Veggie Tots: The Future of Frozen Food?

Bloomberg Businessweek: “Big Food is betting that frozen food, a relic of Sputnik and the Mickey Mouse Club, can stir the hearts and palates of the quinoa generation even as sales figures have fallen each year since 2009. The products need to overcome a reputation, some of it earned and some not, that the meals found in your grocer’s freezer, often packed with sodium and preservatives, taste meh.”

“B&G is wooing millennials with frozen ‘veggie tots’ with broccoli and cauliflower. Kraft Heinz’s Devour line includes recipes like white cheddar mac and cheese with bacon, pulled-chicken burrito bowls and pesto ravioli with spicy Italian sausage … Conagra Foods Inc., the maker of leading brands Marie Callender’s and Banquet, is trying to bring some foodie prestige with its Wicked Kitchen line, which the company says was inspired by food trucks.”

“B&G is approaching the future with a little bit of the past. The pickle and snack company’s purchase of Green Giant nearly doubled its size and marked its first foray into the freezer case. It’s betting the Jolly Green Giant will tap into the nostalgia of parents looking to put vegetables on the dinner table while finding a new audience with millennials.”

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Grocers Trust Their Gut When Buying Stock

The Washington Post: “Blue Yonder, a retail tech company, surveyed 750 grocery managers and directors in the U.S., U.K., Germany and France … The most disturbing metric: 48 percent said they use a ‘gut feeling’ when making inventory decisions … The study also found a quarter of grocers feel they are not delivering at the speed that their customers require–not a great sign in an age where customers are becoming more and more demanding for speed and convenience and would have little patience for stores running out of stock.”

“Losing customers is one risk of not automating. But there are other costs. For example, according to Blue Yonder’s research report 4 million tons of food is wasted each year by the grocery industry in the U.K. alone. That translates into a big cost in what is historically a low-margin business.”

“Adding even more pressure to the typical small grocer is this week’s rumors that Amazon it is entering the brick-and-mortar grocery business. You can bet the managers at Amazon will not be making their inventory decisions based on a ‘gut feel.’ They’ll be using data and automation. Lots of it.”

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The Branding of ‘Bodega’

The Wall Street Journal: “Bodegas are hot. Yes, the humble corner stores, with their grouchy cats and reams of toilet paper, are fast replacing the taxi and the bagel as a symbol of New York authenticity, lending urban credibility to any endeavor. There’s Bodega, the clothing line, and Bodega, an art gallery on the Lower East Side. Not to mention the Bodega, a wine bar in Bushwick, and Bodega Pale Ale, a craft beer only distributed in New York. Bodega 88, a sports bar, opened in August on the Upper West Side, in a former bodega.”

“Bodega Magazine, ‘your literary corner store,’ is an online monthly … Managing editor Cat Richardson says each issue provides a quick, accessible hit of contemporary fiction, poetry and creative nonfiction, with a few surprises thrown in. ‘It has everything you need, like toilet paper, and then something unexpected,’ she says … Mark Littman, founder of Bodega Studios, a video-production agency with offices in Chelsea and San Francisco, says the outfit’s name is a nod to its New York roots and personalized service.”

Bodega Pizza “co-founder Jose Morales, who grew up in the neighborhood working in his father’s bodega, remembers corner stores where everyone gathered to drink and play the Dominican lottery … The facade of his pizzeria … is a yellow metal awning featuring a traditional bodega’s red lettering and flashing bulbs. The front windows are stacked with green tins of Keebler Export Sodas Crackers, pillar candles and faded Brillo boxes. Mr. Morales … says he’ll soon offer groceries along with the pizza. ‘You can eat a nice pie, have a beer and go home with some soap, cereal and toilet paper,’ he says.”

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Wing on Wo & The ‘Wow’ Project

The New York Times: “Wing on Wo’s humble red-painted storefront at 26 Mott Street is said to be the oldest continuously run business in Chinatown. It opened on Mott as a general store in the 1890s … The family that established Wing on Wo more than a century ago still runs things … although the shop’s appearance doesn’t suggest any important heritage. Its shelves are dusty, its pace is sleepy and foot traffic is slow.”

