Brief

Report: More people shopping for food outside of grocery stores, sharing responsibilites

Dive Brief:

  • Retail channel fragmentation continues among today's grocery shoppers, and manufacturers that adapt their products and packaging will have the best chance of capturing a wider range of shopper demographics, according to the 2016 U.S. Grocery Shopper Trends report from the Food Marketing Institute.
  • Consumers have shifted away from shopping at traditional grocery stores. Now they shop for food at a broader array of stores, with discount retailers like dollar stores, seeing more grocery shoppers. Online shopping also increased 4% in the last year, with 15% of surveyed consumers saying they occasionally do it.
  • According to the report, two of every 10 customers are single shoppers, making the food purchases for themselves because they live alone. Two out of 10 are sole shoppers, which  includes single parents or multi-adult households with only one person doing the grocery shopping. Six out of 10 customers are co-shoppers, sharing the food-shopping responsibilities with someone else in their household.

Dive Insight:

Understanding where consumers shop for groceries today can have a significant impact on product development and packaging strategies, particularly when it comes to product size and pricing. For dollar stores, manufacturers may make smaller, lower-priced versions of their usual varieties to fit the discounted nature of the retailer while maintaining profitability per unit. This enables manufacturers to reach more consumers in low-income households, which expands brand penetration.

This strategy has worked well for a variety of manufacturers. General Mills reported 8% growth in the dollar and drug store channel in 2014, as compared to 1% growth in net sales overall that year. Before its merger, Kraft was able to revitalize sales for brands like Velveeta by creating smaller packaging and single-serve meals.

Convenience stores are another growing destination for grocery shopping, with manufacturers ranging from Hostess to Hershey devising plans to increase sales there. These stores serve consumers who lead more on-the-go lifestyles, as well as many who live in food deserts, with limited access to traditional grocery stores.

The wide prevalence of co-shoppers also informs manufacturers on developing products and packaging. While specific target demographics remain important, those at the grocery store are not all moms shopping for their families. A report from the Hartman Group released last year found that men make up about 43% of primary household shoppers. Men's shopping habits are driven more by convenience than price, and more toward club, convenience and online retailers.

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Filed Under: Manufacturing Packaging / Labeling