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    Food by the Numbers

    10.3%: Surge in Hain Celestial’s stock price after news of the company’s better than expected figures. Concerns over the company’s organic growth potential were not enough to offset positive sales figures of the company’s organic products.

    $100 million +: Average investment in digital technology investment of large organizations ($500 million+ in annual revenues) for the coming year as determined by a survey of 820 top executives by Tata Consultancy Services.

    $8.5 billion: Offer Family Dollar Stores rejected from Dollar General Corp. Family Dollar Stores is now pursuing completion of a prior agreement to be acquired by Dollar Tree in an agreement that would shake-up the quickly growing “dollar store” market.

    $1.2 trillion: Purchasing power of Hispanic community in the United States – helping explain retail and grocery efforts to cater to the community with bilingual campaigns, “international” food offerings, and the growth of both Hispanic grocers and national chain locations in Hispanic communities.

    58%: Percent of Americans that are unsure whether foods produced through biotechnology are available in supermarkets according to the International Food Information Council’s “Consumer Perceptions of Food Technology” survey.

    200: Number of stores Walmart tested its “Scan & Go” app in. While the tests were not favorable, Walmart has used the insight from the tests to direct future testing and research – noting customers liked tracking spending while shopping as one favorable insight gained.

    51%: The percent of seafood at Safeway that is sustainably sourced according to the company’s sixth annual sustainability report. Safeway has a goal of reaching 100% by the end of 2015.

    1: Major British retail locations that are not reliant on the country’s national energy grid after a Sainsbury’s in central England partnered with Biffa, an anaerobic digestion plant, to turn rotten vegetables into the power needed to run their shopping location.

    3 million: Reduction in calories consumed by Google employees after the company displayed dried figs and pistachios in place of M&M’s in its offices. The move has led to greater discussion of changing the foods placed near check-out counters to combat obesity.

    1.7 billion: Number of items sold weekly in US supermarkets according to James Kaufman, manager of public health research for IBM Research. IBM has recently started an initiative to use algorithms to identify potential sources of contaminated food and food-borne disease that have, up until now, been very difficult to trace due to the complexities of the US retail landscape.


    Refrigerated Cases and Berry Freshness

    Supermarket News highlighted findings from recent case studies that may change the way grocers and retailers display food in certain refrigerated units.

    Despite widely adopting refrigerated technologies such as EC motors, night curtains, LEDs, and other energy saving practices that have resulted in significant energy savings, few grocers have adopted glass doors to open cases. While there is little debate that such doors could reduce upwards of 70% of the energy load of the refrigerated cases, many grocers and retailers have raised the objection that glass doors reduce sales as customers do not want to open doors to access food.

    Recent case studies have shown that these reductions are lower than thought, meaning the energy savings are likely to offset any lost sales – supporting the adoption of glass doors. With a new generation of more efficient, attractive, and flexible options, it is possible that momentum will switch towards the adoption of these options.

    Interestingly, the high growth of berry sales may aid in adoption of these new refrigeration units. Agricultural lender Rabobank forecasts 7% growth of berry sales in 2015. Importantly, grocers can capture a premium for fresh berries, as customers prefer fresh berries to frozen. Proper temperature control is key to realizing berry sales and a new white paper from Hillphoenix Inc., a retail refrigeration supplier, outlines how refrigerated cases or walk-in coolers are superior to static (or still-air) units which cool only the outer edges of the items in the unit. Today’s advanced refrigeration units provide more cooling and can cool berries 20 times quicker than static cooling. Hillphoenix’s Jack Sjorgen believes “Berries offer significant opportunities for retailers, with appropriate refrigeration to maintain the right temperature and humidity, retailers can protect the freshness of their berry products and the viability of their sales.”


    GMO Labeling Proposition to be on Colorado Ballot

    A Washington Post article outlines a proposal in Colorado to require the labeling of genetically modified food.

