According to Supermarket News, the mainstreaming of health and wellness products has helped retailers gain in food industry profits.
Scott Mushkin, an analyst at Wolfe Research in New York, published these findings in a report based on a survey of American women. The reports shows the trend toward “pure foods” is growing with more demand for products that skimp on the processing and are found closer to home.
Retailers have responded to this need, netting them a greater share of the food industry profits.
“Indeed, the 20th century branded food industrial complex is decaying, and this, in our opinion, is having major implications on the food-at-home industry. Iconic food brands, the mainstay of the American diet, are being associated with negative attributes such as high fat/sugar content. This is not only tarnishing the brands, but also swinging the profit pendulum toward better retailers,” Mushkin said in the report.
Smart retailers, Mushkin added, are offering more enhanced produce, natural and organic private label items and more local goods.
“This trend places more of the value-added aspects of the food-at-home experience with the retailer than on the brand of a manufacturer,” he pointed out. “This suggests to us that better retailers may command more of the economic profits of the food-at-home channel than they have traditionally.” Mushkin notes that Kroger, H-E-B and Wegmans stand to benefit the most in the report.
