It’s no secret the grocery industry is evolving at a rapid pace, and prognosticators say 2018 is bound to be another year of big change for grocery industry trends. The most notable shift in the market from 2017 was Amazon’s acquisition of Whole Foods. 2017 was a progressive year for grocers and Michael Flack, co-founder and U.S. President, RELEX Solutions has predicted that several of these trends are here to stay.
Grocery Industry Trends Coming in 2018
Although some trends from 2017 will remain prevalent in 2018, a recent article from Retail Info Systems divulges grocery industry trends we can anticipate in 2018.
The game-changing 2017 Amazon acquisition will impact the 2018 trends heavily. Traditional grocers must accept their competitive landscape has changed. Operations must be optimized to lower costs, and differentiation is no longer a competitive advantage but a requirement to remain viable. Amazon’s retail entrance also affects the grocer e-commerce expectations. According to Retail Info Systems, 30% of U.S. shoppers have already adopted partial online grocery shopping. Brick-and-mortar chains will be pressured to innovate their processes and deploy e-commerce options to retain their shoppers.
Other anticipated grocery industry trends include the rise in fresh foods, weather forecasting, and supply chain efficiency increases. The severe weather challenges 2017 presented will undoubtedly result in grocers keeping a much closer watch on the weather predictions and data. If retailers are planning for unpredictable weather, the disruption should decrease. By matching demand forecasts with replenishment cycles, grocers could reap benefits ranging from direct-to-shelf deliveries to an increase in storage, both optimizing in-store space. 2018 is predicted to be a very promising year for grocer innovations, cost savings, and increased efficiencies.
Customer Expectations in 2018
Consumers are driving demand for corporate transparency, healthfulness and social responsibility in addition to an overall increase in choices. These emerging grocery industry trends will be challenging to meet and maintain, given the fact labor costs are expected to spike by 50 to 100 percent in the next decade.
“We’re entering a whole new environment,” says David Henkes in a Technomic presentation about food industry trends anticipated over the next eight years. “Today’s consumer is certainly much different than the consumer was 10 years ago, and it’s impacting what, how and why we’re eating.”
Some overall trends expected by Henkes:
- In response to consumer demand for transparency, Fair Trade certification, responsible production and animal welfare standards, food labeling will become more detailed and specific, predicts Whole Foods. Origins, additives and growing and processing methods will be clearer. For example, albacore tuna brands will list the captain and vessel that caught the fish, and other foods will be rated on sustainability, GMO Project Verification, etc.
- Through 2020, predicts Technomic, food consumers in the U.S. will become more health-oriented and more vocal about local and sustainable practices. A Technomic survey indicated when asked what factors will influence their buying decisions, 82 percent of respondents look for sustainable production.
- Food vendors will increasingly be vetted by consumers based on issues such as living wages, health insurance offerings, diversity and executive compensation, in addition to fair trade practices.
- Price and value will become more important to customers seeking what Technomic calls “affordable quality.” In some cases, innovative food service outlets will capitalize on convenience, experience, and quality to outperform traditional restaurants.
- Technomic points to the growth of personal chefs; grocery subscriptions; grocerants (vendors blending grocery store and restaurant concepts); fresh-prepared foods at supermarkets; mini fresh stores; food trucks; fresh meal kits; snack boxes; expanded year-round farmers markets and personalized deliverable foods. Next-generation vending machines, kiosks and pop-up stores will be generating $10 to $20 billion annually by 2020, it predicts, while fresh-delivered meal kits will generate $3 billion to $5 billion.
MMR Research has concluded consumers shop more often at retailers they perceive as sustainable. The promotion of RPC use and the application of sustainable containers has a positive impact on both customer visits and purchase intent — particularly among fresh produce shoppers. As such, the authors recommend food vendors highly promote anything they’re doing to optimize reuse or recycling, water savings and the reduction of landfill waste. Grocers that deploy RPCs into their supply chain and promote the sustainability benefits have a differentiating advantage for attracting the conscious consumer.
2018 will be a time of challenges and opportunities for the grocery industry. The successful retailers will not only embrace growing grocery industry trends and innovations but also keep the preferences and priorities of consumers top of mind.