In the past year, Abbott Nutrition continued to build on its successful category management programs in various store departments, including adult/diabetic nutrition, toddler nutrition and infant formula. In the area of adult nutrition and diabetes management, Abbott worked with a retailer that specifically wanted to drive conversion of HBC categories through cross-category promotions and out-of-aisle merchandising.
To meet this objective, Abbott joined forces with two other leading suppliers in a co-promotional event targeting caregivers, a group that spends $600 more and visits the store at least 20 more times than the average shopper. The two-week promotion leveraged secondary merchandising via end cap support, signage, and in-store and online communication across key categories shopped by caregivers. It ended up exceeding Abbott’s projections and helped lift Ensure sales. The adult nutritional segment also grew during the promotional period, seeing lifts in units and dollars. Additionally, a quarter of shoppers during the event were identified as new shoppers to the category.
Separately, in the toddler nutrition and baby care segments, Abbott worked with a regional retailer that wanted merchandising recommendations to improve category shopability and increase space for infant formula, while expanding growth segments in older kid nutrition. Based on the latest consumer research, Abbott developed a new planogram with more space for infant formula, toddler nutrition and oral electrolytes.
Toddler nutrition and oral electrolytes were placed adjacent to infant formula, followed by baby foods, to create a section that parents will notice as they shop milestones for their babies. The company opted to promote PediaSure with toddler nutrition, while placing Pedialyte within oral electrolytes.
As a result of its efforts, infant, toddler and oral electrolytes at this retailer grew impressively versus year-ago sales, with the formula category growing slightly less. Control stores that didn’t implement resets saw declines during the same period.
Cacique is using its position as the country’s leading brand of Hispanic cheeses, chorizos and cremas to help U.S. retailers capitalize on growing consumer interest in Mexican cuisine. The company’s multiplatform marketing approach targets core Hispanic, bicultural Millennial and general-market consumers, and features a 10-year partnership with celebrity chef Aarón Sánchez to attract new consumers to the category. In its retail partners’ stores, Cacique created authentic destination sets featuring Sánchez and a Mexican Meals Made Easy theme, which brought a significant lift in dollar sales.
Meanwhile, the company’s dedicated innovation group has helped it drive new product development faster. In the past six months alone, Cacique has brought two new product lines to market — Fully Cooked Chorizo and Mexican-Style Queso Dips — and expanded its presence into the heated and refrigerated meals set for the first time. Also in the past year, Cacique acquired El Sol Foods, further expanding its portfolio of Mexican mealtime essentials to include Homestyle Salsas. Its initiatives helped drive up overall Hispanic dairy/meat household penetration over the past year.
Following its successful secondary-display programs in previous years, Chiquita leveraged category insights to launch a healthy-snacking campaign with a Southern retailer this past spring. The program covered nearly 80 percent of the retailer’s stores with kid-friendly displays that invited children to take a piece of free fruit. As the sole branded partner, Chiquita’s bananas were featured regularly, but other fruits were also rotated in based on seasonality. The initiative not only promoted healthy snacking, but also helped reduce shrink by using the broken clusters of bananas that otherwise might not have been purchased.
In addition to this program, Chiquita joined forces with an Eastern retailer to provide easy lunchbox solutions. The companies shared lunch recipes and back-to-school ideas via online media, circulars and in-store signage. The campaign successfully drove new users to the retailer’s website, while lifting in-store banana sales; post-campaign, sales continued to increase.
In another promotional venture, Chiquita worked with Chobani after realizing through its research that bananas and yogurt have a buyer overlap of 85 percent. The two companies promoted the “ultimate banana and yogurt smoothie bowl” using in-store signage and digital content aimed at health-focused Millennials and families.
The habits of beer-loving consumers have changed over time, but for the most part, the beer shelf hasn’t kept pace. Constellation Brands set out to change that through its category management program, which featured its new Shopper-First Shelf initiative. The company recognized through research that consumers are seeking variety but often find too much or too little selection of relevant items. In fact, the high-end beverages that are driving category growth tend to be out of stock most often.
Working with multiple research partners such as Kantar, IRI and InContext, Constellation analyzed relevant data and consumer behavior to understand shoppers’ decision-making process, uncover barriers to purchase in the category and determine the necessary solutions. Its Shopper-First Shelf approach is helping retailers grow the beer category by optimizing shelf flow, space and assortment based on how today’s consumers shop for beer.
