Invafresh was honored to be a keynote sponsor at last week’s FMI FreshForward event in Denver, Colorado. This exclusive, executive-only event was a great opportunity to meet with industry peers and discuss topics relevant to the grocery retail business.
Importance of Fresh in Grocery Retail
The continued importance of fresh in grocery retail was a central theme. According to research from FMI, 85% of grocery retailers use fresh and prepared foods as a differentiator strategy, with three quarters of them planning to increase store allocation for fresh food items.
Retailers plan to expand in several fresh categories:
- Fresh grab-and-go selection (74%)
- Fresh produce (40%)
- Fresh prepared chef made-to-order stations (31%)
- Fresh prepared self-serve bars/buffets (28%)
- In-store bakery (23%)
- Fresh meat (22%)
Fresh is both a profit center and a driver of foot traffic. Fresh products provide an experiential element, a concept reinforced by data shared at FMI FreshForward.
Challenges and Opportunities
Despite being a profit center, external factors could stifle growth in the perimeter store. Factors include changes in meal consumption patterns due to convenience and healthy choices, and shifts in shopping behavior driven by the hybrid work environment. Grocery retailers’ adaptation will determine their success in navigating the future of fresh.
The definition of value is evolving, with traditional tenets (cost, taste, convenience) augmented by quality, relevance, experience, and sustainability.
Healthier Eating Trends
Healthier eating is a trend, with 80% of shoppers prioritizing nutritious foods. Additionally, 63% of these shoppers seek pre-cut and washed produce for convenient preparation. Retailers can foster healthy lifestyles through displays, prepared meals, and value-based options.
Conference Themes
eCommerce – Online and In-Store Integration
Data from Circana shows 83% of U.S. households are eCommerce buyers. The pandemic accelerated this, with the average household making 54 eCommerce trips yearly. While only 6% exclusively shop groceries online, 29% of Millennials and Gen Z use eCommerce for part of their groceries, with 10% exclusively online. By 2027, 70% of grocery retail sales will be digitally influenced. Online and in-store experiences will blend as apps replace circulars and social media gains traction.
Meal Planning – Addressing “What’s for Dinner?”
The perennial question, “What’s for Dinner?” drives many shoppers’ decisions. Grocery retailers can effectively respond to this query by introducing innovative approaches. This includes crafting signature products, offering recipes and the accompanying ingredients through dedicated displays, and presenting budget-friendly meal plans catering to health-conscious yet price-sensitive customers.
Many great examples were shared of innovative approaches being taken by retailers to answer this question, from The Fresh Market’s “Little Big Meal” to Lazy Acres online cooking classes.
Generation Z: Digital Natives
Understanding and engaging with the succeeding generation is a challenge. The transformative element with Generation Z is their status as genuine digital natives. Having grown up with technology, they possess a high level of proficiency and expect retailers to match their technological fluency. They view online and in-store experiences as indistinguishable and anticipate a consistent experience across channels.
Furthermore, their grocery purchasing behavior centers around convenience, freshness, and products that uphold sustainability. With a substantial disposable income exceeding $360 billion, retailers are poised to cater to this emerging demographic.
Future-Proofing Grocery Retail
Adapting to eCommerce, offering healthy guidance, and catering to Generation Z are essential for grocery retailers to maintain loyalty. Technology will guide this adaptation, ensuring sustainability and a rewarding shopping experience.
Grocery retailers are innovating to future-proof the shopping experience, with fresh products playing a vital role in profitability and customer satisfaction.
