The advent of online shopping has  upended many supply chains. Consumers can now download music directly from a musician’s website instead of going to a traditional retailer. Experts are predicting the same market transformation could take place in the book publishing industry. Instead of perusing books in the aisles of a brick and mortar store, consumers can download e-books from author sites directly to digital readers.  Where do these changes leave the CPG industry? Will the middlemen be cut out?

Up to 40% of CPG manufacturers have seen a reduction in the amount of branded label product facings on retailer shelves because of consumer preference for private label since the recession started . CPG analysts say “as retailers increase their focus on private brand growth, we believe a ‘SKU fight’ is brewing.”  While manufacturers say they’ve had a sales benefit from consumers who are purchasing more food to cook at home, they’re feeling squeezed when it comes to sales of higher-profit branded products.

To compensate for these problems, a significant percentage of manufacturers are considering selling direct to consumer.  Here’s what manufacturers say about their plans to sell direct:

• No current plans 47%
• Yes, currently sell through Web site 28%
• Yes, currently sell through third-party online sites 11%
• Plan to initiate in 2010 8%

Analysts say it’s inevitable that direct-to-consumer  path is here to stay and will grow over the next few years. As this sales channel strengthens, the nature of the advertising and promotion agreements between CPG manufacturers and their retail partners is certain to change. Look for manufacturers to increase their DTC marketing and to forge personal relationships with consumers as they seek to boost their brands.

[Source: 2010 Sales and Marketing Report. Consumer Goods Technology. 2010. Web. 30 Jun. 2010]

There’s nothing like the latest obesity reports to make consumers pay fresh attention to what they’re eating. This week’s release by the Robert Wood Johnson Foundation shows that obesity has increased in over half of U.S. states. And for now, 38 states have obesity rates that exceed 25% of the population.

Reports like this along with the documented and expensive health ills associated with obesity have spurred new legislation that requires chain restaurants, those with 20+ locations, to give consumers the bad news. This means that calorie counts will show up on menus and even on the menu boards presented at drive-thru stations.  As much as consumers say they want to lose weight, they have strong opinions about food choices when they’re dining out. According to Mintel, here’s the picture:

• Diners want food that tastes great 60%
• Diners want to eat a healthy meal 23%

Here are the strategies consumers are using in their attempts to eat healthier at restaurants:

• Order lower-fat options 67%
• Eat more fruits/vegetables 52%
• Order less food 49%

Eric Giandelone, director of foodservice research at Mintel, says restaurants worry that healthy meals won’t sell. But he adds that once consumers get a look at the current calorie load in their favorite dish, restaurants “may have to start listing lower-calorie options or smaller portion sizes to help diffuse this unpleasant surprise.”  Since 60% of consumers want to know what’s in the food they’re eating, restaurants could benefit by developing and promoting healthier menu offerings now.

[Source: F as in Fat: How Obesity Threatens America’s Future 2010. Robert Wood Johnson Foundation. 29 Jun. 2010. Web. 1 Jul. 2010; Menu Transparency Takes Effect and Consumers Eat it up, Reports Mintel. Mintel. 16 Jun. 2010. Web. 1 Jul. 2010]

Ad-ology Research recently updated their Industry Marketing Insights report for Ice Cream Shops. The following are the predicted Top 3 Opportunities/Challenges from the report for this industry for the upcoming 12 months:

• Operators are reporting a resurgence of interest in frozen yogurt as consumers perceive these options to be healthier.
• More ice cream shops are co-branding their offerings with other food types such as donuts or sandwiches. In doing so, they can make better use of ad money, appeal to a broader cross-section of consumers, and smooth out revenue streams during the year.
• Despite the continued seasonality of ice cream sales, heavily weighted in the months between April and August, frozen dessert sales are seeing better performance during the entire calendar year.

The Industry Marketing Insights report for Ice Cream Shops is available on Ad-ology.com (Research Store) for $195 USD with local market data for any U.S. market.

[Source: Ad-ology Research. June 25, 2010]

The restaurant industry continues to struggle with slow sales. Technomic recently reported that the family-style segment holds a sweet spot to counter sour consumer attitudes about the current economic conditions. Is there anything fine dining operators can do to improve their position?

A new survey from Restaurant Rx reveals clues about what consumers are looking for and how fine dining operators can position themselves for success.  For example, while some consumers may be flocking to chain restaurants for quick-serve or fast-casual meals, they have a different attitude about fine dining. Nearly all surveyed consumers, 81%, want to eat at a  “one-of-a-kind establishment” when they are paying for a fine dining experience. And operators can forget about steak and potatoes as a growth area. Only 11% of consumers put themselves in that category.

Here are a few details about what consumers are seeking:

• “Simply prepared foods service in a casual atmosphere 63%”
• “New dishes and exotic cuisines 61%”
• High quality food and service – These factors ranked over 90%

About 88% of surveyed consumers said they would visit their favorite ‘upscale’ restaurant sometime in the next 3 months. Operators can increase their chances of growing their business by making sure to emphasize their unique offerings in marketing campaigns.
[Sources: Technomic sees upside for family-style restaurants as consumers remain budget-conscious. Technomic. 14 Jun. 2010. Web. 23 Jun. 2010; Restaurant RX Releases New Survey “2010’s Changing Face of America’s Fine Diners”. RestaurantRX. 21 Jun. 2010. Web. 25 Jun. 2010]