Retail Report - Hass Avocado Board

Transcription

Retail Report
Retail Outlook and Forecast
to Build Hass Avocado Retail Sales
2014–2015
HASS Avocado Board | 230 Commerce, Suite 190 | Irvine, CA 92602
TABLE OF CONTENTS
Key Opportunities..................................................................................... 4
Retail Facts, Figures & Trends.................................................................... 5
Food Price Inflation.........................................................................................5
Fruit & Vegetable Prices..................................................................................5
Retail Store Performance................................................................................6
Market Dynamics.......................................................................................6
A Closer Look at the Retail Landscape........................................................7
Online Grocery Shopping...........................................................................9
Other Projected Trends.................................................................................10
Snacking...................................................................................................11
Breakfast..................................................................................................12
Consumer Facts, Figures & Trends........................................................... 13
Organic.....................................................................................................13
Locally Grown ..........................................................................................14
Food Safety...............................................................................................15
Sustainability............................................................................................16
Targeting Consumer Demographics..............................................................17
Millennials................................................................................................17
Hispanic Shoppers....................................................................................18
Closing.................................................................................................... 19
Appendix................................................................................................. 20
Top Fruit Categories......................................................................................20
Retail Top 20..................................................................................................21
Works Cited...................................................................................................22
HASS AVOCADO BOARD | 2014 – 2015 ANNUAL TRENDS REPORT
2
PREFACE
Each year the Hass Avocado Board (HAB) tracks and monitors the
retail trends, changes and challenges that impact the retail and
produce industries. In order to minimize your time reading, HAB
has developed this report to provide you with key learnings in a
quick and easily digestible format. The report focuses on retail
with an emphasis on fresh produce.
OVERVIEW
Retail sales of fresh produce are expected to continue to grow as
consumers place a greater emphasis on eating healthier, more
nutritious foods. These changing trends are resulting in some
dynamic shifts in the way consumers shop, which in turn are
forecasted to impact sales at all store formats and online shops.
Fresh format stores are gaining market share as consumers shop
multiple store formats for their grocer needs. In the online space,
Amazon Fresh has emerged as a dominant player in the retail
landscape. Mobile marketing has become significant in reaching
consumers as they use their Smartphones to compare prices,
order groceries, find nutritional information and recipes, and
participate in loyalty programs. Snacking and breakfast eating
occasions are also expected to increase as healthier food options.
The years ahead will present some challenges and significant
opportunities for Hass Avocado growers.
While this report cannot highlight every issue facing retail today, it
does highlight the industry trends for 2014-15 and calls attention
to factors that may impact future retail grocery, and in turn, Hass
avocado sales.
Visit hassavocadoboard.com/retail to learn more about HAB’s
retail research and data program and how it’s helping stakeholders
increase category performance.
Emiliano Escobedo
Executive Director
3
KEY OPPORTUNITIES & SUGGESTIONS
• As we look to 2105 and beyond, shifting consumer
demographics will create competitive challenges for both
retailers and manufactures. As consumers’ age and the Hispanic
and Asian populations increase, retailers have the opportunity
to appeal to specific shoppers.
• Convenient, healthy food options, especially for breakfast and
snacking, will be a focus at retail. This bodes well for produce
because nutrition and healthful eating, vegetable and fruits are
taking center stage on plates. Avocados can be marketed and
cross-promoted with other healthy food items.
• To remain competitive, retailers can benefit by differentiating
themselves from other store formats. It will be important for
retailers to integrate online and in-store models of a multichannel platform to increase market reach.
• Research suggests that consumers will find pleasure in simpler
food with a shift towards home cooking. A healthy and holistic
approach to eating is also projected to increase. Avocados are
ideal to promote as a staple in homemade meals. Encourage
retailers to utilize social media platforms to share recipe and
usage ideas.
• As consumers increasingly seek more about their food and
where it originates, the trend towards local, organic and natural
are expected to remain significant. Food safety and sustainability
policies also remain important with consumers.
4
RETAIL FACTS, FIGURES & TRENDS
Food Price Inflation Returns to Historical Norm
The United States Department of Agriculture’s Economic
Research Service suggests that food price inflation is on
track for normal annual inflation. Relative to 2012, in 2013
prices rose considerably for poultry, eggs, fish, and fresh
vegetables. Over the past 20 years, grocery store prices have
risen by an average of 2.6 percent per year.1 This assessment
is based on an assumption of normal weather conditions.