    Supporters of the proposal, Proposition 105, have amassed close to 40,000 more signatures than the required 86,105 for the initiative to be placed on Colorado’s November ballot.

    The initiative follows the failure of Washington state to pass a similar initiative last fall that saw record spending ($33 million against and $10 in support) from both corporate giants and interest groups. Neighboring Oregon will also vote on labelling requirements for genetically modified food and Vermont became the first state to enact requirements earlier this year.


    Growth of Sustainable Palm Oil

    According to an article on FOODBUSINESSNEWS, global sales of sustainable palm oil have risen 65%.

    In the first half of 2014, 1,117,042 tonnes of sustainable palm has been sold, compared to 678,181 tonnes over the same time period in 2013 according to sales data from the Roundtable on Sustainable Palm Oil (RSPO), which certifies the sustainability of the product globally. The 65% increase outpaces the 29% increase in sustainable palm oil supply – the first time sales of certified sustainable palm oil have outpaced supply.

    The RSPO found that large-scale oil palm expansion from 1990 to 2010 resulted in the loss of 3.5 million hectares of land in Indonesia, Malaysia, and Papua New Guinea and the WWF outlines how this loss, mostly from rainforests, has destroyed land critical to endangered species such as: rhinos, elephants, tigers, and orang-utans. The certified sustainable palm oil (CSPO) label by the RSPO signifies that the palm oil plantations were established on lands without significant biodiversity, wildlife habitat, or other environmental values as well as well as ensuring high environmental, social, and economic standards.

    Companies such as Proctor & Gamble have recently adapted their policies to ensure more sustainable efforts and consumers can make more informed purchasing decisions through utilizing the Palm Oil Guide & Scanner sponsored by the El Paso Zoo and powered by LabelINSIGHT from FoodEssentials.


    FDA Gluten-Free Regulations

    As of August 5th, new FDA regulations on gluten labeling became law in the United States. The rules had been announced in August 2013, giving companies a year to come into compliance. Rules to govern gluten labeling had first been proposed in 2007 in response to The Food Allergen Labeling and Consumer Protection Act of 2004 which requires manufactures to disclose the presence of eight major allergens, including wheat, on food labels and required the FDA to establish rules for gluten-free labeling.

    The new regulations will standardize the meaning of “gluten-free” on food labels and will be a voluntary claim for manufacturers to use. The FDA limit is 20 parts per million (ppm) for foods to be labeled as “gluten-free,” “no gluten,” “free of gluten,” or “without gluten,” as this limit is said to be an acceptable amount for those with celiac disease. Manufacturers that use the label without meeting criteria are subject to FDA regulations. The regulations apply to all foods and beverages with the exception of: meat, poultry, and certain egg products (regulated by the USDA) as well as alcoholic beverages (regulated by the Alcohol and Tobacco Tax and Trade Bureau).

    The news is likely to be a relief for the approximately 3 million Americans (~1% of population) with celiac disease as well as the 11% of households that have adopted gluten-free diets (with 25% of those citing celiac disease of gluten sensitivity as the main reason for adoption). The ascension of gluten-free products is estimated to raise gluten-free market sales from $4.2 billion in 2012 to an estimated $6.6 billion by 2017 according to Packaged Facts, with the marketing firm Mintel estimating the sales of gluten-free foods and beverages to reach as high as $15.6 billion by 2016.


    The Challenge Posed to Large CPGs by Their Small and Nimble Counterparts

    A recent FoodBusinessNews article highlighted the advantages of smaller more nimble businesses. Tony Vernon, the CEO of the Kraft Food Group, shared his insight regarding changing customer trends and the increasing threat small businesses are posing to large Consumer Packaged Goods (CPG) companies during the company’s second-quarter conference call. Vernon stated, “In some ways, we have to unlearn what we believed to work in the past and re-learn what will make a difference today. In the short term, adjusting to such momentous shifts favors the smaller, more nimble players that are working from a small base. I think that’s what you’re seeing play out in the most recent set of financial results across the food and beverage industry.” Vernon referenced the fast pace of change by smaller players in the industry when discussing challenges Kraft faces, noting the rise of sweet yogurts as a cause of the company’s Jell-O brand’s slumping sales.

