Jesse Newman’s Post

As a food manufacturer, I know many of our costs have risen, and obviously we can't stay in business if we operate at a loss. As a consumer, I feel the pinch also at the store. I sense that some companies have taken the opportunity to jack prices way higher than necessary, and then to offer substantial discounts initially, gradually decreasing those deal values, to ease consumers into accepting higher prices and higher profits. I particularly look at the very large food manufacturers that have the buying power to force price increases at retail while also squeezing discounts out of all of their suppliers. #entrepreneur #entrepreneurship #sustainability #womenentrepreneurs #missiondriven #startups 

"Consumers’ food bills continue to climb. U.S. supermarket prices were up 2.4% in September from a year prior, the Labor Department said earlier this month, while restaurant prices climbed 6%." Will big #cpgs drop their #pricing? No, not with #inflation continuing to impact costs across most of the food supply chain. But they will send truckloads of promotional dollars to #grocery retailers to provide weary shoppers with temporary discounts and sales. "In grocery stores, the portion of food sold on promotion has reached a level not seen since 2019, according to research firm NielsenIQ, but shoppers are still paying more than one-third more than they did then." Some tips for Consumers: 1. Shop at multiple retailers. 2. Look for sales and use loyalty cards and coupons. 3. Stock up when you see a great sale - many foods have a long enough shelf life for you to use them before they expire.

“I almost had a heart attack the other day when I saw a box of cereal for $8.99. I was like 'Does that come with a gallon of milk too?'" #Supermarkets and #restaurants are starting to see some pullback among US #consumers -- per AC Nielsen, unit sales are down 2% YoY -- as 2+ years of high inflation are taking their toll. The response? Deals. #Grocers, #CPGs, and #restaurants are all enticing customers with discounts, which largely went away as #covid disrupted global #food supply chains. In this game of chicken, consumers generally win as #retailers and #brands prioritize #sales over #margins. https://lnkd.in/egWvbQsK

🚦  How Is Discounting Impacting Your Brand Loyalty? Food prices rose in last 2 years due to record inflation and supply shortages But there’s also talk of “Greed-flation” where brands raised prices opportunistically. WSJ shows food sales are now down and brands resorting to more promotions. For long term success in both sales and brand loyalty, CPG leaders need to address critical questions. 🔍 The Data: →  Year-over-year, total U.S. food sales by unit have dropped by 2% →  33% of all food units are now from promotions, back to 2019 levels (36%) →  But shoppers are paying over one-third more $ on promotions vs 2019 →  Restaurants with deals have regained visits, but diners are paying ~40% more →  Stock prices for S&P 500 Packaged Foods & Meats have taken a -19% hit. (sources: Nielsen IQ, Circana, + others) 🤔 Critical Questions To Review: 1.     Profit vs. Volume vs. CLV: ►    Are deep discounts a sustainable or profitable way to boost sales? ►    What do analytics say on profit/volume impact of reducing your prices? ►    Is a myopic focus on short-term sales metrics compromising long-term drivers like customer lifetime value (CLV) and brand loyalty? 2.     Brand Value vs. Quick Sales: ►    How are persistent promotions impacting your perceived brand equity? ►    Do promotions risk downgrading your potentially loyal, profitable buyers? 3.     Consumer Behavior: ►    Many CPG execs say “consumers will get used to higher prices” – how true is that for your brand? ►    Consumers are cutting corners due to high prices – what’s your target’s behavior? ►    How should your portfolio’s pricing strategies be adjusted? (what’s your price piano?) ✨ Remember, sustainable growth isn't just in the immediate sales numbers. It's in the depth of the connection your brand builds with its consumers. What Are Your Thoughts and Plans?   www.khatanalytics.com   #consumerbehavior #marketing #brand #sales #khatanalytics

