Food consumption is going home.

The latest consumer survey report from Benenson Strategy Group (BSG) nailed the shift we’ve seen emerge recently: Seventy-seven percent of consumers “almost always” prefer a home-cooked meal rather than a restaurant option. According to the survey, twice as many consumers routinely eat home cooked rather than restaurant food.

It’s a significant change to be sure. We’ve watched the annual creep of food service spending for years as home food consumption lost ground. Consumers seemed content to abandon the kitchen in favor of outsourced meals. All those pots and pans sitting in the cabinet gathering dust as people often favored ‘do it for me’ —especially in the growing fast casual sector.

Well, not anymore.

A kitchen renaissance is in full swing as mealtime moves home and consumers increasingly look for food preparation ideas and menus they can do themselves. From scratch cooking to meal kits and supermarket prepared foods, it’s a mélange of everything. From full-on culinary exploration to time-sensitive partial prep solutions featuring fresh, often farm sourced meal kit menus — all are unfolding in the home kitchen.

So what happened?

We call it emergence of The Wholesome Life — an overwhelming desire for control and authorship over higher quality food experiences. At the crux of this change is a realization that consumers care deeply about managing freshness, ingredient decisions and using foods they believe are simple, clean and less processed.

Consumers, by the way, defined clean eating in the study as:

• Free from pesticides – 63%
• Free from added hormones – 49%
• Food that is all natural – 47%
• With no added sugars – 38%

Food Navigator’s coverage of BSG’s study outcomes described this in cultural terms as “a desire to eat fresh, wholesome and ingredients they (consumers) can both pronounce and customize to fit their unique dietary needs.” BSG Partner and survey author Danny Franklin reports a rapid climb in interest for “greater control, greater transparency and a greater perception of authenticity.”

Also at work here: realizing and preserving the emotionally-satisfying experiences of serving loved ones and maintaining (and honoring) family time. Right along side the relationship-burnishing benefits runs the passion for a healthier lifestyle, aided to a great extent by higher quality, real food options now prepared at home.

Home is indeed where the heart (and palate) is…

This shift home offers an extraordinary opportunity for food brands and retailers to build more meaningful and relevant relationships with consumers. Whether the motivation is better-for-you eating, satisfying a creative passion to experiment with new cuisines, or facilitate social experiences with friends and family, brands and retailers can become partners and enablers on this journey by offering useful, helpful guidance on:

• Menus
• Healthier preparations
• Snacking ideas
• Shopping lists
• Cooking techniques
• Kitchen hacks
• Kitchen tool advice
• Flavor enhancements
• Special occasion planning
• Global cuisines
• Food and beverage pairings

There’s virtually an endless array of opportunities to help feed this preference and behavior, and in so doing, brands can earn a place at the table alongside consumers and their passions around food.

Especially exciting, we think, is the chance to build video content that satisfies the need to know more — served with a big helping of emotional impact because food is such a visual feast. You can almost taste it, right?

So, when are you coming over for dinner?­­­­

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Emergent’s guidance on what comes next

The recent Amazon/Whole Foods acquisition has ignited a firestorm of analysis and assessment concerning the impacts and implications. Some of the conversation has reached far and wide – from the future of supermarkets to outcomes for large CPG food brands and foodservice businesses.

Here we help summarize how the food industry changes could manifest, as well as guidance on what comes next.

Implications of the Amazon/Whole Foods acquisition

Grocery leadership is rapidly becoming a two horse race between Walmart and Amazon, creating a new class of retail that blends online and physical store strategies. The ‘new last mile’ competition now moves to address the single biggest barrier to grocery e-commerce growth: fresh/perishable sales. Many consumers lack trust in online platforms to select and safely transport produce and proteins to their standards and freshness expectations.

Change in strategy for supermarket companies

The future of supermarket companies shifts more towards ‘specialty retailer’ strategies focused on improved, curated grocery and perimeter businesses. Higher quality, unique products, local sourcing, improved Deli menus, Grocerant businesses, and heavier investment to in-store experience become the retail differentiator. The goal here is to leverage a physical advantage of tactile, higher quality food and culinary experience. E-commerce will be mission critical – that said, not likely anyone will catch up now to Walmart and Amazon. Costco maybe.

Hard discount takes price leadership, elevates private brand strategy

Entry of Lidl, and Aldi growth investment will put pressure on pricing at all levels. Large cap CPG may take the brunt of this as their core categories continue to see challenges in the face of cultural shifts to preference for new, innovative and higher quality, artisanal brands and fresh versions of packaged items. This could force more M&A activity to satisfy Wall Street and engage balance sheet efforts to reduce operating costs.

