Ten Food Trends That Will Shape 2018, Part 2

Ten Food Trends That Will Shape 2018, Part 2

January 3, 2018
Phil Lempert

By RDBA CEO, Phil Lempert

Trend #6. Technofoodology

Technofoodology and Artificial Intelligence are the best things to ever happen to a grocery store. Alexa, Google Home, Sonos and other home-based assistants are ushering in a new way to buy our foods. We can easily replenish our foods by asking Alexa to reorder from Amazon; and just last week one of the nation’s leading c-stores, Sheetz, announced that “made to order foods” from their 564 stores can be ordered on Alexa.  By 2020, there will be 55 million smart devices in our homes making them the biggest supermarket chain on the planet.

What this clearly shows is that relationship between “the internet of things” and food is here. In our homes, smart refrigerators and cupboards will take over the automatic replenishment of those branded products that we can’t live without. The branded paper towels, condiments and other products we never want to run out of – those branded staples we love – will be auto replenished, which leaves the supermarket with the “exciting” foods – fresh, artisan, and prepared foods to focus on, allowing the stores to become exceptional.

Trend #7. Advertising 

David Ogilvy wrote “the creative process requires more than reason. Most original thinking isn't even verbal. It requires 'a groping experimentation with ideas, governed by intuitive hunches and inspired by the unconscious. The majority of business men are incapable of original thinking because they are unable to escape from the tyranny of reason. Their imaginations are blocked.” 

Advertising should inform and get people to buy, no question. When it comes to food, it also needs to tell the truth especially about nutrition. 

Today people want a connection with the foods they eat, they want to know where foods come from; and if we can use advertising to empower them to eat healthier we have achieved success. The Muppets’ Cookie Monster, isn't filling himself with cookies any longer; he has a new cooking show and is focused on the foods. He and his sidekick Gonger embark on journeys in their food truck to source the ingredients. Anthony Bourdain for kids, if you will, in a food segment which offers great promise in teaching our kids from where foods come.

The ad rules have changed since Ogilvy and Della Femina’s halcyon days. We now have iPhones and Social Media instead of magazines and TV ads. Most CPG and retail brands are not taking full advantage of today’s media. Only 27% of brands engaged in storytelling last year and are mostly ignoring Instagram, Pinterest and YouTube. The reality is that 3X the amount of people trust word-of-mouth more than they do online ads.

And then there is the science behind advertising. Gherkin is the hunger hormone. It tells us when we are hungry. In the 2011 study “Mind over Milkshakes” researchers found that when people thought they were drinking shakes high in calories, their Gherkin level dropped three times more than when they thought they were drinking a shake with zero fat, no added sugars and was low in calories. Another study found that when people ate the same food and the same size portion that was labeled differently – one was labeled "snack" and the other was labeled as a "meal" – the people who had the snack version ate 50% more.

It’s obviously not only what we eat, it is how we communicate our food messages, especially when it comes to nutrition issues that make the difference.  What we believe has an impact on what and how much we consume.

Trend #8. Security

How safe do you feel these days? Personal security will be top of mind in 2018 as we haven’t seen this state of anxiety since 9/11. The American Psychological Association’s 10th Annual Survey finds that over one-third of Americans feel nervous or anxious and a similar amount feel anger or irritability. Retailers in particular should add visible security in-store and in parking areas. People will be avoiding large groups and events, so retailers will bring events in-store, smaller ones and more often.

One quarter of all women and 18 percent of men are coping with their stress by eating more – the good news is that over half say they are exercising more. But it is affecting America’s health & well-being and underscores the need for in-store dietitians to help shoppers cope with good nutrition and other well-being services. Chains like ShopRite and others offer exercise classes. Retail dietitians are offering meditation and yoga classes. All of which are helping shoppers cope – and at the same time, building a strong relationship that goes far beyond the price of a can of peas.

Amazon and Walmart/Jet are testing in-home deliveries, which in my opinion just won’t work for a bunch of reasons, in particular, personal security. Home Grocer and WebVan experimented years ago with placing delivery units in people’s garages and that didn’t work; why do we now feel that allowing strangers direct access to our home to put milk in our fridge will? The idea of the opening of the lock triggers a video monitor on your phone, while maybe a nice feature that emotes security it also opens the system to hackers. And then there is the whole issue that once the Amazon Key is connected to your door - you are 100% Amazon for life. 

The one benefit to all this anxiety? Over half of Americans say that because of the state of America they are volunteering and supporting causes that are close to their hearts; which underscores the opportunity for retailers and brands to do the same and align values with their current and potential customers.

Trend #9. Politics & Food.

This is not about political parties, it is an overview of where we are today and what is coming. The USDA is one of the most powerful and largest government agencies and has not yet been fully staffed.  Food Policy Action has created a scorecard that clearly depicts that food has now become a bi-partisan issue as many existing regulations are being dismantled. To date there have only been six bills voted on; and all the votes have been along strict party lines.

