Baking & Snack - September 2017 - 12

It's 'game on' for supermarkets

Mainstream grocery chains that continue to quietly lose
share to other retail channels have become the talk of
town with Lidl and Amazon separately venturing into the
market. The German supermarket giant and the online
prowess of Amazon are raising expectations and revolutionizing the retail arena.
Certainly, both are taking aggressive but different approaches that provide big opportunities - and maybe
some challenges - for bakers and snack producers.
Amazon's purchase of Whole Foods is widely expected
to redefine the shopping experience. While online food
purchases are intriguing, they don't excite many baking and snack manufacturers - at least not yet - because they're still small compared to the huge portion of
impulse-driven sales. However, Amazon could reinvent
how food is sold by employing a creative blend of online
ordering with delivery options that genuinely meld
with a premium brick-and-mortar shopping experience. Already, Amazon has lowered the historically high prices at Whole Foods, and it's planning to give further discounts to its Amazon
Prime customers. And now Wal-Mart is teaming up with Google to present a competitive
shopping initiative of their own.
Meanwhile, Lidl is making a value play that
seemingly challenges established grocers and even
discount stores with their small-format stores and
lowest possible price models. Lidl has a vast wealth of
experience in international markets, operating more than
10,000 grocery stores in nearly 30 countries.

EDITORIAL
Editorial Director
Dan Malovany
Editor
Joanie Spencer
Senior Editor
Charlotte Atchley
Managing Editor
Nico Roesler
Digital Media Associate Editor
Matt Hamer
Associate Editor
Anna Wiber
Contributing Editors:
Donna Berry
David Busken
Len Heflich
Jim Kline
Lynn Petrak
Joe Stout
DESIGN
Design Services Manager
Sadowna Conarroe
Design Services Assistant Manager Ryan Alcantara
Graphic Designer
Brian Peterman
Senior Design Consultant
Becky White
Graphic Designer
Nick Martens

But how will the nation's largest supermarket chains
- and their regional counterparts - respond? Will they
simply match prices on Lidl's value side and copy the bold
thinking from Amazon? Or will they sit on their hands
until it's a "Lidl too late"?
Another sweeping change in food retailing involves
a new approach outlined during the American Bakers
Association's annual convention earlier this year. Rather
than relying on category management, forward-thinkers
in retail are exploring a shopper-centric approach.
Instead of focusing on what's selling in a specific category,
this model examines what consumers are putting into
their grocery carts and why.
In many ways, it's cross-merchandising on steroids for
the entire store. It seeks to bundle together complementary products in a display that's more in tune with the way
shoppers act when purchasing food.
Think of it as an enormous meal kit. For an Italian dinner, the display may feature fresh pasta, tomato sauce, spices, olive oil, Caesar salad and even a loaf of ciabatta that's
hopefully sold at full price. A menu card shows consumers
how to put the meal together if they need a refresher.
For bakers, participating in the shopper-centric environment would allow them to position bread and rolls as components of the meal and branch out beyond the bread aisle.
Yes, maybe we're seeing the beginning of a retail revolution that will shake up the way the game is played for
the foreseeable future.
- Dan Malovany, editorial director
dmalovany@sosland.com

PUBLISHING
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Jon Hall
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Erica Reyes
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Carrie Fluegge
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Jim White

CORPORATE
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Charles S. Sosland
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G. Michael Gude
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E-mail: BakingSnack@sosland.com
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Baking & Snack - September 2017

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