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Restaurant Daily News Sunday, May 21, 2017 4 6 KEY TRENDS SHAPING FUTURE OF GROCERY RETAILING What could be said 20 years ago is even truer today: the U.S. food retailing busi- ness has never been more competitive. According to "The Future of Food Retailing: Value Grocery Shopping in the U.S.," a brand new report by market research firm Packaged Facts, there are a number of trends that are putting pressure on food retailers of all stripes, from supermarkets whose bread and butter is groceries to supercenters and drugstores for which food is a smaller but still cru- cial part of the product mix. "Food retail is evolving. The cus- tomer is king, and perhaps more than any time in history, the consumers are firmly in control. Competition from multiple channels is unrelenting, and retailers must be creative and innovative in their marketing, products offerings, services, and even store designs just to garner even a semblance of consumer loyalty," says David Sprinkle, Research Director, Packaged Facts. In "The Future of Food Retailing: Value Grocery Shopping in the U.S.," Packaged Facts identifies several trends impacting the food and beverage retail market. Three of the most prominent are the incursion of e-commerce onto the food retailing landscape, the evolution and expansion of contactless payment options and the rise of the smaller store formats. The E-Commerce Effect For several years, e-commerce has been one of the fastest growth areas for gro- cery and consumable products. Retailers covet e-commerce shoppers because they tend to be less price sensitive, spending noticeably more than in-store only shop- pers and driving higher margins. E-com- merce shoppers are also desirable because they tend to stock up, placing two large orders per month on average, with items in their baskets often double or even triple what is typically found in the carts of in-store shoppers. Not surprising given Amazon's inex- orable inroads into consumables, many brick-and-mortar chains have begun mak- ing it possible for shoppers to order online and pick up in store. By some estimates, brick-and-mortar stores now average more than 100 e-commerce orders per week. The practice is so popular that even Amazon wants a piece of the pie and is reportedly considering establishing up to 2,000 "click and collect" stores and possi- bly even some full-scale grocery stores. Unsurprisingly, even the ever savvy and mighty Walmart is not immune to the allure of e-commerce. The supercenter juggernaut is working to get up to speed and dramatically boost its digital opera- tions to better compete with the likes of Amazon, which presently has the advan- tage of a larger online presence in inter- national markets, a larger selection and number of products online, and a more successful mobile app and customer loy- alty program in Amazon Prime. Walmart's $3.3 billion acquisition of Jet.com in August 2016 was a decisive strategic step in boosting the retailer's digital operations. Use of Mobile Payments, Apps, and Screenless Payment Accelerate Especially as Millennials and Gen Z come of age, a growing aspect of shop- ping convenience will be the ability to pay wirelessly or by tapping a card on a reader. Many experts predict 2017 will see accelerated growth in contactless transactions due to a variety of factors, including America's continued transition to the EMV electric standard for smart payment cards requiring insertion rather than swiping. Rapidly gaining ground are apps designed to speed up the payment process, keep track of transactions, cal- culate and apply customer rewards, and help shoppers bypass lines. For example, since introducing the popular Walmart Pay in 2016, Walmart has already added two new features to the mobile app: the ability to refill prescriptions and skip pharmacy lines and the ability for users of Walmart Money services to submit information for the transaction privately rather than filling out paperwork in stores, also skipping the line. Also get- ting into the app game, Target plans to introduce a mobile payment option in 2017, although it is not yet clear whether it will be embedded in the core Target mobile app, Target's Cartwheel dis- count/coupon app, or both. On a similar note, screenless pay- ment is shaking up online grocery shop- ping. A pioneer in this area is Amazon with its voice-activated Alexa home assistant and developing cashier-less Amazon Go brick-and-mortar stores, where sensors automatically calculate purchases as customers load up and leave the store." Smaller Stores Bigger Than Ever If there's one thing every grocery shop- per wants, it's the convenience of being able to get in and out of the store as quickly as possible, and for a growing number of shoppers and retailers, smaller stores are the ticket. In Europe, ALDI and Lidl have long wielded the smaller store advantage compared to the huge hyper- markets, and both chains are expanding in the U.S. As a result, the smaller store strategy will be even more important to Walmart and Target, both of which