ST. PAUL, Minn. – When a box of Cheerios clears the sales till in a
grocery store, it isn’t only the consumer and the store clerk who know
what was bought.
The scanned data from the sale “goes to the store or grocery chain and
straight to the manufacturer, so General Mills knows how many Cheerios
were sold yesterday and can gear up the line to restock the shelves,”
said Jean Kinsey, co-director of the Food Industry Centre at the
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University of Minnesota.
The centre researches the food industry in areas such as productivity,
consumer preferences, marketing, and human resource management by
interviewing managers, employees and customers.
Surveys of supermarkets in the United States show they are looking at
what consumers want and what they will buy, Kinsey told the North
American Agricultural Journalists meeting in St. Paul, Minn., recently.
She said this is a new way of doing business and “a shift from the
supply chain to the demand chain mentality.”
Changing technology allows stores to control their inventory in faster
and cheaper ways. The data influence what the manufacturer makes and
when, and they analyze consumer trends based on purchases made and
successful marketing.
This information is valuable because it helps grocery stores determine
whether consumers really are influenced by the factors they claim.
Kinsey said the average American household spends 14 percent of its
income on food, but only six percent is spent in grocery stores.
Research shows that around 45 percent of consumers claim to be price
shoppers, and the rest don’t consider price as the most important
influence when buying food.
If people are spending such a small part of their income on food, will
they really worry whether one can of tomatoes is a few cents cheaper
than another can?
“Come on, give me a break,” Kinsey said. “They’re concerned about
whether it’s natural, or whether it will impress their friends.”
Kinsey said while we hear a lot about organic foods, statistics show
that niche market is not as big as some others.
Organic foods represent a $7.8 billion US sales business in America,
but the kosher market is worth $48 billion. Neutraceuticals, including
fortified foods, is $64 billion, and vegetarian food is $250 million.
Meanwhile, the sector representing foods for convenience takes a large
piece of the total $890 billion food and beverage sales pie. Energy
bars take a $3 billion bite, internet sales have grown to $6.7 billion,
and the largest slice is take-out sales of $176 billion.
Grocery stores are attempting to gain some of the latter market, but it
has been a challenge.
Kinsey said supermarkets have been working to capture a larger share of
the take-out market. Four years ago, they had only 12 percent of the
total take-out share. “Then it popped up to 20 percent and then back to
17 percent” in 2002.
“There is a lot of competition out there for our share of the stomach.”