    An Ad Age article from last October outlined these changing dynamics, noting that small and midsize firms took 1.6 share points ($10 billion in sales) from large CPG companies from 2009 to 2012 according to a report by IRI and the Boston Consulting Group. Rex Briggs, CEO of the analytics firm Marketing Evolution, suggests, “Digital and social media actually tilted the playing field in favor of the new entrant who doesn’t have the legacy ways of doing things.” This trend is also present in e-commerce, where analysis done by Sanford C. Bernstein found e-commerce sales account for 5-9 percent of large CPG company sales while smaller more nimble alternative CPG companies rely heavily on e-commerce (Method and Seventh Generation both have greater than 25 percent of sales through this channel). With the struggle of small retailers to find (or pay for) shelf space, the limitless “shelf space” on online retailers such as Amazon represent an area where smaller companies can compete on fairer terms – which may explain why in October of 2013 Bob’s Red Mill gluten-free rolled oats was the number one selling cereal on Amazon.

    While it remains to be seen how large CPG companies such as Kraft will cope with lost market share, or whether the gains by smaller companies are sustainable, it is clear that a multitude of factors have changed how companies compete for sales. Perhaps most importantly, changing customer perceptions and large company’s unwillingness to compete in new categories that offer lower (relative) returns will continue to result in markets for smaller more innovative companies to compete in, often at the expense of larger companies.



    Walmart: A Summary

    WalmartThis week, we have listed and analyzed Walmart's Health & Wellness functions across its three platforms (online, mobile, and in-stores).

    Walmart, with its attribute-inclusive, structured product database that links to other functions (i.e. shopping list, recipe box, filtration, etc.) excels. However, there are other opportunities for improvement, specifically in-stores.

    Here are some areas where Walmart can expand its health and wellness initiative:

    • Attribute Based Shelf Tags: Instead of just tagging products as "Great for You", Walmart could identify them with a variety of attribute based shelf tags: "heart healthy", "low-fat", "gluten-free", etc. 
    • In-Store Events: Walmart could offer in-store events/resources beyond the clinic. Other companies employ retail dietitians, provide store tours, wellness screenings, nutrional advice, and more. 
    • Special Store Sections: Walmart could create seperate in-store sections for special diet attributes like gluten-free, kosher, etc.
    • Mobile App Content: The mobile app could be improved by including Aisle7 health and wellness information, as seen online.
    • Continue Reformulation Efforts Beyond 2015
    • Virtual Features: Store tours, nutrition advice, fitness advice, etc.

    As retailers look for ways to evolve and respond to ever-changing consumer demands, a complete and robust product database presents itself as a necessity rather than a luxury. Retailers that have a complete and up-to-date product database, one that is encompassing of every product's ingredients, nutritional information, as well as certification and marketing claim attributes, find themselves in a place to be proactive - in a position to win in the marketplace. Knowing what is happening today places you in a better position for tomorrow.

    Next week, we will look at ___! Stay tuned!

    A Live View Into The Marketplace



    Walmart: In-Stores

    WalmartToday, we will take a look at Walmart's in-store H&W platform that starts with its effort to reformulate packaged foods by decreasing sodium and sugar.

    Take a look at the in-store features:

    • Great For You Shelf Tags: The "Great For You" icon is a shelf tag that denotes products that Walmart has deemed "more nutritious". All products displaying this tag have met various nutrition criteria based on the latest nutrition science from the 2010 Dietary Guidelines for Americans, U.S. Food and Drug Administration (FDA), U.S. Department of Agriculture (USDA), and Institute of Medicine (IOM). 
    • Reformulating Packaged Foods: By 2015, Walmart seeks to reduce sodium by 25%, decrease sugar by 10%, and remove all industrially produced trans fats and partially hydrogenated oils from thousands of products by working closely with suppliers/manufacturers.
    • Corporate Commitment: Walmart has commited to making healthier choices cheaper.
    • The Clinic at Walmart: Individual clinics offer services at select stores nation wide.  These services include: blood pressure checks, flu treatments, wart removal, cholesterol screening, and more.

