Consumer Trends: Packaged Food Volume Declining

BELLEVUE, Wash. (Hartman Strategy) — The "super" is being drained from the average American supermarket's growth engine through a steady volume shift away from traditional grocery channels and into discount channels. A new report titled Reimagining the American Supermarket for a New Era in Food Culture finds packaged food and beverage declining in volume across U.S. supermarkets.

The report from Hartman Strategy, a leading innovation and strategy consultancy serving major food and beverage companies, closely examines how this primary food retailing channel can isolate and build new sources of growth.

"Pantry-stocking categories are not driving supermarket growth as volumes continue to migrate to discount channels," said James Richardson, Ph.D., the top executive at Hartman Strategy and author of the report. "What we believe is that CPG companies can partner with supermarket chains, large and small, to reverse the channel decline."

"Our category-level analysis reveals that almost 20 percent of sales volume is in low-velocity categories that underutilize shelf space," Richardson added. "Supermarket velocities are worse in markets with lower income and heavy saturation of discounters."

The Reimagining the American Supermarket report examines the historical roots of the rise to prominence of the supermarket in America and the transformation from the purveyor of dry, bulk, unpackaged goods to packaged, prepared foods and the supersizing of center store.

The report's results illustrate that top-growing packaged foods and beverages in today's supermarket channel are healthy beverages, snacks, and contemporary cooking ingredients for simple meals.

"Fastest-growing supermarket channels position themselves exclusively upmarket or exclusively downmarket, or they manage each store location to the relevant market extreme," noted Richardson.

Reimagining the American Supermarket provides an in-depth assessment of the current state of the supermarket channel, including the super-fresh perimeter, the packaged core of the supermarket, supermarket magnet categories, and performance segments within the supermarket. It offers strategic thoughts on how to "reimagine" today's supermarkets for the future.

A free copy of the report can be downloaded from Hartman Strategy's website.

About the Report

Reimagining the American Supermarket for a New Era in Food Culture is a comprehensive analysis of the state of the supermarket in the U.S. marketplace and provides an industry-insider's analysis of the categories and segments within the store with an upside or downside opportunity. The report is authored by James Richardson, the top executive at Hartman Strategy, and is the latest installment of Hartbeat EXEC, a free quarterly report for executives within major U.S. food and beverage companies. A full copy of the report can be downloaded from Hartman Strategy's website.

About Hartman Strategy

Hartman Strategy works exclusively with the largest and most-respected food and beverage companies to identify, create, and seize growth opportunities that align with America's constantly evolving food culture. Hartman Strategy consultants partner with senior executives to develop long-term, incremental growth strategies that enable each client to capitalize on both current and emerging market demand. The company is singularly focused on the food and beverage industry and provides clients with access to three decades of research on eating behavior, consumer demand, and business strategy. Our core capabilities include: corporate innovation strategy; analysis of market trends in U.S. food culture; and investment guidance on early-stage food and beverage companies.