This week in retail (Sept. 8)
It was a busy week in the retail world, especially when it came to plant-based products. Nothing draws a crowd in the CPG world like double digit growth which is why major CPG companies and retailers are piling on the plant-based movement.
Hormel announced the launch of its Happy Little Plants brand at investment bank Barclays annual Consumer Conference. The launch is the first under the company’s Cultivated Foods umbrella, although Hormel introduced its blended Fuse brand burger in 2014. Speaking at the same conference, Kellogg announced the launch of its new brand called Incogmeato by MorningStar Farms. The new brand will include nuggets, tenders and burger patties and arrives early 2020.
Meanwhile, Tyson’s new Raised & Rooted brand of nuggets made from plants and burgers made with beef and plants will arrive in 5,000 store by the end of September. Tyson also announced it completed an investment in San Francisco-based New Wave Foods, a plant-based shellfish producer launching a shrimp alternative for food service operators early next year. Tyson President and CEO Noel White said at the June launch of Raised and Rooted that alternative proteins could eventually be a $1 billion business for the company. Two months earlier, Conagra Brands launched numerous new prepared foods products featuring plant-based proteins under its Gardein brand. Launch in 2003, Conagra said Gardein’s compound annual growth rate since 2012 has been 34%.
Kroger isn’t giving plant-based brands a chance
Dozens of plant-based items across a range of categories will join Kroger’s Simple Truth store brand in the coming months. With 1,550 Simple Truth items already and annual sales of $2.3 billion, Kroger’s latest move is a perfect example of the industry trend that has seen retailers become early adopters of the latest trends rather than fast followers.
"Kroger is at the intersection of plant-based curiosity and culinary innovation. Our customers are really open right now to exploring plant-based alternatives, and we're responding with our new collection," Gil Phipps, Kroger’s VP of Our Brands, said last week at the Good Food Conference where the launch was announced.
Kroger in spotlight for another reason
The eyes of the food retail world will be on Kroger this week when the company reports second quarter results on Thursday, Sept. 12. Investors will be focused on the company’s same store sales since a 1.5% first quarter increase was short of a guidance range of 2% to 2.25%. Despite the miss, Kroger maintained its full year forecast, implying it would make up for lost ground in the second quarter and back half of the year. The second quarter is also noteworthy because it marks the halfway point in the company’s three-year transformation plan dubbed Restock Kroger that was announced in late 2017.
Survey says Americans want ‘real’ milk
Plant-based is all the rage, but a survey of 2,200 Americans found 86% prefer dairy milk over “other” beverages, a category that includes plant-based products. The survey was conducted by Morning Consult in partnership with the International Dairy Foods Association (IDFA). The survey respondents overwhelming identified 2% and whole milks as the most nutritious. As the U.S. school year gets underway, IDFA president and CEO Michael Dykes said, “it is important that policymakers and regulators who influence what we eat stay grounded in the reality of what American families prefer and value.
Long live brick and mortar
Appealing to the rural lifestyle has served Tractor Supply Company well. So well the company recently opened its 1,800th store in Berkshire Township, Ohio. The store is one of 80 the company expects to open this year after opening 80 last year. At this rate it won’t be long before the Tractor Supply hits 2,000 locations.
INSIGHTS AND INNOVATION
Kraft Heinz finds new source of CPG revenue
Kraft Heinz plans to extend its brands into new lifestyle and food and beverage consumer product categories and has hired global brand consultancy Brand Central as its licensing agency. The move comes roughly two months after former Anheuser-Busch InBev global chief marketing officer Miguel Patricio joined Kraft Heinz as CEO on July 1 and one month after the company reported weak sales and a major profit decline. On August 8, the company said sales for the first half of the year had declined 4.8% to $12.4 billion and profits fell 51.4% to $854 million.
“The level of decline we experienced in the first half of this year is nothing we should find acceptable moving forward," Patricio said. "We have significant work ahead of us to set our strategic priorities and change the trajectory of our business.”
Brand Central will help by develop a portfolio of licensed products for Kraft Heinz across food, beverage, experiential and merchandise categories for North America. The agency will also explore product extensions for various brands such as new food and beverage categories, innovative merchandise partnerships, and collaborations with leading lifestyle brands.
