Companies across the food sphere report earnings this time of year, so Food Dive breaks down the latest earnings news all in one place.
Whole Foods looks to new store chain, misses estimates
Whole Foods Market announced it would be opening a new chain of stores to complement its current store format and product selection while capturing a younger demographic who might be hesitant to shop in its traditional stores.
The retailer reported record sales of approximately $3.65 billion for the second quarter, a close to 10% increase, but it was still not enough to impress Wall Street analysts, who expected the company to announce sales of about $3.7 billion. The company posted a 3.6% increase in same-store sales, which was another disappointment to Wall Street, which forecasted an increase of 5.3%.
Whole Foods has been lowering prices to compete with other chains like Wal-Mart Stores Inc., which is now offering natural and organic products in many of its stores. This has not been the boon Whole Foods was hoping for and instead continues to leach from the retail chain's profit margin.
The chain will have a "modern, streamlined design, innovative technology and a curated selection. It will deliver a convenient, transparent, and values-oriented experience geared toward millennial shoppers, while appealing to anyone looking for high-quality fresh food at great prices," said Whole Foods co-CEO Walter Robb a statement.
It seems Whole Foods feels if they can't bypass their "whole paycheck" image among millennials, which it has in part thanks to the national marketing campaign launched last year, the health foods retailer could appeal to that group of consumers through other avenues like convenience and technology. The company will release more details sometime this summer.
Other strategies for Whole Foods include more store-branded products, a customer loyalty program, and other innovative add-ons like rooftop beer gardens and in-store breweries.
Whole Foods also currently has a certain amount of power over food industry entrepreneurs, who often fawn over the opportunity to be included on the retailer's shelves. However, in the process, Whole Foods may request that they make changes to their products, such as rebranding or having to pay for organic certification. The Wall Street Journal notes that while Whole Foods may not dominate the specialty foods retail market anymore, it is still "the ultimate gatekeeper" for many food industry startups.
Keurig earnings fall on 2.0 debacle
The company lowered its forecast for the year from mid-single digits to high-single digits down to flat to low-single digits.
Keurig also announced that Peter Leemputte will be the new CFO and treasurer effective August 17.
Keurig has not seen the success it expected from its new Keurig 2.0 machines, which is incompatible with K-Cups made by other companies and even its own K-Cups that were made before this past summer. This has left many customers furious, and Keurig has clearly taken a hit because of it.
The company's Keurig Kold machine is due out this fall, turning to cold beverages. Many of these products are branded by a number of major companies, including Coca-Cola Co. and Dr Pepper Snapple Group. Whether the addition of cold beverages is enough to turn around Keurig's earnings is up for debate.