“[Food prep] is a natural tie in with all the food items in a supermarket.” Anna Mancini, Vice President of Merchandising for Value Merchandising Company
Supermarkets who relegate food prep products like cookware, bakeware, and kitchen gadgets to the general merchandise aisles in the center of the store are missing out on incremental sales and margin dollars.
Consumer and retail trends and consumer purchase behavior are coming together to create a golden opportunity for retailers that sell food and general merchandise.
The healthy eating trend is fueling renewed interest in cookware, bakeware, and kitchen gadgets and tools.
- Nearly nine in 10 adults (87%) feel that fresh foods are healthier, according to “The Consumer Healthy Eating Report” by Technomic.
- 78% of consumers are making a strong effort to eat more fresh versus processed foods, according to “The 2014 Gallup Study of Cooking Knowledge & Skills” report.
- Over the past 10 years, consumption of fresh foods has grown 20% to more than 100 billion “eatings” per year and will exceed 120 billion per year by 2018, according to The NPD Group’s “Where Is Fresh Headed?” report.
- Shoppers are buying more fresh ingredients, up 10% versus three years ago, according to the “U.S. Grocery Shopper Trends” report by the Food Marketing Institute.
- Nearly half (47%) of shoppers are cooking more from scratch, using fewer convenience foods in order to save money, according to IRI’s 2015 “Promise Poking Through for CPGs” report.
Healthy eating requires changes in how consumers prepare food: They have to spend more time on food prep and use more time-consuming cooking techniques.
- One in three HomeTrend Influentials who have made/are planning to make major changes to the types of foods they eat are spending more time on food prep. They are spending more time on food prep because they are eating more fresh foods that take longer to prepare.
- One in three HomeTrend Influentials are cooking from scratch or using “speed scratch“ cooking techniques more than they did a year ago.
Cooking with fresh ingredients using scratch cooking techniques often triggers the purchase of all the items needed to prepare and present home-cooked meals: cookware, bakeware, food storage, kitchen appliances, tableware, and a host of tools and gadgets.
- Two-thirds of consumers who have recently purchased cookware, bakeware, and/or kitchen gadgets and tools say they buy utensils, cookware, and other kitchen items if they need them for a new recipe or cooking technique according to Riedel Marketing Group’s Market Tracker. As a result, sales of cookware, bakeware, and kitchenware are on the upswing.
The synergy between food and food prep products
Joe Kirby, Vice President, Retailer Sales & Category Management, Imperial Distributors Inc. of Auburn, MA believes that “There’s an opportunity in supermarkets, where we sell all the ingredients you need to make the wonderful dishes that you see on the Food Network, to sell the kitchenware that goes along it.”
Anna Mancini, Vice President of Merchandising for Value Merchandising Company agrees, “[Food prep] is a natural tie in with all the food items in a supermarket. Many best-in-class distributors and retailers are starting to merchandise food prep products with the related food products.”
Many food retailers are shrinking center store in order to expand perimeter departments. Merchandising food prep products with food offers grocers an opportunity to move profitable general merchandise (GM) items out of the center-store aisles that are under growing pressure and space constraints and get them in front of shoppers who are focused on their food purchases.
In order to sell more GM, it is essential to have relevant food prep items presented in tandem with related food products.
There is growing proof that grocers who merchandise food and food prep together are seeing increased and profits. For example, kitchen gadgets, cookware, bakeware, and small appliances combined are Value Merchandising Company’s third largest GM category in terms of sales. “And [food prep products] are significant contributors to gross margin, even at promotional retail levels,” according to Mancini.
How to leverage the opportunity
- Work with your retail customers. Develop merchandising programs that make it easy for your retail customers to move relevant high-margin food prep items into the food aisles and perimeter departments where the bulk of customer traffic is.
- Think beyond the obvious tie-ins. Merchandising food prep products with the related foods offers opportunities to feature kitchen gadgets and tools that shoppers might not even know exist. For example, during fresh corn season, corn skewers are the obvious pairing. But what about the shopper who already owns skewers? Consider other corn-related products that corn-on-the-cob aficionados might buy on impulse. Items such as corn cutters, corn strippers, corn butterers, and de-silking brushes.
- Think beyond the produce department. Yes, the produce department offers plenty of opportunities to promote a wide variety of kitchen gadgets from salad spinners to apple corers to corn skewers to food storage containers. But there are many other food sections that also offer cross-promotional opportunities. Here are just a few: Cereal storage containers in the cereal aisle. Cookie sheets, cake pans, nylon turners, icing spatulas, cupcake and cake carriers and stands merchandised with cake mixes, flour, and sugar. Seafood scissors, crackers and forks, crab mallets, and butter warmers in the seafood department.
- Tear down the silos. The silos between food and GM, the interdepartmental grocery store politics, are perhaps the obstacle retailers and their manufacturer partners have to overcome. It is essential that grocers tear down the food and non-food silos. Senior management must be persuaded of the incremental sales AND profits to be won by a holistic merchandising strategy that does away with turf battles for the benefit of the entire organization.