Severe weather events could potentially increase food
prices. As an example, the drought in California could have a
price impact on agricultural goods that are produced within
the state.
Fruit and Vegetable Prices
In 2014, the food, food-at-home, and food-away-from-home
consumer price indexes are expected to increase 2.5 to 3.5
percent over 2013 levels. (see Fig. 1).2 Prices are rising for a
range of food staples, from meat and pork to produce, squeezing
consumers who are struggling with modest wage gains.
Fig. 1. Source: Bureau of Labor Statistics, 2014. Forecasts by Economic Research Service.
5
Retail Store Performance
Retailers can evaluate alternative ways to address the consumer
need for value, convenience and safe foods by focusing their
growth strategies on the overall
A key growth area
shopper experience. Today, price and
convenience continue to trump other
for retailers is
consumer trends in attracting attention
in store. Health and wellness-based
to offer fresh foods
themes are the third most common
as a convenient,
platform for displays behind price-only
and snack and meal solutions. A key
immediate solution
growth area for retailers is to offer
fresh foods as a convenient, immediate
for shoppers.
solution for shoppers. Additionally,
improved shopper engagement, digital and mobile integration
and greater precision targeting will create the next-generation
shopping experience.
Market Dynamics
Technology is expected to be the most critical catalyst of change
in grocery retailing. Mobile technologies are already transforming
the shopping experience. An increasing number of people will
depend on their smartphones for every shopping transaction from
in-store navigation, loyalty programs, and mobile wallet payments
to price comparisons. With the evolving technology, there
will be more data available that can be used to build shopper
engagement strategies to offer greater shopper personalization.
Retailers and brands will work together to include personalized
shopping lists, brand savings alerts, mobile checkout, recipe
services, and product ratings and reviews.
Technology
is expected to be
the most critical
catalyst of change
in grocery
retailing today.
Shifting consumer demographics will also create competitive
challenges for both retailers and manufactures. Hispanics
and Asian populations are forecast to increase 41% and 37%
respectively, from 2010 through 2025. Also, age-based shifts will
impact the marketplace. The 65+ -year-old segment will increase
7% (as a % of total US population). Both the 18 and under and
25-44 year old segments will decrease. All other age segments are
expected to remain relatively flat. The shift in demographics will
allow retailers the opportunity to develop ethnic and generational
store strategies.3
6
Retail differentiation is key to remaining competitive at retail.
Utilizing technology to personalize the shopping experience is one
method of creating shopping diversity. Retailers may also gain
market share by transitioning to online selling in addition to their
bricks-and-mortar store.
A Closer Look at the Retail Landscape—Store Formats
The grocery retail landscape continues to evolve. In the 1990s
the biggest threat to supermarkets and grocery stores came from
the supersized “one-stop shopping” retailers such as
supercenters and warehouse clubs. Today, consumers
are buying groceries across many retail formats including
e-commerce. Companies, such as Walmart and Target,
are focusing on the development of smaller store formats
to remain competitive.
Walmart has two smaller-format units, which include
both the Walmart Express and Walmart Neighborhood
Market banners. Both are making inroads against dollar
stores, supermarkets and drug stores and are expected
to play a key role in the company’s future. Walmart
plans on opening 500 Neighborhood Market stores by fiscal 2016.
However, Walmart considers Supercenters a growth vehicle from
a sales perspective and will continue to build them when they see
opportunity.4
Target launched a Target Express in Minneapolis in July. It is
its smallest store yet at 20,000 square feet. It includes a larger
selection of grab-and-go-foods along with a basic selection of
home goods, portable electronics, health and beauty products
and pharmaceuticals. Target will evaluate the new format to
determine plans for future growth.4A
Some in the industry expect to see retailers experimenting to
secure their future financial success. More consolidation is
expected at the regional and local levels as family-owned retailers
become less interested in keeping the family business. More
growth is expected in extreme value formats and dollar stores,
with limited assortment stores growing from 2,500 today to
between 5,000 and 7,000 over the next five years. E-commerce is
projected to grow as is emphasis on fresh store formats.5
7
Fresh store formats are anticipated to grow as shoppers attempt
to eat healthier meals by including more fresh produce in their
diets. Fresh store formats offer center-store assortments that
differ from traditional retailers by offering a larger selection of
ethnic, natural and organic items in a smaller store format. In
addition to the fresh store format, many other store formats are
expected to grow, while others are expected to lose market share.
