Growing influence of millennial shoppers, baby boomers' desire for more healthful food, transparency about ingredients, sourcing seen as three key trends shaping US food retail industry in 2013

Cindy Allen

NEW YORK , January 7, 2013 (BEEF) – It seems that everyone is putting out top 10 lists of happened in 2012 or what is going to happen in 2013. I am going to enter that space, sort of, with this post.

A few weeks ago, Phil Lempert, known as the “Supermarket Guru,” put out a great article, “The Top 10 Food Trend Predictions for 2013” on supermarketnews.com.(Supermarket News is owned by Penton Media, our parent company.) Phil did a great job providing some insights and analysis about what he sees affecting food retailing in 2013. I am going to “borrow” some of the points on his list and share the topics that I see as having the most impact on natural products retailing in 2013.

Millennial movement

The changing of the demographic guard continues. There are many well-written studies about the effects that the millennial generation will have on the marketplace. The one that I gained the most from is called “Trouble is Aisle 5” by Alix Partners.

The research paints a concerning picture for those involved in traditional food retailing who don’t pay attention to the differences between millennials and baby boomers. I, however, don’t see a dire picture for natural products retailers as this generation becomes an economic force. While millennials are more price conscious and less brand loyal than boomers, they are also willing to pay more for product attributes such as natural, organic, tastiness, freshness, healthy, local, fair trade, GMO free and sustainable.

Local stores that can highlight their community connections and feature these kinds of products will do well as a millennial shopping destination.

The boomer health reality

While millennials will be the dominant economic group from 2020 forward, boomers are a strong force as their influence grows until 2015. This affluent group is going to be trying to stay young or ward off disease—or both.

Depending on what you read, we are either in the midst of an epidemic of type 2 diabetes, high blood pressure, heart disease, etc.—with many cases being brought on by lifestyle habits and behaviors rather than genetic causes.

My colleague, Todd Runestad, editor in chief of Functional Ingredients magazine, wrote a great post on newhope360 about the growth in supplements for those dealing with blood sugar. In this post, he not only quotes sales data and market forecasts but also references some recent scientific studies about emerging products.

Healthy products will continue to sell and do well with the boomer generation. Certainly this includes grocery and produce items, but also includes dietary supplements. Well researched supplements, those with good studies behind them and structure-function claims on their labels, should also connect well with boomers trying to deal with health issues.

True, vitamins are everywhere these days, but well-trained staff are not in the aisles of every store. Natural products retailers have a distinct advantage here—our stores not only have more staff than the competition, but they also have better staff, staff more focused on providing both information and service.

The story behind our food

In a word: Transparency.

This is a big and growing deal as technology provides consumers with insights into what companies do and why. The most transparent companies have an advantage here.

In the NEXT Forecast 2013, a forward-looking study by New Hope Natural Media and the Sterling-Rice Group, transparency was a trend with a very rare ranking—“high” on “impact today” and “high” on “impact tomorrow.” In other words, it is important now and its importance won’t change in the foreseeable future.

Given the ingredients that were given vast amounts of media attention in 2012 (Does “pink slime” ring a bell?), companies that are very open about what they put into food are going to gain customer confidence. Look at what the “Behind the Scenes” ad campaign did for Domino’s Pizza. Gone is the day when consumers “ignore the man behind the curtain” a la the Wizard of Oz.

As we are now early into 2013, what are you seeing in your stores? What are you predicting? Please use the comments section below and share your thoughts and insights.
© 2013 Penton Media

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.