TradeUSA Newsletter

Members of Gen Z have higher consumption rates of organic foods and beverages than any other group, according to The NPD Group. Although close in age, Gen Zs differ from millennials in their attitudes towards large, multi-national brands, in that they seek brands that support their lifestyle, and are willing to use them regardless of the brand’s size.

Gen Zs are similar to millennials in that they demand authenticity, freshness, and purity in the products they use, but even more than millennials, Gen Z consumers say clean eating improves their quality of life and fresh foods play a large role in this lifestyle.

“Food marketers should understand that this generation grew up knowing that food is much more than sustenance; food represents culture and therefore is an expression of who they are,” says David Portalatin, NPD food Industry advisor.

Source: Specialty Food Association

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Source: Biz Journals

It is tempting when talking about the future of retail to focus on technology. What is more relevant, however, is changes in societal attitudes — the way consumers think about themselves, about each other and how they want to look and present themselves in public. Those kinds of changes are at least as impactful as changes in technology and they directly affect what consumers want to buy. Jared Weiner, EVP and Chief Strategy Officer at The Future Hunters, made a presentation on this very topic at the Innocos Beauty Summit recently. Here’s what he talked about:

Templosion

As Weiner put it, “Acceleration in the implosion of time.” What he means is that big things are happening faster all the time. We all know that but what he’s referring to particularly is the life cycle of companies:

• Startups are getting to high valuations faster.
• Established companies are losing share and consumer attention faster.
• Planning cycles are shorter and product life cycles are shorter.

Technology is facilitating acceleration but so are people’s expectations. Once people believe something is going to happen, there’s no patience left for the interim, gestation period. That was always true in financial markets, now it’s true in many other areas of life as well.

 After Millennials, What?

Generally referred to as Gen Z, Weiner calls them Cybrids, people born in 1996 or later, the generation after Millennials. They have no memory of a time when mobile technology was not part of daily life. The younger ones in the group learned to use a touchscreen before they could read. Technology is natural to them in ways that Millennials can’t relate to. This group has different attitudes about many things. Data indicate they view the world in a less gender-based way. They have reduced brand loyalty.

Leslie Ghize, EVP of TOBE, which consults on consumers and culture and is a Doneger Group company, presented on this topic at the recent fashion trade show Magic in Las Vegas. About these Cybrids or Gen Z consumers, Ghize says they are the most overscheduled generation with tutors, coaches and classes. Ghize asks, “Why isn’t anybody at a mall? Ain’t nobody got no time for that.”

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Source: Forbes

• The US Cattlemen’s Association (USCA) has filed a petition to the USDA arguing that lab-grown meat startups should not be able to call their products “meat,” since they do not come from slaughtered animals.
• Though so-called “cultured meat” products are not available in restaurants or supermarkets yet, a number of startups are attempting to make it more commercially feasible.
• The debate will likely intensify.

For the first time, a major part of the US beef industry is taking aim at tech startups creating cultured meat — also known as lab-grown meat or clean meat — that’s grown in a lab using animal cells.

The US Cattlemen’s Association (USCA) has filed a 15-page petition to the USDA asking the agency to strictly define “meat” and “beef” as animals raised and slaughtered.

The group, comprised of farmers across the US, argues that lab-grown meat does not meet that definition, and that labeling cultured products as “meat” will confuse consumers.

By filing an official motion, the country’s ranchers are showing cultured meat startups that they are prepared to fight for that definition.

In the petition, the USCA mentions Memphis Meats, Just (formerly called Hampton Creek), and Mosa Meats, — three startups that are racing to bring lab-grown meat to market.

Recent venture capital investments could make that more commercially feasible. In January,Tyson Foods announced that it had invested in Memphis Meats, joining the startup’s list of prominent backers, including Bill Gates, the food giant Cargill, and Richard Branson. In 2016, Tyson also bought a 5% stake in Beyond Meat, a company that makes plant-based burgers, chicken, and sausage.

Just could be the first to get its meat to stores. Last year, the company said it plans to do so by 2018. Memphis Meats and Mosa Meats say they will start offering their products to the public in 2021.

