Oser Communications Group

GOURMET NEWS OCTOBER 2014 www.gourmetnews.com GENERAL NEWS 6 Trade Show Buzz American Farmland Trust will be holding the first Farmland, Food and Livable Com- munities Conference in Lexington, Ken- tucky on October 20-22. The conference will bring together leading experts from around the country for the first nationwide conference focused on farming, land use and food policy. It will showcase and en- courage best practices and inspire efforts to protect farmland and the environment, support the next generation of farmers and women in agriculture, encourage job cre- ation and create new opportunities in local and regional food systems. "This is the first time a national confer- ence will bring together these diverse inter- ests to comprehensively address the 21st century challenges of agriculture," said An- drew McElwaine, President and CEO of AFT. "The conference will encourage greater understanding and collaboration to support agricultural viability and vibrant community food systems." "Nationally, we have been losing one acre of farmland every minute to other uses," McElwaine continued. "Globally, we need to double food production by 2050 … With some of the most productive farmland in the world, the United States must be part of the solution to hunger here at home and around the world, and to do that, we must find creative ways to protect farmland and the farmers who sustain us." The conference programs will address four principal themes, including ensuring high-quality farmland is available and af- fordable for agriculture, supporting agricul- tural viability and a fair and just food system, creating opportunities for the next generation of farmers and emerging issues surrounding women in agriculture. Keynote speakers and local as well as na- tional leaders will share their experiences and expertise on these themes with many opportunities for participants to network, share information and learn about best-in- class practices, planning and policy devel- opment. Other conference highlights will in- clude an opening reception, giving partic- ipants a chance to network and experience fare from local farms; a farm tour, showcasing Fayette County's world- renowned farms and demonstrating the value of its land use planning and farm- land protection efforts; mobile work- shops, giving participants a taste of urban agriculture and innovative local food en- terprises in Louisville and Lexington; and a farmer-chef connection banquet that will celebrate farmers and showcase the region's seasonal bounty. "We are thrilled that American Farmland Trust has chosen Kentucky as the site of this national conference," said Kentucky Agriculture Commissioner James Comer. "The leaders and experts at this conference will take on some of the defining issues of the 21st century – food production, food safety, hunger and balancing the need to protect the environment with the need to provide a safe, abundant and affordable food supply to a growing global popula- tion. As a state with a rich agricultural her- itage and a diverse agricultural industry, Kentucky will lead the way in meeting these challenges." The American Farmland Trust is the na- tion's leading conservation organization dedicated to protecting farmland, promot- ing sound farming practices and keeping farmers on the land. For more information on the policies and programs of the Amer- ican Farmland Trust, visit www .farmland.org, follow the organization on Facebook at www.facebook.com/american farmland or on Twitter at www .twitter.com/farmland. GN American Farmland Trust to Hold First National Farmland, Food and Livable Communities Conference Customer Loyalty Continued from PAGE 1 percentage is on the decline, demonstrat- ing that mainstream retailers are lagging behind when it comes to reaching those consumers who are seeking out premium products. "The mainstream food retailers are lag- ging behind and really not capturing all this growth," said Jim Wisner, President of Wisner Marketing Group Inc. WMG recently conducted a study of how spe- cialty foods can drive profits and build customer loyalty at mainstream retailers. "For mainstream retailers, specialty foods are at a crossroads. Either they are going to continue to lag behind the mar- ket, or they can move forward … and look to how specialty foods can play a bigger role and can be absolutely instru- mental in driving new profits." According to the WMG study, spe- cialty food shoppers represent a particu- larly valuable consumer segment to American food retailers. On average, spe- cialty food consumers spend $94.37 per week on retail food purchases, versus $75.03 for non-specialty food shoppers. Specialty food shoppers often have higher incomes, they are younger, and they are more adventurous and willing to try new cuisines. In addition, four out of five specialty food shoppers are willing to pay more for a higher-quality product. Still, despite how valuable specialty food shoppers are to food retail in this country, many mainstream retailers con- tinue to miss the boat, failing to offer an adequate selection of the products that are in demand among these consumers. The WMG study cites a number of rea- sons for this, including limited shelf space, product proliferation by main- stream CPG companies, the growth of private label, out-of-touch category man- agement and a misunderstanding of products' profit margins. The result of this is that many consumers are leaving their old supermarkets and flocking to the handful of mainstream retailers that are getting things right. One company that is working to help mainstream grocery retailers navigate the potentially tricky seas of specialty food is retailer-owned wholesale grocery co- operative Unified Grocers. Through its