The following stores are estimated to have increased dollar market
share through 2017:
• Fresh Format Stores (Whole Foods, Sprouts, The Fresh Market,
Independents) will increase from 1.1% in 2012 to 2.1% in 2017
• Limited Assortment Stores (Aldi, Trader Joe’s and Save-A-Lot)
will increase from 2.7% to 3.4%
• Convenience Stores with Gas to increase from 12.7% to 13.8%
• Supercenters (Super Target, Kroger Marketplace) to increase
from 17.3% to 18.2%
• Dollar Stores (Dollar Tree, Dollar General) to increase from
2.4% to 3.1%
• Wholesale Club Stores (Costco, Sam’s Club) to increase from
8.7% to 9%6
Fig. 2. Source: Willard Bishop Consulting, 2013.7
It is estimated that traditional supermarkets will continue to lose
market share as consumers choose other formats for their grocer
needs. The estimated decreased dollar market share for the
following retail environments through 2017 include:
• Mass Merchandise Stores (Walmart, Kmart, Target) will
decrease from 4.4% to 2.7% in 2017
8
• Convenience Stores without Gas will decrease from 2.2%
to 2.1%
• Traditional Supermarkets will decrease from 39.8% to 36.5%8
Overall grocery demand and capacity dynamics are expected
to have intense competition in the years ahead. By 2025, it is
expected that supercenters will reach saturation in all but the
most urban markets; dollar stores will approach saturation
with about 36,000 stores; and online grocers will command
approximately 10% of the market; and the overall industry will
have added nearly 290 million square feet. It is projected that
non-supermarket channels will add 145 million square feet by
2025, which includes supercenters, neighborhood markets, dollar,
club, drug and convenience stores.9
Online grocery
shopping is on
track to become
a $9.5 billion
industry by 2017.
Online Grocery Shopping
The increasing value of convenience among consumers
is helping build online grocery sales. Online grocery
shopping is estimated to become a $9.4 billion industry by
2017.10 There are a few established online retailers such as
FreshDirect and Peapod serving regional areas. However,
Amazon Fresh is fast becoming the influential online grocer
due to their logistical capabilities and capacity.
Amazon’s relationship with its customer base depends on its
ability to deliver items quickly and efficiently. Amazon Fresh
ran a five-year trial in Seattle. It expanded by offering same-day
grocery delivery service to Los Angeles and San Francisco. Prime
Fresh members pay $299 a year and receive same-day and earlymorning delivery on fresh grocery items and free two-day shipping
on all other items Amazon offers.11
To build a technological lead over other online grocers, Amazon
is testing the new Dash handheld wand that allows users to
scan bar codes to have it added to the shopping list.
Once the list is built, consumers log in to their
Amazon account and schedule delivery. Currently,
Dash is being tested where Amazon Fresh is
offered. As expected, mobile devices will play
an important role in online retailing.11A
9
As more retailers offer online services, a central challenge will be
to establish credibility. Amazon Fresh has brand credibility due to
Amazon’s reputable delivery program. However, some consumers
are likely to weigh their options to determine if online grocery
shopping is right for them. Brick-and-mortar stores tend to offer
a more familiar, personal experience for many shoppers—a perk
they may not be willing to trade. Typically, once the online retailer
establishes credibility with the consumer, the barrier to purchase
is alleviated. Online grocery retailing is expected to grow.
Other Projected Trends
Convenient, better-for-you food options, especially for breakfast
and snacking, will be a focus in retail for 2015. That’s good news
for produce because along with nutrition and healthful
eating, vegetable and fruits are taking center stage on
Convenient,
plates. As consumers seek more information on the food
better-for-you food
they eat and purchase, technology will play a pivotal
role especially when targeting specific consumer groups.
options especially
Food safety and sustainability are also important trends
as retailers try to improve consumer confidence.
for breakfast and
snacking will be
the
Nutrition will play a central role in an effort to maintain
optimal health. When eating out, consumers are
focus of retail
choosing vegetable dishes more often. Vegetable
offerings on restaurant menus nationally have
for 2015.
increased 11 percent over the past three years.12
In fact, vegetables are becoming mainstream and are even
dispensed through vending machines. As an example, Farmer’s
Fridge™ started offering a unique vending concept in Chicago. The
company uses organic ingredients from local farms to make salads,
sides and snacks from scratch each morning. It packages them in
recyclable plastic jars and delivers them to the vending machines.
