Fresh Look at Canned Goods

Communicating value, convenience and par with perimeter offerings is key to boosting sales for grocers.

With healthier eating continuing to be a concern among supermarket shoppers, grocery retailers and suppliers alike expect canned foods — vegetables in particular — to be a sales opportunity as consumers seek value alternatives to pricy perimeter options.

“Canned goods continue to provide value and convenience to the customer,” says Dave Krause, SVP of category management for Tyler, Texas-based Brookshire Grocery Co. “Vegetables are a preferred side dish to protein. Canned goods, properly leveraged, can be the connection between the perimeter and center store.”

That bodes well for grocers still in search of that magic bullet they hope will inject more excitement into center store, which tends to cower in the shadow cast by lavish displays in fresh departments like produce, deli, bakery and prepared foods. “The challenge is to stay relevant through innovation and creating usage occasions,” Krause asserts.

But according to Sherrie Rosenblatt, VP of marketing and communications at the Washington, D.C.-based Can Manufacturers Institute (CMI), “Cans are the way to center store success.” Rosenblatt, who heads up CMI’s “Cans Get You Cooking” retailer-manufacturer collaborative marketing campaign (http://cansgetyoucooking.com/), says that for many Americans, a home-cooked meal means reaching into their pantries. “And in light of evolving consumer lifestyles with respect to budgets, schedules and confidence in serving homemade family meals,” she says, “canned foods have the potential to fulfill customer needs and put benefits within reach for retailers, too.”

Rosenblatt cites data from Acosta Marketing Group’s “Tipping Point for Center Store” study showing that 70 percent to 80 percent of the bottom line for grocery retailers can be attributed to center store sales. “Canned food products are also more productive on the shelf, exceed the grocery department average margin and deliver higher sales per facing,” she continues, citing Willard Bishop’s “Total Store SuperStudy,” released last May. “There is a strong incentive for retailers to address center store sales declines by leading with canned foods.”

Krause says recipe-driven promotions and price-focused shopper marketing programs continue to create customer engagement in the category. “I also expect to see continued educational marketing that speaks to the health benefit of increasing vegetable consumption featuring canned vegetables,” he says.

Opening Healthy Eating

Sarah Ludmer, manager of nutrition services and communications for San Francisco-based Del Monte Foods, certainly agrees. “Canned fruits and vegetables play a vital role for retailers because they play a vital role in the health and nutrition of Americans,” says Ludmer, a registered dietitian. “Research shows that only 2 percent of Americans are eating enough fruits and vegetables every day — an incredibly low number. … There are multiple studies that have found that canned fruits and vegetables are nutritionally equivalent to fresh and frozen varieties, so there’s an undeniable positive role that canned goods can play in the dietary needs of consumers.”

Del Monte is in the midst of what Ludmer calls “the brand’s largest marketing campaign in 10 years.” Dubbed “Bursting with Life,” it communicates the nutritional benefits of canned fruits and vegetables and how they’re nutritionally on par with fresh and frozen. “We are also dedicating significant resources to Del Monte-specific consumer education programs and strategic industry partnerships with organizations such as Produce for Better Health Foundation, USDA National Strategic Partners, Canned Food Alliance and Solutran,” she notes.

Del Monte’s campaign additionally includes recipe development to help grocers steer shoppers into center store for year-round produce selections.

Krause acknowledges canned goods’ role in meal solutions. “Seasoned and value-added canned vegetables give the consumer the ability to provide creative and convenient sides to their family meals,” he says. “Canned goods are a good fit with the consumer interest in budget, diet and convenience.”

Colt Reichart, new media manager for Elwood, Ind.-based Red Gold Tomatoes, says his company is developing recipe starters to help make preparation of complete home-cooked meals easier. “Red Gold has also developed recipes to give busy moms and active families the opportunity to enjoy a nutritious and delicious meal prepared at home,” he says.

For its part, Del Monte is helping simplify consumption of fruits and vegetables with new products aimed at kids and parents in innovative formats such as squeezer pouches and cups, Ludmer says.

Opportunities Abound

Still, the segment faces challenges at retail, among them issues related to biphenol-A (see sidebar).

“Drought conditions over the last couple of years created availability issues in certain forms of canned vegetables. Short supply and manufacturer allocations hampered the ability to promote and merchandise specific forms of canned goods,” Krause says, further noting continued competitive pressure from frozen and fresh.

Rosenblatt cites data showing nearly one in five units sold in the average store grocery department comes from categories dominated by can packaging, while 90 percent of Americans currently have canned foods in their kitchens, with the average pantry containing 24 cans.

“By encouraging consumers to not just stock up on canned foods, but to cook and eat with them, thereby cycling through their pantry inventory more quickly and increasing overall usage,” she says, “retailers will see a sales increase in the center store.”

“Canned goods continue to provide value and convenience to the customer. The challenge is to stay relevant through innovation and creating usage occasions.”
—Dave Krause, Brookshire Grocery Co.