“Wing on Wo’s salvation appeared in Mei Lum, 26, the second-youngest of the family’s five grandchildren … She is now reinventing the shop, molding it into a community space that operates against the backdrop of Chinatown’s history … she envisions a forum for panels on issues like neighborhood politics, exhibitions for local artists and a coffee shop. Ms. Lum held an event recently at the store on the neighborhood’s gentrification, and a planned panel will include influential businesswomen from Chinatown. She calls her concept the W.O.W. Project.”

“Ms. Lum’s new vision for Wing on Wo, ironically, resembles the store’s original incarnation over 100 years ago … General stores like Wing on Wo were crucial hubs in this early village-like stretch. They sold tastes of home like dried fish, herbs and tofu, but they also operated as social clubs, representing Chinese villages and counties, and provided mail and money-wiring services.”

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Foodies & The Single Cow

The Wall Street Journal: “Retailers including Whole Foods Market Inc., FreshDirect, and Amazon.com Inc. are building farm-to-store meat operations that sate some consumers’ desires to trace their burger or bacon all the way back to an individual animal … Other retailers, like Honest Beef Co., are supplying cuts directly to consumers, cutting out the meatpacking middlemen and grocery chains in a foodie twist on traditional mail-order businesses like Omaha Steaks International Inc.”

“Setting up a single-cow supply chain is costly and complex … Customers must be willing to pay princely sums for these cuts. In addition to its minimum order size, Honest Beef charges around $8.50 a pound for dry-age ground beef. Elsewhere, ground beef prices in August averaged $4.25 a pound nationwide … most burgers are made from a combination of lean and fatty scraps left over after higher-value cuts like the T-bone are carved up. That means a 1-pound package of store-bought ground beef could contain meat from hundreds of animals.”

“When officials at online grocer FreshDirect began traveling to Pennsylvania and upstate New York to pitch farmers on ‘disrupting the grocery supply chain,’ the idea was met with skepticism … Today, the skeptics are falling away. Demand for a cut of a cow offered in its ‘hyper, hyper local’ beef, which the Long Island City, N.Y., company can identify down to the group of steers it bought from a particular farm, has been strong since it made its debut last year.”

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Walmart’s Online Pickup Plan

The Washington Post: “Walmart is America’s largest grocer, and its aggressive expansion of pickup services has turned its parking lots into a laboratory for the future of online grocery shopping — one of the trickiest puzzles in all of retail … With the pickup model, Walmart is testing whether its best weapon in this digital fight is its most old-school — and hardest to replicate — asset: a network of more than 4,600 stores.”

“It is counting on a different idea of convenience, one that caters to time-starved suburbanites who spend hours each day in their cars. Maybe for them swinging into a parking lot for a few minutes makes more sense than waiting around the house for a delivery … While Walmart does not disclose sales figures for online grocery pickup, it has taken the program from five markets to more than 80 nationally in the past year.”

“Walmart will have hurdles to clear as it aims to build the free service into a bigger business: For one, shoppers have often been reticent to buy groceries online because they are worried about the quality of the fresh meat and produce … Yet, if the pickup format keeps gaining customer affection, Walmart could be especially well-suited to ride the wave. About 90 percent of Americans live within 10 miles of a Walmart store.”

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Walmart & The Nexus of Hi-Tech and Hi-Touch

Walmart CIO Karenann Terrell: “We’ve observed that online customers have a very, very high level of satisfaction—above 90%—while for those shopping in the store, it isn’t nearly at that high level. We wanted to dig underneath and find out why. The convenience of online ordering, coupled with the special treatment online customers get when they come in person to pick up their orders, leads to a more satisfying experience.”

“We’ve hired dedicated personal shoppers to pick these online grocery orders for customers. They see these customers regularly and know their preferences and begin to know them personally. That has been a huge learning for us in how we will manage stores. One associate wrote a Happy Mother’s Day card to a single mom who visits every week and has a son with Down syndrome.”

