Groceryshop 2023 Day Three: Opportunities in Grocery in 2023 and Beyond

Introduction

Coresight Research is a research partner of Groceryshop 2023, which is taking place September 19–21, 2023, in Las Vegas, Nevada. Groceryshop is an annual conference that helps businesses navigate the evolving grocery landscape, exploring the latest business models, advanced technologies and shifting consumer behaviors.

In this report, we present our top insights from the third and final day of the event.

Groceryshop 2023 Day Three: Coresight Research Insights

Unified Shopping Experience: “It Starts with the Consumer”

The seamless convergence of online and offline shopping experiences will be a major trend in Groceryshop 2023. Consumers expect a smooth transition between digital platforms and physical stores, which demand unified inventory, pricing and personalized promotions across all touchpoints.

While many consumers will continue to use the physical channel for their grocery shopping, many on-the-go shoppers need retailers to reach them in new ways, as discussed in the “Serving the On-the-Go Consumer” session. Cara Keating, Chief Customer Officer at Frito-Lay North America, PepsiCo, stated that the company is working to have the right products available for consumers whenever and wherever they want them, which requires a change in perspective, shifting away from a more traditional channel management perspective. “It starts with the consumer, and the consumer is changing rapidly,” she explained.

The proliferation of new channels also requires a change in product innovation, so that the products meet the needs of consumers who need products quickly or shop via new channels. The panelists said that is especially important in regard to prepared foods, the quality of which can decline quickly if they are not served within a certain period of time.

Making these types of changes can be particularly challenging for smaller companies. When asked what advice she would give to smaller brands, Keating stated that companies should ensure that they are picking both the right channels and the right channel partners, ensuring their portfolio is strong and accessible.

Keating (left) and interviewer Shefali Kapadia, Managing Editor and CPG Specialist at the Financial Times (right), during the “Serving the On-the-Go Consumer” session
Source: Coresight Research

 

In another session, Chad Petersen, Senior Vice President of E-Commerce at Lowes Foods, also briefly covered the importance of an omnichannel assortment and serving on-the-go consumers, stating that the company’s emphasis is on keeping its assortment aligned across both the physical and digital channels. Lowes Foods does not see Instacart and similar companies as competitors; instead, the company views them as a way to deliver goods to customers in the way they desire. As such, Lowes Foods has worked hard to make sure that Instacart and other, similar services have the product assortments that customers demand.

New Growth Opportunities: Growth in 2023 and Beyond

Diversification beyond traditional offerings will unlock new revenue streams. Increased focus among stakeholders on sustainability, as well as trends in health-conscious consumption, retail media and “polycultural” consumers, present significant opportunities for brands and retailers—these opportunities were a major talking point during the final day of Groceryshop 2023.

Hy-Vee Launches Its Retail Media Network at Groceryshop 2023

During the “Unlocking Growth in Grocery: A New Approach” session, many of the themes of Groceryshop 2023 came together, providing attendees with a path toward growth amid industry change. Panelists explained that, before tapping new growth opportunities, companies need to create the right organizational structure in order to meet customer demand and the needs of the business—in short, the needs of a business and its customers should drive the structure, not the other way around.

Retail media networks (RMNs) were also a major point of discussion as, according to the panel, the concurrent writers’ and actors’ strikes will lead to an estimated 30% drop in television content this fall, but that will not change consumer demand for content. The strikes are creating a significant opportunity for RMNs to compete with established media networks and provide consumers with the content they crave. As such, Donna Tweeten and Aaron Wiese, the Presidents of Hy-Vee, took the opportunity to launch the company’s RMN, Red Media, at Groceryshop 2023. “I don’t know how [companies] will exist in the future without it,” Tweeten stated in reference to retail media.

In another session, Beatriz Alejandra Núñez Jiménez, Chief Growth Officer at Walmart de México y Centroamérica, also provided advice to companies looking at retail media as a growth opportunity. “The most important part of retail media is how you create relevant experiences for the customer,” Jiménez explained.