The unpurchased salads are removed each morning and donated
to a local food pantry.13
Millennials (18- to 34-year-olds) and the IndieWoman (comprised
of nearly 31 million 27-year-old and older, childless women living
alone and spending a combined $50 billion on food and beverages
each year) are looking for convenience and healthy ingredients.
Millennials want to purchase ingredients for recipes found on
Pinterest and have it delivered to their home. According to Price
Grabber, 57 percent of Pinterest is made of food-related content
10
with one-third indicating they may have purchased food or cooking
items after seeing it on the site. Additionally, the IndieWoman is
looking for brands to offer semi-homemade meals that use fresh,
high-quality ingredients because they do not have time to cook.14
SNACKING
Snacking and breakfast eating occasions are expected to increase
with improved food options. It is projected that more protein-rich
and convenient breakfast choices will be on the rise as consumers
opt to live a healthier lifestyle without compromising taste. Equally
important will be the availability of nourishing snack alternatives.
Supermarkets may offer alternative choices to high-sugar, high-fat
snacks at the checkout with convenient, on-the-go replacements.
Snacking is an $87 billion business in the United States, but it is
the better-for-you snacking category that is growing. Retailers
and restaurants are looking for new ways to meet the growing
demand. For example, McDonald’s and 7-11 stores are both
introducing improved food options to attract customers with
snack-sized options.15 Consumers are increasing their snacking
occasions. In a Technomic study, forty-eight percent (48%)
of consumers reported that they snack at least twice a day,
compared to 25 percent in 2012.16 As a result, consumers are
more likely to graze through the day seeking snacks that provide
fuel between traditional meals.
Snacking is typically an impulse purchase with sixty-two
percent (62%) reporting that most of the snacks they purchase
are on impulse.17 According to a 2013 IRI report, one in five
Americans now eats snacks throughout the day instead of
eating three square meals or several mini-meals each day. These
consumers are classified as opportunist eaters who grab food
and drink throughout the day as the opportunity arises, without
consideration as to whether they are eating a meal or snack.18
In fact, according to the Technomic study, more than 33 percent
of consumers claim they will eat more nutritious snacks in the
coming year.19
Teens and young Millennials are most inclined to eat snack foods.
Fresh fruit is among the top five snack items among this group.
Sweet and savory snacks are also popular.19A This group wants
a greater variety of choices including snacks with exotic flavors.
11
The food industry is developing new products such as nuts with
rosemary and black pepper, spicy potato chips and chocolate
paired with sea salt or beef jerky. Retailers can capture a larger
share of the “buy and consume” behavior by rotating the types of
items stocked, such as avocados, near the entrance or check-out
counter to align with the time of day. Additionally, the breakfast
category is expected to expand because it is part of the better-foryou, on-the-go snacking eating occasion.
BREAKFAST
The breakfast market is a $65 billion industry and is projected to
grow in value to $83 billion in the next eight years.20 Consumers
consider breakfast to be the most important meal of the day.
However, people often skip breakfast, with 56 percent of
consumers included in an IFIC Food and Health Survey indicating
that they do not eat breakfast every day.21
Several factors are impacting retail sales of breakfast items.
Retailers are facing competition for sales from quick-service
restaurants (QSR) such as Starbucks, Jack in the Box and
McDonalds. Sales at QSRs were up 21 percent and accounted
for 22 percent of the breakfast menu items. There have been
increases in menu items at QSRs such as breakfast wraps,
breakfast sandwiches, and French toast sticks.22
The breakfast
market is
projected to grow
in value to $83
billion in the next
eight
Retailers may consider increasing their breakfast
products because they account for eight percent of
store sales, indicating there is substantial room to grow
the category.23 With consumers’ increasing concern for
nutrition combined with hectic schedules, retailers have an
opportunity to appeal to consumers by offering more fresh
options from the produce department.
Retailers can add value by adding meal solution
merchandising. Recipes that include Hass avocados can
years.
be an excellent choice for breakfast. By placing breakfast
items together, it satisfies the shopper’s need for solutions, such
as nutritious, homemade dishes and convenience, and it helps
retailers differentiate themselves from the competition. Consumers
are looking for grab-and-go items in the morning and products
from the grocery store provide cost savings. Portable, nourishing
breakfast items present a significant opportunity because of
convenience for the time-starved, health-conscious consumer.
