FMI Midwinter—How grocers can (and should) win with ‘occasions’FMI Midwinter—How grocers can (and should) win with ‘occasions’

According to recent data, grocers already win at holidays—by far—so why does their dollar share lag behind Mass Merchandisers and Club stores when it comes to quick trips, pantry stocking, and more? 

This was one of the more interesting questions posed during Friday’s keynote at FMI Midwinter, the annual big show for FMI—The Food Industry Association held Jan. 30-Feb. 2 at the JW Marriott in Marco Island, Fla. 

The answer to that question, according to Circana’s Sally Lyons Wyatt who was presenting Friday, is that holidays are a natural opportunity for grocers to sell an occasion, rather than just selling by category. If grocers can begin to shift their mentality and find more opportunities to sell shoppers on occasions, they can begin to capture more of that dollar share, Lyons Wyatt said. 

In the last three years, traditional grocery has seen a drop in dollar share across all trip types, including quick trips; pantry stocking; all trips; fill-in; and special purpose. While retail F&B sales volume is growing for the first time in three years, grocers aren’t getting the piece of that pie that they ought to be, Lyons Wyatt stressed. 

Dinner is the largest opportunity to grab some of that pie, Lyons Wyatt said. Some 33% of all F&B dollar sales are attempting to answer the age-old question of “what’s for dinner?” So give them an answer, over and over and over if you have to. 

Other highlights from the show:

Collaboration is key for retailers and CPG

FMI Midwinter was co-hosted by Meijer President & CEO Rick Keyes and PepsiCo. North America CEO Steven Williams. During Friday’s keynote, Keyes and Williams stressed that the relationship between retail and CPG must stay strong (perhaps in response to the seemingly endless growth of private label over the last several years.) “If we keep focused on our collective customer / consumer, everybody wins,” Williams stressed.

It’s not just about digital for Gen Z

According to Keyes, Meijer held an “immersion day” focused on Gen Z habits earlier this year. Something that surprised him? While Gen Z is highly digital, they’re also highly nostalgic. “They kind of long for a different way of living and some of the things that they've seen in the past. And they also really are looking for these in-store experiences, the store within the store, they want to have that experience in the store. And so that was really exciting for us,” Keyes said. 

The GLP-1 effect

Hy-Vee CEO and vice chairman Jeremy Gosch spoke Friday about seeing a significant shift in basket for those taking GLP-1 drugs like Ozempic (which some estimates predict could soon be a third of the U.S. population). He said Hy-vee is countering that by packaging up options like high protein meat and cheese snacks and ready to go meals. Hy-Vee has also taken a closer look at the offerings in its convenience concepts. Lowes Foods President and CEO Tim Lowe echoed this. Lowes’ Brown Bag private label brand is deliberately oriented around the health benefits of its products and takes the guesswork out of label scanning for the shopper. “That’s something that we’re trying do—to meet the consumer where they’re at and understand whether they’re going down the path of better health through alternative medicines or whether they’re going down the path of just better nutrition in general,” Lowe said. 

Talking tech (and AI)

Grocers are further integrating AI into almost every step of the store, but the learning curve is still steep. The tech was discussed at length Friday at the FMI Midwinter breakout meetings. 

What is Generative AI? 

Some grocers still are not familiar with the different types of AI that are out there, with one of those being Generative. Microsoft’s Jeffrey Strasser, general manager, U.S. Retail & Consumer Goods provided an overview of the tech and how it could be used to generate loads of information—almost instantly. 

RFID technology

Radio frequency identification (RFID) was first being used in supermarkets years ago, but it still is in the development stage. Bill Toney, vice president, Global Food Solutions at Avery Dennison said the tech is ideal for a store’s bakery department, where it is effective when scanning for expired product. However, more development needs to be done before RFID tech can be used in other areas of the store.  

AI and cameras

Michael Limauro, LPC, vice president, asset protection for Whole Foods Market talked about how the grocer is evolving in the world of AI and cameras. Whole Foods first began using the two together during the COVID-19 pandemic to help with social distancing and contact tracing, but today the tech is being used for several applications:  

Tons and tons of data

When talking about AI, data is essential, and it could go on for infinity. It is imperative that grocers know how to handle the data moving forward. During a seaside chat that took place on the beach at the J.W. Marriott on Marco Island, the site of the show, members of the grocery industry discussed the road ahead in regard to the tech transformation, and data was on everyone’s mind. Many mentioned the importance of having data that is clean and accurate and how having the right talent in place makes a difference. Without the data accuracy, AI just is not going to work.