2017Issue6_Alabama_v9.indd

There is a systemic change happening in today’s retail landscape that is effecting where, how and why consumers are shopping. This historic shift is making growth for

Clearly, health and wellness is a strategic growth area across all channels. In addition to focusing on services like in-store health clinics, successful retailers have started to change their assortment to more health- focused products across all categories, and they’re developing private-label products with product transparency in mind. They’re also training associates like dieticians to help consumers make better choices in store, among other initiatives. Manufacturers are also following suit, by reformulating their products to contain fewer artificial ingredients, using simpler ingredients, and looking outside their own walls and acquiring companies that focus on transparency as part of their brand ethos to stay in the game. Running parallel to the health and wellness movement is the digital disruption being felt across the industry. Nearly nine out of 10 dollars of FMCG retail growth came from online channels over the last year. The changes happening on this front are occurring at lightning speed. As seen in the Amazon and Whole Foods acquisition, Amazon wasted no time in shaking up the grocery retail industry. Acting quickly on the objective of making health and wellness more affordable through the immediate price reductions across the store, may be just the tip of the iceberg of how Whole Foods and ultimately, the grocery industry, will be impacted. The overlap of Whole Foods and Amazon Prime customers opens the door to allow for more personalization via price and assortment, more targeted marketing, more cost effective distribution for Amazon, helping them reduce the cost of that “last mile” delivery and more opportunity to entice consumers to purchase groceries online. E-commerce Planning Needs to be a Priority

suffer from ailments, there are food factors that are also at play, which may indicate an opportunity for growth. Diabetics, outside of taking specific medicines to manage their condition, are also looking for foods that are low glycemic and low in salt. Another example can be seen with older shoppers who disproportionately look for functional ingredients like fiber, antioxidants, heart-healthy ingredients, and vitamins in their products. However, consumers, especially younger generations, are equally interested in both the products and the companies that make them. They want to feel good about their purchases, and that means they’re spending more with companies that focus on things like fair trade, sustainability, social responsibility, environmental preservation, and high ethical standards. Due to the increased importance of transparency, claims like “natural,” “organic” and “gluten free” have become common on the packages of products throughout the store. These claims are driving notable sales increases. Sales of products that make organic claims, for instance, are up 10 percent from a year ago. And according to Nielsen’s “2017 Fresh Guiding Principles Report,” organic continues to be a differentiator for top fresh retailers, too. Organic share of sales saw dramatic growth due to the power of organic produce shopper. In fact, 32 percent of households are organic produce buyers – of varying degrees. Boiled down, the consumer demand for transparency is ultimately a conversation about trust. Consumers want to trust the brands they engage with. Data suggests that there is currently a lack of trust, as only 44 percent of consumers globally say they trust industrially prepared foods. That means that more than half (56 percent), on some level, don’t trust these products – marking a real growth opportunity for retailers and manufacturers.

retailers and Fast Moving Consumer Goods (FMCG) manufacturers seem elusive. More than ever before, consumers are paying close attention to what they are buying. Driven by several macro health trends, the “why” and “how” behind products have now become just as important as the product itself, often times becoming the primary decision-making criteria that drives a purchase. This has added an entirely new layer of complexity to the way FMCG companies develop and market their products and how retailers capture the attention of consumers. Additionally, with $100 billion in grocery sales expected to move online in the coming years, grocery retailing is at a digital tipping point, where every aspect of the shopper’s journey will soon be influenced by digital, and increasingly enabled by digital platforms. With Amazon’s recent acquisition of Whole Foods, the merging of technology and health and wellness has become a retail reality. Therefore, in order to win in this new challenging environment, today’s retailers and manufacturers must have a sharp focus on the opportunities around health and wellness, transparency and digital. Understanding the Consumer’s Need is Key Consumers are paying attention to product details, and the health and wellness movement is a key driver of that. A rising portion of the population is shopping with an eye focused on product attributes, whether it be for ailment management, lifestage, the need for sustainable products, or just general wellness. Across the store, health and wellness is winning, and understanding the needs of consumers in this important space is key. For instance, there is value in looking beyond the over-the-counter and pharmaceutical needs of those suffering from ailments. For many consumers who

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