The holidays are here and soon 2023 will be gone. As the companies, brands, stakeholders, and employees of the food/bev sector scramble in the last quarter to prepare themselves for 2024, the whizz-bang pace of commerce and technology is as exciting as it is daunting, intimidating as it is game-changing.
At the recent International Foodservice Manufacturers Association (IFMA) Presidents Conference in Scottsdale, Arizona, several keynote addresses helped summarize the contemporary food, tech, and retail landscapes for attendees. The consumer market and greater commercial landscape is wildly different than just a few years ago given the COVID-19 global pandemic, global food price inflation, challenging labor issues of volume from baristas to skilled workers and even truck drivers, while geopolitical instability, diminishing resources, and wild advances in AI and cell-cultured foods have completely upended what many thought of as “a normal day” in food/bev.
To help retailers parse the new-look foodscape, here are some tips and tech to look for in the year ahead. This is Part 3 of a three-part series.
The New Realities of Retail
Today’s consumer is less loyal, more savvy, and has more options in brands, products, and services than ever before. Monolithic allegiance has given way to the brands and companies that can provide the best, most convenient, and value-driven experiences, making every consumer a seven-headed hydra set loose in a volatile market and delivered via email, mobile phone apps and updates, and in the omnichannel and in-store experiences.
“For CPG brands, standing still is not an option – nimble evolution is imperative,” said the team at Kroger’s 84.51° data team to TFI.
Top trends to look for in retail 2024 include:
- Budget-conscious shopping – How inflation is redefining perceptions of value and deals.
- Consumer willingness to switch to private-label brands – What brands can do to retain customers.
- Consumers want a seamless omnichannel experience – The digital-physical retail convergence aka “phygital” and how to adapt to an omnichannel future.
- The evolving definition of loyalty – The evolution of brand loyalty and tips for staying top-of-mind among shoppers.
- Freshness is a top priority – Freshness is rising as a product expectation. With messaging centered on freshness, brands can tap into shopper priorities spanning sustainability, health, taste, and affordability.
“Retail is undergoing an exciting shift with innovative technologies like automation and AI to create a more efficient, productive retail space,” said Michael Gabay, co-founder and CEO of Trigo, a provider of frictionless retail technology to several leading retailers including Tesco, Rewe, and ALDI.
“Frictionless checkout technology is designed to make the shopping experience more convenient for shoppers by eliminating the need for them to pay at a till,” he said, adding that in-store cameras and machine learning to capture information about shoppers’ purchases in real time can help create a digital shopping basket, “both saving time for the shoppers and allowing retailers to improve and optimize stock management.”
Parsing the Private-Label Foodscape
Finally, the rise of private label has led to a sea-change in how brands view what they used to regard as perennial non-competitors and how consumers are mostly happy to save money from premier lines for a similar (and in many cases, indistinguishable) food and beverage experience.
Daymon recently released its 2023 Private Brand Intelligence Report. Here are some of the takeaways:
- 92% of consumers trust Private Brands as much as or more than National Brands (up +3 ppts from Daymon’s 2021 proprietary study).
- 83% of consumers view Private Brands as a better value for their money than National Brands (up +14 ppts from Daymon’s 2021 proprietary study).
- 44% of shoppers are purchasing more Private brands today than they did a year ago, and another 34% told Daymon they only plan to increase their Private Brand purchasing over the coming year.
- 61% of shoppers want Private Brands to provide more affordable convenient-to-use-or-consume products, while 35% of consumers are asking for products with functional ingredients.
- 83% of consumers are interested in a healthier lifestyle, leading to 70% of consumers exerting more effort into selecting nutrient-dense and healthier foods than they did a year ago.
From restaurant to retail, once unthinkable technology is fostering a food future of value, convenience, and cutthroat competition. Those unwilling to adapt may find their plates empty and their names forgotten.
Part 1 of this series, Restaurants Automate to Elevate, is available here.
Part 2 of this series, Cutting Through the Cold Chain, is available here.