For instance, when its shelf-flow recommendations are implemented, retailers can see up to 10% growth in category dollars versus other common flow scenarios. Its “space to opportunity” approach, meanwhile, incorporates forecasted growth and seasonality to set the shelf for the future. When allocated correctly, that change helps bring retailers up to 8% category dollar growth and helps prevent out-of-stocks.
As for assortment changes, Constellation’s research indicated that up to a fifth of the beer assortment can be removed from the shelf with no negative impact to the category. In fact, the category can grow by up to 5% as space is increased for more productive SKUs.
Overall, Constellation’s Shopper-First Shelf initiative has helped retailers see net category gains in the mid-single digits. Some accounts even saw double-digit gains. More than 5,000 stores nationwide have implemented the strategy.
Dole Food Co.
Dole has created a sweet spot for retailers by leveraging its legacy in commodity produce and value-added salads behind three winning propositions: re-energizing the banana category through organics, driving salad category growth through kit leadership, and leveraging plant-based eating trends with the new Bountiful line.
Using national banana consumption trends, Dole provided valuable insights to its retailer partners on the decline of the No. 1 volume generator in produce. The message was clear: Bananas were losing volume to such items as mandarin oranges, cherries and avocados. Low-income households were purchasing less, while high-income households were purchasing more. The company aimed to re-energize the category using organic yellow bananas as a powerhouse to attract and drive more natural and organic households to the store.
Through an increased presence at shelf, along with secondary organic displays strategically placed throughout its stores, one retail partner was not only able to impact the organic banana segment, but also drive additional dollars and volume to the entire banana category and store, bringing increases in banana volume and market share.
Dole’s sales-velocity leadership position in the value-added salad kit segment, and in the critical, growth-driving chopped-kit space, extends to new product innovation. In 2019, Dole launched the Bountiful plant-based line, meeting a trending consumer need and bringing new shoppers to the category. At one retailer, more than a quarter of Bountiful sales were above expected from new category buyers, based on the amount of sales from new buyers in the previous period. Retailers that have added Bountiful are seeing higher dollar and unit velocities in chopped kits than those that haven’t.
Retailers heavily involved in Dole’s category development process experience an additional five to six points of growth, alongside a thriving partnership primed for sustainable future growth and innovation.
From emerging varietals to alternative packaging formats, the wine industry has experienced continued growth due to innovative products, so it’s critical that retailers adapt quickly and provide solutions for consumers’ ever-changing needs.
A major consumer need that has emerged is that of occasion-based drinking, with consumers seeking solutions based on specific drinking occasions. In answer to this need, small-sized wine formats have grown over the past year at more than five times the rate of the total wine category — 15% versus 2% — and Gallo has played an important role in driving this growth. In 2019, the company launched 25-plus small-format wine items, thereby further driving the category opportunity.
By leveraging category insights and a progressive shopper marketing approach, Gallo developed the Anywhere, Anytime small-format category program. The nationwide program focused on driving single-serve purchases, while also educating consumers on the benefits of small-format wine for their various drinking occasions. The three phases in the program were Living, centered on building brand awareness via branded social media content and partnering with social media influencers; Looking, which targeted the consumer through a combination of Pinterest ads and a mobile microsite; and Buying, focused on converting pre-sold customers with impactful in-store point of sale and a digital retailer toolkit.
The use of digital advertising, shopper education and solution-focused marketing all contributed to the overwhelming success of Anywhere, Anytime: Nationwide, there was a significant lift in dollar sales on the programmed brands as well as in volume sales, and an incremental $2 million in revenue generated during the two-month digital activation. The program was also highly successful with both national and regional retailers.
By embracing change, being quick to innovate and focusing on consumer-centric solutions, Gallo was able to execute a category-focused program that drove business nationally and significantly contributed to overall category growth.
Enjoy Life Foods
The creator of the free-from food category in 2001, Enjoy Life has played the primary role in rapidly expanding the category through its strong understanding of the free-from consumer — ranging from those who rely on lifesaving allergy-friendly foods for medical reasons to those who opt for clean, better-for-you foods.
