Last updated on June 11th, 2024
The IDDBA Show kicked off June 9 with a panel discussion on the six guiding trends in dairy, deli and bakery.
Moderator Anne-Marie Roerink, president of 210 Analytics, was joined by panelists Jewel Hunt, Albertson’s VP of fresh merchandising; Josh Bickford, president of Clyde’s Donuts; Jody Barrik, UNFI’s SVP of fresh merchandising and sales; and David Stearle, VP of sales at US Dairy Foods and president of Vermont Creamery.
Roerink said they asked 1,500 consumers to share their thoughts on each trend.
The six guiding trends are:
- Food influences mind, body and spirit – This is a reflection of a broader cultural shift toward holistic well-being, increased access to health information and desire for more intentional, meaningful living.
- Food influences sourcing, sustainability and salary – Consumers are balancing emphasis on sustainability with affordable ingredients to make environmentally conscious choices without breaking the bank.
- Food influences technology of today and for tomorrow – The relationship between food and technology is increasingly significant. It’s influencing current practices as well as shaping the future.
- Food influences the young, the youngish and the young at heart. Each generation tends to have distinctive preferences, values and behaviors that shape their food choices and their shopping habits.
- Food influences community convenience and cash flow – Food is an essential and influences not only physical well-being, but also social interactions and financial considerations.
- Food influences culture, cuisine and culinary explosions. Consumers today have more adventurous and diverse palates, they’re traveling more and they’re becoming more globalized.
“At the end of the day, whether you are a retailer, manufacturer of items that go into dairy, deli and bakery or a wholesaler, we all have the same boss and that is the consumer who decides what to buy, where to buy it and how often to buy it,” Roerink said.
She said the data shows that there are “massive differences comparing low income to high income, different regions, different ethnicity, but more than anything, massive generational gaps that we’re seeing out in the marketplace. Every single one of the questions that we had in the survey, we saw vastly different attitudes and behaviors between the Gen Z-ers, the Millennials, the Gen X-ers and the Boomers.”
While retailers have been catering to the large Baby Boomer generation for about 30 years, they must now look at how to safeguard their spending while looking toward the future.
In the survey, when asked how they come up with what they decide to cook, Boomers stick with what they know. With Gen Z, the influence of the digital world begins to come in, mainly through Tik Tok, YouTube and Instagram.
As for cooking from scratch, about 37 percent of Gen Z said it does so, compared to 52 percent of Boomers.
“These are the kinds of differences that we see everywhere, every single question – whether it’s their attitudes toward convenience, sustainability and health and wellness or it’s things about what they buy, when they buy it and where they buy it.”
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Citing Circana data, Roerink said the share of food and beverage dollars coming out of the supermarket channel remains high, but younger generations tend to over-index in mass/supercenter/club and online channels.
She said for $100 spent in retail today, the Boomer generation remains powerful, representing 34 percent of all sales. Gen X, a small generation “that is punching above its weight,” comes in at 31 percent. And while Gen Z and Millenials are smaller, together they are almost as big as Gen X or Boomers. Roerink noted that they spend more when they’re in the store, but they make fewer trips.
“That means whenever we have these young folks in our stores, we better optimize that trip and get every planned and a lot of unplanned purchases in those parts,” she said.
There also is a big difference in how the younger generations look at food. They are exploration-driven, she said, with more focus on cultures and cuisines. This gives retailers permission to have more fun, whether through key lime pie cookies, s’mores made with different ingredients or bringing in some specialty breads.
Roerink said the same is true for the deli department.
Seasons also are at time to try something new and fun, and perhaps make those items available throughout the year.
How do you balance best sellers with new items?
Hunt said it is important to listen to customers. They come back time after time for comfort foods, but they also like to try new flavors and spice things up. She said if customers like something new they have tried, they will come back to it and it can become a frequent favorite. Offering several choices keeps things fresh.
What does innovation look like from the manufacturer side of bakery?
Bickford said data shows people are “really desperate for new flavors, new ideas and innovation.” However, nostalgia or traditional items also remain popular. He said adding flavors to a nostalgia classic is a good option.
How have online sources influenced meal inspiration with younger generations?
Barrick said the older generations also are getting on social media to see what is out there. Retailers should look at how to take what’s popular online and build that meal option in the store. “I think it’s going to continue to play more and more into how a retailer can merchandise and bring things together in the store.”