12
CONSUMER FACTS, FIGURES & TRENDS
Organic
Consumers no longer have to shop at specialty stores to find a
variety of organic produce as most major retailers have adapted to
meet the growing demand. Consumer sales of organic products,
both for food and non-food products, accounted for $31.5 billion
in sales in 2012, adding approximately $2.9 billion in new annual
sales dollars, while also achieving double-digit growth for the
first time since 2008.24 Sales of organic avocados reached $32
million for 2013, which is nearly a 25 percent increase over
2012 sales (source C). Produce continues to be the leading
category of organic purchases, with 97 percent of organic buyers
indicating they purchased organic fruits and vegetables in the
past six months. Consumers of organic produce are typically loyal
shoppers; tend to spend more per shopping trip; and shop more
frequently than those who never purchased organic produce.25
According to a white paper published by Sullivan Higdon &
Sink, even occasional organic produce shoppers agree that
organic foods are beneficial. However, some consumers think
the term organic is a marketing term. Forty-four percent (44%)
of consumers indicated that they understand the meaning of
organic, but many others admitted they did not know and do
not understand the requirements needed to be labeled organic.
However, half of all consumers believe organic is better for the
environment; 45 percent believe organic is healthier.26
Nearly half of those who purchased organic foods do so because
they believe it is healthier for them and their children. Thirty
percent (30%) of parents say they buy organic because they want
to avoid toxic and persistent pesticides and fertilizers; 29 percent
want to avoid antibiotics and growth hormones; and 22 percent
want to avoid genetically modified organisms.27 Moreover, over
four in 10 parents (42%) said their trust in organic products has
increased. The awareness of the USDA organic seal has grown,
with more consumers more likely to look for the seal when
shopping for organic products.28
13
Organic shoppers also look for local and natural claims. Organic, local
and natural consumers are more likely to care about nutrition. Cost and
convenience are less important to them. For some consumers, organic
and natural are thought of as interchangeable.28A However, natural
is not a regulated claim while use of the term “organic” is regulated.
Organic labeling indicates the food has been produced through methods
approved by the U.S. Department of Agriculture’s National Organic
Program. Although natural products have had solid growth over the
years, concerns have been raised as to whether highly processed foods
can use this term.
Locally Grown
Locally grown continues to be a growing trend. According to Sullivan
Higdon & Sink, consumers (79%) claim they want to buy more locally
grown food. In fact, 53 percent of consumers state that they are
willing to pay more for local food. Consumers typically associate local
food with freshness and organic food with healthfulness. Consumers,
in areas where locally grown produce is prominent, are generally
willing to pay about an equal premium for organic and local food.
However, locally grown produce is often less expensive than organic
produce, tipping the scale in its favor and driving demand.29
The definition of local varies by consumer. Only about 17 percent of
consumers claim they do not care where their food is grown. About
36 percent (36%) want their food to come from within the country in
which they reside, and 38 percent want it to be from their state. Only
nine percent (9%) expect their food to come from their hometown. As
expected, consumers interested in organic, natural and local produce are
more interested in where their food is grown. While consumers want
food to be grown and produced closer to home, they also have realistic
expectations of food production and logistics.30
Fig. 3. Source: Sullivan Higdon & Sink Market Research, 2013 31
14
Locally grown produce is more important to consumers that have
access to produce grown in their geographic area. However even
these consumers purchase imported produce in order to enjoy it
all year long. In many regions of the country, consumers rely on
imported fruits and vegetables all year long, due to the year-round
availability. According to a UC Davis report, 49.4 percent of all
fruit (excluding bananas) as a share of U.S. fresh consumption is
imported.32
Food Safety
Millions of Americans are affected by foodborne illnesses each
year according to the Centers for Disease Control and Prevention
(CDC). The CDC data indicates that 48 million people get sick,
128,000 are hospitalized and 3,000 die from foodborne diseases
every year.33 To combat the rise in outbreaks of foodborne
illnesses, food manufacturers, distributors and retailers are taking
greater care in selecting business partners that are proactive
with food safety. Some food companies are now requiring their
suppliers and distributors to have certifications recognized by the
Global Food Safety Initiative (GFSI).