The company works with retailers to reveal how the free-from consumer shops and help them change the way they merchandise their sets by adopting the strategy of brand blocking, including its own products with their distinctive packaging in the color teal — the unofficial color of food allergy awareness — allowing consumers to easily spot the items. Enjoy Life also encourages retailers to use shelf tags educating those seeking free-from products, with the most effective tags those calling out the specific allergens that aren’t in a product.
Where Enjoy Life has assisted with remerchandising using brand blocking, not only have retailers seen double-digit sales increases of Enjoy Life products, but also significant increases in the set itself, as well as the other brands within the set. Retailers have been able to promote connectivity within various shelf sets, including front end and back-to-school displays, and custom signage.
Enjoy Life collected sales data from a leading retailer in the Northeast over a six-month period, pre- and post-brand blocking at 13 store locations. The retailer experienced significant actual sales growth versus pre-brand blocking, with three locations achieving about four times average sales growth of Enjoy Life products. Brand-blocking stores outperformed non-brand-blocking stores over the first six months, resulting in incremental sales. Nearly all Enjoy Life product lines are growing faster in brand-blocked stores, with the growth coming from higher turns and access to more product offerings.
Enjoy Life’s consumer-centric strategy meets consumer needs at the market intersection of shelf-stable foods, technology, data mining and special diets.
The Hershey Co.
Working with a large retailer, the Hershey team led several cross category initiatives to drive and enhance seasonal results. One initiative was a candy apple program for Halloween.
The goal was to have shoppers dip traditional caramel apples into crushed-up candy, nuts and cereals to enhance the eating experience. Hershey partnered with other manufacturers to develop an event to communicate the idea to shoppers, which included a full-page ad in the retailer’s in-store magazine, paid digital/social media, an e-coupon, in-store demos and custom point-of-purchase signage. To build baskets, stores set up displays near produce to create a simple solution center for shoppers as they entered the store. The program drove significant increases on focused items in the weeks leading up to Halloween and helped the retailer sell more apples in the stores with a display near produce.
Again applying a shopper-centric approach, Hershey teamed with another manufacturer to build a Candy Cabin program at the same retailer. To generate awareness, Hershey leveraged an influencer program and the retailer’s magazine to inspire shoppers to build their own cabins. In-store POS brought the idea to life on end caps and in merchandising displays in various locations throughout the store. The program helped the category to grow for the holiday season. Further, Hershey sales for stores using the program signage rose higher than stores that didn’t offer the program.
Additionally, after an update to the company’s packaging, Hershey worked with retailers to optimize aisle flow by usage occasions and to secure placement of the new bags. The reinvention and flow-through started in late March/early April, and in-store results are validating the consumer research with strong productivity. Since the reset, several retailers are experiencing double-digit sales growth and improving conversion rates on the new bags to drive base sales growth at the shelf.
Hormel works closely with retailers on initiatives designed to drive sales across the store.
One of the most impressive focused on the deli as a destination for special-occasion solutions involving its Hormel Gatherings and Columbus deli meat brands. A strategic pricing strategy for in- and out-of-season timeframes grew the category with Hormel Foods and private label products. A Columbus focus on premium in-home entertaining through charcuterie included chef-hosted and charcuterie board events at retailers, and development of a charcuterie sampler with on-package wine-pairing recommendations, with resulting higher basket rings.
Additionally, Hormel has been working closely with multiple retailers to drive traffic, sales and interest in center store, which is being ignored by many in favor of the fresh perimeter. Hormel’s business analytics and insights team conducted research and developed a robust strategy to help support customers with long-term center store strategies. Insights allowed for simplification of segments within canned meat and meals based on shoppers’ purchase experience, assortment recommendations based on item exclusivity and incrementality, and a better understanding of segment adjacencies.
For a Wisconsin-based independent grocer, Hormel assisted in building a standardized canned-meat planogram to simplify shoppers’ purchase experience, boosting share and dollar sales. Adjacency and assortment optimization implementation for a Midwestern regional chain grew the category by double digits. Another Midwestern chain anticipates robust growth across the separate canned-meat and -chili sets by implementing adjacency recommendations that will improve shopability and promote cross purchase. A Southeastern retailer expects positive growth in canned meat with assortment and facings optimization to reduce out-of-stocks, and adjacency optimization to improve shopability. Double-digit sales growth was realized through similar partnerships with a West Coast regional grocery chain and a national mega-retailer.