While it is always a good time talking acceleration of trends, talking acceleration of price points is...less so. "The smallest available lattes at chain brands with over 250 locations cost a median of $6.82 in the fourth quarter of 2023, according to food and beverage analytics company Datassential. That’s a 110% jump from the $3.25 they cost in 2019. " https://lnkd.in/gTav4uiA This median is driven by one chain (no it is not Starbucks, no I will not say who it is), but there is no denying prices went up. Some of this is how we've changed since 2019, and some of it is other nuances. This is the smallest MENUED item and sometimes chains remove small items for menu board space. Additionally our reference point may be a fast food machine latte, but we are just as likely to try the new Lavender Oat Milk Latte (I tried the new one from Starbucks yesterday, the BEST lavender latte I've ever had and...I've had A LOT). Flavoring ups the price, I'm likely to level up to that medium now that I realize it is only $0.xx more for usually four ounces more, I probably use an alternative milk now sometimes, all factors that mean my latte costs more. Beyond that the price point has hardly shifted at independents, if you want a deal without downloading an app support your local cafe, full stop. If you still want your chain specific offering and at a lower price point download some apps, show your loyalty, and at least in my experience the chains will reward you.

One thing to watch for is how #inflation may begin to sway #consumers to switch brands or make purchases in less frequent intervals. The pace of #inflation has slowed to 3.2% from its recent peak in June 2022, according to the U.S. Department of Labor. But prices are still rising, just at a slower rate. It's still amazing to see how everyday items we purchase are so much more expensive now than what they used to be. For example, a Starbucks order, a vanilla bean Frappuccino with caramel, is up to nearly $7 from around $5 in 2020.  At Chipotle Mexican Grill, a classic chicken bowl with chips, guacamole and a drink rose from $8 a few years ago to about $20 recently. The feeling at the register is total “Shock and anxiety.” #supplychainplanning #demandforecasting https://lnkd.in/eRsspsiA

"Can you tell me how to get, how to get to..." #profitablegrowth? When #consumer trends find their way to #SesameStreet, you know it's real. #Shrinkflation has been a strategy in the #foodandbeverageindustry for decades, sometimes to improve #margins , other times to achieve a consumer goal like the 100-calorie snack pack. Now, #congress is potentially stepping in to regulate what is perceived as disingenous commerical tactics from big food. Watch this closely, as managing pack size is a core #revenuegrowthmanagement lever and, if controlled, will put more emphasis on other #RGM efforts going forward. Elmo Sesame Street Drew Gaputis Abigail Treworgy Slark Kristi Page Kaplan Michael Jeschke Adam Jutha Justin Cook https://lnkd.in/eYgWZJnV

Below is an article on the increase of sales of non-alcoholic beer. Besides the fact that the sales are increasing, it discusses a decrease in drinking by the younger generation. As science comes to the consensus that alcohol, even in moderation, is harmful to our health, this generation is making the rational move away from alcohol consumption. It is important to consider the impact this change in behavior, if it continues and grows, will have on restaurant sales, and what impact that will have on mix use centers traffic. https://lnkd.in/gGmJHwnu

A balance-sheet approach to snacking A great business story in the Wall Street Journal about the "snackification" of America underscores the resilience of Twinkies and Ding Dongs. There’s a reason why Hostess executives speak of a "balance-sheet approach" to snacking—consumers are more finicky than one would assume. The calculus of the snack aisle is a balancing act between indulgence and moderation. Snacking is no longer just a whim to be satiated; it's a carefully curated selection designed to fulfill a spectrum of needs and whims. This is why J.M. Smucker's $4.6 billion acquisition of the Hostess portfolio appears not just sweet, but shrewd. The deal also gives Smucker's a greater footprint in convenience stores, paving the way for broader distribution of its Uncrustables snacks. On a side note, despite its unpronounceable name in French, the company is sticking with it on the French side of the box. The company must be betting that Quebeckers will believe that with a name like this, it has to be good. Adam Zitney John Kotsopoulos https://lnkd.in/guRsGJ25

We prepared this comprehensive guide to showcase the fun, filling, and alluring realm of American snacks. So, buckle up, and get ready to find out the best, most popular, and unique American snacks. https://wix.to/OqXSL9V #newblogpost