A curious post about Instacart appeared recently on Reddit’s Boston subreddit that deserves some attention in grocery retail.
Instacart delivers groceries and other products from a range of retailers. Here in Boston, they deliver from Whole Foods, Costco, CVS, Star Market/Shaw’s, Market Basket, Russo’s, and Petco, plus some liquor and specialty stores inside the more urban parts of the area. My family and I are regular users. (You can try the service yourself with my referral link, which will get you and me both $10.)
An early version of Instacart. By Jewish Historical Society of the Upper Midwest, via Wikimedia Commons.
Originally, the service didn’t disclose whether the prices were the same as in-store or different, and that changed in 2015 with clearer disclosures.
Some retailers are official partners and the prices online match what’s available in-store. But many retailers available on the platform aren’t official partners, and it’s no secret that Instacart’s prices are “15%+ higher than in?store,” as disclosed when shopping. The plus symbol leaves a lot of latitude, leaving the extent of the mark ups opaque
Before the recent Winter Fancy Food Show, I served up some trend predictions that we might see at the show. Let’s revisit those predictions.
This display of cheese wheels was impressive and very tall. Inside the wheels was a space for booth staffers to meet with food buyers.
Using food processing byproducts creatively: ReGrained upcycles spent grain from beer brewing and turns it into “Eat Beer” bars. They tasted like a cross between a cookie and a nutrition bar.
Coconut: In some form, I saw coconut as an inclusion in many products, from protein shake powder and nutrition bars to seaweed snacks and chocolates. Dang had its coconut chips (and some new non-coconut rice snacks that were delicious).
Cooking made easier: I was surprised that meal-kit companies like Blue Apron haven’t started to show up with retail-ready offerings. But I did see some fun make-it-yourself kits. Back to the Roots sells kits to grow your own mushrooms. And Brooklyn Brew Shop sells beer, wine, and cider brewing kits. (And both companies have expanded beyond those core offerings to
I’m in the air on my way to the Specialty Food Association’s Fancy Food Show in San Francisco, where I’ll be for the next 3 days.
I’m planning to post some photos and highlights from the show (as I’ve done in the past). But in the meantime, what food trends are people talking about for 2017?
Here are some trend predictions from Instacart, Whole Foods, and Consumer Reports that I will be looking for:
- Using food processing byproducts creatively. For example: Sir Kensington’s Fabanase no-egg mayo made with chickpea cooking water, or drinks made with cascara, the outer husk of coffee cherries that are often discarded after harvesting beans.
- Coconut as an inclusion or core ingredient in more products.
- Cooking made easier: Items that make meal prep easier but don’t require purchasing a full meal prep kit delivered to your house.
- Lower calorie frozen treats, like Arctic Zero and Halo Top. They can’t can’t technically be called ice cream but are hard to distinguish from the real thing.
- A growing proliferation of dairy alternatives. This will move beyond the established soy and almond milks to
As I was shopping for my family’s holiday meals this year, I was reflecting on full aisles in the supermarket and check-out lines snaking through the store. It seems when the holidays come, everyone heads to the supermarket.
This is important for food and CPG manufacturers to keep in mind as you plan out your year. Even non-food items have sales upticks as supermarket traffic generally increases.
Sales spike in most categories during the weeks around Thanksgiving, Christmas, and Easter. (Some categories have additional weeks with extra-high demand, like cocktail mixers for summer holidays like Memorial Day, July Fourth, and so on.)
It’s great news for manufacturers. But it requires planning to work well.
Some emerging manufacturers get caught by surprise when a flood of orders arrive to meet seasonal demand. Supermarkets are accustomed to these cycles and will place orders accordingly (and ideally with guidance from your sales team or broker). This sometimes leads to urgent production to fill orders — and sometimes even leads to unfilled orders for those who are caught off guard. (This has happened with big companies that I’ve worked with, not just the small ones.) It’s important to build up enough inventory to meet
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Many attribute this quote to John Wanamaker, the founder of the department store that bore his name. The quote is attributed to others, too, but the source isn’t important. What’s important is that it’s incredibly hard to know if advertising is working or not. Marketers perpetually struggle with this.
In 2009, I saw results of work Google did with Lipton Tea. Google ran ads for a new white tea alongside search results, on YouTube, and on its display network. If these ads had been on TV or radio, it would be difficult, if not impossible, to measure the impact on retail sales. Even with online advertising, it would typically be difficult to make that connection.
But Google and Lipton took their analysis a step further in two ways.