have been fielding smaller formats to offset inroads made by dollar stores and to fill the gap between full-sized supercenters and stores too small to warrant their invest- ment. Walmart's experiments with small- format stores include its Neighborhood Market stores – which measure approxi- mately less than one-quarter the size of a Walmart Supercenter – and currently number about 700, with expansion ongo- ing. Walmart also recently added two Walmart Pickup and Fuel shops as a way to test additional pickup options. Customers order online and pick up at the smaller stores, which carry convenience store basics as well as fuel. The orders are delivered from larger Walmart stores to the smaller stores. Target, too, has been opening small stores, though mostly in urban areas where space is tight. In late 2016, Target opened three smaller format stores in New York City, and according to reports, Chief Executive Officer Brian Cornell envisions opening hundreds of smaller Targets, making them a major part of future growth. Overall in 2016, Target opened 32 "flex-format" stores occupying less than 50,000 square feet, with plans for at least 16 more in 2017. The smaller stores afford Target entry into high-rent urban areas that can't handle typical big- box stores. Along with the smaller size, the stores' product selection is tailored to the surrounding demographic. As of early 2017, even the smallest value grocery format of all – dollar stores – is going even smaller. Looking to tap further into the all-important Millennial cohort, in January 2017 Dollar General began testing in Nashville a 3,400- square-foot concept called DGX, with plans to open a second DGX in Raleigh, North Carolina. ALPHA PACKAGING FOCUSES ON SPORTS NUTRITION WITH PET AND HDPE CANISTERS By Marny Bielefeldt, Vice President of Marketing, Alpha Packaging Alpha Packaging has added new sizes, gram weights, manufacturing locations and bottle shapes to offer packaging options for sports nutrition products from 1500cc to 2 gallons. With the recent addition of 5000cc, 6250cc and 7,570cc (2-gallon) sizes, Alpha Packaging has once again extend- ed its line of polyethylene terephthalate (PET) Indented Large Packers, offering the most complete line of sizes ranging from 1/2-gallon to 2 gallons (including two styles of 1-gallon Indented Packers). All of Alpha's PET Indented Large Packers are manufactured using a single- stage blow molding process. Standard colors are clear, white, cobalt blue, dark green, light amber, dark amber and black. Bottles are available with low minimums for standard colors; custom colors require a minimum of 10,000 pieces with a $500 purge charge, or Alpha will waive the purge charge for orders of 50,000 pieces or more. In addition to the family of PET Indented Round Packers, Alpha also offers three sizes of square PET Plaza Jars with grip areas. The fam- ily includes a 32-ounce, 64-ounce and 1-gallon size. The 32-ounce Plaza Jar features an 89mm neck, and the two larger sizes both have a 110mm neck large enough for scoops and spoons. However, with the convenient grip areas, they are also easy to hold in one hand while pouring out the contents. In addi- tion to sports nutrition powders, Alpha's Plaza Jars are ideal for dry food products and powders, including coffee, loose tea, herbs and spices, soup mixes, cereals, dried beans and legumes, candies, nuts and pretzels. If you prefer high density polyethylene (HDPE) bottles for your sports nutrition powders and dry sup- plements, Alpha's line of straight-sided HDPE canisters offers 11 sizes and three neck finishes to accommodate different styles of closures. Additional new sizes and styles of HDPE Large Packers are being added in 2017 with a focus on the West Coast. Samples can be ordered at www.alphap.com. For more information, call 800.421.4772. THE A LA MODE ICE CREAM STORY As longtime ice cream lovers, a la mode didn't want kids or adults with nut aller- gies to live in a world where they could- n't enjoy the tasty treat of some sweet delicious ice cream – so the company did something about it. First, in its critically acclaimed ice cream shop on New York City's Upper East Side, and now in its national product roll-out, a la mode ice cream leaves out the potentially harmful stuff (nuts, gluten, sesame seeds and eggs), but leaves in all of the rich, satisfying taste of a premium ice cream brand. With nut and other food allergies of increasing concern, it's good to know that a la mode ice cream is made in a state-of-the-art manufacturing facility where there is absolutely no chance of its products being compromised by any nut dust (or trace amounts of eggs, sesame seeds or gluten). The delicious cre- ations from a la mode have already been widely recognized for their supe- rior flavors and variety. This allergy-con- scious, handcrafted approach – along with a mouth-watering menu of exciting new flavors – guarantees that a la mode ice cream will soon become an ice cream "superstar" in your store, too. You can't buy happiness, but you can buy ice cream … and that's pretty much the same thing.