Winning Customers In the American Food Revolution

Here are the 5 keys to growing food sales during today’s consumer revolt

  McDonald’s 4% U.S. sales decline further documents that the American consumer is in active revolt against conventional foods.  But that is just half of the story. The Supermarket News’ 2015 survey presented at the Natural Product Expo West found that health and wellness product sales are growing at three times the rate of conventional foods. Eighty percent of survey respondents reported increased sales of health and wellness products with a third reporting double-digit sales growth of twenty percent or more! Winning customers in today’s consumer food revolt The current market reality is that most food retailers are playing catch-up with their customers’ accelerated shift into healthier food sourced-sustainably by trustworthy companies. Here are key attributes consumers now demand of food products:

1. Gluten/allergen free
2. Organic
3. Non-GMO
4. Local
5. Simple ingredients.

As evidenced by the sales success of Chipotle and Smashburger, the food industry’s lagging response to this mega-shift in consumer expectations is creating revenue growth opportunities for businesses that can align with the consumer’s health and wellness expectations. Five keys to growing food sales The following are 2015 best practices that win customers and grow sales in the food and restaurant industry:

1. Customer education. Consumers are confused and distrustful about food. They have a jaundiced view of conventional foods’ advertising. They are losing trust in package labeling especially with increased reports of regulatory actions. Consumers are confused over conflicting health research like the recent reversal removing dietary cholesterol as a human health risk.

One proven best practice for growing food sales is to provide an in-store dietitian to answer questions or provide healthier recommendations. Another sales growth winner is the provision of in-store “beacon” digital technology that engages the customer’s smart phone. Yet, while the food industry is aware that consumers are confused and that solutions like in-store dietitians or beacon digital engagements will grow sales they are not mass adopting these best practices because these best practices require increased investment. Instead most stores are letting their customers use their smart phones to figure it out themselves at the substantial risk that their customer will leave the store for a healthier choice.

2. Serve “food-tribes.” Americans are increasingly self-identifying with food tribes. For examples, the sale of gluten and allergen free foods extends well past people who suffer from Celiac disease. The gluten-free “tribe” consists of consumers seeking organic and healthier foods. Interestingly, men are more likely to be in this tribe than women.

Other types of food-tribes include “exploring moms,” “millennial generation urban dwellers” and “generation z home chefs.” A sales and marketing best practice is to identify the food tribes meaningful to your sales growth and design your messaging and products to align with their expectations.

3. Simple ingredients. Consumers want foods with ingredients they understand and trust. This shift in expectations is creating a growing competitive advantage for products without chemical addictives. This has obvious implications for the fast food and convenience food industry because over the last year the American consumer has self-educated themselves to understand that food convenience is achieved through chemical preservatives.

In grocery stores, customers are deserting the inner store shelves with their preservative-laced products. Instead, consumers are heading to the fresh produce department and refrigeration sections in search of foods that do not have chemical preservatives.

4. Align with your customer’s definition of local. The definition of local is a point of contention between consumers and food suppliers. Some consumers view local as food sourced from their county or one nearby. Others view it as food sourced within their state or within a few hundred miles of their homes. Still others view local as sourced from the USA. A sales best practice is to align your food products with the sourcing expectations of your customer.

For example:

• • California-sourced arugula may be local to a consumer in Vermont but California-sourced maple syrup is not. This customer-centric definition of local has created a new marketing focus called “best sourcing. ” Under best sourcing foods are represented based upon the advantages a farm or ranch has for sustainably-sourcing a food.
  • Consumers may accept eating Australia cattle because of that country’s ability to sustainably herd grass-fed, free ranging cows if the beef can be shipped using flash freezing without preservatives.

5. Stand for a “wow” tied to human health. Chipotle’s commitment to sustainably-sourced food has made them the huge winner with a stock price above $600. Their unique marketing videos have won the hearts of the millennial generation. But with notably few exceptions like Chipotle, the food industry currently has a marketing void in terms of wowing customers. There is a huge revenue growth opportunity for companies that can sell the sizzle of health and wellness products.

Next page: Applegate Case Study