First, They used comScore’s online panel to measure the difference in web engagement with Lipton assets between those exposed to the advertising and those who didn’t see it. They also conducted survey research to understand how the advertising affected attitudes and opinions toward Lipton and this new
This year, I’ve been on the road more than ever, which is one of the perils of working as a consultant. Over time, I’ve accumulated a variety of junk that I haul around in my bag to make life a little bit easier while away from my home base. One colleague likened my bag to Mary Poppins’ magic bag (which I am hoping was meant as a compliment!).
This is a departure from my usual food/CPG industry writing, but I know there’s many readers who travel as much as I have, and I hope you can find a little something useful to take away, or find something to share with a frequent traveler in your life.
1. Pencil case: Carries many of the pens and other tiny things in this photo. I have the Nomadic PE-08, which appears to have been discontinued and replaced by the PE-18, but any small case will do.
2. Umbrella: It doesn’t happen often, but when it does, it is terrible to be caught in the rain. I carry a Lewis N. Clark umbrella.
3. Power strip: This might be the most useful things in
I probably consume more media via podcast these days than any other format. (I have such a large queue of shows I listen to that I speed them up by 25% so I can fit them all in.) One of the earlier podcasts to get a big following is NPR’s Planet Money, born out of the 2008 financial crisis. From its beginning with explaining the root causes of the housing crisis, they have broadened their reporting to so many little known nooks and crannies of the global economy. It’s a great show and worth listening to regularly.
One recent topic was supermarket self-checkout machines. Did you know that an ER doctor invented the first self-checkouts in his spare time? The first pilot ran in a Price Chopper in the mid 1990s. Not what I expected at all. Listen below.
Listen above or go to: http://www.npr.org/sections/money/2016/10/19/498571623/episode-730-self-checkout
If you’ve been into a Walmart in the past few years, there’s a good chance you were disappointed in your experience. You weren’t the only one — Walmart’s management agreed with that sentiment.
The New York Times recently reported, “Shoppers were fed up. They complained of dirty bathrooms, empty shelves, endless checkout lines and impossible-to-find employees. Only 16 percent of stores were meeting the company’s customer service goals.” To boot, Walmart’s same-store sales numbers had dropped for five quarters, and total revenue actually dipped for the first time in the chain’s history.
During that time, I was making the rounds of Walmart stores to check on new items my company had in distribution. I’d often pick up household necessities while making those visits, and I continually had a hard time finding common items. I remember looking for diapers for my daughter and found vast swaths of items to be out-of-stock. For the variety of diapers we used in my daughter’s size, I had to borrow a mop from a nearby aisle and climb up onto a shelf to sweep the very last box available off that
I answered this question on Quora, where I enjoy answering questions from time to time. One came up recently wondering why people still go to the supermarket when one could just order via one of the online grocers that has popped up in recent times.
Why do many people still go regularly to the supermarket when they could save time ordering grocery online & getting it delivered to their home?
Thinking about it… they could save money for the gas too if they regularly use their car to do the shopping. Is it a matter of customer experience? How buying grocery offline is better than doing it online? Is it a matter of habit, & people need to get used to it as we got used to buy books online?
I’ve heard this line of reasoning from friends who are close to the tech industry and think it’s obvious that everyone will glom on to the latest innovation. (I once heard some aspiring tech innovators suggest that children’s’ toys and games could be made irrelevant if they could just make iPad apps that were good enough.)
My answer, as I wrote on Quora:
A glance at Instacart’s Service Areas
Of the four Ps of marketing, price has the most power to transform a company’s revenue and profit. The best way to kickstart a pricing discussion is to visually display price analytics.
Ultimately, these visual tools support portfolio and channel strategy development. Importantly, they help take emotion out of pricing decisions and focus strategic discussions on the heart of the matter.
Among others, these are three powerful tools to visualize prices:
- Price Waterfall
- Discount Curve
Each tool demonstrates a range of insights that can drive strategic thinking.
1. Price Waterfall
The price waterfall shows us where we might have problems with profit leakage. Though the chart is simple, it can be shockingly difficult to calculate some of the costs, especially trade costs, and translate them to costs for an average unit.
Example of an interpretation: Above, much of the manufacturer’s profit is eaten up by discounts, shown as trade spending, which is used here largely to allow the retailer to discount from MSRP (manufacturer’s suggested retail price) to its ASP (average selling price).
The full amount of trade spending isn’t reflected in that discount amount, and we might suggest reducing the amount of