Emergence of super-premium private brand investments

Retailers, increasingly on the hunt for innovation and better margin businesses, will up their game by putting more investment in their private brand programs – potentially surpassing legacy CPG brands on quality and uniqueness. Amazon will bring 365 to their Fresh platform. This, in turn, puts more pricing pressure on large CPG.

Implications to casual restaurant chain business

Roughly half of casual dining restaurant chain sales are sourced from family occasions – and families have hastened the declining use of casual dining outlets, moving instead toward at-home meals. Primary reasons for the move back home are health (e.g., quality ingredients), preparation control and cost. The Amazon-Whole Foods combination could make at home/healthy meals easier and less expensive in ways that compete with supermarkets and restaurants. It’s possible that Amazon could become a top-10 restaurant chain (near the $5 billion in system sales of Panera Bread). By creating faster market share gains in perimeter categories, Amazon and Whole Foods will quicken the ongoing center-store rationalization.

Battle is on for hearts and minds of Millennials

Sixty percent of Millennials are Amazon buyers (source: NPD Group). Twenty percent of American consumers bought at least one item from Whole Foods last year, however among Millennials, the number is substantially higher: 24 percent. This is extraordinary penetration for a supermarket chain with just 431 stores. The proposed deal gives Amazon control of those stores – nearly all of them are in neighborhoods that are more affluent and younger than America as a whole.

Emergent’s guidance on what’s next:

1. Unique and differentiated brands are now more vital than ever as competitive leverage for supermarkets. Brands that play to consumer sensibilities around higher quality ingredients, craftsmanship and visibility to creation stories, and mission (Higher Purpose) will be key to retail channel.

2. Deli marketing and merchandising programs become more critical to supermarket growth as center store rationalization picks up pace; a conundrum for food retail as this is traditionally where the profit often sits. Pricing pressures on large cap CPG will likely come from several fronts. More legacy brand declines could be on the way, amping the need for faster innovation.

3. A newly charged renaissance in home cooking will create more opportunities for brand growth as consumers look for ideas and inspiration to fuel their eat-at-home aspirations. Creative programming to leverage this condition is key. Emergent has developed a variety of content creation strategies to leverage this opportunity, which can be repurposed for retailer use on their own social channels.

4. Further erosion of the casual dining segment is likely to continue due to competition from supermarkets and Amazon/Walmart for prepared foods, kits and fresh food solutions for at-home meals. For multi-channel companies this condition might recommend greater investment now in retail channel development and brand marketing investments.

5. The emergence of new brands in center store and perimeter categories will create challenges for retailers. This is due to absence of scaled promotion budgets and higher product input costs contributing to higher prices on lower overall volume businesses. Retailers will need more sophisticated marketing and merchandising solutions to help nurture and grow these higher quality, boutique brands. The same holds true for CPG companies that invest and acquire these new, emerging brands that require a different formula to build scale. Emergent has designed a new Emerging Brand Marketers’ Playbook for this purpose.

6. Consumers are omni-channel shoppers. The move online will accelerate and reach a tipping point in the next two years. Fresh is the battleground. Brands need to be collaborative partners with food retail as e-commerce strategies gain traction and the need to address trust issues with fresh/perishable item shopping is key to growth. Emergent can help optimize omni-channel strategies.

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A Conversation with Founder and CEO Joe Heitzeberg

Do you know where your beef comes from? Do you know what breed it is and how the animal was raised? Do you know the backstory behind the family that owns the ranch? And can you get higher quality steaks and ground beef directly from those ranchers at a price that’s comparable to supermarkets?

Joe Heitzeberg is betting the farm (so to speak) that consumers are ripe for higher quality and more transparent beef products, by purchasing their proteins directly from the rancher through his website and then delivered to your door.

Joe’s company, Crowd Cow, is disintermediating the traditional way beef is purchased with an innovative business model – one that plays deeply to the consumer’s desire to know more about the foods they buy and eat.

We spoke at length about his new approach and how it can potentially change the face of beef sales in America.

What problem are you working to solve at Crowd Cow?

JH: “Crowd Cow is delivering variety and choices consumers don’t normally get at traditional retail. At the conventional supermarket meat counter, you’ll encounter a limited array of cuts and little to no information about breed, how the animals were raised, and what they were fed.

We’re all about transparency – single-origin beef, if you will. So, we answer the question about knowing where your food comes from and sharing the story of the rancher who raised and cared for the animal.”

