IGA Guest Contributor Perspective

The Basics of Food Marketing

A message to IGA Retailers from...
Phil Lempert
The Supermarket Guru®

Phil Lempert, known as The Supermarket Guru®, is an expert analyst on consumer behavior, marketing trends, new products and the changing retail landscape. Today Lempert shares his insights on consumer food marketing as it relates to IGA's Alliance members.

Strolling up and down the aisles at this week's Food Marketing Institute 2010 Convention in Las Vegas, one thing is perfectly clear. The branding of food has changed. Today the directional thinking of CPG manufacturers is to push soap opera and prime-time TV advertising aside in favor of in-store promotional techniques to support the launch of new products. The reason is simple: The store is where sales occur and where the influence of messages—however fleeting—could have great impact on purchase decision making.

This is great news for IGA's independent retailers who can leverage the power of the Alliance by collaborating with their Licensed Distribution Companies and dedicated Red Oval CPG partners on in-store marketing programs that help shape shopper decisions.

Think of your store as the new channel tuner where consumers first see newly launched products. Indeed, Nielsen figures tell us that "the store beat TV as an awareness driver by a 50 percent to 36 percent margin in 2008" (the most recent figures available)—a dramatic increase over the margin reported just four years earlier.

Consumers love to find, taste and tell their friends about new products. In fact, in research we conducted on behalf of Everyday with Rachael Ray magazine, over 75 percent of the responding shoppers told us they are "bored with their foods" and are actively "seeking out new flavors and foods to add excitement to their everyday dining." The time is here for IGA Retailers to take advantage of the opportunity and work with brands to showcase new products through off-shelf displays, retailer circulars, product demonstrations and in-store media, which in addition to increasing sales will certainly bring added excitement to your store.

Thank you,

Phil Lempert

Retail News

Aloha Petroleum Ltd. agreed to buy retail and terminal operations in Hawaii belonging to Shell Oil Products U.S., reported Honolulu Advertiser. Full Story

Grass-fed-and-finished beef is offered in all of Whole Foods Market's 284 stores in the U.S. Full Story

Walmart and the Walmart Foundation launched a five-year, $2 billion initiative, "Fighting Hunger Together," which includes the donation of more than 1.1 billion-lbs. of food from Walmart stores, distribution centers and Sam's Club locations, valued at $1.75 billion. Full Story

Giant Food and Shell customers in select areas will be able to save on fuel at participating Shell stations when they use their Giant card. Full Story

The Deloitte Consumer Spending Index rose for the second consecutive month in April and remains at its highest level in six years. The Index, comprising four components - tax burden, initial unemployment claims, real wages and real home prices - rose to 5.0%, from an upwardly revised gain of 4.64% a month ago. Full Story

Executives on the Move: Sunny Street Cafe named Scott Moffitt president. Full Story ... FoodLink Online appointed Eric Peters CEO. Full Story ... Smokey Bones Bar & Fire Grill named David Terry EVP of operations, reported Orlando Business Journal. Full Story (Free Registration Required) ... Larry J. Merlo will become president and CEO of CVS Caremark Corporation in May 2011. Full Story

Manufacturer News

Kraft Foods Inc. introduced more than 30 new products, many of them brand extensions, at the FMI show. New products include Back to Nature Gluten Free Rice Thin Crackers with 23 grams of whole grain per serving and what the company claims is the first flavor changing gum, Stride Shift. Full Story

Kids ages two to 17 ate more refrigerated yogurt as a snack-oriented food in 2009 than they did in 2008, but fresh fruit remained the top snack food consumed by this age group, according to the NPD Group. Potato chips, fresh fruit, string cheese and prepackaged cheese cubes or shapes and hard candy also experienced growth in 2009 versus 2008 as snack foods eaten between, with or instead of meals. Full Story

Green Mountain Coffee Roasters, Inc.'s tender offer for all outstanding shares of Diedrich Coffee common stock resulted in the tendering of approximately 5,446,334 shares representing about 95% of the outstanding shares as of the tender offer's expiration date on May 10. Full Story New! A recording of the Food Institute webinar A Look at Merger & Acquisition Activity, Past, Present and Future is now available! The webinar reviewed recent M & A activity and discussed what makes certain companies appealing to sell or buy. To purchase a recording, click here.

Hershey is set to expand its Palmyra, PA-based distribution center and co-pack facility in June. The $28 million project is in the final design phase. Full Story

Dole Food Company, Inc. formed the Office of Corporate Responsibility and Sustainability, replacing Dole's office of Corporate Social Responsibility. The Office's efforts will support programs such as infrastructure development and nutrition and health initiatives as well as three priority initiatives including carbon footprint reduction, soil conservation and water management. Full Story

The Kansas Bioscience Authority will provide $750,000 to Cargill Meat Solutions to support the construction of a state-of-the-art technology and innovation center focused on food safety and the development of new food products, pending a decision by the company to build the planned research facility in Kansas. Full Story

Stridex launched Stridex Naturally Clear medicated pads, which do not contain alcohol. Full Story

