Supermarket Perimeter - December 2021 - 17

T
he shortages - and subsequent price hikes -that have
shadowed many corners of the food industry in the second
half of 2021 don't seem to have significantly affected
demand for one category of goods you might expect to be especially
hard-hit: premium products.
Americans who shopped premium in the grocery perimeter before
the supply chain disruptions kicked in are not inclined, at least not yet,
to change their buying patterns, according to industry insiders.
In the past decade, consumers' increasing willingness to try
international foods and other foods new to them has helped drive
product innovation, and that has seen an increase in premium
products, said Raj Shroff, founder and principal of Columbus, Ohiobased
PINE Strategy & Design.
What started in restaurants has trickled down to the grocery fresh
perimeter and supermarkets in general, and it's a dynamic that falls into
the snowballing category, with new demand leading to new innovation
leading to new demand, and on it goes.
" People now expect new and different all the time, " Shroff said.
Even with the economic turmoil produced by COVID, premium has
continued to thrive, Shroff said. The higher income households who
were more likely to buy premium in the first place have not been hit
nearly as hard in recent years, and they continue to be more likely to
indulge when buying food.
In fact, America's recovery (albeit slow) from the pandemic has
unleashed demand for many premium products, Shroff said. Just
take a look at the lines at Starbuck's, he said. And those consumers
willing to pay $5 or more for a coffee are also willing to spend more
for a premium cut of meat, a plant-based product, a specialty fruit and
countless other fresh food items sold in the grocery perimeter.
With the pandemic, many Americans hunkered down and leaned
heavily into the comfort foods they've known their whole lives, said Bill
Bishop, chief architect and co-founder of Barrington, Ill.-based Brick
Meets Click.
For many, that may have meant a longer-than-usual detour back to
center-store.
" I think of Campbell's rolling out soup recipes, " Bishop said. " Who
didn't grow up with red and white soup cans? "
But this might be a case of the exception proving the rule. Premium
fresh products sold in the grocery perimeter were on the uptick before
with high quality assurances and
verifiable safety standards
Source: ADM
the pandemic, and now that COVID is (hopefully) starting to recede for
good, that momentum, perhaps interrupted in some cases, shows no
signs of letting up.
" I think people are getting more definite about what they want, and
they're willing to pay more for it, " Bishop said. " And it's hard to see how
this is not going to continue - it's particularly true of the younger set. "
People continue to get more ambitious in the kitchen, spurring
demand for new (and often premium) fresh foods at the grocery store,
he said.
Shroff agrees. The pandemic, he said, has taught consumers that you
can splurge on foods in the perimeter and throughout the store and still
spend a lot less than you would eating out.
" The affordability of grocery vs. restaurants is a real thing, " he said.
" You were forced to eat at home, and people realized they could
make great meals and have more time with their family. There's a new
comfort with eating and making food at home. "
Premium prepared
For those who don't want to cook, Bishop said, more and more grocery
stores are willing to meet the need with premium prepared foods.
" Twenty years ago you were lucky to get maybe some kind of
imitation Chinese food. Now there's fresh sushi in every supermarket. "
Shroff agreed that there's room for growth in deli-prepared.
" You look at things like Kroger's new ghost kitchens, " he said. " These
are competing head-to-head with restaurants. With the chef there,
there's the perception that it was made right away. "
Such offerings scan as " premium " for many consumers, though
they're often quite affordable, especially compared with a restaurant tab.
49% of consumers are willing
to pay a premium for products
supermarketperimeter.com
DECEMBER 2021 - 17
COLEMAN, CHANDLERVID85 - STOCK.ADOBE.COM
http://www.supermarketperimeter.com
Supermarket Perimeter - December 2021

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