The future of snacking in downtown Chicago
There is a new address for snacking innovation and it’s 350 N. Orleans Street in downtown Chicago. That’s where Conagra Brands is building a 40,000-sq.-ft. Center for Food Design adjacent to its existing headquarters in The Merchandise Mart. Schedule to open first quarter 2020, the facility will be staffed by 50 employees focused on innovation and the rapid development of on-trend products related to Conagra’s $2 billion snacking portfolio. The new facility won’t replace Conagra’s existing Center for Food Design and Technology in Omaha, Neb., where the focus is on frozen, refrigerated, shelf-stable meals, condiments and enhancers. Corey Berends, SVP of research and development for Conagra said the facility, “will be a fresh, collaborative space with state-of-the-art capabilities to provide our talented team with the right resources to help grow Conagra's snacking business.”
H-E-B ‘Favors’ Cowboys over Houston Texans
Despite H-E-B’s limited physical presence in the Dallas/Fort Worth area, its on-demand delivery service known as Favor entered into a multi-year partnership with the Dallas Cowboys. H-E-B acquired Favor in February 2018 and recently launched the first statewide brand campaign for the service available in 130 Texas cities with TV, digital, streaming services, strategic sponsorships and out-of-home media.
Throughout the football season, Favor plans to offer unique fan experiences, including the potential for surprise deliveries made by Cowboys players, the chance to win tickets and merchandise on social media. In July, Favor also became a partner with the Texas Rangers baseball team, also based in the Dallas area.
AmazonFresh offers $300 free delivery
Amazon marketers have a strange way of defining free. The latest example can be found in Indianapolis, the company’s newest market to offer the AmazonFresh program offering “free” two-hour delivery on thousands of grocery items and key products in categories such as electronics, health and personal care, home, kitchen and toys. Technically speaking, a case for free can be made since users are not billed per order. However, use of the service requires a $14.99 monthly fee that is billed on top of a $119 annual Prime membership fee that brings the total annual cost of the service to $298.88.
Retail Leaders on the move
The Park City Group, parent company of ReposiTrak, a provider of food safety and supply chain compliance solutions, is next in line to benefit from the expertise of Peter Larkin. The recently retired President and CEO of the National Grocers Association (NGA), joined the board of Park City Group, after leading NGA since 2010. Prior to that he was with the Food Marketing Institute, the California Grocers Association and P&G.
In CIO moves of note, Walgreen Boots Alliance is looking for its newly appointment Global Chief Information Officer Francesco Tinto to drive profitability through business process improvement, eliminate redundancies and optimize the next generation of IT infrastructure. Tinto joins WBA from Kraft Heinz and Kraft Foods where he spent the past 17 years, most recently as global CIO. He also spent a decade at Procter & Gamble.
Meanwhile, Paul Gaffney joined Kohl’s as Senior EVP, Chief Technology Officer, after spending seven years at Dick’s Sport Goods as chief technology officer and prior to that was with The Home Depot as SVP of information technology.
And in other Kohl’s news, Sona Chawla stepped down from her role as president. She joined the company four years ago from Walgreens as COO. At the time of her hiring, Kohl’s said Chawla was a potential successor to long-time CEO Kevin Mansell along with chief merchandising and customer officer Michelle Gass. Two years ago, Gass was named CEO and Chawla was elevated to president.
Stephanie Pugliese joins Under Armour as President of North America on Sept. 16 after spending 11 years with Duluth Trading Company, including the last four as CEO. She also spent time with Land’s End and Ann Taylor.
In luxury news, Lana Todorovich was named president and chief merchandising officer at Neiman Marcus Group. She previously served as president of North America Wholesale at Ralph Lauren. Tapestry, parent company of Coach and Kate Spade, said board chairman Jide Zeitlin would also serve as CEO after Victor Luis resigned after five years as CEO.
Healthy food ingredient supplier Calyxt named Keith Blanks SVP of Sales and Marketing. He was previously with High Liner Foods and spent 20 years with Cargill. The addition of Blanks means Manoi Sahoo will transition to the role of Chief Business Development and Supply Chain Officer focused on strategic collaborations in the areas of wellness, plant-based proteins and sustainability.
IN CASE YOU MISSED IT
The deadline is approaching for the 23rd annual Category Captains Awards presented by Progressive Grocer. The entry requirements have been adjusted this year to reflect the evolution of category management. Learn more about the changes and how to enter.
What makes a retail winner and what are the new rules for success? To answer both those questions, Retail Leader hosted a webinar last week with dunnhumby. New insights were shared from a survey in which 7,000 shoppers were asked about 56 food retailers ranked on dunnhumby’s Retailer Preference Index. An on demand replay is available here.