As a manufacturer, distribution decisions are everything. How can dairy, deli, bakery help differentiate and draw traffic to the store?
Stearle said many consumers, especially the younger generations, see everything all together. It presents an opportunity for different departments within the store to work together and bring ideas together.
A world of ‘and’
Roerink said the economy is a huge influence and people’s finances are under pressure. However, it is not always about price and promotion.
“It is a world of ‘and,’ as I call it. It is price and nutrition, price and convenience, price and what I’m in the mood for, price and sustainability, you name it. And that’s where we’re seeing tremendous amounts of concerns out in the marketplace relative to the grocery prices today.”
She said the question is how to gear up promotions and “get to a price point that opens people’s eyes but also protects our incremental purchase and our margins as well. That is a difficulty in today’s marketplace.”
Holidays are opportunities for promotions. Other than the primary ones, what are some ideas for secondary holidays or fun occasions?
Hunt said any event can be made into a holiday. The beginning of summer can be a month-long celebration focused around sandwiches. She noted that customers look forward to the change of seasons. Autumn presents an opportunity for a harvest set of products available across the entire store.
“They’re hungry for the next change in season, and we can create those by having great products, mass merchandising and, of course, the key here is tying in our associates who can tell that great story to the customers and get them super excited.”
Bickford gave an example of highlighting the Masters golf tournament with a brioche doughnut pimento cheese sandwich, adding there’s a lot of opportunity for collaboration and overlap.
“I think what’s really interesting is to be able to generate excitement for seasons that don’t even exist on the calendar,” he said.
Stearle suggested a partnership with suppliers and teams in the store in building consistency for events, such as Dairy Month in June, across the store.
Bickford added that execution is key. “When you have the whole store and the whole perimeter working together on the same concept or same holiday, the execution is much better.”
How can we hold onto that retail dollar and help grow deli as the center star?
Hunt said it’s a value-driven economy right now and customers are thinking about where they spend every dollar.
“Today, we have some great items and selections across our retail stores that offer value, but they also offer inspiration. If we make it fun, easy and exciting now, they’re going to remember. And as we continue to change with the trends, they’ll be ready for that next evolution of what we have available for them.”
Any insights on how to make promotions work?
Stearle said it’s important to understand what you want that promotion to do – drive traffic, get another purchase – and then make sure that’s what you’re doing. “I think it’s really working with your partner in retail to understand what that ad’s trying to do. And then what you’re trying to do as a company in trying to find that maximizing value.”
Health and nutrition
Roerink said there has been a lot of change in how people define health and well-being, with many now believing everything is good in moderation. She noted that about 90 percent of those surveyed said it is fine to occasionally enjoy treats, and 93 percent agreed that physical health and emotional well-being are interwoven.
“Ultimately, it is all about tradition and emotional connections,” she said.
Today, many consumers – especially younger ones – are interested in fortified foods. This presents an opportunity to call out the nutrient but also the benefit, according to Roerink.
She also mentioned a lot of focus now is on ultra-processed foods, although consumers’ definition of what that means can vary.
How is the move toward emotional well-being impacting dairy, deli, bakery?
Bickford said the better-for-you movement is strong and not going away. He said with technology today, there is a responsibility to use cleaner, healthier ingredients. But he also said value remains important.
“Value can come in size, or it can come in price, but it also comes in emotional value. If I’m going to have an opportunity to splurge, what am I going to splurge or spend that extra dollar on? I think bakery and sweet goods in particular have that opportunity to be that escape and to be that little emotional health of the day.”
Looking at functional items, are they contributing to sales?
Hunt said consumers are reading labels, looking for that cleaner, simpler ingredient statement. However, they also are giving themselves permission to indulge in bakery.
“They’re looking for freshness, quality, convenience and value. If you can deliver on all those for what they need at that point … you really come through with a winning solution. At the same time, they like to experiment. Taste really drives them, and if it tastes great, they’ll be back.”
How do you balance that function with taste? Does taste always win out?
To Barrick, taste does win out. “If it doesn’t have a good taste and the quality is not there, they won’t buy it again.”
Is concern over ultra-processed items here to stay?
Stearle said consumers have their own definitions of ultra processed, so it’s up to the manufacturers and retailers on how to present that.
“It’s not going to go away because I think people care about where their food comes from.”
