Contactless shopping and the elimination of free samples. Less browsing and “product discovery” and more focus on the expedience of repurchasing.
These are ways the novel coronavirus has changed how Americans buy groceries.
The pandemic has altered what products people purchase, when and where, and who is buying them as well as how much time is devoted to the endeavor.
Americans are spending more, yet increasingly they are being offered fewer choices, both online and in person, slowing a years-long trend toward innovations that put “good for you” and “environmentally friendly” spins on established and much-loved products.
The winnowing — what one expert calls a “Sovietish” reduction of choice — also is solidifying eating patterns, for good or for ill.
With customers’ selections reinforced by online advertising, repeat ordering and other algorithms, the food system is becoming bifurcated as consumers who have expressed enthusiasm for healthful or artisanal foods are offered more of the same, while those with a penchant for highly processed comfort foods are inundated with opportunities to restock.
It’s no different in Eastern Iowa.
“In March when a lot of the downtown restaurants initially had to close, we saw a spike in grocery and produce buying for sure because everyone had to make their own food,” said Danan Block, grocery manager at Bread Garden Market in Iowa City.
“And there was definitely panic buying, in that people were buying up all the toilet paper and non-perishable foods. Our paper good aisle and can aisle were looking pretty barren in those few weeks after, for supply chains were having a hard time keeping up with the new demand for those products.”
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Block said Bread Garden Market has had to bring in different brands and products in general because supply chains still are not caught up in some cases.
After the initial pandemic rush, Block said the store saw a noticeable slow down as students and staff headed home to self-isolate.
“We did start offering online shopping as soon as we could and it has definitely been popular,” Block said. “And I also think we have some customers who like to shop here because it is not as busy as some of the big-box stores so they social-distance better.”
She added that, “You can tell people are cooking at home more from the amount of baking, spices, produce and products of that sort are selling. You will see the traditional name brands of a lot of these items are sold out because the demand is so high, so we’ll bring in whatever brand we can get.”
Block noted that some brands have started doing things they were not doing before, such as creating hand sanitizers.
At Bread Garden Market, buyers have not yet had to put purchasing limits on any items.
“This (pandemic) has definitely brought a lot of challenges, but we implemented our new online grocery service which has gone over well,” said Block, noting that local businesses need support now more than ever. “It’s just been a good opportunity for us to kind of start fresh again and really analyze everything that we do and why.”
“The largest shift we have seen since March has been the increase in online orders and curbside pickup,” said Amy Hospodarsky, brand manager for New Pioneer Food Cooperative, which has venues in Cedar Rapids, Iowa City and Coralville.
She added it launched its online shopping platform, Co-op Cart, in October 2019.
“At the beginning of March, we were fulfilling a handful of orders a day, and by mid-march that number had increased to over 100 per day,” she said.
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“We also work with a large number of local farmers and producers, and so, while farmers’ markets were limited, we were able to fill a much needed gap for them by offering their products for curbside pickup,” Hospodarsky said.
At the beginning of summer, New Pioneer also debuted a virtual market to encourage the community to connect with local farmers and producers and order their products through Co-op Cart.
Hospodarsky said New Pioneer stores haven’t made major shifts in what products they offer.
“We have focused on promoting our local product offerings as there are more limited places to get those items with farmers markets being limited,” she said.
“At the start of the COVID-19 pandemic we, like other retailers, saw customers’ increased demand for some of the more in-demand items like paper products, water, cleaning supplies, hand soap and hand sanitizer,” said Christina Gayman, public relations director for West Des Moines-based Hy-Vee.
“However, over the past couple months we have seen much of that return to more typical purchasing cadences.”
Demand for Hy-Vee Aisles Online services — a program Hy-Vee rolled out in 2015 — including pickup and delivery, has quadrupled, she added.
“We have innovated in ways that can make our customers’ lives even more convenient, including the launch of our Mealtime to Go website where customers can place orders for a variety of meal options that can be picked up curbside,” Gayman said.
Hy-Vee also now offers curbside and ship-to-home options to receive prescriptions from Hy-Vee pharmacies in addition to existing drive-through and home delivery options. It also now has drive-up flu shots at its Hy-Vee pharmacy locations.
Shifts in what is available in the aisles or online are subtle, Corridor retailers said.
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“Hy-Vee continues to offer the same great selection of products throughout all of our departments that we always have, but the main differences customers may notice are new or different brands of some items or sizes and quantities of items that they may not what they traditionally are used to seeing,” Gayman said.
“With more customers being and cooking at home, we have seen increased demand in several categories,” said Emily Toribio, corporate 0utreach and communications manager at Fareway Stores.
She, too, noted paper products, non-perishables, and protein all saw spikes in demand.
“Customers have also changed habits — shopping less frequently and purchasing more per trip. Fareway has worked hard with our great supplier partners to keep shelves stocked throughout the pandemic and to meet customers’ needs.
“... We have not experienced dramatic shortages and we have been able to respond quickly and efficiently.”
Toribio said the chain, headquartered in Boone, has tried to be agile in establishing relationships with new suppliers.
“This has allowed us to continue to offer an expanded variety of products, which we may begin to carry more regularly moving forward,” she said.
While Fareway does not yet have full-store online shopping — Toribio said it will have more to say about that in coming months — the grocer does offer an online meat market, FarewayMeatMarket.com, which ships direct in the lower 48 states.
Dariush Mozaffarian, a cardiologist and dean of Tufts University’s nutrition science school, said the pandemic has heightened disparities in shopping patterns and health between high- and low-income Americans.
“There are two different reactions to COVID — a small number who are getting health conscious and reacquainting themselves with real food, and a larger group that is going with comfort food that is cheap and shelf-stable,” he said.
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The great eating divide is an unexpected result of changes set in motion by the shutdown of restaurants and the retreat to home kitchens, which have led consumers to spend significantly more money on groceries than they did last year.
The monthly grocery bill for the average American household spiked to $525 in March — up 30 percent over March 2019 — according to census data, as dollars pivoted from restaurant meals to home and people snapped up items in bulk.
By July it had settled to about $455 a month, still up 10 percent over the same month last year.
Based on research conducted for the food industry trade group FMI by an analytics firm, FMI Senior Vice President Mark Baum said many consumers are increasing the amount of money spent per trip and simultaneously decreasing the amount of time spent in the store.
Shoppers are more likely to have a list of critical tried-and-true items and are less inclined to browse and let serendipity guide them to something new.
He said more men are claiming to be the primary shopper during the pandemic, and “they do buy different things and buy differently.”
Men, Baum said, tend to favor efficiency — shopping club stores for bulk purchases, convenience stores and online. They report making fewer, larger, quicker trips for a narrower range of items.
Grocery stores, marking these behavioral changes, have chosen to focus more on restocking their top-selling 1,000 items — items such as pasta, Tide and Oreos.
Frito-Lay said that, when shutdown and stay-at-home orders started going into effect in March, it cut its number of unique bar codes — stock-keeping units, or SKUs — to get more products into the market faster.
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“We reduced about 21 percent of our SKUs to deliver the volume of our most in-demand products, ensuring availability everywhere for consumers,” said Mike Del Pozzo, senior vice president of sales for Frito-Lay North America.
The company later restored most of its paused product bar codes, but not all.
The decrease in new offerings marks a historic change in American manufacturing patterns, after an explosive expansion in the number of grocery items in the decades after World War II.
Michael Ruhlman, in his book “Grocery,” writes that the number of items offered in U.S. supermarkets went from 9,000 in 1975 to a staggering 40,000 to 50,000 by the beginning of 2020.
The pandemic not only has halted that growth, it’s reversed it.
Food manufacturers are focused on producing more of the top-selling varieties of a particular product, pushing off the launch of different flavors or spinoffs until sample stations can return.
Giants such as General Mills, which has facilities in Cedar Rapids, as well as ConAgra, Kellogg’s and Campbell’s — seeing a rise in sales of their dominant brands — are making more of those at the expense of new products.
Meanwhile, budget-minded shoppers have embraced more-affordable private-label store brands, squeezing out shelf space for independent and rookie brands.
The contractions are most visible in the beverage aisle, specifically in a reduction in the array of sugar-sweetened and sugar-free sodas on the shelves, according to Signals Analytics chief marketing officer Frances Zelazny.
On-the-go snacks like granola bars also are being squeezed out as working from home is normalized.
And while Americans’ enthusiasm for sustainability has waned, reducing sales of items such as personal-hygiene products or cooking oils that make environmental claims, interest in products touting immune-health benefits such as probiotic yogurts and garlicky foods has increased, Zelazny said.
This “narrower range” is not just a brick-and-mortar constriction. As the pandemic accelerates the shift to online shopping, the number of packaged food products available to purchase on the internet fell 21 percent globally from January to May, according to Euromonitor International, a London-based market research company.
It found nine out of the 10 biggest countries by retail sales saw a drop in the number of unique SKUs available online.
The uptick in online shopping is expected to further reduce choices.
“Four years ago, online shopping was embryonic,” Baum said. “We projected then there would be $100 billion in online sales by 2025, and we’ve revised it twice since then.
“In January we revised the number to $143 billion, and that was pre-COVID, so obviously we will have to revise that projection again.”
Max Pedro, co-founder of Takeoff Technologies, which develops hyperlocal robot automation for grocers, said online shopping may “stifle innovation,” with boxed, canned and other shelf-stable items, typically stocked in the center aisles of grocery stores, narrowed to fewer choices — or even disappearing as they move from stores to e-commerce.
