Seeds & Chips 2019: Four retail leaders on consumer preferences, sustainable innovation and food trends

Seeds & Chips is one of the leading food innovation events that has been gathering more than 10 000 participants, over 300 speakers and 350 companies every year since 2015.

With the events in Europe, Australia and USA, it creates an ecosystem of policymakers, entrepreneurs, institutions, startups, corporations, universities, accelerators and incubators, NGOs, investors and opinion leaders from the entire world.

We have attended the panel on retail innovation to discover, what stores should put on their shelves to meet the customers' demands and which technologies can improve the process.

Phil Kafarakis, the President of Specialty Food Association, mentioned a few retail trends from the US.

Eat properly and understand your dynamics

These days, Americans start understanding how proper food and diet impact their life. Everybody is on a diet in the US: from heart health to high-fiber to gluten-free to Weight Watchers — people are obsessed with what happens with their weight and what is going on inside their body.

The notion of “know thyself” is commercialized: for less than $300, you can buy a 23andMe kit and run a genetic test understand your dynamics.

Wellness treatment for the customers

In Des Moines, Iowa, the supermarket chain of Hy-Vee has put the health and wellness programs in the center of their store and replaced pharmacies with dieticians. Retailers are asking consumers about blood pressure and calorie intake and take care of them as they begin their journey for more nutritious lifestyle.

Frictionless shopping and click & collect

The technology is driving the notion of walking through a store with no friction. Amazon Go store in Chicago is living truth: you walk in and get yourself whatever you want, by the time you get to the office, a receipt is waiting for you. Click and collect is happening from the smallest stores to the largest chains. In the places like Walmart, you can connect through the app or their loyalty program to your shopping list that Alexa put together and simply pick a bag from the store.

Regulatory compliance can be a hassle

As consumers are getting more protected by regulations, the food producers are facing challenges. Milk used to come from bovine — not anymore. Consumers are drawn to soy, almond and coconut alternatives, but is milk the right word to describe them? Can we label animal cells grown into a bioreactor or a plant-based substitute as “meat”? We all need to pay attention to the regulatory environment.

Substitutes and CBD keep booming

When it comes to food trends, American market is big on sustainable products and mission-based brands. Fermented CBD marches into the market, consumers incorporate it into their wellness programs. Jerky alternatives and rose-infused drinks, cauliflower-based products and dairy substitutes are going to have a strong presence on the shelves in the upcoming months.

Verena Wiederkehr, International Head of Food Industry & Retail at ProVeg International, talked about successful cases of supermarket chains introducing plant-based meat and dairy alternatives.

Tesco has co-created the role Director of Plant-Based Innovations with the famous chef Derek Sarno. Derek developed the Wicked Kitchen range which consists of ready meals and food-to-go for the customers who are not necessarily vegetarians or vegans.

What is Wicked Kitchen of Tesco doing well? They are fulfilling the parameters of the meta triangle: good price, convenient products and, obviously, great taste. In the end of the day, it is taste that motivates consumers to buy the product once again.

Within 33 weeks, Tesco sold 4 over million vegan Wicked Kitchen meals.

The products are positioned in the meat isle, turning it into a protein aisle. This approach enhances their visibility and boosts sales. You can see the same tendency in other food categories such as plant-based dairy, where rice, oats, soy and nut-based milk packages are placed right next to cow milk.

There is still a lot of room for improvement in this category: when we have a look at alternative yoghurts, they are mostly soy-based while vegan cheese options are lacking behind in terms of taste and texture.

Despite of that, 43% of all European consumers already tried plant-based milk.

British chain Sainsbury's is increasing the sales of their plant-based product line by 20% each week. In 2018, Waitrose & Partners expanded their plant-based range by 60%. Those retailers are sometimes supported by campaigns such as Veganuary.

This January, 300 000 people in the UK and other English-speaking countries signed up for trying plant-based lifestyle. And companies are surely taking advantage of this timeframe.

Producers are also in the game. Rügenwalder Mühle is a major meat producer from Germany focusing on meat alternatives. At the moment, they are making about 25% of their revenue with plant-based options. The company commited to making the whole vegetarian range completely plant-based and spent all of their marketing budget on the plant-based product line.

CEO of Rügenwalder Mühle Christian Rauffus is convinced that 20 years from they will be working without meat.

In the future, the industry might be disrupted heavily with cell-based products produced in bioreactors from animal cells. The end product is identical to meat but without many negative effects that industrial animal agriculture has. There are quite a lot of companies out there that are focusing on this technology so this is definitely a sector worth watching.

Product Innovation Manager of Sirap Group Victor Lopes Mascarenhas conducted multiple researches to define the key drivers of nutrition — trust, freedom of choice and convenience — and deliver them in one single packaging experience.

His discoveries showed, that an ideal balanced meal consists of 50% of salad and vegetables, 25% of protein (chicken, fish, edamame, tofu) and 25% of whole grain (chickpeas, whole rice, whole bread, quinoa, bulgur). Meal8 by Sirap Group is a custom ready-to-eat balanced meal packed in a tamper evident safe-t-fresh.

Plug-in Meal8 fridge with modules can be placed at the entrance or next to the checkout areas of the supermarkets. Spiral dispenser hosts all Meal8 modules allowing different combinations. This solves the problem of various ingredients having different shelf life: if you have a salad with walnuts and parmesan, you have to throw all of it away once one of the ingredients expires. Serving ingredients separately allows to use their shelf life more efficiently.

Stefano Robbi, founder of Cicalia, is convinced that modern technology is not changing the user needs but impacts the way users address them.

The way Italians did their groceries until 15 years ago is different to modern shopping habits, but this diffference is not critical. While other sectors like movie rentals are undergoing complete transformation, 95% of people in Italy are still going to physical supermarkets.

The major reasons for this are infrastructure investments, significant barriers to entry and logistical constraints.

When it comes to logistics, non-food industries don't have this issue: DHL, UPS and other services can cover all Italy in 24 or 48 hours. In food delivery, especially with fresh products, it is all about temperature control which traditional carriers cannot ensure.

All these reasons lead to the fact the penetration of online grocery shopping in Italy is at 0,5%.

Many countries in Europe that are not so far from Italy have higher numbers: Germany — 2%, France — 6%; UK — 8%. These numbers prove that Italy has quite a big potential. According to the data from 2018, online grocery shopping in Italy grows by more than 45% yearly. There are online shopping systems with geographic restriction that deliver from the supermarkets nearby and digital native players that focus on non-fresh products and work in selected cities.

Cicalia is the only online grocery shop in Italy that is able to deliver both dry and fresh products all over Italy.

More than 650 positive reviews in Trustpilot and 30% traffic growth on a monthly basis proves that the lack of penetration of online grocery shopping in Italy is not due to the lack of demand, but due to the lack of supply. According to a research conducted in the US, we spend more than 60 hours a year doing traditional grocery shopping. The mission of Cicalia is to give back a big chunk of this time to the consumers.