retail news in context, analysis with attitude

Notes & comments by The Content Guy

ORLANDO -- There may be a slow economic recovery taking place, but food retailers need to work to define for themselves differential advantages that can set them apart from the competition and create tighter and more lasting relationships with shoppers. In some cases, the advantage may be food; in others, technology ... but what seemed to be consistent in both cases was a sense that it as much what you offer as how you offer it.

That seemed to be a key takeaway during Day Two of the Food Marketing Institute (FMI) Midwinter Executive Conference ... at least from my perspective. And, to be perfectly honest, I have a strong perspective on this, because I moderated one of the morning’s panels, entitled “Stomach Wars,” in which a group of fascinating people from the food industry - but not the supermarket business - talked about the nation’s food culture and what retailers need to do to build such a culture for fun and profit in their own businesses.

For me, the “smack me upside the head” moment came when Mike O’Donnell, CEO of the Ruth’s Hospitality Group (which has Ruth’s Christ Steakhouse as one of its banners), noted that his franchisee group was meeting just down the hall. I asked him how much time that group would spend talking about food, and he replied, “Ninety-five percent.”

That’s extraordinary, and it pointed to the fact that while food can be a great differentiator - it is the single greatest competitive advantage for a number of supermarket chains - food retailers tend to spent relatively little time talking about its role in the store and how it can be exploited for fun and profit.

Some other moments from our session...

• Sandra Lee, of “Sandra Lee Semi-Homemade” fame on the Food Network, suggested that supermarkets are a great untapped resource, and suggested that retailers need to do a better job about communicating the opportunities available within; she also noted that economic concerns seem to be pushing some folks back toward cooking for scratch, and suggested that better labeling and information could get people to buy more and cook more.

• Victor Giellisse, of the Culinary Institute of America (CIA), recalled a conference he went to years ago at which an expert spoke in layman’s terms about trans fats, noting that they are a virtual poison and just a few chromosomes away from being a plastic. The industry has done an excellent job, in this case, of eliminating them from most foods and communicating the reasons for the shift.

• Luigi Bonini, who runs all of Starbucks’ foodservice programs, noted that European retailers seem to be way ahead on prepared meals, and suggested that speed and simplicity matter when creating an effective and relevant prepared meals strategy.

One final note. There seemed to be general agreement that the market for great food in the US is far greater than most retailers believe, and that the booming food truck trend is evidence that when given the opportunity, Americans are willing to go out of their way to spend a little extra for great tasting food. Flavor choices are getting better and bolder. (One FMI attendee mentioned to me that he’d recently had an $18 lobster roll and a $12 bowl of clam chowder from a San Francisco food truck, and it was some of the best food he’d ever eaten.) It will take an investment of both energy and money, but US supermarkets are capable of exploiting this trend to their own advantage.

But it will take an investment of energy and money. The alternative, however, would be to not take advantage of what should be a core competency and a built-in competitive advantage.

( should be noted yet again that FMI seems to be expanding its efforts in this area, with the inaugural “FMI Supermarket Chef Showdown” that it announced earlier in the conference, described as “unique cook-off competition exclusively for culinary professionals in the food retail industry.” It’ll take place at the Dallas FMI Show in May, and you can find details here.

Some additional notes from FMI Midwinter...

• In one session, Cathy Green Burns, president of Food Lion, and Jesse Spencer, Social media manager at The Integer Group, took the audience through the introduction and initial chapter of the latest study done by the North American Coca-Cola Retailing Research Council (CCRRC), into the challenges and opportunities offered by social media. Much of what they said was previewed here yesterday by Michael Sansolo; in addition to contributing weekly to MNB, Michael also is research director of the CCRRC, and you can read his view of the social media study here.

Burns noted the fast-shifting demographics of social media usage: in 2011, she noted, 15 percent of users were under 18, 40 percent were ages 18-34, and 45 percent were older than 35, while in 2013 is is being estimated that the user base will get older as 35 percent are 18-34, and 50 percent are 35+. What this means, she said, is that core supermarket shoppers increasingly are immersed in the social media world, going there to get recommendations, critiques and a wide range of observations - all of which can and do shape their buying decisions.

“Social media is not a marketing channel, it is a communications channel,” said Spencer. “It is not a monolog. It is a dialog.”

And, they both agreed, it is an area in which retailers need to invest money and energy (yes, those two again) if they are to use it to their advantage. Hopefully, their differential advantage.

If you want to read the initial chapters from the CCRRC study, you can do so by clicking here for the introduction and here for Chapter One.

• And, in another panel that focused on differential advantage, Thom Blischok, president of Global innovation and Strategy for Symphony IRI Group (full disclosure, an MNB sponsor), noted that 2012 is shaping up to be “a challenging but opportunistic environment.

This led Donald Knauss, chairman/VEO of Clorox, to say that “the retailers that sell ideas instead of categories are starting to see real growth,” and that “people don’t want to buy charcoal, they want to buy a grilling experience. People don’t want to buy cleaning products, they want to buy a healthy home.” It is the retailers that tap into these needs, Knauss suggested, that will carve out for themselves a differential advantage.

To which I can only say...Exactly.

In other FMI news...

• Art Potash, CEO of Potash Markets, received the Food Marketing Institute (FMI) Glen P. Woodard, Jr. Award for his outstanding contributions on behalf of the food industry in government and public affairs.

• Douglas R. Conant, former president and CEO of Campbell Soup Company, received the Food Marketing Institute (FMI) William H. Albers Industry Relations Award today for his excellence in trading partner relations in the food retail supplier community.
KC's View: