2Bits: Grocery Stores Reducing Shelf Space for Locally Produced…
It is fun to sample food products as we grocery shop. Grocery stores are charging big bucks for this marketing opportunity!
Continuing with our trends to watch this year, grocery store chains are using more in-store and private labels. This reduces shelf space for locally and regionally produced foods. Additionally, suppliers are charged for product sampling and other merchandising tasks, like inventory management.
Why are grocery store chains stocking more of their own brands and charging for in-store product sampling? How does this impact small farmers and manufactures that currently sell their products in these stores?
Grocery stores are all competing for a piece of the $800 billion grocery market. Competitors are aggressive and product margins are lean. New inventory systems that support their online grocery service are costly. Aldi’s launched a new vegan line called Earth Grown, while Amazon added Whole Foods’ private label, 365 Everyday Value, to it’s Fresh delivery options. HyVee gave more shelf space to its’ HyVee store labeled products.
Private and in-store labels help grocery stores control cost and strengthen customer loyalty. This better positions the stores for sustainability and growth.
Why are grocery stores starting to charge for product sampling?
In the past, suppliers, including local and regional farmers and small manufacturers, did in-store product demos for free and managed their own merchandise. Now, grocery store chains have to invest in costly inventory and merchandising systems to support online grocery shopping technology, which is in high demand. Charging for in-store product demos and inventory checks are two ways to pass the costs for these systems to suppliers.
Grocery store shelf space is prime real estate. Available space for locally and regionally produced items is being reduced.
Grocery store customers still want locally and regionally produced food items. However, there may not be enough affordable shelf space for small farmers and manufacturers to showcase their items. Sampling of local products may become too costly of a marketing opportunity for small farmers and manufactures. Grocery stores may require the sampled item be offered for sale at a discounted price. In-store demos can cost around $110 – $165 per hour.
How can consumers help small farmers and manufacturers?
First, look for new ways to connect and buy from small local farmers and manufacturers. Also, civic or faith-based organizations can hold tasting opportunities for their members and invite local farmers and manufacturers to participate. Finally, don’t forget to support your local farmers market.
What can small farmers and manufacturers do?
Farmers and manufacturers may want to try on-site tasting events. These could be as elaborate as a Farm-to-Table dinner or a less-involved seasonal product tasting fun activity. Also, consider new ways to sample products for consumers, and be creative.
We think the best way is to join 2BuyAg’s online community today. Directly connect with the farmers and small food manufacturer’s that provide healthy, innovative food products that provide you with the healthiest food options.