Customerland

Grocery Attitude Shifts Point to Some Large Opportunities on the Horizon

• Maria Arand • Season 2 • Episode 36

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What if you could revolutionize your food habits to match your fast-paced life? This episode promises to reshape your understanding of modern food culture as we sit down with Maria Arand, the insightful Director of Customer Strategy at 84.51°. Maria reveals compelling research on how younger generations are redefining convenience in their food choices amidst bustling lifestyles and evolving family dynamics. Single-parent households and dual-income families are shifting traditional meal planning, and these changes are rippling across industries, forcing a rethink in customer-centric strategies.

Discover the balance between pre-planned and spontaneous purchases, where Maria sheds light on how about 50% of items end up in our carts on a whim, guided by price, quality, and convenience. Learn how personalized offers, digital coupons, and clever store shortcuts can streamline your shopping without the stress. Plus, we celebrate the collaborative triumphs, sharing insights from 84.51°'s latest research and looking ahead to future innovations. Join us for an episode brimming with revelations and practical tips to navigate the evolving food landscape.

Maria Grand:

With younger generations, we see food serving more and more of a role in their lives, which is leading to this desire to spend more and more energy at a time when they have less energy to spend.

Mike Giambattista:

Today on Customer Land, I'm with Maria Arendt, who's Director of Customer Strategy at 8451. And if you've been paying attention to this podcast for any length of time, you know that we've hosted a handful of people from 8451 because they are always insightful and usually a lot of fun. So with that, I'm open for the best with this. Thanks, Maria, for joining me. I really appreciate it.

Maria Grand:

Thanks for having me and thanks for setting a high bar.

Mike Giambattista:

Okay, right. Well, your team sent over something a couple of weeks ago that said that 8451 had done some research indicating that consumers no longer have enough mental energy to devote to food, and that is a wildly big topic to unpack, which I'm really looking forward to get into with you. But maybe, just for context, can you tell us what you do at 8451? What's your role there?

Maria Grand:

Absolutely so. While the company has a pretty deep engagement with both CPGs and Kroger, my team, which is the office of the customer, sits primarily on the Kroger side of the world, and what we're really focused on is understanding how shoppers are behaving and feeling today, what trends and forces are shaping their choices in the future, and then working with all sides of the organization to really enable the development of customer-centric strategies that drive profitable growth.

Mike Giambattista:

So you oversee that group, you work within that group. Sounds like you interact with people, mostly on the Kroger side.

Maria Grand:

Yes.

Mike Giambattista:

But it probably extends further than that, occasionally as well.

Maria Grand:

It certainly does. So we're very focused on Kroger and answering a lot of the questions that Kroger executives and Kroger leaders have, but obviously a lot of those questions are very importantger executives and Kroger leaders have, but obviously a lot of those questions have are very important, not just for the retail side but for the CPG and media side as well.

Mike Giambattista:

Okay, so you know this, this latest little bit of research that you sent over, as we were mentioning just before we hit the record button, probably has application well beyond the grocery world, absolutely, I mean, I think every ad agency in the universe is probably interested in these factors. I think every marketer who is marketing on a B2C basis is probably interested in this stuff. So I think, all that to be said, I think you're about to become world famous.

Maria Grand:

All right Okay.

Mike Giambattista:

So I want to kind of just read the headline here and then we can just talk this through because you actually know what went into this For two years. 8451, the retail data science, insights and media company helping partners create customer-centric journeys, researched whether consumers lack the mental energy to address food, and there are generational components to that. I'm sure there are many more. But not having the mental energy to address food has monster implications, not only for CPG brands and everybody who has product within the grocery world, but even beyond that. Because if you I'm going to editorialize here for a moment but think back to the pandemic days when food related media spiked. It was probably a pastime, who knows we all have something to do.

Mike Giambattista:

We all like to eat, we all needed something to devote our mental energy to, but that dissipated pretty quickly once the pandemic ended. I take it.

Maria Grand:

Yes, very much so. As we saw customers coming out of the pandemic, a lot of their old kind of lifestyle or former lifestyles emerged, and before the pandemic, we were very focused as an industry on convenience I think that was something we talked about all the time and on the go meals and snacking To your point. During during the pandemic, a lot of that kind of went away. Everyone was home, looking for pastimes, hobbies, things to learn, and food was a really important element of the pandemic era. As we got into 2022, obviously there's economic factors at play here as well, but largely we saw a lot of the pre-COVID behaviors reemerge, including things like emphasis on convenience and snacking and, as you can see in the report, that's especially prevalent with the younger generations, indicating this isn't a passing trend. This is really something that's here to stay and that we as a total industry and other industries that matter should really be focused on this and solving this for customers.

