacement Shake. Bottled water grew by 65 percent year-over-year in the last quarter to now outrank energy drinks as the largest subcategory. In 2017, Essentia gained an additional 4 percent of the market and now ranks as the largest water brand on Amazon.

Source: Specialty Food Association

The U.S. organic beverage market is surging as shoppers pursue fresh products, gut health and sugar reduction. As sugary sodas decline in popularity, 62% of consumers are looking for more natural beverage options, according to the Beverage Industry’s 2018 product development outlook. Some of the most sought-after categories are hybrid drinks with added protein, vitamins and antioxidants, carbonated juice, and juices with functional add-ons.

With consumers looking to eat healthier, it’s no surprise that organic beverages as a whole are benefiting from the broader push toward organic. Consumers still want the flavor and convenience that come from many of these products, but they also want them to contain better-for-you ingredients grown without pesticides and other chemicals. Increasingly, that means organic — regardless of the kind of beverage.

Countless beverages, including juice, tea, beer and milk, have embraced organic, either by reformulating existing brands or introducing new product lines. Organic milk continues to remain popular, though the swell of plant-based beverages hitting the market contributed to a slip in sales for organic dairy-based milk in 2017.

In juice, Coca-Cola bought part of Suja Juice, and Hain Celestial has its BluePrint organic brand. Brands such as Honest Kids and Juicy Juice organic also are positioned to appeal to the increasing contingent of parents shunning sugary food and beverages in favor of healthier sugar-free and all-natural alternatives for their children. PepsiCo launched USDA-certified organic varieties of its popular sports drink brand Gatorade, called G Organic, in 2016 after Coca-cola did the same with Honest Sport. And Anheuser-Busch’s Michelob Ultra brand announced in March that it is adding Michelob Ultra Pure Gold, which is made with organic grains, to its lineup.

Many retailers, such as Kroger and Whole Foods, have introduced their own organic drinks through their own private-label brands, often at a much lower price point than mainstream products.

With organic demand growing, food manufacturers and retailers will need to continue offering more of the popular beverages. It soon may not be enough to simply be organic but to also offer taste and creative flavors that keep shoppers coming back.

Source: Food Dive

Millennials belong to more loyalty programs than older consumers, according to research by Hawk Incentives. Older respondents report that they are active in 3.9 loyalty programs, on average, while millennial respondents are active in an average of 4.2 programs. Overall, millennials are enrolled in 6.5 loyalty programs, compared to 6.2 on average. In addition, millennials appear to be driving consumer preference for prepaid and gift card rewards in loyalty programs.

Millennials are more likely to pick digital options as rewards, with 65 percent noting it was their preferred reward type. Only 45 percent of Boomers prefer digital rewards. Overall, the cohort is very likely to belong to a food and beverage loyalty program. Membership to an online retailer’s program is more likely among millennials than any other age group, as 41 percent belong to an online retailer loyalty program, versus just 29 percent of Gen X and 25 percent of Boomer respondents.

Source: Specialty Food Association

Seattle-based retail giant Amazon.com Inc. (Nasdaq: AMZN) is expanding another Prime perk to Houston.

Beginning June 26, Prime members in Houston will be able to order groceries and other items from Whole Foods Market through Prime Now and have them delivered in as little as an hour. The service also rolls out to Chicago, Minneapolis and San Antonio June 26, according to a press release.

Amazon first launched Prime Now delivery from Whole Foods in four cities in February. With the addition of Houston and the other three cities, the service is now available in 19 cities with more to come in 2018. It’s just one of the services Amazon has launched in the wake of its $13.7 billion acquisition of Austin-based Whole Foods last year and amid Prime membership growth.

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Source: Business Journal