“The boring center aisles may go virtual so that the more exciting fruits, vegetables, meat and seafoods will be in person,” he predicted. “No one gets excited about roaming the supermarket for paper towels.”
Baum said the purchasing of some items — coffee, water, pet food — will pivot to auto-replenishment or online subscriptions, and that there has been “a tremendous slowdown of new product introductions” in stores.
“Esoteric things,” niche items for which retailers might have a hard time justifying shelf space, can have a much more avid audience online, said Daniel Lubetzky, founder of snack company Kind.
Franklin Isaacson, founding partner of Coefficient Capital, a consumer package goods venture capital firm, likens online shopping to spearfishing, while in-store shopping is more akin to net fishing.
“If you go stand in the salty-snack aisle of Kroger, there is probably a sampling station. You pick up a bag, read the nutritional panel,” he said. “Whereas on Amazon, you’re typing in ‘Heinz ketchup.’ You’re not going to discover Sir Kensington.
“People that buy groceries online tend to buy the brands that they know, the brands that have highest unprompted awareness. Seventy-five percent of repeat online shoppers start shopping in their previous basket, so if you’re a new brand it’s hard.”
In other words, new products and start-up food businesses may be in trouble. And with many trial-balloon opportunities nixed during the pandemic — trade shows such as the Fancy Food Show or the Natural Products Expo West have been canceled, along with sports and music events — there are fewer forums for debuting a product and persuading retailers to buy in.
That risks scuttling the trend over the past decade of better-for-you products in almost every food category, Isaacson said.
“It would have been a perfectly viable business idea to pick an aisle and do an ‘organic’ or ‘natural’ or ‘sustainable’ version of anything,” he said. “That was companies’ investment theory: Find the natural alternative.”
What consumers buy has always been manipulated by food brands via trade promotions — things like coupons and buy-one get-one, or BOGO, offers — as well as “slotting fees” that a manufacturer pays a supermarket to get its products on the shelves. Category leaders often hold sway over where everything is placed in a grocery aisle, helping to draft the “planogram,” or store map.
Online purchasing is no different.
“Platforms like Instacart are now allowing you to advertise,” Isaacson said. “If you type in ‘steak,’ a chimichurri sauce comes up. Most brands pay anywhere between 5 and 20 percent for trade spends like BOGOs and discounts, and online retailers want that money as well. It’s being at the top of the search, or a banner ad.”
And in the same way Netflix uses algorithms to determine a person’s taste in movies, in a digital economy it’s much easier to track consumers’ predilections based on past behavior, Pedro said.
While in-person grocery shopping, especially cash transactions, is largely anonymous, online retailers can “for the first time track what people are really into. The more attuned to what that shopper needs, the better retailer you’re going to be,” Pedro said.
“Last century that was paying for the end cap. Now, it’s who does it show first, and it’s even worse on a phone where you can see just a handful of products. It does perpetuate existing habits, for the good or bad,” he said.
If purchasing habits are healthful and wholesome, a consumer will be targeted with products that fit that pattern.
If purchases lean in the other direction, so will targeted marketing. And that could have dire consequences for low-income Americans who already suffer disproportionately from lifestyle-related diseases linked to poor diet.
Lower-income people always have had disproportionate access to junk food and frequently are bombarded with ads for inexpensive, ultra-processed and fast foods, said Nancy Roman, president of the Partnership for a Healthier America.
A 2016 U.S. Department of Agriculture study found that recipients of federal SNAP benefits, commonly known as food stamps, spend a higher percentage of their total grocery dollars on sweetened beverages, packaged desserts, salty snacks and prepared foods, and a lower percentage on fresh fruits and vegetables, than other Americans do.
SNAP is one pandemic-era driver of online sales, with as many as 7 million Americans newly signing up for benefits and the U.S. Department of Agriculture expanding a pilot program for online shopping through SNAP debit cards to 44 states and District of Columbia. Pandemic EBT, a similar online-purchasing debit card program for students who would have received free and reduced-price school meals, has been approved for 50 states, District and the U.S. Virgin Islands.
For families who qualify for both, benefits are housed on the same card.
Roman said while it’s a good thing that people can use SNAP benefits online, “when you mix digital marketing with digital access, you get an intensification of everyone being ‘optimized,’ which reinforces and accelerates the trend that was already underway.”
For Jeff Chester, executive director of the Center for Digital Democracy, artificial intelligence and machine learning, operating seamlessly and efficiently, represent a surrender of power to food manufacturers that increasingly are adept at manipulating consumers.
“They know what you want before you even know,” he said.
“A system is being unleashed to take advantage of those who have fewer choices. Lower-income neighborhoods are already targeted, and with e-commerce they will receive a flood of unhealthy products,” Chester said.
“No one is looking behind the digital curtain to see how it affects those most at risk.”
The Washington Post contributed to this report.
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