Mike Giambattista:

So in one sense, understanding that people consumers don't have the mental capacity to focus on whatever the topic is, is a really important concept. But I'm interested in understanding how those insights were kind of worked out Like like, what does that look like in grocery? And then maybe we can take a few steps beyond grocery and talk about what those implications might be elsewhere.

Maria Grand:

Sure. So there's really this research is not done in a silo. Obviously, we're doing this in partnership with many other pieces and there's there's two things that jump out to me as I'm looking at this data, beyond just the mental load. I think one is this driver of diversification impacting this need, and we talk about diversification on many different facets of population, but the one I'll focus here on is actually family dynamics.

Maria Grand:

So go back 20 years, 30 years, and we're used to this idea of a nuclear family. Right, that's the standard or the average two parents, two kids, one parent's a wage earner, one's working in the home and can really dedicate mental energy to meals as well as other kind of household tasks. What we're seeing more recently is increasing number of single parent households or two working parent households. We're also seeing more single households as well as two income, no kids, and those are just different lifestyles as well a lot more active on the go, traveling activities and then, finally, the aging population is another element at play here that we're hearing from customers. So it's not just about caring for my immediate household or my immediate family, but they have parents who are older and need support. Sometimes that's daily, sometimes it's just more on a weekly basis. But that's an increasing pressure that many customers are facing, particularly those in the millennial generation, so that family dynamic is really at play in the stressors that are causing customers to feel the crunch on time.

Maria Grand:

I think the other piece that's also at play is the increasing importance of food in people's lives. So you'll see the generational difference here. As you go back generations you get closer and closer to food as sustenance right, it's a necessity, it's something that we have to purchase, we have to engage with, but it's kind of on the back burner. But it's kind of on the back burner With younger generations.

Mike Giambattista:

We see food serving more and more of a role in their lives, which is leading to this desire to spend more and more energy at a time when they have less energy to spend. So you're in a grocery store environment, you've got a limited amount of mental energy, and let's just assume they're already within the grocery environment. You've got a limited amount of mental energy and let's just assume they're already within the grocery environment. You've got a limited amount of mental energy to spend on these things. No-transcript. You're a CPG brand. You're a floor planner for one of these stores. What does that mean to you? What are some of the ways that we can combat this fatigue? And I'm sure there's different ways according to different either generational strata or whatever those particular stressors are. But you've probably looked at this. So, having understood that, yep, there's a problem, nobody's got enough brain space to really focus on this. What do you do about it?

Maria Grand:

What do you do about it?

Maria Grand:

You know, I think a lot of both retailers and CPGs have started experimenting in this space and you see that kind of playing out in stores with this kind of test and learn concept of we are hearing the need, how do we start to address it, and seeing what really resonates with customers.

Maria Grand:

Some of the things that we're hearing very positive feedback from customers on, I'm going to say, are concentrated displays, whether that's a permanent space or a temporary space, but the idea of a destination where I kind of know the level of preparation that I am going to get and I can make a choice at the shelf on what my meals are going to be that week. That is something that we hear kind of appreciated from customers. We also know that, I'll say, attribute shopping is increasing as well. So sometimes it's health we're very used to talking about health, but it's also things like experiences and connection to some broader goals, for example the environment or supporting local businesses or minority-owned businesses as well. So sometimes just the labeling and clear communication on the benefits of a product in that sense are also something that can be a shortcut for customers.

Mike Giambattista:

You did bring up something I think is going to be a really interesting idea to unpack, which is where shoppers are starting to make their decisions, because there are grocery shoppers who make out the list, stick to the list, check out, go home and that's it. Your decisions are made probably at the brand level and at the item level before you get there, and that's certainly some percentage of grocery shoppers. But in my purely anecdotal research I'm in the grocery store and I see very few, less than 10% of the people I would say, with any kind of a list. Most people are just kind of browsing the shelves looking for the thing that you know, they know they need to get this thing or something like it. So I'm going to look for a brand I know or something like that. You know something that that pings my comfort or familiarity level For those kinds of people assuming there are some who are stressed out and they can't think about this stuff Are there, are there things that retailer, that that CBGs should be thinking about for those kinds of in-store decisions?

Mike Giambattista:

I mean, you, you know, of course packaging is an issue, but you know, and you, as you mentioned, you know some of the of the environmental benefits if you will, but those things can be hard to display in a shelf packed with other competitive items. What do you do to try and make those decisions happen either earlier in the cycle or make them potentially more powerful in the moment in the store?

