There will be more blurring of lines in foodservice as competition among convenience stores, restaurants and other retail outlets drives new opportunities for channel growth and meets changing shopper demands.
This is one of Acosta Group’s 2024 retail predictions, identifying how brands and retailers can win shopper loyalty, drive sales and achieve efficiencies in another year of anticipated marketplace disruption.
“Retailers see the opportunity to expand made-to-order meals to attract cost-conscious shoppers who want restaurant-quality solutions anytime, anywhere,” said Acosta Group, Jacksonville, Florida, whose Retailer Confidential Report reflects that 71% of retail executives are doubling down with fresh foods.
Specifically, c-stores are responding to requests for hot foods and new, globally inspired flavors for breakfast, such as 7-Eleven’s French Toast Breakfast Sandwich, one of which offers sausage, egg, cheese and chipotle bacon mayo on French toast bread. Meanwhile, restaurants are bringing back diners for the benefits and convenience amid continued elevated grocery costs and the return to in-office work. Other retailers, meanwhile, are replicating the restaurant experience with food halls and local restaurant partnerships.
Steps all retailers can take to boost foodservice, according to the Acosta Group:
- Enrich the in-store experience and create reasons to linger, sample and dine.
- Create cross-promotions to provide shoppers with meal solutions across all meal occasions.
- Elevate digital integration.
“We are excited about the opportunities to connect with consumers in more customized ways in 2024, building brand and retailer growth with the right mix of services and solutions,” said Colin Stewart, executive vice president of business intelligence at Acosta Group. “Insights-based innovation and the ability to stay nimble remains critical in meeting changing shopper behaviors and market needs.”
While Acosta Group expects 2024 to stay as complex as 2023, brands and retailers will have opportunities to better understand and meet customers’ evolving demands and securing meaningful growth for their businesses, Stewart said.
“We formulate our predictions based on the insights of our retail experts and industry thought leaders, as well as proprietary Acosta Group studies conducted throughout the year with shoppers, brand owners, and retailers,” he said.
Driving Growth
Elsewhere, strong promotions will be crucial in another year of cautious spending, channel shifting, private-label purchasing and value messaging, said Acosta Group, noting in its report that 90% of top U.S. retail leaders are prioritizing unit growth in 2024.
“Consumers will respond to bold, creative promotions that provide them enriched value,” said Kathy Risch, senior vice president, thought leadership and shopper insights, Acosta Group. “Smart retailers, brands, delivery services and restaurants are stepping up to create promotions that resonate.” Whether it’s dollars-off purchases, cross-marketing partnerships or other value-based offerings, 71% of top retailers say they are upping promotions in 2024.
When developing a promotion strategy, Acosta Group advises:
- Create promotions that don’t erode margins for retailers, brands or shoppers.
- Deploy/evolve revenue growth management programs.
- Practice disciplined post-promotion analytics.
What’s Out Is In
Another part of the report reveals that the acceleration of the clean label trend in U.S. food was sparked by the passing of The California Food Safety Act of 2023, which takes effect in January 2027.
The act bans four harmful chemicals, affecting up to 12,000 primarily food products from processed foods sold or processed in California, the report said, and companies will be required to switch to ingredients now used in the European Union and elsewhere; several large brands have already pulled the additives.
In addition:
- 41% of consumers have heard of clean label, relating it to natural and healthy, and 78% find it appealing when provided a definition, according to FMCG Gurus.
- Natural and organic shoppers’ values will go more mainstream.
In addition, retailers and brands will benefit from:
- Understanding that analytics segmenting key label attributes will be important.
- Actively communicating what’s not in a product.
- Leveraging artificial intelligence for customized shopper lists.
- Using promotion and digital/social media to educate shoppers and demonstrate value.
Acosta Group is a collective of retail, marketing and foodservice agencies empowering brands and retailers to win in the modern marketplace. By delivering transformative, commerce-focused solutions and more than 95 years of expertise, Acosta Group connects the company’s partners with people at every point in the consumer journey.
Want to learn more about the foodservice category? Check out our event CRU in Nashville Feb. 28-March 1, 2024. Sponsors can gain 15 one-to-one meetings with qualified retailers.
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