Dive Brief:
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Grocery Headquarters' annual State of the Industry Almanac found that carbonated beverages were the top-selling supermarket category with $10.6 billion in sales, despite the bottled water segment's 8% sales increase. Beer and alcoholic cider were close behind, coming in second place with sales of $10.5 billion.
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Pretzels, popcorn and chips came in third place with sales around $10 billion. Milk came in fourth place, but this category's sales were hit the hardest of the top 10, with dollar sales falling to below $10 million — a 5.4% drop from last year, according to Grocery Headquarters.
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Yogurt came in last place with a sales dip of 2.4%, but ice cream and sherbet were up 4% with sales around $4.5 billion. The spice/seasonings and butter categories also saw sales increases.
Dive Insight:
Consumers consistently say that they want healthier foods and drinks, and manufacturers have scrambled to deliver, diversifying their product ranges and reformulating existing products to contain less saturated fat, sodium and sugar, and adding ingredients like protein and fiber.
In this context, it's striking that the top three grocery categories in 2016 were carbonated soft drinks, followed by beer and cider, and salty snacks.
The next three categories are staple ingredients – milk, natural cheese, and bread – and all have seen flat or falling sales. Unit sales of milk were down 2.3% compared to a year earlier.
For retailers, this produces a dilemma; should they try to nudge people in the direction of healthier foods and drinks, or should they try to capitalize on the products that people really buy? The answer is likely to be a delicate balance between the two. As Nielsen reports, consumers really do want to improve their health, but they may need a little help.
Reduced sodium claims on potato chips, for example, increased 18% from 2012 to 2014, and sales of foods carrying natural and organic claims were up 24% and 28%, respectively. And despite taking the top spot, soda sales by number of units were down 1.4% last year. Meanwhile, the bottled water category has grown so fast that some retailers are having trouble finding enough space for all the different products in the segment.
These figures suggest that consumers may be reaching for healthier products within favorite categories, such as salty snacks or frozen treats, rather than moving to traditionally "healthy," fresh categories. Grocers could make an effort to position the healthiest offerings in these aisles with signage and promotions in order to lure health-conscious consumers.