Progressive Grocer was similarly impressed with Hormel’s MegaMex division’s partnership with a Southwestern grocery chain to drive sustainable growth in Mexican food with an aisle solution that employs research based on segment lifts and cross purchasing to simplify shopability and drive a bigger basket.
Further, a refrigerated snacking study with two major supermarket chains shows promise for its potential to create a cross aisle destination for snack solutions.
Kellogg is a leader in multiple store categories, and collectively has become a formidable provider of solutions for grocery shoppers.
Amid the rise of plant-based meat products, Kellogg’s MorningStar Farms brand stands as a pioneer in meat substitutes, and the company is committed to category development with retailers through a consumer-centric strategy, strong innovation, and proprietary and shared tools and research.
As adjacency to frozen vegetables is driving category sales, penetration and new-user conversion, Kellogg is currently executing in-store testing with a major retailer, with plans for full-chain activation in 2020.
Additionally, to help retailers optimize space for expected growth through 2023, Kellogg collaborated on macro-spacing projects across the frozen department. Further, the company is seizing an opportunity to close the gap in snacking occasions, with a new platform, including bite-size snacks containing 11 grams of plant- based protein, that’s already showing early success in boosting baskets. Also, the launch of its Incogmeato line puts Kellogg in the game with a product that aims to capture the taste, texture and sizzling qualities of meat.
In other categories, Kellogg is:
Growing on-the-go snacks with better organization, footprint, adjacencies and packaging design
Forging innovative and strategic partnerships for crackers, such as its Cheez-It brand with House Wine, bringing consumers a new way to enjoy cheese and wine with a combo pack of red wine with original Cheez-Its, delivering on the sophistication that snackers are seeking
Delivering research-based assortment solutions to retailers for frozen breakfast through leveraging and expanding the iconic Eggo brand by adding French toast
Engaging shopper-centric research to improve shopability of portable wholesome snacks by developing shopper-led aisle solutions built around three “mega needs”: taste enjoyment, healthy lifestyle and purposeful nutrition.
Overall, Kellogg is making significant investments in research, both account-level and nationally, in collaborations with InContext Solutions, IRI, Nielsen and Kantar, among other partners.
Litehouse, a leader in refrigerated salad dressings, credits ongoing collaboration with its retailer partners as key to its success. Its retailer promotions not only show significant increases in unit sales, but also help drive overall basket size.
This year, Litehouse provided its retailers with better visibility into consumer behavior and segments by launching two retailer-specific data programs and a consumer panel provider. The resulting insights help Litehouse better assist with supporting retailer business trends, as well as gain a deeper understanding of consumer demographics and psychographics across the store, and in differentiated retailer groups.
Cross brand promotions, within the produce category and beyond, leverage secondary placements and advertising materials to highlight product offerings and versatility. For example, Litehouse collaborated with brands across the store during its Super Bowl promotion, including wings and ready-to-eat frozen appetizers, boosting sales for its ranch and blue cheese dressings.
A retail promotion during May’s National Salad Month spotlighted Litehouse Caesar dressings and was supported by in-store signage, an integrated online campaign with targeted digital ads, and recipe content to inspire usage occasions and drive consumers to stores. The promotion drove a double-digit sales increase that outperformed the category.
Strong cross brand promotions drove product sales and led to promotion opportunities at other retailers, including a successful Q1 I Heart Salad cross promotion with produce brands at a major West Coast-based national supermarket chain. Program awareness and performance resulted in a Q3 promotion extension at a major Southeastern regional retailer.
Additionally, Litehouse provides customers and retailers with valuable visibility into consumer segments and behaviors. The company gathers shopper insights from syndicated data providers, third-party research and retailer insights platforms, which help inform innovation, retailer partnerships, promotions and merchandising strategies throughout the year. This year’s data led to three recurring themes: better-for-you offerings, convenience, and size and flavor variety.
As shoppers migrate online, where most purchases are planned, retailers are presented with both an opportunity and a challenge. To meet the demands of today’s consumers and adapt to the evolving retail landscape, grocers must create intuitive, engaging online platforms that drive impulse purchases and leave visitors satisfied. With more than 100 years of category leadership, Mars Wrigley is partnering with national ecommerce and grocery retailers to drive the digital confectionery aisle through new test-and-learns and shopper-based insights.
