Oser Communications Group

features Prepared Foods Becoming Top Strategic Imperative for Retailers Rotisserie chicken may have started the trend, but recently food retailers of every ilk are seeking out ways to ramp up their Retailer Meal Solutions programs. RMS has emerged as a critical strategic initiative for not only most supermarket chains and supercenters but also for convenience stores, dollar stores and drug stores. Shifting consumer dynamics are one reason for the growth in RMS. "Gone are the days of trips to the grocery store designed to address a family's needs for the next one to two weeks," said Wade Hanson, Director of Retailer Meal Solutions Practice for market research firm Technomic. "Instead, consumers shop more often and use many different types of stores with an eye toward fresh foods and ready-to-eat meals." For most food retailers, prepared foods at the store perimeter present a critical way to differentiate themselves from their competitors. "Since the center of stores have changed very little in look and function over the years, retailers must concentrate on the perimeter to set themselves apart with consumers," said Hanson. Suppliers can play an important role in helping retailers develop products and deal with related issues like supply chain, waste and consumer understanding. To help suppliers and retailers tackle these and other challenges, Technomic recently completed a new study on the RMS segment. The report updates Technomic's prior RMS research and provides new five-year forecasts, projected growth rates and insights into the needs of consumers and retailers alike. According to Technomic, over the past five years, supermarket prepared foods have grown more than 6 percent annually. Mass merchandisers/supercenters have experienced annual prepared foods growth exceeding 13 percent over same time period. While food margins are often slim, retailers have seen prepared foods margins strengthen and now view RMS as a profit center rather than a traffic driver. This development is fueling changes in store layout, labor utilization, merchandising, preparation practices and prepared foods menus. As the economy improves and consumers return to restaurants, retailers will need to continue raising the bar on their RMS offerings, particularly in terms of value and convenience. Technomic provides clients with the facts, insights and consulting support they need to enhance their business strategies, decisions and results. Its services include numerous publications and digital products, as well as proprietary studies and ongoing research on all aspects of the food industry. To learn more about Technomic's research on retailer meal solutions, visit www.technomic.com. n Eight in Ten U.S. Parents Report Purchasing at Least Some Organic Products in Past Six Months U.S. families are increasingly embracing organic products in a wide range of categories, with 81 percent now reporting they purchase organic at least sometimes. This is according to the Organic Trade Association's newly released 2013 U.S. Families' Organic Attitudes and Beliefs Study. Not only are more consumers choosing organic products at least sometimes, but the majority of those buying organic foods are purchasing more items than they did a year earlier. New entrants to buying organic now represent 41 percent of all families, demonstrating a growing interest in the benefits of organic food and farming. Produce continues to be the leading category of organic purchases, with 97 percent of organic buyers saying they had purchased organic fruits or vegetables in the past six months. Breads and grains, dairy and packaged foods were also frequently cited, all scoring above 85 percent Candy Sales Continued from Page 1 to change their candy purchasing behaviors, compelling them to both cut back and switch to less expensive products. If confectioners and retailers hope to continue to see rising profits from candy sales, they will need to adequately respond to a changing market and make smart, informed business decisions. Holiday sales continue to be among the most important for the confectionery industry, with approximately 25 percent of all candy sales occurring during four major holiday seasons: Halloween, Easter, Christmas and Valentine's Day. Retailers should begin planning and placing orders up to a year in advance if they are to take full advantage of these important seasons for confectionery sales. However, maximizing retail sales of Halloween or Christmas candy does not necessarily mean simply stocking seasonal aisles with monster- and Santathemed merchandise. According to Rob Auerbach, President of novelty confectionery company CandyRific, retailers must instead focus on taking advantage of the increase in overall store traffic they experience during these times. "Sometimes because you have so much traffic in stores, it doesn't necessarily need to be seasonally themed to be a big seller," Auerbach said. He offered up CandyRific's ever-popular Star Wars-themed merchandise as an example of something that sells well at any time of year. For him, it is important that retailers focus on the seasonal