Other issues come into play regarding food safety including how
consumers choose to handle their food at home. For example,
California’s ban on plastic grocery bags and the implications
associated with customers’ reuse of bags that are not sanitary
pose challenges for retailers. Also, health officials recommend that
consumers wash all produce before eating, but they may not follow
such procedures. Educating the consumer through social media
may help draw attention to these issues. As Millennials use their
buying power, technology may be the best way to reach them.
Some in the produce industry believe that a grading system (similar
to the health standards in the restaurant industry) for produce
suppliers and retailers could work well to reach this demographic.
Retailers may need to take a more proactive stance to ensure
consumers are getting the best and safest products. More emphasis
is being placed on planning and designing food safety systems that
reduce risk. Companies may benefit by identifying where a risk may
exist and then focus their efforts on food safety and quality over
regulations. As retailers plan for food safety programs, they may
want to implement sustainability programs as well because it is
becoming one of the fastest-growing segments.
15
Sustainability
A product’s sustainability impacts
shopping decisions including
product and retailer choice.
Consumers want help from retailers
to purchase eco-friendly grocery
products. Nearly half of adults
claim they are more inclined to buy
eco-friendly products, and four out
of 10 say they would pay more for
them. Still, the majority indicates
that they buy whichever products
suit their needs at the time, green
or not.34
The green marketplace is one of the fastest-growing sectors in the
U.S. economy,35 and some retailers are making an effort to reduce
their carbon footprint. For example, Publix, which is known for its
sustainability, including recycling, donations of unsalable items,
and other initiatives to divert food waste from landfills, is in an
alliance with other key retailers such as Wegman’s and Kroger to
reduce food waste. Their collaboration is called the Food Waste
Reduction Alliance (FWRA) and its goal is to reduce the amount
of food going into landfills and to feed more of America’s hungry.
Wegman’s is the founding member of FWRA and plans to increase
the amount of waste it composts over the next six years.36
Other retailers are also making a concerted effort in
the green initiative by taking action. In addition to
46% of consumers
recycling, retailers are supporting green businesses
indicated that green
by featuring products from companies that use
renewable power to manufacture products; opting
product options
not to sell bottled water; and offering products in bulk
to reduce packaging. However, even though green
can influence
continues to be a hot topic, consumers indicated that
unplanned purchases.
retailers and manufactures do a relatively poor job of
providing green information in the store. Retailers can
benefit from using in-store materials to help communicate their
green efforts because 46 percent of consumers indicate that green
product options can influence unplanned purchases.37 Eighty-four
percent (84%) of consumers say they consider sustainability when
making purchase decisions.38 Overall, women tend to be more
16
eco-conscious (45 percent), and are willing to pay a premium
for green products.39 Consumers tend to look for companies and
brands “doing the right thing” and “being responsible.”40
Sustainability is increasingly important for both consumers and
companies. Retailers will want to resonate with consumers and
communicate their position on their green products and programs.
Consumers are familiar with sustainable products yet some are
unable to name specific sustainable companies or products. By
closing this gap, consumers may purchase more of the sustainable
products they claim they are interested in. Sustainability efforts
tend to resonate more with Millennials.
By 2015,
Millennials will
be the largest
contributing group
and influencer
in food sales.
Targeting Consumer Demographics
Millennials
Millennials have an estimated annual direct spending power of
$200 billion. Their indirect spending each year is an estimated
$500 billion. This group will make up the largest portion of the
work force by 2015 and will be the largest contributing group and
influencer in food sales. They are the first generation to grow up
“digitally” and they prefer a two-way dialog with select products.
They are heavily influenced by their peers and can be reached
by leveraging digital capabilities. Millennials base their purchase
decisions around quality, price, and what other people are saying
about it. They do not shop alone, and one in three will not make a
purchase if their friends disapprove.41
Mobile is becoming a critical part of the marketing mix when
reaching this target. These Millennial shoppers use digital
channels for grocery shopping, educating themselves about
products, saving money, and making the task more fun. When
they are shopping inside a grocery store, Millennials favor
the produce and freshly prepared foods located on the
perimeter of the store. Millennials seemingly spend as much
time looking at their phones as they do at the products on
the shelves. Sixty-one percent (61%) use their smartphones
to compare prices of items; 57 percent find coupons; 54
percent access a shopping list; and 51 percent look for
recipes.42
17
Millennials are early adopters, gravitate towards cause marketing
and prefer promotions that are tailored to personal shopping
patterns. They will continue shopping in multiple outlets, both
online and in physical stores. The retailers and products that
connect at the store level and online will have a better chance of
reaching this savvy consumer group. If a retailer can offer savings
through a loyalty card or mobile app, it has a better chance of
making a sale. Hispanic Millennials are a subset of this group with
tremendous influence and growth potential.
