Oser Communications Group

GOURMET NEWS AUGUST 2016 www.gourmetnews.com GENERAL NEWS 8 Retail Foodservice Continued from PAGE 1 extended deli counters offering sliced meats and cheeses. About 10 percent of supermar- kets fit into the foodservice specialist cate- gory, which offer warm ambiance for in-store diners, an extensive array of cuisine and per- haps a checkout area that's dedicated to food- service. About 25 percent of supermarkets fall into the destination supermarket cate- gory in which the stores are positioned as full-line grocers with good foodservice op- tions. About half of today's supermarkets fall into the tier that Technomic defines with pre- pared food departments, and many or most of them are currently looking at moving up a tier to the destination supermarket cate- gory, according to Hanson. At the same time, convenience stores are also aggressively moving toward more pre- mium foodservice options, he noted. Consumers are embracing these foodser- vice options offered by supermarkets. In the decade between 2006 and 2015, the an- nual growth rate for retail foodservice was 10.4 percent, compared to a 2.1 percent growth rate for conventional restaurants. On a dollar basis, the money that con- sumers spent for supermarket foodservice during that period went from $12.5 billion to $28 billion. Today, supermarket foodser- vice is a bigger business in the U.S. than K- 12 school foodservice, college foodservice or all health care foodservice. "Consumers are seeing more and more value in what they're experiencing with retail foodser- vice," Hanson said. In particular, con- sumers say that what they spend on a meal in a grocer's foodservice department is comparable to what it would cost them to prepare the same meal at home, while the price of the same meal in a restaurant is perceived to be more expensive. Technomic expects that supermarket foodservice will continue to grow at an an- nual growth rate of about 9 percent over the next 10 years, far exceeding the growth that's expected for restaurant foodservice, and Hanson predicts that retail foodservice will continue to steal market share from restau- rants over the foreseeable future, presenting grocers with a lot of opportunity for profit. In particular, Hanson anticipates that the line between retail foodservice and restau- rants will continue to blur, that younger consumers will drive more widespread use of retail foodservice, and that improving technology such as mobile payments and mobile ordering software will allow more more market segments to compete for the retail foodservice dollar. He suggests that self-serve and made-to-order formats will proliferate in preference to grab and go op- tions. "Grab and go is still doing well, but consumers are gravitating to the idea of customizing their food," he said. Ready-to-heat foods will gain traction, with more ethnic entrees that require re- heating, he predicted. This is not the same as a ready-to-bake option; it's the entree that requires just a couple of minutes of re- heating in the customer's home kitchen, he explained. Transparency in preparation, branding and labeling will help improve consumers' quality perceptions, and the demand for better-for-you prepared meals will continue to grow, which advantages grocery stores over convenience stores, Hanson predicts. "Consumers are becoming more interested in what's in it rather than what's not in it," he said. "Consumer acceptance is on the rise, but so are expectations. Everybody is on a level playing field when it comes to meeting consumer expectations," he said. "Prepared foods gives you an opportunity to differen- tiate." He noted that some stores are al- ready doing 20 percent of their business in prepared foods. "It's a gold mine if it's done right." GN Amid U.S. Senate approval of a mandatory nationwide system for labeling genetically modified foods, a new consumer survey from Coast Packing Company and Ipsos Research finds that only half of Americans say they understand the content of food la- bels -- and less than a third believe them. The nationwide survey of 1,000 adults, conducted in late May, examined both awareness and behavior around food label- ing, querying consumers about what they read, understand and believe – and how they act, based on that information. The Coast/Ipsos research revealed pro- nounced gender and generational divides in how we respond to data conveyed on food labels. When it comes to posted ingre- dients, less is more both for women and Millennials: 40 percent of women agreed that "a food label with fewer ingredients has a positive effect on my purchasing de- cision," as opposed to just 25 percent of men, and 33 percent of those in the 18-34 age bracket endorsed that view. Millennials are avid readers of food labels (68 percent versus 62 percent overall), and more than half say they understand food label content (54 percent compared to 50 percent overall). Fully 35 percent of Mil- lennials believe the content of food labels, highest of any age group. According to the survey, food label infor- mation tends to be more a deterrent to con- sumption than a license to eat. Overall, 45 percent of Americans avoid certain foods based on the content of food labels, with women (54 percent) more likely than men (36 percent) to avoid certain foods based on food label content. Older adults, ages 55+ (53 percent), are most likely to avoid certain foods based on the content of food labels, while younger adults ages 18-34 (42 percent) are least likely to steer clear of foods based on label information. By contrast, only 26 percent of those surveyed consume more of certain foods based on what's on the label. "Food labels are intended to help us make better food choices, but they're not working nearly as well as they should," said Eric R. Gustafson, CEO, Coast Packing Company, which supplies animal fat shortenings. "It's clear from the data that Americans aren't ig- noring food labels, but a great many don't fully understand or believe what they read. "We come down on the side of healthy, minimally processed animal fats, which is consistent with the entire movement in food and cooking right now," Gustafson said. "All things being equal, the fewer in- gredients on the label, the closer you are to the source, the better. We're encouraged that nearly a third of the population under- stands 'minimally processed' and values products that limit artificial ingredients – and that's especially true for Millennials." In late 2015, a Coast/Ipsos consumer survey found that that younger Americans are more receptive to animal fats in their diet than their elders -- and are eating ac- cordingly. The survey of 1,000 adults ex- amined how attitudes about animal fats in the American diet have changed in recent years – and how consumption patterns may be changing as well. Respondents were asked whether they were more or less open to animal fats, and whether those views ex- tended to actual behavior. In keeping with those results, The Hart- man Group's recent "Foodways of the Younger Generation" report found that both Millennials and Gen Z (15-18) are "crafting their own food culture: Millenni- als begin with a foundation of childhood habits learned from their parents, and then receive unprecedented exposure to the philosophies of healthy diets throughout their years in school. Today, they are con- ducting their own conversations and dis- coveries about food through their social networks and popular media channels." GN Survey Finds Confusion About Food Labels KeHE Distributors, LLC (KeHE) has named Timothy J. Wiggins as its new Chief Financial Officer, effective July 11. In his new role, Wiggins will be respon- sible for leading all aspects of KeHE's fi- nance function and strategic planning, as well as business unit and subsidiary per- formance. He will also serve as a member of the board of directors of World Finer Foods, a KeHE subsidiary, and as a member of the advisory board to Tree of Life Canada. "After an extensive nationwide search, we are pleased to welcome Tim Wiggins to the team," said Brandon Barnholt, President and CEO, KeHE. "Tim brings a depth of financial experience in the public and private sectors that will be valuable as we continue to drive shareholder value. Just as important, Tim is an excellent cultural fit due to his commitment to the development of people and a desire to help us live out our mission and values." "I am delighted to be joining such an outstanding organization," added Wiggins. "KeHE's mission, vision and values res- onate deeply with me, and I look forward to contributing to this important work." Prior to joining KeHE, Wiggins served as senior vice president and chief financial of- ficer at DeVry Education Group. He is a CPA and holds a Bachelor of Arts in ac- counting from Michigan State University. For more information, visit www.KeHE.com. GN KeHE Appoints Chief Financial Officer

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