sales window as opposed to only on seasonally themed items. among those who purchase organic. Because of the growing interest among consumers in purchasing these items, organic foods are becoming increasingly important to retailers of all types. Organic buyers report spending more per shopping trip, and they are shopping more frequently than those who never purchase organic foods. Consistent with findings from previous studies, nearly half (48 percent) of those who purchase organic foods said they do so because these items are healthier. Additionally, consumers' desire to avoid toxic and persistent pesticides and fertilizers (30 percent), antibiotics and growth hormones (29 percent), and genetically modified organisms (22 percent) ranked high among the reasons cited for buying organic products. Awareness of the USDA Organic seal has also grown, with more consumers more likely to look for the seal when shopping for organic products. MoreIn addition, it is vital that retailers not rely solely on holiday sales when it comes to marketing candy to their customers. Especially this year, when both the Easter and Christmas holiday seasons are unusually short, retailers must think outside of the box and promote candy purchases throughout the year. Perhaps most importantly, both confectioners and convenience retailers should focus on creating and offering products that are timely, topical and on trend. "The retailer needs to be relevant to the consumer," said Auerbach. "If I'm the retailer, and I have a great selection, and I'm topical, I become a destination retailer." This is the difference between being the retailer the customer seeks out when she or he wants to make a particular candy purchase and one where customers simply make casual impulse buys. Of course, choosing what types of products and what licenses are going to be on trend and in demand a year or more in advance can be a particular challenge. For CandyRific, the answer lies in relying on the products and themes that are timetested and least likely to fail, but also with relying on years of industry expertise in spotting up-and-coming new hits. "We're dealing with licenses where there's low or no probability it's going to be dead or out of fashion," said Auerbach. "You see a license really starting to come in, and you try to ride the wave and time it." Right now, CandyRific is planning to launch a line of Monster's Universitythemed novelty confections, based on the characters from the popular children's movie franchise. The franchise's past popularity practically guarantees that the li- over, over four in ten parents say their trust in organic products has increased, versus 32 percent who indicated this point of view a year ago. In fact, younger, new-to-organic parents are significantly more likely to report improved levels of trust in organic products. "Consumer trust is on the upswing for organic as the gold standard when seeking to avoid toxic and persistent pesticides, antibiotics, synthetic hormones, genetically engineered ingredients, and additives," said Christine Bushway, CEO and Executive Director of OTA. Study findings are based on responses from 1,239 U.S. households, surveyed about their attitudes and behaviors related to organic foods. The report provides in-depth information about organic consumers' demographics, purchase motivation, labeling comprehension and shopping patterns. The study is available for purchase at www.ota.com/bookstore/2.html. n cense will be a profitable one for the company and for retailers that offer CandyRific products to their customers. However, with other licenses, such as Moshi Monsters, a group of characters already immensely popular in the U.K. and Australia but only recently introduced to the United States and Canada, CandyRific is relying on its unique industry expertise in jumping on what it hopes will be a profitable new wave. In addition to featuring products that are on trend and in demand, it is important that retailers not get too comfortable with their existing confectionery selection and constantly work to keep their candy aisles full of fresh, new offerings. "We are always constantly changing what's going on," said Auerbach about CandyRific's always evolving product line. "What we've seen over the years is that retailers that emphasize fun, exciting things are having greater success." Finally, by working with confectionery companies that have a proven track record for understanding today's candy consumer, retailers can ensure that they are getting reliable information about how best to market sweets to their customers. "We've been able to guide [retailers] intelligently," said Auerbach of his company's relationship with the stores that sell CandyRific products. "We are very data driven, and we've given our customers some good data about what's happened in the past." For retailers, having reliable data about the products their customers want to buy can mean the difference between a rapidly selling selection of sweets and a candy aisle that is just gathering dust. n May/June 2013 C onvenienceRETAILER 11

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