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Future Retail & Foodservice Opportunities. James Degen J. M. Degen & Company, Inc. www.Degenconsulting.com 805-434-2400. Words of Wisdom.

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Future retail foodservice opportunities l.jpg

Future Retail & Foodservice Opportunities

James Degen

J. M. Degen & Company, Inc.

www.Degenconsulting.com

805-434-2400


Words of wisdom l.jpg
Words of Wisdom

  • “So like Noah said--you’d better wake up you don’t want to get stuck in this zoo. Cause when he leaves the dock he ain’t waiting round for you. Be prepared to change some too.”

    • Boz Scaggs--”Some Change”

J. M. Degen & Company, Inc.


Undercurrents of change l.jpg

Food At-Home

Working women

Time to prepare

Declining skills

Decline of “family meal”

Expectations

Food Away-From-Home

Labor cost

Labor skill/availability

Consistent quality

Safety

Menu differentiation

Profitability

Undercurrents Of Change

J. M. Degen & Company, Inc.


Declining food expenditures l.jpg
Declining Food Expenditures

J. M. Degen & Company, Inc.



Food marketing and consumption have changed forever l.jpg
Food Marketing and Consumption Have Changed Forever

  • Demographics

  • Wellness Culture

  • Search For Value

  • Value of Time

  • Channel Blurring

J. M. Degen & Company, Inc.


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Demographic Drill Down

  • 78MM Boomers enter new life Stage--empty nest, retirement

  • 73MM Gen Y’ers are becoming adults driving new culture cohort

  • 61% of population growth by 2014 due to immigration

  • 34% of U. S. households will be single person by 2010

J. M. Degen & Company, Inc.


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Wellness Culture

  • Obesity and related heart health and diabetes concerns increasing--world-wide

  • In 2004 33% of U. S. Adults on a diet

  • 37% of health club memberships held by boomers

  • 32% of Americans dieting for health reasons in 2001

  • 71% of Americans believe that food & nutrition play a great role in maintaining overall health

  • Increasing consumer interest in digestion/gut health

  • Functional food category is estimated at $16+B

  • Fresh = Healthy

J. M. Degen & Company, Inc.


Search for value l.jpg
Search For Value

  • According to FMI, price is the leading reason for switching supermarkets (32%)

  • Households most likely to participate in frequent shopper programs is $75K+ (35%)

  • 39% of consumers shop at both Wal-Mart Supercenters and traditional supermarkets. In the South it is 92%

  • 82% of consumers participate in at least one frequent shopper program--93% of consumers over $100K in income

J. M. Degen & Company, Inc.


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Value of Time

  • Convenience culture continues with “time” the currency of 21st century

  • 46% feel more stressed Vs 5 years ago

  • 46% don’t have enough time in the day--53% of boomers

  • 1/5 of all meals eaten in a car

  • Food prepared away from home continues to grow

  • Disappearance of traditional meal leads to more snack meals--4-6 meals/snacks per day

J. M. Degen & Company, Inc.


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Channel Blurring

  • Traditional retail food channels blurring into multiple retail channels offering food

  • Traditional foodservice channels following similar patterns particularly snack meals

  • Food becoming a traffic building tactic due to purchase frequency

  • Value-priced food appeals to value-conscious consumers

J. M. Degen & Company, Inc.


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Non-Traditional Channels Impact Retail Food Purchases

  • Wal-Mart--U.S. food/beverage sales $67.6B (2003)

    • Supercenters

    • Sam’s Clubs

    • Neighborhood Market Stores

  • Membership Clubs

  • Dollar Stores/Extreme Value Retailers

  • Limited Assortment Stores

  • Convenience Retailers

  • Result: Supermarkets given up competing for center-store sales

J. M. Degen & Company, Inc.


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Supermarket’s Decline In Relative Food Retailing Importance

J. M. Degen & Company, Inc.


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Retail Food Channel Growth Rates Importance

J. M. Degen & Company, Inc.


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Foodservice Is Defined By Chains Importance

  • Restaurants account for 63.6% of all foodservice industry retail sales.

  • Top 100 chains account for 96.3% of all restaurant sales

    • 96.3% of hamburger restaurant sales

    • 91.3% of all family steak restaurant sales

    • 83.4% of chicken restaurant sales

    • 57.6% of other sandwich restaurant sales

    • 50.7% of pizza restaurant sales

J. M. Degen & Company, Inc.


The most frequently used culinary utensil is the window control of a car harry balzer npd l.jpg
“The most frequently used culinary utensil is the window control of a car.”--Harry Balzer, NPD

J. M. Degen & Company, Inc.


Retail foodservice opportunities l.jpg
Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • New retail and foodservice products are going to have to deliver against these changes in consumer definition, behavior and motivation

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Foodservice or food “prepared away from home” an opportunity for companies not already participating

  • Members of Gen-Y eat out on average 24 times per month--almost once per day (Technomic)

  • 51% of Gen-Y ate restaurant-prepared food growing up “sometimes” or “more often” compared with 12% of their baby-boom parents (Technomic)

  • “These (Gen-Y) are consumers of bagged lettuce and (healthful)prepackaged meals” (FMI)

  • “BATH restaurants (Better Alternative to Home), i.e., simple ethnic establishments” (Tim Zagat)

J. M. Degen & Company, Inc.


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Rise of Culinology control of a car.”--Harry Balzer, NPD

  • With most consumers growing up on eating out, food quality expectations and experiences are high

  • The research chef has joined with the food scientist to create the culinary linkage between the supermarket, foodservice and food processing industries called Culinology

  • Consumer and foodservice operator demand for nutritionally improved, convenient to prepare foods with acceptable sensory characteristics has created unique challenges for food scientists and research chefs.

