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Confluence of Trends Challenges Food & Beverage Brands in 2012

Extremely Cost Sensitive Consumers & Touch Screen Dining

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Food & Beverage consumers are becoming adept at navigating the “new normal” in grocery shopping.

Food & Beverage consumers are becoming adept at navigating the “new normal” . CPG brands must deal with new consumer behavior such as cutting back and clipping coupons and creating new entry points for extremely cost sensitive consumers.

JWT

Healthy Vending Machines
Machines that sell snacks like carrots and apples, hummus, meal replacement bars and yogurt are popping up in response to consumer interest in nutritious eating, combined with legislation aimed at limiting junk food in schools.

Vending machines have been around forever so what is the driver now? According to Ann "Health Vending Machines has been ongoing trend and it is coming to a head now due to the obesity epidemic. One life stage to deal with obesity is during childhood development. By opening up healthier options, schools are being proactive in reducing obesity."

Screened Dining

Interactive screens are coming to restaurants with the potential to replace menus, provide ordering and payment as well provide dining entertainment. Technology guru's always refer to digital media's "four screens"… television, computer, tablet (iPad) and the smart phone. Tablets and smartphones are radically changing the way we buy and the Kraft iFood Assistant is a most compelling example of using Artificial Intelligence to determine how we buy and when we buy. It is inevitable 2 of our 4 screens will work their way into restaurants.

Inamo Restaurant London , "…uses e-table technology to grant consumers the ability to change their dining experience" according to Ann.. Using projector technology Inamo can turn the table top into an interactive screen and diners can navigate it with a built in mouse. Diners can view menus, play games, change virtual table cloth and even order a taxi.

California chain Stacked uses eLacarte's Presto… a tablet attached to the table that lets diners order, play fun games and pay without leaving their seats. Diners at a restaurant in the Manhattan department store Barney's can order at one of 30 screens in a glass-covered communal table, then browse the store's catalog while eating.

So Ann… what is driving this trend ? " The major trend of screen interactions we have for work and play is now opening up to brands for consumer interactions. Touch screens are going main screen and consumers have become accustomed to using their touch screens in their day to day lives. Consumers will be more comfortable with touch screens in restaurants".

Stop & Shop has taken the mundane task of grocery shopping and created the Stop & Shop mobile app that goes well beyond the basic loyalty card, providing targeted promotions on your smartphone and allowing you to scan your items with the phone easing the checkout burden.

Smaller SKUs for the new Struggling Consumer

Smaller SKU's are the most telling examples of food & beverage brands reacting changing consumer behavior based on the new normal… stagnant economy and uncertainty in the consumers financial future.

"This is part of the trend in navigating the new normal for extremely cost sensitive consumers" Food and beverage brands are beginning to swing in the opposite direction from the mega-sizes and bulk offerings at supercenters and club stores. Brands with "smaller skus" are squarely targeting budget-savvy consumers. Extremely Cost Sensitive Consumers and Budget Savvy Consumers are 2 new emerging customer segments that food & beverage brands will be targeting in their new product launches.

A most telling quote from Meg Nollen, SVP of investor Relations And Global Program Management Officer, H.J. Heinz Co. is indicative of that this will be a pervasive trend in the food & beverage market and product innovation in smaller sizes will develop rapidly. "Value to that [struggling] consumer is a price point. It doesn't matter what the cost per ounce is. It matters, 'Can I afford to buy even a small portion of that this week?' And (that means) having small sizes, convenient sizes, convenient channels, convenience stores, pharmacies, dollar stores for quick small trips that are close to home, as opposed to going out for the big loads at the supercenters. So there is very different behavior that is occurring."

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