“I’m so fascinated with the Internet of Things. It could make a huge difference operationally and with the improvement of the experience for customers … It’s real-time data about goods on the shelf at the time that the customer shops. On-shelf availability means what the customer wants is fully available to them. They don’t say, ‘I wanted Crest Pro Health toothpaste but they were out.’ The Internet of Things is going to rock the world of operational effectiveness.”

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Grass-Fed Beef: Not a ‘Luxury’ Anymore

The Wall Street Journal: “Grass-fed beef, once a niche luxury, is now sold at ballgames, convention centers and nearly every Wal-Mart in the U.S. Beef labeled as grass-fed connotes much more than cattle that were raised in a pasture, say grocers and restaurateurs. Many consumers perceive grass-fed beef as a healthier, higher-quality alternative to conventional beef and are willing to pay more for it, no matter that labeling—and flavor—can be inconsistent.”

“Not every retailer is onboard. Costco Wholesale Corp., the country’s second largest retailer after Wal-Mart, doesn’t sell grass-fed beef, though it sells organic ground beef in every U.S. store. The definition of grass-fed beef is still too ambiguous, the taste too inconsistent and Costco consumers gravitate most to an ‘organic’ label for now, says Jeff Lyons, Costco’s senior vice president of fresh foods.”

“Theo Weening, Whole Foods’ global meat coordinator, expects demand for grass-fed beef to grow well beyond human appetites. ‘When a customer likes grass-fed beef and they have a dog, they want the dog to have grass-fed beef, too,’ he says.”

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Rural Retail Joins Digital Age

The Wall Street Journal: “E-commerce hasn’t just reached rural America, it is transforming it by giving small-town residents an opportunity to buy staples online at a cheaper price than the local supermarket. It also provides remote areas with big-city conveniences and the latest products. Contemporary fashion, such as Victoria Secret bathing suits or Tory Burch ballet flats—items that can’t be found at Dollar General—are easily shipped.”

“According to Kantar Retail, about 73% of rural consumers—defined as those who drive at least 10 miles for everyday shopping—are now buying online versus 68% two years ago. Last year, 30% were members of Amazon Prime, up from 22% in 2014 … A Wal-Mart built in 1982 in Altus, Okla. … brought residents choice, convenience and low prices. Now, online shopping is creating another retail revolution here that doesn’t require a half-hour drive to Wal-Mart or roughly 2½-hour drive to Oklahoma City … ”

“E-commerce has provided new opportunities for area residents to earn money. In Willow, Okla., Anneliese Rogers, a mother of three, raised $1,500 in one sitting by selling items from her closet on Facebook. Nearby, Kassandra Bruton mails up to 100 packages a week from her clothing store Trailer Trash … E-commerce has changed life for Flowers Unlimited, the last remaining Mangum, Okla. florist and gift shop on the town’s square. While it has lost much of its bridal and baby registry business to online retailers, it has one big advantage: There is still a need for last-minute gifts, says owner Darla Heatly. ‘They can’t do e-commerce if they don’t plan ahead,’ she adds.”

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Joy Makers: How Driscoll’s Brands Its Berries

The New York Times: “Its strawberries have been bred for a uniform shape … while Driscoll’s raspberries are pinker and shinier, made to meet desires expressed by consumers … Driscoll’s is betting that once consumers know why its berries are distinctive they will demand them by name … Driscoll’s plans to build awareness methodically, by starting with digital outreach. The company’s website, which largely offered recipes, has been changed to explain more about Driscoll’s berries and what makes them different.”

“The public will get an introduction to the people Driscoll’s calls its Joy Makers — agronomists, breeders, sensory analysts, plant pathologists and entomologists who will explain how the company creates its berries. The company’s YouTube channel will feature stories told by consumers about why berries make them happy. Facebook, Twitter and Instagram will be used to send traffic to the website and YouTube.”

“Labels on the company’s berries have been changed, too, to ‘speak’ more to consumers, using a scriptlike font for the Driscoll’s name with the dot over the ‘i’ colored to match the berries inside the box … Since margins on produce are razor-thin, most companies elect to spend the few dollars they have for marketing to woo buyers for supermarket chains rather than consumers.”

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