CPGmatters: Hormel Foods Aims to Simplify Center Store Shopping

Apr 23, 2009

By John Karolefski

a special arrangement, presented here for discussion is an excerpt of a
current article from the monthly e-zine, CPGmatters.

Last month, Hormel Foods
Corporation and Cannondale Associates released the results of a study finding
that, rather than having convenience items scattered throughout the store,
shoppers would prefer a dedicated convenience meals aisle where the full range
of quick and easy products could be found.

The convenience meals
aisle would be located in the center store, a highly profitable area for
retailers, representing 88 percent of total store net profit. 

“What are consumers
looking for in the shopping environment?,” Jeffrey Ettinger, Hormel’s
chairman and chief executive officer, asked recently at a presentation
recently at the Food Industry Summit hosted by St. Joseph’s University
in Philadelphia. “They’re still time pressed and don’t want to spend
a lot of time in the store. They find the store layout to be frustrating.”

For example, he said
microwaveable products such as soups, meals and
pasta are in different aisles of the grocery store. This identified a potential
problem and a potential solution for the Hormel team.

“The center of the
store – particularly in some retailers – has not gotten much
attention and wasn’t calling out new items to consumers. So we thought
the center of the store was ripe for innovation,” said Mr. Ettinger

Research for the study
involved interviewing 1,500 shoppers in-store, and analyzing more than
15 million frequent shopper card households and more than 100 million baskets.

Hormel Foods designed
its convenience meals aisle solution to allow retailers to customize it
to specifically meet the needs of their stores and shoppers. For example,
retailers can implement the solution in small steps, starting with key
adjacencies, and can integrate private label with national brands to find
the right assortment of products to serve their clientele.

During this study, shoppers
defined which products they would include in the convenience meals aisle,
as well as the organization of those items within the aisle. Shoppers requested
that ultra-convenient items, such as microwavable meals and microwavable
soups, should be placed at the end of the aisle nearest the front of the
store, and more time-intensive meals, such as boxed dinners and sides,
including macaroni and cheese and add-meat-and-heat entrees, should be
placed toward the back of the store. Shoppers also chose a name for this
aisle: the “Convenience/Prepared Foods” aisle.

The research also found
that convenience meal shoppers are worth up to 31 percent more annually
than other shoppers for retailers.

“Based on the study
results, we are now communicating with many of the retailers in the U.S.,” said
Mr. Ettinger. “We’ve started pilots with a few of them to try and
change the section. It won’t be a radical change in one day from the way
the store is designed today to a complete reset, but we are encouraging
them to try a sub-section at a time in a few stores.”

Discussion Question:
What are the pros and cons of creating a center store “Convenience/Prepared
Foods” aisle? How would establishing a dedicated
convenience meals aisle affect the supermarket shopping experience?

Please practice The RetailWire Golden Rule when submitting your comments.

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7 Comments on "CPGmatters: Hormel Foods Aims to Simplify Center Store Shopping"

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Joan Treistman
13 years 29 days ago
There’s a difference between an abstract perspective and actual shopping behavior. The research study evaluates a rational solution to consumers’ needs. How did the study define convenience or was it self defined by the shopper? One shopper’s convenience product may be another’s hassle. Therefore the convenience section will likely exclude products that some shoppers prefer for their convenience. Will they buy an alternative in the convenience section or feel the store is inconveniencing them? What is the impact on existing shopping patterns? Which products lose out when there is a convenience section? Unless I’m visualizing this incorrectly, there will now be two soup sections, for example. There will be the soup products in an array of soup and those only available in the “convenience” section. How inconvenient is any soup? How much more convenient is the soup in the convenience section? Why are we eliminating the opportunity for attention to brands that are not quite convenient enough for the convenience section? Trying to get consumers to shop differently is a challenge. I recognize that a… Read more »
Raymond D. Jones
Raymond D. Jones
13 years 29 days ago

Consumer shopping behavior is driven by need states. Most shoppers encounter a variety of different need states during the course of their shopping. Similarly, most products can be seen to fulfill different needs for different shoppers.

Consumers are used to shopping by category. While it may certainly be logical to have a separate section with convenience meals, there is an assumption that these products only serve that need and no others. Unless the products have a dual location, this may breed confusion.

Some retailers have experimented with occasion-based placement and merchandising. However, as Joan points out, where does the soup go?

Joel Warady
Joel Warady
13 years 29 days ago

The concept does seem to be a bit confusing. In essence, you would need to duplicate products; some of the same SKUs would be both in the convenience area, and in the regular shelf set. And consumers who do not realize that they are looking at the convenience set might think that the selection is minimal of certain SKUs, and both the manufacturer and retailer could potentially lose the sale.

This sounds great in theory, but I’m not sure that it is going to work in practice. Remember, consumers told us that they wanted New Coke as well, but then never purchased the product. Sometimes we can’t always believe what consumers say that they want.

Jonathan Marek
13 years 29 days ago

The concept may have merit, but it is far too general. I am glad to hear that Hormel is looking to trial the idea (hopefully in different forms) with various retailers. This is exactly the type of idea where an in-market test is essential in order to bridge the gap between theoretical consumer wants and actual shopping behavior.

Lee Peterson
13 years 29 days ago

Considering the fact that the center store is currently a vast no-man’s land owned by CPG companies, anything interesting there would be a plus.

But why stop with just prepared meals?

Why not cooking tips? Or someone to demonstrate new cooking ideas? Why not ‘foods of the world’ to taste? Celebrity food expert visits? Beverage of the day! These could be sponsored by CPG companies or TV stations. On and on.

Hopefully, prepared foods the first step to re-thinking the center store altogether. Surely, some very forward grocer is already putting these types of ideas together.

Ralph Jacobson
13 years 29 days ago
The Center Store aisles haven’t truly changed in 100+ years. Truly. Some grocers like Foodlion/Bloom have made a strong effort to change that with c-store attributes and curved aisle gondolas, etc. However retailers and manufacturers must start with a clean sheet to have a break though. It is valuable to look outside the US to (Tesco’s UK formats, Japanese Stores, stores in The Nordics) to get some ideas, however we all have inherent prejudice on what we feel a store should look like. We need to look at ourselves as consumers and take all aspects of our food shopping needs and evaluate today’s best ways to address those needs. Convenience sections are only one aspect. Meal groups can be stocked in so many ways. Maybe soup has to have duplicate presences for certain SKUs. Why does center store have to be in the center of the store? There is no rule that it even needs to be in one massive area. Why can we not have canned veg with fresh veg? My wife hates canned… Read more »
Bob Samples
Bob Samples
13 years 10 days ago
Reflecting on the comments from the BrainTrust panelists, I would like to first thank you for your interest in the study and also help clarify a few key points. The information in our published document is meant to provide universal intelligence about shopper behavior and feedback about the center store regarding prepared meal items. However, we have done much more targeted research with individual retailers who have partnered with us to implement these concepts. As you know, aisle assortment varies greatly among retailers due to market conditions, customer segmentation and strategy, so it would have been far too difficult to include all of the information in a short reprise of the study. So Lee’s comment on cooking ideas and demo’s was excellent—and we have built many of those elements into the merchandising plan for each segment in the aisle, but did not include it in our report. In regard to duplication of products, our recommendation is to avoid duplication and instead focus on fewer brands with broader variety around flavor, form and format. This is… Read more »

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