Hispanic Shoppers
The Hispanic spending power is strong and growing with more
than 52 million Hispanics in the United States, their spending is
expected to hit $1.5 trillion in two years.43 The largest growth
potential is in younger Hispanics and second- and thirdgenerations who are becoming enculturated while retaining much
of their heritage.
When it comes to shopping, Hispanics tend to shop less
often, but spend more per trip and are less likely
to buy products at promotional prices. Spanish
language-preferred consumers are less frequent
shoppers in supercenters and convenience stores.44
Retailers could benefit by developing a connection
to become the destination of choice due to fewer
shopping trips and preference of small independent
stores. Specialty stores, known as tienda, are important
to Hispanic families because they carry fresh authentic
products and serve as a place of emotional standing.
These consumers prefer fresh products that allow them
to replicate dishes from home.
To appeal to the Hispanic market, retailers, such as Target and
Walmart, are focusing on freshness and marketing the produce
section. The strategy is working because they are generating more
trips to the store. Other factors that gain shopper loyalty with
this consumer group include: an abundance of fresh produce and
groceries; friendly service; short distance to the store; reasonable
prices; assortment; and a fun shopping experience.45
Retailers can benefit from leveraging digital shopping tactics
to appeal to Hispanic Millennials. According to the Center for
18
Hispanic
Hispanic Leadership, Millennials use mobile devices at nearly
twice the rate of non-Hispanics.46 Hispanic consumers are more
likely to own a smartphone (57%) vs. the general population
(45%).47 Social media is also important to this market. Retailers
can review online comments about their store or specific
spending products and modify their messaging accordingly to appeal
to this market.
is expected
to hit $1.5 trillion
by 2016.
The Hispanic consumer is important to retailers. By reaching
out to the Hispanic shopper in creative ways to earn their
trust, loyalty can be built with customer relationships and
social media connections.
Closing
The Retail Report provides retail trend information covering the
dynamic shifts in the produce industry—from changes in store
formats, online shopping, mobile marketing to changes in eating
patterns including snacking and breakfast eating occasions. This
report calls attention to factors that may impact retail grocery
and Hass avocado sales in the coming years. Industry executives
and marketers can use the information compiled in this report to
review industry changes and trends to help build Hass retail sales
and remain competitive in our ever-changing industry.
19
APPENDIX
Retail Produce Department Performance
Avocados ranked #1 in percentage growth at +15.5% and #6 in
total dollars, outpacing the total Fruit category dollar growth rate
of +3.7% for the 13-weeks ending 2/23/2014 (for categories over
$120MM-GROC).
Fig. 4. Source: IR I/Freshlook Marketing, 13-weeks ending 2/23/14
Fig. 5. Source: IRI/Freshlook Marketing, 13-weeks ending 2/23/14
20
RETAIL TOP 20
The list of Supermarket News’ top 20 food retailers in the United
States. The beneficiary of Supervalu’s decision to sell the retail
stores was Albertsons, which was once counted out as a major
player. Albertsons purchased 877 stores from Supervalu and
another 50 United Supermarket stores in Texas.48 Albertsons
also purchased Safeway for $9.2 billion dollars.49 Albertsons has
returned to prominence moving up to number eight on the list.50
1. Walmart Stores
2. Kroger Stores
3. Costco Wholesale Corporation
4. Target Corporation
5. Safeway Stores
6. Publix Super Markets
7. Ahold USA
8. Albertsons Supermarket Company
9. C&S Wholesale Grocers
10.H-E-B Stores
11.Delhaize America
12.Dollar General Corporation
13.Supervalu Stores
14.Meijer Inc.
15.Wakefern Food Corporation
16.Whole Foods Market
17.BJ’s Wholesale Club
18.Trader Joe’s Company
19.Metro Inc.
20.Family Dollar Stores
21
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23

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