How is this different than how beef is sold currently?

JH: “The industrial food supply was designed to move large quantities to the retail system as efficiently as possible. Meat packers are concerned about these efficiencies and about cost, more than they care about quality stories. There are four companies supplying nearly 80 percent of the beef sold in America. So, you aren’t going to know where your beef comes from. But consumers have changed and now they want to know everything about the food they eat.

Some companies, for example, are feeding their cows grass pellets so they can claim the cattle are grass fed. This is industrial farming. On the other hand, the small rancher knows their land, treats the animals well, and breeds for quality. We’re tapping into this and bringing it directly to the home kitchen.”

How is this different than visiting a ranch and buying from them?

JH: “Ranchers sell animals, not individual steaks. So, if you buy beef from the farm, most often you’re going to have to buy 550 pounds of meat, which won’t work for most people. And for the rancher, they need to sell all the cuts, or they’re going to go broke. When an animal is ready for harvesting, you need to move it. Selling to a meat packer in the commodity world turns you into a price taker. Working with us enables the rancher to sell all of the cuts at a better price, while the consumer can select the types and amounts they want.”

What enables you to do this?

JH: “The Internet has changed everything. From wherever you live, you can engage with Crowd Cow and watch video or read stories about the rancher and how they raise their cattle and how those animals are treated.

You can point and click on the types of cuts you want and purchase the quantity you’re interested in. We invite consumers to become “steakholders,” so to speak, and we sell portions of a cow until it’s completely gone. We don’t charge anyone until the entire animal is purchased.

We can do this at prices comparable to food retail because we cut out the middlemen. So, you’re getting a higher quality product with transparency about the source at an affordable price.”

What are the challenges to scaling your business?

JH: “Right now we are national and can ship anywhere. Our single biggest challenge is creating a nationwide network of farms that meet our standards for animal welfare and a commitment to quality in how the animals are fed and cared for.

We have ranches involved now on both sides of the nation, and all of our beef is domestic. But we also want to provide unique and special experiences so we’re going to Japan where the highest quality Wagyu beef is raised. There’s a natural marbling unique to that breed you can’t get anywhere else. And, we want to bring it to our customers.”

How do you address food safety concerns?

JH: “We use 100 percent USDA procedures throughout our process. Every single piece of beef we handle will have been touched by USDA inspector presence. And that presence is way higher than in a traditional plant where hundreds of animals are slaughtered every hour. Many of our inspectors are veterans. They’ve done the big plant assignment earlier in their career and prefer now to be working with real people who care about what they’re doing.”

Why do you think you’ll succeed?

JH: “Quality, convenience, choice and transparency. It’s just easy to go online and click to buy. Our goal is not to be a special-occasion option, but an everyday protein purchase. The economics are there for competitive price, better quality and the opportunity to explore the variety of producers and types. It’s not a niche thing.

We are de-commoditizing beef. Key to this and our growth is education. And the Internet enables a rich, multimedia experience with photos and video. You may not know what a Murray Grey breed is, but we can tell you that story. People love to explore.

There’s discovery involved in sampling beef from different ranches – how they raise the beef has an impact on flavor profiles and taste experiences. We provide explanations about the cuts, recipes and preparation guidance, so you have help from us too.”

In sum…

Joe thinks other adjacent businesses may be ripe for this model including seafood, bison, pork and turkey. For now, he’s a beef missionary: “This is fun and exciting because we’re the first to do this. And we’re introducing consumers to a variety of breeds and flavors that may be new to them.”

Collapsing the distance between producer and home kitchen is at work in his model as small becomes the new big; and unique and special overtakes standardized and consistent. To the extent consumers care about meaningful differences, disintermediation could occur in other categories where higher quality, skill, craftsmanship and story matter.

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When we started Emergent, it was based on an overwhelming body of research and evidence that food & beverage industries are in a state of transition – and in need of new, fresh, refined and more relevant business-building solutions.

Of all the conditions impacting change, from the demand for transparency and clean labels to fresh foods – healthier lifestyle is the dominant driver of the consumer desire for improvement in food and beverages.

Evolution makes healthy all-inclusive

In the past, ‘healthier’ was an addition-by-subtraction model based on removing “bad” things – like sugar, calories and fat: so-called diet foods. Quite often, taste and eating satisfaction were also eliminated. This approach was bound to be problematic because it existed in conflict with the human inclination for indulgent food experiences. Guilt only goes so far.