“We have made progress in all areas that needed improvements — creating fat tissue, creating color, moving towards serum-free culturing — but we’re not there yet,” Mosa Meats CEO Peter Verstrate previously told Business Insider.

Proponents of meat-mimicking foods like cultured meat and plant-based “meat” argue that it’s more environmentally friendly than raising traditional livestock. Globally, traditional animal farming accounts for about 18% of greenhouse emissions, uses 47,000 square miles of land annually, and exhausts 70% of the world’s water.

As startups improve their meat alternatives, the debate over what can legally be considered meat will likely continue to intensify.

Source: Business Insider

The majority of U.S. grocery shoppers could be buying online within five years, according to a joint report from Food Marketing Institute and Nielsen.

That timeline represents a faster pace of adoption than previously believed, as both organizations originally estimated it could take up to 10 years for consumers to warm up to buying groceries on the web.

According to projections, 70 percent of shoppers will be buying some portion of their groceries online within five to seven years. That could equate to $100 billion in total spending. The shift online will impact grocery shopping in stores, where consumers are still expected to spend 80 percent of their grocery dollars.

Traditionally, the grocery industry has been more insulated from e-commerce disruption than its peers in the apparel and book sectors. Shoppers tend to be loyal to their grocers, and the grocery supply chain is so complex.

However, the rise of meal kits and delivery services has helped to change shoppers’ expectations. Amazon’s acquisition of Whole Foods, which threatens to combine data, logistics and automation in a way the industry has not seen, has put the entire industry on notice. Earlier this month, Amazon launched its first automated grocery store.

The shift is already evident: 49 percent of all shoppers bought a packaged good online within the last three months. That includes 61 percent of millennials and 44 percent of baby boomers. It also includes 54 percent of affluent households and 40 percent of low-income households.

Grocery stores, cognizant of the price transparency the web affords, will feel the pressure to keep prices low. The largest ones, like Walmart, are expected to put an extra focus on low prices to help win their battle for market share. To help keep prices down and make shopping an event in itself, they will continue to invest in automation and grab-and-go technology.

Both large and small stores will continue to emphasize fresh and prepared foods, as well as meat, in an effort to compete with goods not easily ordered online.

Changes will also transpire behind the scenes, as brands and retailers look to use data they get through new technology to inform pricing, selection and promotion. Albertson’s launched a new service this month to use shopping data in its stores to better assess online ads.

Source: CNBC

The state of the wine industry is good but expect major changes in the future, says Danny Brager, senior vice president with Nielsen, reports the Sacramento Business Journal. Nielsen data indicates that some 31 percent of wine purchases in retail stores are unplanned, and consumers spend only 1 percent of their online shopping bill on wine. That’s a significant change from shopping in-store, where consumers spend 6.2 percent of their bill on wine.

Brager also forecasts changes in packaging. Canned wines represent a small, rapidly growing segment of wine sales, and peaked at $45 million in the summer of 2017, an increase of 58 percent from 2016. Glass containers, followed by bags in boxes and waterproof cans, represent the vast majority of wine sales.

In terms of demographics, most wine buyers are Baby Boomers and Gen Xers, but the largest potential wine buying group, millennials, is becoming more interested in wine. Older people generally trade up for higher-priced wines, and based on their income, millennials currently don’t have the spending power of previous generations, according to the report.

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Source: Specialty Food News

After a year of testing with its own employees, Amazon opens its store that lets you browse, grab and walk out — skipping the checkout line, but not the bill — to the public Monday.

The convenience store and its proprietary technology, made up of hundreds of cameras and sensors and requiring a new Amazon app, dangled the promise of solving a bedrock complaint for shoppers — long checkout lines — when it was unveiled just over a year ago. The high-tech approach, crafted by the company that’s most visibly changed how Americans shop in recent years, suggested grocery shopping was on the cusp of its biggest breakthrough since bar codes.

The change spurred by Amazon Go may be more gradual than that. The technology behind it, called Just Walk Out, is proprietary and Amazon is expected to keep its details secret while it tests it on a small but more varied customer set than the Amazon employees who’ve been using it. It was originally scheduled to open to the public in early 2017 but was delayed in part due to the complexity of the technology. It opens to the public at 7 a.m.  Pacific time.

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Source: USA Today