  • Prepared foods must replicate scratch-made quality in flavor, aroma and authenticity

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Food Movements

    • Organic foods

    • “Free range” meats/poultry

    • Artisan foods

    • Vegetarian

    • Slow foods

    • “Locally grown”

    • Pedigreed/heirloom foods

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Next Big Food Wave--Pan-Asian

    • Consumers seeking more variety and new tastes

    • Bigger and more diverse than Latin

    • Beyond food to the importation of culture

    • Asian foods deliver against many consumer food demands

      • Healthy

      • Craftsmanship from complex recipes

      • Exotic

      • Fresh perceptions

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • The “G” word replaces the “C” word

  • Low-carb trend (always a U.S. phenomenon) fades (Mintel)

  • Other parts of the world look to low glycemic

  • Reduces food intake decisions to a number

  • Can be difficult to understand but can be simplified for consumers

J. M. Degen & Company, Inc.


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International control of a car.”--Harry Balzer, NPDFood Labelling Program

  • Registered trademark in Australia/USA/UK

  • Foods must be GI tested by accredited laboratory

  • Must meet nutritional criteria (eg saturated fat, salt)

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Recap

    • Less money spent on food

    • Price motivation to purchase on deal and at non-traditional channels

    • Food prepared away from home including foodservice and “restaurant quality” prepared foods

    • Diminishing consumer cooking skills and limited time to cook

    • More snacking and smaller portions

    • Foods that travel including dashboard dining and “Desk-fast”

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Recap (Continued)

    • Weight control foods including the trend towards glycemic testing/labeling, nutrient-dense foods, etc.

    • Food as medication including Pharmafoods directed at heart health, quality of life improvement, pre/probiotics, etc.

    • Shift from Western European cuisine to ethnic alternatives including Pan-Asian

    • Rise of Culinology

    • Demand for “fresh” ingredients that implies healthy

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • SUPER TRENDS

    • Cleaner labels

      • Fewer ingredients

      • Recognized ingredients

      • Natural and organic ingredients

      • Nutritional label claims

      • Natural label claims

    • Big Flavor

      • Higher consumer expectations

      • Ethnic flavors including regional ethnic flavors, Latin, Asian

      • New flavors and flavor combinations

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Meeting the challenges of clean labels and big flavor, naturally

    • Multi-functional commodities

    • Fewer processed food ingredients

    • Nutritional and functional improvements

    • Flavor enhancement capabilities

    • Flavor contributions

    • Multiple ingredient forms

J. M. Degen & Company, Inc.


Retail foodservice opportunities dried plums l.jpg

Composition control of a car.”--Harry Balzer, NPD

Fiber

Sorbitol

Malic Acid

No Sucrose

Low Glycemic Index

Antioxidants

Benefit

Fat replacement

Sugar replacement

Antimicrobial agent

Flavor enhancement

Preservation

Natural color

Extend shelf life

Retail & Foodservice OpportunitiesDried Plums

J. M. Degen & Company, Inc.


Retail foodservice opportunities mushrooms l.jpg

Composition control of a car.”--Harry Balzer, NPD

Low calories

Glutamate

Fat-free

Sodium-free

Sugar-free

Selenium

Low Carbohydrates

Benefits

Consumer satiety

Flavor enhancement

Savory flavor

Meat replacer/vegetarian

Increased value perceptions

Retail & Foodservice Opportunities Mushrooms

J. M. Degen & Company, Inc.


Retail foodservice opportunities almonds l.jpg

Composition control of a car.”--Harry Balzer, NPD

High protein

Low carbohydrates

Glutamate

Fiber

Vitamin E

Low in unsaturated fat

Benefits

Consumer satiety

Flavor enhancement

Nutrient dense

Crunchy texture

Baked breading alternative

Protein replacer

Increased value perceptions

Retail & Foodservice Opportunities Almonds

J. M. Degen & Company, Inc.


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Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

  • Dried Plums, Mushrooms, Almonds demonstrate multi-functional ingredient benefits

    • Fresh perceptions

    • Replace artificial ingredients

    • Add nutritional improvements

    • Eliminate duplicated ingredients

    • Increase and enhance flavor and texture characteristics

    • Communicate favorable consumer perceptions

J. M. Degen & Company, Inc.


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Final Words of Wisdom control of a car.”--Harry Balzer, NPD

  • "As you discover changing times you must have the strength to endure. As you discover a changing world you can't be guessing, you must be for sure. In these ever changing times.”

    • Earth, Wind & Fire

J. M. Degen & Company, Inc.


Future retail foodservice opportunities33 l.jpg

Future Retail & Foodservice Opportunities control of a car.”--Harry Balzer, NPD

James Degen

J. M. Degen & Company, Inc.

www.Degenconsulting.com

805-434-2400


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