Foodservice News

Starbucks will expand franchising efforts for Seattle's Best Coffee that will increase distribution to more than 30,000 venues by the end of its fiscal year from 3,000 points earlier this year. AMC Theatres will also begin serving Seattle's Best Coffee in July at nearly 300 locations while almost 70 will serve espresso-based beverages. The chain will also debut a new logo. Full Story Eventually, the brand will also be sold in convenience stores, drive-through kiosks, coffee carts, vending machines and mobile trucks. David Palmer, an analyst who follows Starbucks for UBS Securities, believes the strategy makes sense, as no national coffee brand can be found across the U.S. convenience-store industry, reported The Wall Street Journal. Full Story (WSJ Subscription Required)

CT Business Group purchased the right to franchise Mrs. Fields and TCBY stores in Honolulu and Washington State. The agreement also includes an international master franchise agreement in South Korea. CT Business Group will open 30 new Mrs. Fields or TCBY stores in Hawaii and Washington state as well as 30 new stores in South Korea over the next five years. Full Story

Restaurant Roundup: Pretzelmaker/Pretzel Time introduced Mini Pretzel Dogs. Full Story ... Jamba Juice relaunched its California Flatbread item; the product is now 25% larger. Full Story

Pat & Oscar's unveiled a new prototype design at its original unit in Carmel Mountain Ranch, CA. The new look is the first phase of a systemwide remodel plan that initially will include three more company units in Southern California, as well as new units going forward, stated John Kaufman, Pat & Oscar's president and chief executive, reported Nation's Restaurant News. Full Story (Free Registration Required)

Health News

There is a lack of consistent information about the prevalence, diagnosis and treatment of food allergies, according to researchers who reviewed data from 72 studies. The review authors found that food allergies affect between 1% and 10% of the U.S. population, but it is not clear whether the prevalence of food allergies is increasing, reported HealthDay. Full Story

Washington News

First Lady Michelle Obama and members of the Childhood Obesity Task Force unveiled the Task Force action plan: Solving the Problem of Childhood Obesity Within a Generation. The plan seeks to return the childhood obesity rate to 5% by 2030. The report presents a series of 70 specific recommendations, including providing healthy food in schools through improvements in federally-supported school lunches and breakfasts and improving access to healthy, affordable food by eliminating "food deserts" in urban and rural America. Full Story, Full Report

The Los Angeles attorney's office filed 14 counts of false and misleading advertising against Ralphs and Kroger Co., reported The Associated Press. Full Story

Wal-Mart Stores Inc. agreed to pay as much as $86 million to settle a class-action lawsuit accusing it of failing to pay vacation, overtime and other wages to thousands of former workers in California. The accord requires court approval, reported Reuters. Full Story

Global News

Sobeys Inc. introduced a new format, FreshCo, which will focus on fresh foods, while catering to budget-conscious multicultural customers. Sobeys is launching the new concept in eight of its former Price Chopper stores beginning May 12. The chain plans to rapidly expand FreshCo, converting more of its 87 Price Choppers to the new format and adding new outlets, reported The Globe and Mail. Full Story (Free Registration Required), Full Release

Japanese pork exports to Hong Kong resumed after being suspended due to the discovery of foot-and-mouth disease in pigs and cows, according to the Agriculture, Forestry and Fisheries Ministry, reported The Japan Times. Full Story Meanwhile, the Japanese government will provide full compensation for livestock losses suffered by farmers as a result of the foot-and-mouth disease outbreak, stated agriculture minister Hirotaka Akamatsu, reported The Japan Times. Full Story

Market News

Onion farmers found unusually strong demand for their crops as harvest begins in the Imperial Valley. Rain and other weather problems damaged onions grown in Texas. Most of the onions now available come from storage. Observers claim prices will remain high until onion supplies catch up with demand, reported California Farm Bureau.

Apricot Producers of California claim trees bloomed early, but cool weather this spring delayed fruit maturing. Farmers expect the crop to produce about the same amount of fruit as last year. California-grown apricots should be available from now until mid-June, reported California Farm Bureau.

Another tomato blight outbreak could occur this year, according to Cornell University plant pathologist Meg McGrath, reported The Associated Press. Full Story

APHIS will begin issuing permits for the importation of fresh pomegranates and fresh baby kiwi from Chile. Based on the findings of pest risk analyses, APHIS believes that the application of one or more designated phytosanitary measures will be sufficient to mitigate the risks of introducing or disseminating plant pests or noxious weeds. Full Notice

The Farm Service Agency will hold a second public meeting of the Dairy Industry Advisory Committee on June 3-4 to discuss farm milk price volatility and dairy farmer profitability, review USDA's current dairy programs and federal dairy policy, hear proposals from the dairy industry and hear public comments. Full Notice

An EPA regulation established tolerances for residues of clethodim, fluazinam and flutriafol.

FDA is amending the animal drug regulations to reflect approval of an abbreviated new animal drug application for use of an ivermectin injectable solution in cattle and swine for treatment and control of various internal and external parasites. Full Notice