FMI/Nielsen: Online will dominate grocery by 2022
Retailers who are ready to bridge the gap between their consumers and their stores through delivery or pick-up will be real winners in the coming years, because according to the “Digitally Engaged Food Shopper” study, in as few as five years 70% of consumers will be grocery shopping online.
The estimated $100 billion spend, which is equivalent to every U.S. household spending $850 online for food and beverage annually, may occur as soon as 2022.
“The grocery industry is currently in the age of digital experimentation, where the roadmap on how to navigate and achieve real and profitable growth continues to evolve,” Chris Morley, U.S. President FMCG and Retail, Nielsen, said. “While analytics will continue to be critical for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level, a collaborative approach to balancing physical and digital sales strategies is the key to unlocking omnichannel success.”
The Food Marketing Institute and Nielsen shared these insights on Monday at the FMI Midwinter Conference in Miami, Fla. Building on the joint research findings issued in 2017, this set of insights examines what food and beverage manufacturers and brick-and-mortar retailers need to do to ready themselves for the rising digital grocery landscape, identifying six digital imperatives for omnichannel success.
Key findings from this year’s study show that omnichannel shopping has passed the tipping point with online grocery shopping on an accelerated path to industry saturation. The first year of research predicted that consumer online food and beverage spend could reach $100 billion by 2025. Today, FMI and Nielsen report that the pace of change and adoption has far outrun initial predictions, where the pervasiveness of online engagement could cut the timeline by as much as half.
The six organizational imperatives that can help retailers and manufacturers accelerate their omnichannel success are:
- Align Organizational Structures for Omnichannel Success: Integrate digital offerings in parallel with brick-and-mortar operations;
- Address Discrepant Datasets: Scrub master data files for discrepancies; strength in data and accuracy is a critical component to successfully support online sale efforts;
- Integrate Forecasts to Increase Operational Efficiencies: Integrate online and offline forecasting so the right amount of inventory is available to meet orders through either channel;
- Optimize Shopper Insights: Bring retailer and manufacturer shopper information together into a single, comprehensive view of customer insights;
- Improve Marketing and Promotions: Optimize the management of omnichannel marketing and promotions; and
- Merge Digital and In-Store Shelf Capabilities: Manage the physical shelf and its digital counterpart to create a seamless shopping experience, where consumers see the same information both on or offline.
“People, process and technology are the trifecta for a true omnichannel collaboration model,” said FMI chief collaboration officer Mark Baum. “No matter the maturity stage, food retailers and their CPG business partners will find value in leveraging these six organizational imperatives as they respond for a more digitally engaged consumer.”
Keurig, Dr Pepper Snapple Group merge to create new company
In a surprising move, Keurig Green Mountain has announced entering into a definitive agreement to merge with Plano, Texas-based Dr Pepper Snapple. Together the brands will launch a new company, Keurig Dr Pepper, or KDP.
The combined company will house Dr Pepper, 7UP, Snapple, A&W, Mott’s, Sunkist, Green Mountain Coffee Roasters, Keurig’s single-serve coffee systems, and more than 75 owned partner brands in Keurig’s system, among others.
“This transaction will deliver significant and immediate value to our shareholders, along with the opportunity to participate in the long-term upside potential of our combined company and attract new brands and beverage categories to our platform in a fast-changing industry landscape. We are excited to combine with Keurig to build on the rich heritage and expertise of both companies and provide the highest-quality hot and cold beverages to satisfy every consumer throughout the day,” Larry Young, president and chief executive officer of Dr Pepper Snapple Group said.
Under the terms of the agreement, Dr Pepper Snapple Group shareholders will receive $103.75 per share in a special cash dividend and retain 13% of the combined company.
“Our view of the industry through the lens of consumer needs, versus traditional manufacturer-defined segments, unlocks the opportunity to combine hot and cold beverages and create a platform to increase exposure to high-growth formats. The combination of Dr Pepper Snapple and Keurig will create a new scale beverage company which addresses today’s consumer needs, with a powerful platform of consumer brands and an unparalleled distribution capability to reach virtually every consumer, everywhere. We are fortunate to have talented leadership teams within both companies, and I look forward to working together with the Dr Pepper Snapple team to make this combination a success for all of our stakeholders,” Bob Gamgort, chief executive officer of Keurig, said.
Bob Gamgort, current chief executive officer of Keurig, will serve as chief executive officer of the combined company and Ozan Dokmecioglu, current chief financial officer of Keurig, will serve as its chief financial officer. Dr Pepper Snapple president and CEO Larry Young intends to transition to a role on KDP’s Board of Directors to help the new management team realize the full potential of the company.
Drive DeVilbiss to distribute Uccello Kettle
Drive Debliss Healthcare, a manufacturer of medical products, announced plans to become the exclusive distributor of the Uccello Kettle in the United States and Canada. The product is a weighted base that arcs on a rotating axis and holds a non-weight bearing, ergonomic handle for the easy and safe pouring of hot beverages.
“The Uccello Kettle is equipped with easy pouring technology,” Jeanne Borgia, product manager of personal care and bath safety, said. “This gives individuals with limited dexterity and strength the ability to pour hot water safely and steadily.”
The kettle holds 1.5 liters and features a large, hinged lid with a wide spout for filling, cleaning and steadying the proper pour amount. It also can be removed from the base to allow users the option to pour the liquid by hand.
Other features in the product include a power light to indicate when the kettle is boiling, auto shut off to prevent overheating, an easy-to-read water level indicator, stainless steel heating elements, a non-slip base removable, and an anti-scale filter for easy cleaning.
Further product information can be found on the company’s website.