Feature: The mother of all grocery stores

By MARCELLA S. KREITER  |  May 4, 2003 at 11:00 AM
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CHICAGO, May 4 (UPI) -- Think of it as the mother of all grocery stores.

The annual Food Marketing Institute opened Sunday at McCormick Place for its three-day run where everything from new alcoholic concoctions to a combination breath mint-diet pill is on display.

Todd Hale, senior vice president for consumer insights at A.C. Nielsen said research indicates ethnic foods will remain a driving force behind growth in the retail grocery market, along with products catering to the 50-plus crowd.

"Ethnic foods provide opportunity for the younger and larger households but there's tremendous growth in the area of those turning 65 years of age and older," Hale said. "That population will almost double in importance between now and 2030. These are clearly consumers in need of products aimed at health and wellness issues -- not just in the area of prescription needs, which is where the grocery channel has been focusing its energy.

"Kroger has been doing a lot of ads on local food and drug stores with a lot of initiatives around shots -- flu shots. They had an ad for a vaccine for people going out of the country. Then there are multi-vitamins for people 50 and over -- growth rates of 17 percent vs. a year ago compared with average category growth of 4 to 5 percent. It's fueled by more targeting and focusing on consumers."

Another area of high growth is products aimed at our fast-paced lifestyle. Stores are offering more prepared foods like pre-cut salads and refrigerated entrees.

"Shelf-stable entrees are growing at 21 percent vs. a year ago," Hale noted.

Superstores like Wal-Mart are showing more traditional grocers there is money to be made in non-food items and to that end, grocery stores are stocking more DVDs and office supplies. Also, more and larger seasonal items are showing up like patio furniture.

"Grocers currently have a relatively low share of these categories but they are growing nicely," Hale said.

"The kinds of consumers who shop the grocery channel come a lot more from upper income groups than those we see at supercenters. We see an overlap between heavy grocery shoppers and office supply stores. We also see retailers like Stop and Shop doing store-within-a-store concepts. Office Depot is also doing store-within-a-store. Whether they can go it alone or whether they need a partner, there's still expertise for them to do so."

The growth of superstores is not leveling off. Wal-Mart opened 183 supercenters in 2002 and has another 100 slated to open this year, Hale noted. When bankrupt Kmart began closing stores, it kept its superstore operations largely intact.

The key is convenience, Hale said.

"Grocery stores offer convenience other retailers can't," he said. "Everybody shops the grocery store more frequently than other channels. The challenge is how to make the experience more pleasurable.

"We see more of them still trying to offer more and more services -- financial offerings, dry cleaners, coffee shops. Minneapolis does some great things with coffee in their stores. Some are offering gasoline on site. They're trying to capture as much shopping as they can."

Some 30,000 people are expected to attend FMI before it closes Tuesday, examining the wares of more than 1,000 exhibitors.

Among the items being introduced:

--Anheuser Busch Inc. is premiering Bacardi Silver O3, a mixture of mandarin, tangerine and Velencia orange juice in a malt beverage.

--Designing Health Inc. has a new high-energy soy meal replacement drink -- Omega Blast -- described as an "all natural super food" that contains no synthetic vitamins, minerals, sweeteners or flavors.

--Health Plus Inc. has Az-One total body cleansing system, which the company says does its "detoxing" on the cellular level.

--Lifemax LLC is introducing Slim Mints, a "weight-loss product and breath mint combined!"

Other companies are expanding existing lines or adding synergies. Campbell's is adding offerings from its Chunky and Select lines to the on-the-go line-up it introduced last year. Mr. Coffee will be selling its own brand of premium coffee for the first time and Pepperidge Farm has joined the mini-snack craze, offering its cookies in bite-size servings.

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