Market Centre subsidiary, Unified Gro- cers provides independent retailers in the western United States with the pre- mium gourmet products that their cus- tomers crave. "I think there are more retailers taking advantage of it today than there was 5 to 10 years ago, but certainly not enough," said Joe Falvey, Senior Vice President at Unified Grocers and President of Market Centre, of the current failure of main- stream grocers to capture the specialty food shopper's spending dollar. "We have seen some great examples of retailers that have been able to maintain a good price representation in the marketplace, creating a good opportunity to buy gro- ceries at a competitive price. They are getting not just a high end consumer that wants variety and selection but also a mainstream consumer who wants to do their regular grocery shopping. That seems to be a winning formula." The principal strategy Market Centre has employed in helping grocery stores become retail destinations for specialty food consumers is increasing the avail- ability of gourmet and premium prod- ucts in those stores. The company currently offers a portfolio of 52,000 SKUs in a variety of specialty categories, in addition to 102,000 SKUs from main- stream CPG companies. From olive oils and vinegars to sauces and condiments to premium candy, Market Centre helps a retailer become a place where shoppers can do their weekly grocery trip and pick up a few unique, high-end items at the same time. According to the WMG study, one of the best ways that mainstream retailers can drive specialty food sales is by choosing two or three categories that it wants to focus on and becoming a go-to place for these products. This can mean specializing in extra-virgin olive oil, hot sauce, honey, farmstead cheeses or any number of gourmet product categories. Market Centre has taken this route to success itself, focusing on offering retail- ers an extensive selection of products in three specific categories: ethnic foods, natural products and specialty gourmet. Another strategy successful retailers have for reaching specialty food shop- pers is to increase the store's selection of locally-produced and locally-specific goods. In short, it is important to iden- tify a store's specific consumer base and offer shoppers at that location products that are interesting and appealing to them. "Start with the basics. But then start looking within the category," said Wisner. "Look for local products, arti- sanal products that build a sense of com- munity about why people shop here." When it comes to merchandising spe- cialty foods in a mainstream supermar- ket, retailers have a choice between locating the gourmet and premium items in a dedicated section or integrating them into the store's larger product selec- tion. Wisner advocates for the latter ap- proach. "You're generally better off and generally will develop higher sales if the products are integrated into the cate- gories where the customer expects to find them. If I'm a specialty food shopper that's not all I am going to buy," he ex- plained. "If I'm an occasional [specialty food] buyer, if you have the products in where the products from the category exist, then you can now have that avail- able as a trade-up option." Falvey concurs with this approach. "For the most part, we believe that inte- grating itemization at least in the Western United States makes a lot more sense," he said. "It's really about the marketing that you do within those mainstream sections to call out the points of difference." When choosing to increase a store's se- lection of specialty foods, there are a number of potential pitfalls that retailers are forced to navigate, perhaps the most significant being the limited amount of space a store has on its shelves. Wisner says that a smart store owner will get rid of items that do not offer something dif- ferent for his or her consumers or in- crease profits. For example, if there are six brands of canola oil on the shelf in the same size, get rid of some of those and instead integrate some regional Ital- ian extra-virgin olive oils that add a brand new experience for the shopper. "What many retailers who get involved in shelf management and have all the space allocation management programs forget is that the goal is to create space and use it for higher margin products and signature products that separate [one] from the com- petition," said Wisner. "Our advice is that you need to create space and … shift con- sumers to higher margin products. In many cases, that means specialty food items." Another potential pitfall concerns the slower turn time for higher-end products in contrast to the turn time for main- stream CPG products. However, Wisner argues that this too is easily managed, as the higher profits on these goods offsets the amount of time they spend on the shelf. "When you really run the numbers … specialty food products performed comparably to mainstream products," he said. "High profits actually do offset slower turns." "It just depends on how you market it, merchandise it and promote it. There's certain formats where specialty products do very well because of the price point," added Falvey. "The difference with us is that I can show you accounts where the specialty gourmet category has become very mainstream. It's all about how you market it, merchandise it and promote it. Regardless of how mainstream retailers navigate the specialty food landscape over the coming years, it is clear that the consumer push for unique, premium and gourmet products is not going anywhere soon. "This is likely not just to be a blip, but certainly a long-term trend. We're all going to be able to benefit over the years," said Wisner. GN

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