As the concept of healthy started to shift, due to pervasive changes in U.S. food culture, the proposition started to look more like addition by addition. Healthy was about real, fresh, authentic, higher quality, less processed foods – more so than food science wizardry. The definition of healthy became more inclusive, broader and lifestyle-oriented.

In a manner of speaking, the concept of healthy morphed to become more three-dimensional. People decided they want higher quality foods, beverages and lifestyle products to go along with their overwhelming desire for a higher quality life. The key insight: consumers came to understand that the quality of what they put in their bodies and what they do are connected directly to their happiness and wellness.

In sum, we’ve encountered the premiumization of everything.

When we first formed Emergent, we believed our agency – devoted to mining this insight and bringing fresh thinking to the table – should become the leading voice and guide in this period of change.

Clients have come to Emergent seeking expertise to navigate these seismic changes. Some examples from our case studies page:

• Transforming Jamba Juice from a smoothie shop to a healthy lifestyle brand
• Helping Schuman Cheese expose food fraud in the hard Italian cheese category through True Cheese
• Leading local grocery chain, Potash, in its transformation to fulfill consumers’ new healthy and culinary preferences

Food & beverage brands are feeling the impact today

Large cap CPGs have been losing ground for years. We know that new, emerging, purposeful brands are gaining traction and attention in kitchens across America – and so now we witness the next wave – a true food renaissance taking place around us.

1. People are coming back to the kitchen, looking to exercise their creativity and control over preparations and quality of ingredients.

2. We’ve entered a period where transparency, health and wellness, safety and authenticity drive purchases more so than the food marketing stalwarts of taste, price and convenience.

3. We know the founder backstory and commitment to a real mission beyond the product itself is a critical component of the new brand marketing playbook. We’ve developed a new proprietary planning model that reflects this understanding – one that demands fresh thinking of how brand relationships are formed and thus how communications should be created.

Over the last five years, our clients have recognized that we at Emergent…

Are experts in this space; our services are aligned with answering these changes.

Help legacy brands re-stage and new brands accelerate. We understand the consumer and how they think, how they behave and how they consume information.

Create traction in a changing retail environment and are on point with where the world around us is headed.

Emergent has predicted changes in the food culture landscape over the years. These changes are now driving the new realities companies are facing as they reassess their growth strategies.

Contact Emergent to learn more about leveraging these food culture trends to your advantage.

Editor’s Note: I would be remiss in this anniversary message to not share my thanks and deep appreciation to those who have made contributions on our path. Thank you to our clients, my top-notch leadership team, our staff and specialty teams, and friends of Emergent. Here’s to many more! – BW

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Showing is more important than telling

Marketing expert Bernadette Jiwa recently wrote: “Harley Davidson’s most powerful marketing isn’t the details about engine size, speed or low-end torque that’s written in the brochure — it’s the stories riders tell about the feeling they get when they ride one. And often your most effective marketing may not even be done by you.”

Most efforts in food marketing will begin with telling consumers about facts and features that go into the product: its recipe, nutritionals, superior ingredients, preparation steps and taste claims. But the days of assertion marketing are at a close, as consumers move away from anything that looks like self-promotion and overt selling.

Food is experiential and cultural

Food – its preparation and enjoyment – is a social, cultural phenomenon and symbolic statement of what people would like the world to believe about them. People have connected the quality of what they put in their bodies TO the quality of their lives. Equally, they’ve discovered the benefits of flavor and experience achieved through improved cooking, preparation techniques, and the quality of the fresh ingredients they use.

The paradigm for successful food product marketing can be summed up in three equally important pillars:

• Sharing = forging communities
• Showing = inspiration
• Guiding = education

In terms of effectiveness and impact, consumers’ experiences, reviews and testimonials are most compelling. It is their assessment and comments that drive belief and trust.

Community development and activation cannot be underestimated as a fundamental strategic component of the food brand marketing plan. It is mission critical to create the forums and opportunities for consumers to provide their testimonials and feedback. It is their words that fuel and validate what marketers want the world to believe.

Thus, user-generated content (UGC) is paramount. It’s important to enable and encourage consumers to share photos and videos of how they use and enjoy your brand. Make it easy to upload; create incentives to do so.

What’s the marketers’ role?

You already know we live in a content marketing world. So, the kind of content you create is key to creating the levels of engagement you expect for the funds you invest.

