The US market can yield many valuable insights with possible applications in Australia. The US west coast in particular has many similarities with the Australian market, which made the recent PMA Fresh Summit event in Anaheim even more interesting. Freshlogic drew a number of insights from the developments and products on show at the event.
- New product development is pushing forward with convenience and being more retail ready. This includes more combinations of ingredients, smaller portions and packaging forms that are more retail shelf space efficient. The breadth of new ranges reflected a maturing and consolidation, rather than a wider proliferation. There were more seasonings with the common promise of “adding some taste to your meal”, with these offers typically available in the efficient hang sell merchandising units.
- There is increased demand for organics, and US regulatory bodies are reportedly adding staff to cope with increased requests for accreditation. The retail price premium for organics has levelled out at around 25% above conventional products, and that stability appears to have been welcomed by mainstream supermarkets, some of which are enjoying strong growth. Organics are taking some of the spotlight that ‘local’ has enjoyed in recent years, perhaps because it is viewed as more substantial and because consumers see the price premium as proof of additional value.
- The provenance story has been in played out in the US longer than in Australia, and it’s significant that some marketers have drifted to a somewhat sceptical description of this as ‘little house on the prairie’ positioning.
- Supplier brands are an integral part of the retail supply chain in the US, and due to the platform they provide, producers and marketers invest more in product support. This same capacity fuels the confidence to innovate and begs the question as to what value could be added to the Australian market if the same branding platform was available.
- The size of the US market and breadth of distribution channel options is reflected in the way the US industry defines them:
- Conventional: supermarkets and hypermarkets
- Natural: chains like the Wholefoods 300+ store network
- Club: membership-based stores such as Costco or Sam’s Club
- Other: including new alternative online channels
- The understanding of what it takes to influence consumers has matured at an industry level. It is accepted wisdom in the US market that other processed foods will always have the budget to outspend fresh food, and that improving influence with consumers is only likely to come from a balance of messages and activities that connect with their emotions.
Many of the trends now playing out in the Australian market were felt earlier in the US, and the way that market is evolving can yield valuable lessons for the fresh food sector here.