Food Business News - June 28, 2016 - (Page 9)

Editorial EDITORIAL STAFF Editor-in-chief Morton I. Sosland Executive editor, markets Neil N. Sosland Editor L. Joshua Sosland Executive editor Keith Nunes Senior editor, markets Jay S. Sjerven Managing editor Eric J. Schroeder Senior editor, markets Ron Sterk Associate editor Jeff Gelski Assistant editor, markets Laura Lloyd Senior editor, digital content Monica Watrous Internet editor Rebekah Schouten Contributing editor Donna Berry Graphic designer, market graphics, data Christina Sullivan PUBLISHING STAFF Chairman and C.E.O. Charles S. Sosland President L. Joshua Sosland Director of Publishing G. Michael Gude Associate publishers David DePaul Bruce Webster North American sales Matt O'Shea Chief financial officer Staci Greco Audience development director Michael Barbee Advertising manager Nora Wages Design services manager Sadowna Conarroe Associate design services manager Ryan Alcantara Circulation manager Whitney Hartman Digital systems analyst Marj Potts Manager of advertising design Becky White Director of e-Business Jon Hall Director of on-line advertising and promotions Carrie Fluegge Promotions marketing manager Jim White WE'RE EAGER TO RECEIVE YOUR FEEDBACK: E-mail or write to us at Food Business News, 4801 Main Street, Suite 650, Kansas City, Mo, 64112 June 28, 2016 KEITH NUNES Market fragmentation intensifies C.P.G., retail competition espite the benefits scale provides when similar to or even higher levels of profitability it comes to production and distribution with smaller retail stores paving the way for efficiencies, market fragmentation has smaller retail chains to expand and take share become increasingly pronounced in the food from larger competitors. Shoppers who are and beverage business. Consumer demand for able to match their preferred store format more products with specific attributes and sold in precisely to their shopping needs and preferconvenient venues is driving change through- ences have benefited from the increase in store out the food and beverage supply chain. formats, according to the study. Two reports published in the past few months Adding to the challenges facing retailers is highlight the challenges companies face. The the competition from restaurants and such new first, an annual collaboration between Informa- entrants as meal delivery services. These trends tion Resources, Inc., and the Boston Consult- are forcing retailers to review operations, most ing Group, shows small companies, those with notably concentrating on the in-store shopping less than $1 billion in sales, and mid-size companies, those with Consumer demand for products with specific attrisales between $1 billion to $5 billion, accounted for 46.4% of butes and sold in convenient venues is driving change total C.P.G. sales in 2015, a 2.7% gain since 2011. The gain transthroughout the food and beverage supply chain. lates into an $18 billion shift in the $670 billion C.P.G. market during the past four years, I.R.I. i h i i i d t assortment t t and da experience, pricing, product said. The shift has taken place as more niche companies are establishing themselves in spe- need for locations near where consumers want cific categories as viable competitors to some to shop. "Perhaps the new retail mantra should be of the largest C.P.G. companies. The findings in the report titled "How healthy, 'Go small or go home,' as the 'Bigger is betprotein-rich foods are nourishing growth in the ter' paradigm has been challenged virtually consumer packaged goods industry" are based everywhere," said Steve Matthesen, president, on the growth track records of more than 400 Nielsen Retail Vertical. "Hyper-localization and C.P.G. companies with annual U.S. retail sales specialization are fueling today's retail growth. of more than $100 million. The study includes As lifestyle and consumption habits change, both public and private C.P.G. companies and we're seeing a structural shift in where consumfocuses on what consumers actually bought in ers shop and what they buy, and some small measured channels as opposed to what manu- formats are driving big growth. Mass-market strategies are also losing relevance as consumfacturers shipped. Key reasons for the increased fragmentation ers look for unique experiences that meet their include low barriers to entry into the market, personal demands." It may be assumed the market fragmentaparticularly easier access to capital, a pool of available industry talent, primarily former em- tion trend will become more pronounced in ployees of food and beverage companies that food and beverage as more C.P.G. and retail have downsized in the past few years, and a businesses adopt models that revolve around greater interest among retailers and food ser- e-commerce and greater customer personalvice operators seeking differentiated products ization. In other consumer goods categories that stand out on retail shelves and restaurant customers have been conditioned to expect greater levels of personalization and it is not menus. A second study, published by The Nielsen far-fetched to believe such expectations will Co. and titled "Think smaller for growth: How reach the manufacturers and marketers of food to thrive in the new retail landscape," highlights and beverages as well. Scale will continue to the fragmentation taking place at retail. While contribute to greater efficiencies, but it is clear modern retail has been driven by scale in the those companies that have a better understandpast, supply chain process improvements have ing of what their customers want will benefit in made it possible for smaller stores to achieve the future. FBN D FOODBUSINESS NEWS ® 9

Table of Contents for the Digital Edition of Food Business News - June 28, 2016

Food Business News - June 28, 2016
What will Brexit mean for U.K. food and agriculture?
Obesity rate rises as sweetener use declines
Beverage Business News - Protein on trend in R.-T.-D. beverages
Table of Contents
Web Contents
Editorial - Market fragmentation intensifies C.P.G., retail competition
Coca-Cola invests in organic aloe water beverage maker
Dunkin’ Donuts evolves with expansion of beverage portfolio
Philadelphia passes tax on caloric, diet beverages
Post said to be considering combining with Lamb Weston
Teasdale adds to private label portfolio with purchase of Mesa Foods
CVS to expand selection of healthier foods, will add to private label line
Monster moving beyond energy beverages with debut of Mutant, Hydro
Coca-Cola changing its soft drink strategy to focus on ‘shaping choice
McDonald’s to relocate corporate headquarters
Smucker earnings soar on coffee sales, pet food acquisition
A squeeze on pectin
Picking out pectin alternatives
Kellogg launches $100 million venture capital fund
Kellogg adds Pure Organic to Kashi portfolio
TreeHouse Foods profiles the changing private label consumer
Martha Stewart enters meal kit market with delivery subscription service
B&G Foods ready to ‘fight back’ in frozen food aisle
Washington - Audit finds F.D.A. must improve food recall process
Snack Trends - Key trends unveiled at Sweets & Snacks 2016
Crispy, convenient and gluten-free
When gluten-free orders get serious
Company profile - WhiteWave Foods eyeing $3 billion in additional U.S. plant-based foods sales
WhiteWave’s Earthbound Farm brand set to soar in fresh and frozen
Industry Images - Record attendance at 2016 Purchasing Seminar
New Food Products
Ingredient Market Trends - Post-eleventh hour compromise on G.M.O. labeling
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - June 28, 2016