you ever plucked a bottle of ketchup from a grocery
store shelf after remembering your kids finished the
last bottle the night before?
perhaps you’ve indulged in a box of cookies that wasn’t
on the grocery list but still somehow ended up in your
spontaneous purchases are a challenge for some of the
largest packaged food companies as they try to appeal to
shoppers staring at their screens instead of wandering
faced with declining center-of-the-store grocery sales
in recent years, food companies like Deerfield-based
Mondelez International and Kraft Heinz, co-headquartered
in Chicago and Pittsburgh, are pouring resources into
figuring out how to succeed online as a growing number
of people shop there instead.
recent earnings calls, executives acknowledged the
accelerated pace of change now underway.
is new is the frequency and the speed at which the
market is changing," said George Zoghbi, strategic
adviser for Kraft Heinz, on the company’s earnings
call last week.
vast majority of retailers now offer in-store pickup or
delivery, said Zoghbi, who was formerly the company’s
chief operating officer for its U.S. business. And, he
noted, people shop differently when buying groceries
online versus walking down the the aisles.
response to this shift, Kraft Heinz is investing
"to build our capability for the pull factor"
in online sales, he said. Kraft Heinz recently promoted
Nina Barton, former marketing chief, to be the company’s
first president of global online and digital growth
job is the same as it’s ever been — to adapt quickly
and keep our brands relevant for all customers and
channels," spokesman Michael Mullen said in an
global retail e-commerce is expected to grow by 20
percent to become a $4 trillion market by 2020, far
outpacing the growth rate of traditional retail,
according to Nielsen research. But so far, online sales
of groceries has lagged behind other consumer goods like
clothes and electronics.
in part because grocery retailers have yet to crack the
code on delivery of fresh food, which can be costly and
labor intensive. Some retailers have found more success
so far with in-store pickup options.
are just not sure how to make money on grocery
delivery," said Randy Hofbauer, digital and
technology editor for Progressive Grocer, an industry
it should come as no surprise then that food
manufacturers are still trying navigate their own
digital strategies. The Grocery Manufacturers
Association, an industry trade group, published a report
this year — after interviewing 22 executives — that
concluded the industry is still playing catch-up.
that long ago, large consumer packaged goods companies
in developed markets had little to worry about. Their
products dominated retail shelves. … In the ‘new
normal,’ however, everything has changed. Consumers
want more," said Laura Gurski, senior managing
director of customer and channels for Accenture, in an
email. Accenture partnered with the grocery trade group
on the research.
23 percent of Americans are buying groceries online
today, that’s expected to more than triple in less
than 10 years, according to a Nielsen report published
parent company of brands like Oreo cookies and Ritz
crackers, has invested heavily in e-commerce, partnering
with bricks-and-mortar retailers as well as online
giants such as Amazon and Alibaba. Mondelez plans to
grow its e-commerce business to more than $1 billion by
Kraft Heinz and Mondelez also sell some products
directly to consumers, cutting out retailers altogether.
American brands like Oreo cookies and Heinz ketchup have
survived numerous tidal waves of change in the food
industry over the decades. They’re still standing.
I don’t think this is radically different. I do think
the speed of the changes is perhaps more pronounced than
we might have seen in the past," Mondelez CEO Irene
Rosenfeld told investors last week.
said the winners will adapt to the changes accordingly.