Among the most troubling to food businesses has been the withdrawal from the Paris Climate Agreement. "We Are Still In" is a commitment that is heavily supported by food, farmers and ranchers and CSA’s in particular, but only a few retailers have signed on to continue the tenants of the Agreement.  

There are two important focused efforts that will impact our food world in 2018. The first is the San Francisco ordinance that requires retailers to report antibiotic use by meat and poultry suppliers. Mill Valley, just across the Golden Gate was where the ban on Trans Fats first started, and this ordinance could also expand across the country.

The second is the Farm Bill that sets in place a five-year period eating and farming policy. Oregon Congressman (D) Earl Blumenthal has put together a terrific review of his position and the issues at hand. "The Fight for Food" is well worth the read as we gear up for what I believe will be the most controversial debates on the Farm Bill we have witnessed in our lifetimes.

Trend #10. Future Supermarkets  

Our final insight focuses on what the supermarket itself may look like in 2018 and beyond.  It’s been a game-changing year for our industry and has set the foundation in place for an entirely new way to look at supermarkets.

In 1989 I sat down with Herbert Hofer, a European artist and shared my vision for what I hoped the Supermarket in the Year 2000 would be. No aisles, no gondolas, lots of fresh foods, lots of excitement, no check stands, products grouped by meal occasions, the topline was a food experience second to none. We haven’t gotten there yet, but the stores that are being built today are closer to this vision than ever.

It’s time we rethink the four-walled structure.  The grocery industry should wake up each morning thinking about how we can make the shopping experience better. UNATA reports that 68% of those who shop online are likely to switch retailers for a better online experience. Actually, one-third of shoppers switch for personalized offers based on history.

Eataly World opened November 15th in Bologna with a million square feet of everything food - 40 farming factories, 40 restaurants, 6 educational rides. A Disneyland for foodies if you will. They predict 10 million visitors a year (Disney world attracts just under 20 million). This is a blueprint for ideas we should be incorporating in our stores. Taste, education, excitement and empowerment – four things every supermarket should stand for.

Also in Italy, in Milan, The Coop – the supermarket of the future – uses technology to give shoppers total transparency and total information; how we should be using Artificial Intelligence and Augmented Reality and move it to everyday shopping.

We are witnessing Food Halls popping up throughout the country which we know bring excitement. Food Halls grew by 37% in 2016. Hy-Vee has done their version in store as has ShopRite and Mariano’s to name a few. The message to shoppers is “we are all things food.” There is the new model that Reebok and B8TA in Santa Monica are testing: showroom only stores where products can’t be purchased, but just displayed and available to try. A great concept to introduce new food products, to read the labels, to taste, to ask questions - a mini-model could be incorporated in every store.

In Japan, supermarkets have put greenhouses on top of or adjacent to supermarkets. Why not put a greenhouse right inside the store and allow shoppers to pick their own right off the vine? After all we have beer and wine coolers where shoppers enter and select their brews, why not for produce?

Coles has launched a “quiet hour” once a week where there are no PA announcements, no music, no stocking shelves, no commotion to offer the parents of the 1 in 6 children that have a developmental disability a haven to shop.

Waste free supermarkets continue to grow globally, but here in the US only a few exist, in Austin Texas in.gredients, in Denver Zero Market and Fillery in Brooklyn have made commitments and should be a model for all stores to learn from.

It’s time to build stores that are truly energy efficient with solar glass blocks and solar roofing that not only reduce energy but creates additional energy that could power an entire store.

Online grocery is at the top of everyone’s list and there is no doubt that it will continue to grow and evolve. Click & collect will become the dominant online channel for all the reasons described here today. Today approximately 25% of all grocers offer this service. KMPG reports that almost 75% of shoppers would use this service to avoid delivery costs and the International Council of Shopping centers found that 61% who do use click & collect also come in the store and make additional purchases.  Shoppers do want to have a relationship with their supermarket. They don’t want the experience to be faceless.  

Online delivery will become more fractured, and more local. As we see these companies popping up on the landscape, companies like Milk & Eggs, GoodEggs, and Thrive Market are creating a new model that serve just a local area with a specialty, and have developed unique, and some times proprietary relationships with farmers and purveyors to offer curated offerings. They are not trying to offer the 40,000 products that are on the supermarket shelves; in fact many of the products they offer aren’t on the supermarket shelves at all. Tomorrow, Boxed Spirits launches in California - the first bulk-sized alcohol e-commerce play that is directed to steal business from Costco and Sam's in this category. We will see the larger national and regional delivery players having to shift to the auto replenishment model.

One of the biggest threats to traditional grocers is being created by blockchain technology. INS Ecosystem wants to reinvent the way people shop for food. They have raised over $60 million and Unilever and scores of other manufacturers are signed up as partners. The goal is to out Amazon Amazon with even greater efficiencies and to have brands sell direct to consumers and eliminate retailers entirely.

As much as tech might want to disrupt the way people shop and make everything more efficient. Let’s remember that this business is all about people and our relationship to shoppers. It’s time to imagine just what a supermarket can be.