Friday, August 10, 2007

The Friday Fishwrap:

News, facts, info and resources you can use...all wrapped up for you

Hot off the press...Could plants and flowers be the next natural products mega-trend? Retailers have recently been reporting that demand for organic, sustainable and Fair Trade floral products has been increasing, and that the category is beginning to grow like...a weed. This article by Amy Sung from the Aug. 6, 2007 issue of Supermarket News discusses this growing market and how some innovative retailers are growing the category in their stores

>Roses may still be red and violets still blue, but as consumers get more and more concerned about the environment, local-origin issues and quality, this is a trend worth watching. With increased sales volume, prices will come down, leading more segments of consumers to buy in. It makes since as American consumers continue to go green.

More from the presses...Chocolate sales surge. A new study from research firm Packaged Facts predicts a healthy increase in chocolate sales of $2 billion dollars from 2006 to 2007. Total U.S. sales in 2006 were $16 billion, and Packaged Facts predicts sales of $18 billion in 2007. The report was just released today. See it here:

>Packaged Facts' study also says the key drivers in chocolate sales currently are consumers' increased interest in dark chocolate products and the growing demand for premium products, including organic and Fair Trade chocolate. Packaged Facts says premium chocolate sales will continue to grow, commanding about 25% of the overall chocolate market by 2001, with about $4.5 billion iin sales. That the growth in chocolate sales is being driven primarily by a desire for premium taste, combined with a demand for organic and Fair Trade (natural attributes) products, is an excellent example of the natural/specialty foods convergence taking place in the marketplace and in the specialty and natural foods industries.

Business Wire...Mega super-natural grocer Whole Foods Markets, Inc. has extended it's tender offer to purchase stock shares of Wild Oats Markets, Inc. from the previous deadline of Aug. 10, 2007 to a new deadline of Aug. 15, 2007.

>The Whole Foods Markets, Inc. buyout of Wild Oats Markets, Inc. continues to be under evaluation from the U.S. Security and Exchange Commission. Some members of Congress also are interested in the buyout, and the possible anti-competitive implications it way have. Although the Bush Administration has been reluctant to block many mergers and buyouts in the last 6 years it is unclear at this point in time if the Whole Foods buyout will be approved. Recently Whole Foods CEO John Mackey was outed for posting negative comments in a financial chatroom, using an anonymous handle, about Wild Oats and it's CEO. This revelation put a brighter spotlight on the buyout as it has been alleged that some of his postings took place during a "quiet time" in which communications from the company proposing the buyout/stock purchase are to be held silent. A decision on the buyout is expected by the end of August but might take longer.

Green/Enviromental News...Last month (July) the state of California passed a law which requires all retail grocers with stores over a certain size to offer recycling bins in their stores for customers to place plastic grocery bags which they can return to the store The law also requires the grocers to offer for sale resusable, canvas grocery tote bags for customer purchase and resuse. The law was passed and implemented without any opposition from the retail grocers association in California. In fact the California Grocers Association participated in writing the legislation. Many California grocers had already offered the plastic bag recycling bins in-store, and already sold the canvas grocery bags, prior to the law being passed and going into effect. The law is being touted as a win-win for consumers, grocers and the enviroment.

Here is an interesting and humorous article from todays (Friday, Aug. 10, 2007) Modesto Bee newspaper about one shoppers experience with the new law.

>The only thing left for California retailers to do under this new law is to make sure store courtesy clerks add a new phrase to their pre-grocery bagging customer service question to shoppers. Instead of just asking "paper or plastic?" the courtesy clerks now need to make sure they ask: "paper, plastic or canvas?"

More Green News...A recent survey shows that consumers and grocers in Canada are going green. In the survery two-thirds of Canadian consumers said concern for the environment is impacting the way they shop. And one-in-four said the environment has a major impact on their shopping habits. They further said their new green consumerism is playing itself out by shopping for items with less packaging, natural and organic items, and other "environmentally friendly" shopping behaviors. Canadian grocers also say they are following this consumer trend and becoming more green in their retailing behavior and operations. A summary of the survey is here:
Some upcoming industry events of note...The Natural Products Expo East, one of the two big annual natural foods and products events, is Sept. 26-29, 2007 at the Baltimore Convention Center in Baltimore, Maryland. for details. On September 29-30 is the Grocery Innovations Canada '07 conference and trade show in Toronto, Canada. This is a good opportunity to see what our neighbors to the north are up to. details:

More innovation...On November 20-21 of this year (2007) is the 6th Annual World Food Technology and Innovation Forum. This is the food industry's version of the famous Davos World Economic forum in many ways. The Forum draws food industry and related innovators from throughout the world. The event features speakers, discusion sections, demostrations and more. All the information on the upcoming forum is here:

Premium taste...Campbell Soup Company is considering selling it's Godiva Chocolate brand. The Godiva brand has huge brand equity with consumers and is considered to be one of the most significant luxury brand franchises in the consumables category. Here is an overview of the potential Godiva brand sale from today's New York Times.

>As a category chocolate is hot. (See the Packaged Facts research survey report above for example.) Mainstream chocolate companies such as Hershey have been on a buying binge of late. Their targets have been primarily upscale, high-quality artisan chocolate companies. This behavior by Hershey and others is being driven by the exploding popularity of dark chocolate and premium quality chocolate varieties. Additionally, more and more small. artisan chocolate companies are being started, feeding into this high consumer demand for premium taste chocolate. These artisan start ups are also responsible for pioneering the increasingly successful organic and Fair Trade confection categories. The big guns like Hershey want a bigger share of these growing niche categories.

Godiva would seem to be a perfect fit for a Hershey, M&M Mars or European-based Cadbury. Godiva also may be attractive to other large food companies which currently have just a marketing toe in the confectionery category but want to make a deeper commitment to this growing category. Current analysis is that Campbell Soup could get upwards of $1 billion for the Godiva luxury brand. However if a bidding war were to ensue among the major confectionery companies that final selling price could be much more.

1 comment:

Natalie said...

Wow, I came to check out your info on the plastic bags legislation, but I also noticed you're coming up to Canada! My company, SBT Seabuckthorn International Inc, is going to be at Expo East too, but the one in Toronto, Canada September 6-9. If you're interested in some of the nutraceutical and 'green' issues up north of the border, check out our blog! See you around!