FreshIncite July 2016

What We’re Seeing

Foodservice set to capture market share from retail in USTop

uber1.png Consumer demand for convenience combined with improved accessibility is delivering gains for the foodservice channel. A number of new meal ordering and delivery services using smartphone apps are lifting food service sales.

A changed food landscape has evolved according to Acosta and Technomic, with US consumers now far more willing to try the new and emerging distribution channels. This bodes well for these new innovators, with the likes of Ubereats and foodora quickly gaining support.  

Technology plays a role in engaging consumers and promoting foodservice through accessibility. Social media platforms make it simple for the consumer to find coupons, special offers and also learn about menus. New foodservice meal options are targeted to specific consumers through these platforms. 

FreshIncite: As food delivery services become more common in Australia, our market could potentially follow the same pattern as the US. 

Do chilled retail ready meals have upside? Top

ready-meal-3.jpg Investment in chilled ready meals is apparent at major retailers, with dedicated new fixtures to showcase new styles and flavours. Designed for the busy shopper, these meals provide a convenient solution for tonight’s meal. The core challenge is they are competing with a very competent takeaway and casual dining offers.

Results from the Freshlogic Mealpulse™ consumer panel show that 25% of all shoppers purchased a chilled ready meal in the last 3 months, with 9% making a purchase in the past 2 weeks.

Further scope for growth appears possible, if certain obstacles can be overcome. Looking past the typical “I would buy more at lower prices” from 34% or respondents, there are a list of other desired attributes that can be actioned. Products that were tastier (29%) and healthier (27%) will win support from consumers.

Also apparent is the opportunity to improve transparency and trust surrounding these products. Respondents indicate they would buy more if they could be certain of they were freshly prepared (29%), used only quality ingredients were used (28%), advised exactly what ingredients were used (26%) and were available through a preparer they could trust (22%).

FreshIncite: While the challenges for chilled retail ready meals look set to continue the demand signals from consumers invite fresh, higher quality products supported by providers that consumers can trust.

Peapod and Whisk partner to turn recipes into shopping lists Top

whisk_peapod1.png US online pioneer Peapod has partnered with Whisk.com to turn recipes into online grocery orders. In an attempt to simplify online and harness the array of recipes available online, Peapod and Whisk have combined to create smart shopping lists, from any online recipe across the web. The customer selects a recipe and the ingredients needed are automatically added into their ‘smart’ shopping list. 

This expands Peapods reach and new order generation into being just one click away for all browsers of online recipes.

Whisk was developed in UK with goals centred on connecting consumers with their desired food as quickly and as easily as possible. The partnership with Peapod is just one of their partnerships with a range of retailers. 

FreshIncite: This is another example of the technology leverage available to those in online channels where they can rapidly increase sales without dependence on building more infrastructure.

The Food Consumer

Plastic packing that recycles like an organic wasteTop

packaging1.jpg A new range of 100% biodegradable plastic packaging made by UK Company TIPA will be used for multiple products including fresh produce in the coming months.

The new packaging product aims to look and act very similar to plastic, the main difference being post consumption it is eco-friendly. TIPA is aiming to market their packaging as serving the same function as plastic without the waste problem.

The consumer demand for environmentally friendly packaging is expected to rise as consumers become aware that the more smaller portions they buy, the more packing waste they create. 

FreshIncite: Consumer concerns about packaging waste seem inevitable, so pre-empting them with recyclable options could be wise. 

Seed developer targets 'snack vegetables' Top

peppers1.jpg Origene Seeds, a producer of vegetable seeds in Israel, is responding to following western market trends by developing a range of snack vegetables which aim to replace fast food snacks. 

Early priorities are centred mini-pepper varieties as "snacks", in three colours and marketed in special packets as "Finger Food". These convenient snacks aim serve a wide range of different purposes – at work, school or leisure.

Hila Vaknin who bred the mini pepper varieties for Origene Seeds notes that the peppers are medium sized, with around 3 cm being the optimum, they also have a long shelf-life.

Recent Freshlogic analysis indicates this style of product, in a whole more durable form would resolve some of the distribution challenges of fresh cut vegetable snacks. Importantly they could be handled by a far wider range of distributors than fresh cut product.

FreshIncite: Vegetable snacks in a small whole form are an attractive “Fresh & Healthy” addition to the range of local snack foods that can be handled by distributors.

