4 Behavioral Declines Set to Disrupt Grocery in 20 Years
Growing up in Hawaii, one realizes quickly that swimming in a pool is vastly different from swimming in the ocean. In a pool, a pretty good swimmer can go wherever they want and doesn’t worry about much except for the other swimmers getting in the way. In the ocean, however, a pretty good swimmer has little choice but to go where the ocean current wants and has many things to worry about.
Unfortunately, grocers — like all businesses — build their plans in controlled and contained pools, but must execute them in the wild, as it were. A few times per year, grocers plan shelf resets, new products, annual plans and long-range plans of a few years.
These plans are unrealistic and short-sighted.
Recently, McKinsey & Co. completed a study across 822 companies for nearly 10 years deconstructing how businesses actually grow. The results show that more than 60 percent of any brand’s individual growth comes from the underlying momentum of the category. Competitive market share gain (e.g., most of advertising, distribution) drives less than 10 percent of a brand’s growth but often occupies 90 percent of a brand's strategy and mindshare.
The far better use of time for both grocers is to assess the health and momentum of the category itself, and use that to make bigger strategic bets. Executives should reframe the question over a 20-year horizon by asking "what must be true" for the category to double or be cut in half over 20 years. It’s important to look for 20-year currents both within and beyond your category. Currents can combine to even further accelerate or destroy a category, or even create new opportunities previously unseen.
Here are a few 20-year currents I am seeing. I derive these from the analytic techniques I describe in my book, “Superconsumers,” and seeing how category Superconsumers’ behavior, demand, and unmet needs and wants are changing over time.