To that end, the company conducted a first-of-its-kind, two-phase neuroscience research effort with the leading ecommerce provider in the United States. This study tracked the shopper experience and the emotional and visual motivators that encourage confectionery purchases online.
After evaluating the results, Mars Wrigley identified that online purchases are triggered by a different part of the brain than the instant- gratification triggers that happen in-store. Since in-store confectionery purchases are typically made to act as treats in real time, shoppers devalue the rewards of many impulse categories when there’s a delay. However, because the company has a deep connection with consumers, it also knows that they will buy confections online if they are reminded to treat themselves. The key to increasing digital impulse purchases is to trigger online how the brain reacts in stores, and deliver confections similarly to make them worth the wait.
For 2020, in addition to cutting-edge test-and-learns with top grocery retailers, Mars Wrigley will bring new insights to transform the landscape and propel its partners into the future of confectionery through its 2020 Innovative Merchandising Incubator program. Mars Wrigley U.S. unveiled the 2019 Innovative Merchandising Incubator to help retailers nationwide address the biggest issues facing confectionery today. The personalized test-and-learn offers innovative solutions to merchandising new product flavors that blur category lines, like salty and sweet.
“This category strategy is perfect. It’s fact-based, exactly what we need …” — that’s what one large national retailer said about Molson Coors’ Purpose Drives Purchase category management strategy, based on a deep dive into market dynamics and shopper behavior.
From this research, four key pillars emerged: consumer choice is driven by occasion, every segment plays a role, the core matters, and the right innovation works.
Occasions, ranging from personal to small social groups to large-group celebrations, all require certain pack sizes and package types. Putting a disproportionate focus on one segment or allocating space at shelf based purely on sales is an ineffective strategy, as it requires a smaller assortment of other segments that appeal to specific shoppers. No amount of innovation can offset the losses of strong core items, which are 3% of all items but drive 80% of category sales. Innovation is important to the category, but retailers must evaluate the amount of innovation being presented based on the incremental value of each item.
The beer category has changed dramatically in the past 30 years, and consumer preferences continue to evolve at a rapid pace. In 1990, the category featured 3,000 items; in 2019, 19,000 beer items are sold at retail. This evolution required a strategic shift in category strategy.
Winning with beer has proved difficult for retailers, with fundamental issues holding back the category, among them declines in category productivity and conversion, out-of-stocks, and a lack of “relaxation” among category shoppers. The stakes are high for retailers, as more than half of beer consumers say that they’ll walk out without purchasing the category if their preferred brand or pack size isn’t carried. These issues were all targets of Molson Coors’ research.
The result: Purpose Drives Purchase has generated category sales increases higher than other category strategies; a reset at a prominent national retailer has been particularly successful, leading to improved performance across all segments.
Nestlé Purina Petcare
To stem the tide of lost sales of pet products to specialty stores and online subscription services, Nestlé Purina Petcare is actively working with its retailer partners to create supermarket pet destinations and recapture those valuable basket items. And there’s plenty at stake — pet care is a $34 billion-a-year business that’s grown by more than 6% in the past year, with similar growth projected through 2022, outpacing many other center store categories.
Shopper trends and consumer insights helped the company reinvent the pet aisle experience beyond just products: educational moments, community connection, grocery delivery services, emerging retail technology, environmental enhancements such as lighting and custom flooring, and even seamless integration with mobile platforms to encourage repeat interactions that drive loyalty. The end concept reflects an ambitious vision for a one-of -kind in-store experience and learning environment that can be scaled across store locations.
Another key component in building stronger partnerships with retailers is Nestlé Purina’s retail innovation center, which brings the company’s innovations and the pet owner experience to life. The immersive lab helps retailers better understand how to overcome their challenges and adapt their aisles to reflect the changing dynamics of the pet care category. Since redesigning the center, the company has seen repeat retailer visits, engaged new audiences from both current and emerging retailers, and used the experience to drive new business opportunities with strategic retail partners.
Nestlé Purina has implemented a dedicated ecommerce category team to help retailers win with pet across the different ecommerce models, using a best-in-class set of category tools, including ecommerce best practices and self-assessments, activation frameworks, and an implementation guide for all phases of the shopping experience.
Further, innovation has focused on premiumization, the primary driver of pet care category growth. Natural products and claims common across human food are increasingly sought by consumers in food for their pets, and the latest Nestlé Purina product releases are reflecting this demand.