• For more on the retail media opportunity, see all Coresight Research coverage of RMNs.

Wiese (left) and Tweeten (right) announcing Hy-Vee’s RMN at Groceryshop 2023
Source: Groceryshop

 

Health and Wellness in Grocery

More than six in 10 adults in the US have a chronic disease, while four in 10 have two or more diseases, according to the “Making Grocery Retail a Health and Wellness Destination” session, making health products a significant growth opportunity for the grocery sector. Irina Pelphrey, Vice President of Health and Managed Care at Albertsons Companies, stated that Albertsons is developing a digital wellness program to tap this opportunity and help customers meet their personal health goals. The program provides “healthy points” when the user makes healthy decisions; these points can be used for rewards via a unique loyalty program.

When it comes to healthy foods, panelists reminded attendees that most consumers will not sacrifice taste for health—if healthy products do not taste good, it will be hard for those products to capture a large part of the consumer market. The session also covered the importance of transparent health claims on retail products, which must be backed up with customer-accessible data.

Looking forward, the panel agreed that health categories will continue to be a major growth opportunity for those in the grocery industry. Rhasheda Boyd, Vice President of Better Choice Snacking Portfolio at Frito-Lay North America, stated that the company expects consumers to buy more healthy foods, especially as they become more widespread and affordable. On the grocer side, Pelphrey stated that further integration of digital health tools and related in-store experiences is top of the mind for Albertsons moving forward.

Boyd during the “Making Grocery Retail a Health and Wellness Destination” session
Source: Groceryshop

 

In the same session where Hy-Vee launched its RMN, Wiese also briefly discussed the growing trend of integrating healthcare into retail offerings. According to Wiese, grocers have the unique opportunity to be part of the “food-as-medicine” trend, providing consumers with healthy food and playing a critical role in preventing disease.

• Health and wellness is one of the many trends that Coresight Research is watching in the consumer packaged goods (CPG) and grocery space.

Polycultural Consumers

Another growing opportunity for grocers is the rise of “polycultural” consumers, per Esi Eggleston Bracey, President of Unilever USA and CEO of Personal Care at Unilever North America. Eggleston explained that the grocery market is moving away from “multicultural needs”—where different demographic cohorts have different needs—and toward “polycultural needs,” where the needs of each cohort influence each other. Eggleston specifically called how the trends of Asian, Black and Hispanic consumers are influencing American consumers overall.

Building a Grocery Assortment

With so many growth opportunities in the grocery industry, building the right product assortment can become a significant challenge. During the “Winning Product Assortment Strategies” session, Jay Owen, Co-Founder and Chairman of Dom’s Kitchen & Market, provided attendees with a blueprint for building an effective grocery assortment. First, he explained that customers place two types of items in their baskets—“stable items,” the items that they buy consistently, and “inspired items,” the items that they want to try out or pick up as a special treat. To ensure customers can purchase both stable and inspired items at Dom’s Kitchen & Market, the company breaks down its assortment into three categories:

• Differentiator products—These are items that customers can only get at Dom’s Kitchen & Market, according to Owen, and make up roughly 25% of the company’s assortment.
• Emerging products—These are new, specialty or organic items, and they comprise approximately 35% of the company’s products.
• Mainstream products—These are the products that customers can find in almost every grocery store in the US, and they make up roughly 40% of the company’s assortment.

In addition to ensuring customers can purchase both staples and inspirational items, Owen reminded attendees that it is also important to ensure that a company’s assortment and workforce align with its core mission.

Owen discussing the product assortment of Dom’s Kitchen & Market
Source: Groceryshop

 

The insights above are just some of the important highlights from Groceryshop 2023. For more on this year’s event, as well as the future of the grocery sector, be sure to read our coverage of the first and second days of Groceryshop 2023, and keep an eye out for our upcoming wrap-up report!