    While Walmart offers a fair amount of H&W features in store.

    Stay tuned for "Walmart: A Summary"!

    A Live View Into The Marketplace


    Walmart: Mobile App

    WalmartToday, we will focus on Walmart's mobile app. The mobile app does offer several Health & Wellness features, but not the complete breadth of information found online.

    Check them out:

    • Early Access Notifications: Notifications to ensure you are the first to learn about in-store and online specials."
    • Fast and Easy Refills: Easily reorder prescriptions to pick up in-store.
    • Store Mode: The application recognizes when you're in a Walmart store and provides easy access to the weekly ad, store specific information, highlights new items, Rollbacks and more.
    • Shopping List: Add items to your list by typing and scanning or speaking product names. The list tallies your total allowing you to budget prior to shopping. When viewing or browsing for items, the app provides users with product data.  This function is linked to the product database.  Users can filter while browsing.
    • Check Pricing and Availability: Understand a product's price and availabilty both online and in your store.
    • Weekly Ad: View your store's weekly ad for easy page-by-page turning, product information, customer ratings & reviews.
    • Scanner:  The app's built-in scanner functions both in and out of the store to access product information, price, ratings & reviews and additional content.
    • Customer Ratings and Reviews: Browse and search within the app to see what others are saying about your desired products.
    • Store Finder: Enter your current ZIP code or city and state to access a store's location (with directions and map), phone numbers and operating hours.
    • Shop Product not found in-store, ability to check on-line

    For a mobile app platform, Walmart's app incorporates a large amount of product data for use in H&W functionality.

    Walmart has delivered positive results in terms of its mobile platform; tomorrow, we will see if the trend translates into high-quality in-store offerings! Stay tuned!

    *Source: Walmart Mobile App 

    A Live View Into The Marketplace


    Walmart: Online

    WalmartWalmart provides users with a thorough online shopping experience; it is well-designed and provides product-data-based functionality.

    Let's take a look at Walmart's online features - with a focus on health and wellness: 

    • Product Database: Walmart's website provides users with a product database containing information on all of its food and beverage (as well as other) products. The data displayed includes: ingredients, specifications, warnings, nutrition facts, and even some claims. Products can be filtered by a myriad of health and wellness attributes as well as price, brand, category, type, dietary considerations, and more. 
    • Recipes: Walmart offers recipes online.  The recipe database makes use of product data; it is filterable by course, main ingredient, cost per serving, number of servings, and dietary preference (Dairy Free, Gluten Free, Nut Free, Vegetarian).
    • Online Tools: BMI Calculator, VitaSelect (vitamin recommendation program), Calories Burned Calculator, Allergy Alert, and Medicine Finder. 
    • General Health and Wellness Information: Information on healthy living, healthy eating, allergies, specialty diets, diseases, mens' health, womens' health, etc. in the form of articles/web pages. This information is provided by Aisle7.  
    • Shopping Cart: Products as well as ingredients from recipes can be added to the shopping cart. The items are selected using the product database - which provides product data.  
    • Recipe Box: Users can add their favorite recipes to their recipe box on Walmart's website.

    Walmart offers a great health and wellness initiative (online); the majority of its offerings are connected through the use of product data and attributes.  The recipe box, recipes, products, shopping list, filtration options, and attribute options are all connected through the product database - a database containing structured product data, for use in multiple platforms, to present to consumers in a transparent fashion that increases the ease of their shopping experience.

    Do Walmart's other platforms match this precedent? Tune in, and find out tomorrow - we will discuss Walmart's mobile application!

    A Live View Into The Marketplace