Mushroom & Cauliflower steaks at Tesco Top

mushroom_and_cauliflower1.jpg The new mushroom and cauliflower steaks available at Tesco are targeting vegetarian consumers attending barbecues. The product launch signifies the UK’s first ever vegetable BBQ steaks. The products are made entirely of vegetables and the cauliflower steak comes with lemon and garlic drizzle, while the Portobello mushroom steak comes with peppercorn sauce.

These new vegetable products bring change to what has been a protein centred meal occasion and the product naming and style presents them as direct alternatives to meat steaks. Tesco are servicing their consumers, many of which are now vegetarian but still likely to enjoy a barbeque.

The Mealpulse panel responses reveal that 14% of Australian household food buyers try to eat mostly vegetarian, which remains unchanged from the previous year. Expanding the meal occasions for cauliflowers can only help generate growth for the Australian retail cauliflower category, which is valued at more than AUD$125m.  

FreshIncite: As vegetables enjoy the limelight of a healthy lighter image, these new products expand their involvement in a wider range consumption occasions. 

Retail

Fresh Meat drawn into the retail promotional spiralTop

meat1.png Competition in the highly competitive Australian retail market has drawn the meat category into promotional activity in recent weeks. The promotional activity began with lamb and spread to fresh and BBQ poultry.

The speed of the responses has been rapid as retailers seek to convey the “best value”  offer and this spiral has typically taken price to new and lower levels. Some independent butchers are stating that they are struggling to match these new price lows and many are now under pressure to remain viable.

With the retail market locked in competition for market share for the near term future, this level of promotional activity appears set to continue.  

FreshIncite: While fresh meat appears to be drawn into a leading promotional focus it may offer some respite for the other categories that have been in this space for some time.   

Vegetables target the $9.33B Australian snacks market Top

veg_snacking1.png The widespread snacking behaviour in Australian households has drawn interest from the fresh vegetable producers and marketers. HIA funded research undertaken by Freshlogic has revealed this $9.33B market has a limited range of vegetable snacks on offer and yet there is clear consumer demand for more healthy snacks.  

A core challenge is making these healthy snacks available where the need for snacking arises. This challenge requires a distribution capacity to handle the fresh vegetable product form. Consumers are now buying snack food in new places like their gym and with vending machine technology advancing the distribution options are expanding.  

It is also clear that consumers are seeking ready to eat healthy snacks that require no preparation.

FreshIncite: While the size of the prize is substantial it appears the major gains won’t be captured until the capacity to handle fresh product is there.

Retail advert activityTop

logo_pics.png Retail competition remains intense and centred on attracting and keeping customers. In this environment retail promotional activity is a barometer, and below are some observations of significance comparing the first quarter 2016 to the previous year. 

Fresh potatoes activity increased over 20% on last year, with more 1 kg pack sizes involved. This is following a similar pattern in UK, which moved consumers to smaller pack sizes and some observers conclude did not help potato consumption.  

Gluten free products were featured in 75 adverts in the first quarter of 2015, however there were no adverts with that feature in 2016. Indicating gluten free attributes may have peaked.  

Organics product adverts increased slightly with yogurt the most common product and for the first time there was promotional activity for organic pet food.

Ready meals activity increased 10% with the staple of Pasta and Pasta Sauces the most popular and yet activity for Simmer & Stir Fry Sauces reduced by 23%

2 for $5” promotional multiples generated the largest increase in type of adverts, with significantly more involvement from punnets of fresh herbs and snacking tomatoes. 

Technology Frontier

Ad blocking may strangle the newsTop

ad_blocking1.jpg

The adoption of ad blocking is stronger on mobile devices where the intrusive impact of unwanted adverts is more disruptive to the reader. Therefore the impact is further magnified by the increased use of mobiles for all things internet. This has sparked the free speech champions to propose government funded news services, that haveindependence similar to our legal court system.

If this advertising income from digital media dries up, given the paper version is already facing financial challenges, it could potentially erode the business model that funds the daily news.  

FreshIncite: The ad blocking momentum is difficult to arrest, but it seems unlikely that today’s informed consumer will tolerate more layers of spin.  Are we headed toward new ways of keeping informed? 

 

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Freshincite is a publication prepared by Freshlogic

Freshlogic is a specialised provider of food market insights and analysis, with deep expertise in the dynamics of fresh foods. We deliver a range of services to industry and corporate clients, which aim to interpret market and supply chain conditions, or address challenges faced in food supply chains associated with changes in the preferences of consumers, supply dynamics, and economic settings.

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