Guiding, coaching and teaching should be the driving force behind your content marketing plan. This is what it will look like:

• Instructional and educational video on creative ways to use your product
• Content that answers questions
• Content that inspires creativity
• Content that celebrates home cooks, food enthusiasts and their stories

This kind of marketing puts the brand in league with the consumer as a partner and facilitator of their lifestyle passions. Nothing you do will outshine the benefits of acting as tour guide to a healthy lifestyle, and showcasing the culinary ideas that make food experiences transformative and memorable.

Talking “at” consumers will not be more impactful and powerful than the sharing of their own experiences and your efforts to showcase uses and ideas relevant to their interests and culinary goals.

In sum, put the consumer at the center of your go-to-market strategies and work backwards from there!

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Re-making the food and beverage business landscape

The single most important and disruptive change in food culture, now winding its way through virtually every part of the industry, is the overwhelming desire for fresh foods.

Call it the quest for all-things real. Fresh is defined as unprocessed, simple ingredients and often refrigerated. Fresh also conveys to consumers higher perceived quality, better taste and healthier. And so the packaged food world finds itself facing a state of transition as fresh versions overtake and replace their processed cousins.

A.T. Kearney/Hartman Group study “Is Big Food in Trouble?” tracks growth of fresh trend as the dominant shift in consumer preference.

Why are meal kit solutions taking off so rapidly? Because they fit with fresh – offering real food ingredients already portioned and curated for menu creation. The meal kit is a form of convenience and taste adventure that connects to the consumer’s desire for experimentation. Thus, meal kits sit squarely on cultural relevance driving the fresher, higher-quality ingredients business.

Fresh fuels grocerants and more interesting prepared foods

The emerging fast casual restaurant sector is symptomatic of the fresh revolution and move beyond fast, cheap and common foods that have dominated the QSR category for decades. Fast casual’s emphasis on open production, customizable, made-to-order foods using fresh ingredients is relevant and in sync with consumers’ interests for higher-quality, healthier food experiences.

Grocerant strategies: all of this should instigate change at food retail to elevate Deli menus, think creatively about prepared foods sold for take-out, and improve in-store dining experiences.

Fresh food implications for retailers –

1. Investment in culinary-trained commissary staff and fine dining experienced chefs in leadership positions (Chief Culinary Officer).

2. Open kitchens and preparation spaces to show ingredients and allow for customizing menu items.

3. Reworking Deli menus to add more creative, global influences to prepared food options, beyond the comfort staples like meatloaf and rotisserie chicken.

4. Creating improved in-store signage and merchandising that will alert shoppers to fresh, in-season, locally sourced products.

5. Building content and storytelling around locally-sourced ingredients, farmer profiles, as well as tangible investments in local agriculture.

6. Cooking classes to inspire improvements in culinary skills and adoption of chef techniques for the home kitchen.

7. Better designs and environment for dine-in spaces inside food retail.

E-commerce traction and influence on fresh

There are those who simply love and enjoy food shopping – call it a sort of culinary catharsis – and want to visually experience the fresh options arrayed in front of them. Shopping at the store is, for some people, a type of food religion observed with regularity. For others, convenience must address the demands of busy lifestyle where online ordering is a valued (even required) option.

Mobile-based ordering platforms – in web and app form – are not peripheral but rather integral to the food retail eco-system. We believe e-commerce will be a factor in fresh product sales. Increasingly, consumers are getting used to the process as orders continue to meet and exceed their quality and freshness expectations.

Where the e-commerce play becomes a real exciting opportunity is when local sourcing can be woven together with digital ordering and delivery – such that time between farm and dinner table is shortened considerably.

As digital sophistication increases, another game changer would be the ability to solve and resolve last-minute ingredient or recipe needs (where rapid ordering and delivery is required).

Fresh and healthier

There is no other consideration more relevant, important and powerful than the groundswell towards healthier lifestyle. While healthy food was at one time attached to diet products, the meaning has changed considerably.

Foods made from simple and less-processed ingredients continue to gain traction, while better-for-you snacks are encroaching on more indulgent rivals.

Insight: we are moving from a production-fueled system to a demand-driven system, founded on the consumer’s interest in real foods and a parallel desire to know more about ingredients, sourcing, transparency, and sustainability.

For strategic planning purposes, food retail and food brands should look hard at the following consumer cues for guidance to what matters on the demand side:

• Fresh, real
• Health
• Higher quality
• Discovery and experimentation
• Kitchen creativity
• Indulgent reward

How brands and retailers respond now will have great bearing on their relevance and success later on.

Emergent’s strategic planning capabilities are designed around this agenda: marry insight to optimizing growth strategies and translating this work to more effective communication.

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