Maria Grand:

It's a great question, I think. First, what I'll start with is the importance of planning in a grocery shop. So to your point, a lot of decisions are made at the shelves, a lot of them aren't and I think, as we've looked at kind of the younger I'll say like average or mainstream customer, we actually see it's about 50-50. So there's kind of 50% of items that I know what. I'm going to walk in and I'm going to buy at least this brand or this product, if not this exact UPC size, et cetera. I know exactly what I'm going to buy and I'm just going to walk to the shelf and buy it.

Maria Grand:

The other half is kind of like all right, I might know that I want to buy a loaf of bread, but I will walk to the shelf and I'll see what's on sale, I'll see what's in stock, I'll see if there's anything new there and kind of play it by ear almost and balance that really active balancing of, we'll say, price, quality and convenience, as they're staring at a list of products and deciding, and convenience as they're staring at a list of products and deciding. So I think there is an element of how can we enable customers to plan better without it feeling like a burden. I think the idea that we're seeing fewer and fewer lists is probably fair when we talk to customers, though, in some cases it almost sounds like that's too much effort, even though it probably saves them time in the long run. But that's the part that feels burdensome.

Mike Giambattista:

Yeah, I guess I'll go with that and I'm trying to frame up what I think you just said in a way that kind of applies to the average consumer like me, of applies to the average consumer like me. If I don't have the mental energy to think about food ahead of time, I feel like getting into the grocery store is the this is the wrong word but the sanctuary, the space where I can think about that and only that, and I'm not worried about my phone or my email or my whatever else, and it's the only place I can really devote to thinking about food. So I get inside the grocery store and now it's like food thought time and I'm just wondering are there mechanisms that people are testing or deploying or developing that help people to kind of enter into that space and begin something that feels a little more guided or directed or focused in that effort?

Maria Grand:

Absolutely so, and that's where I think a lot of the destinations are coming in for shoppers. So knowing I can get pre-sliced, pre-cut fruit and vegetables at this particular point in the store, A lot of times those are not customers who are buying just a single product, right, they're buying a week's worth of those ingredients. Similarly, as customers move through the store, they kind of know where I'm going to say their shortcuts are, because it's not the same shortcut for everyone. Which is what makes it really challenging as a retailer and a brand is to find that exact element that resonates with that exact customer. So when you're in the store that's especially challenging to do, Because you know I might be really interested in cooking my own products but I don't have the time to slice all the vegetables, to season the meat, to think about the side dish and that might be one set of shortcuts, Whereas maybe you're more of a frozen foods guy and that's your way of shortcutting is to have kind of a lasagna in the freezer.

Maria Grand:

That's kind of that backup meal when you don't kind of have the mental energy to decide what's for dinner that night. And we certainly see all of those customers. The problem is one of them is not necessarily the dominant one right. Everyone's got their own quirks and preferences Right, which makes it challenging to execute in a store, and I think that's where the power of things like personalization and targeted both offers, but also just lists and ideas and inspiration can be extremely powerful for a customer in their shopping journey.

Mike Giambattista:

Again completely anecdotal. There's no relevance on anything else that may be statistically important. There's no relevance on anything else that may be statistically important. But in our local grocery store here we live right outside of Manhattan and it's a highly populated but not dense like the city kind of place there are digital coupons, which are a complete pain, frankly. But when you enter in your, when it recognizes who you are through the loyalty program, it spits out a really well organized and orchestrated list of offers for you, because it knows what our shopping tendencies have been. It shows us what's on sale and where, but it also shows us kind of the sequence of where they are in a typical shopping path, which is other than the fact that it's a big pain, it's brilliant. So if they could overcome that big pain problem, I think they really have something there. Do you see other? Well, let me just ask you specifically is Kroger experimenting, or do they have anything kind of like that to guide shoppers through in a kind of personalized way?

Maria Grand:

Yes, so Kroger also leverages the digital coupons which we find many customers, many customers love, but you know, not everyone. Again, everyone has slightly different preferences, so what resonates with one customer doesn't always resonate with another. But when we present those to customers yes, very similar we leverage all the first party data we have and all the science that we have in-house to personalize those offers to you. If not the exact offer itself, at least our general pool of offers is going to show up in relevancy, and then that can apply to your customer journey as well in the store.

Mike Giambattista:

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Mike Giambattista:

I'm intrigued by one of the bullet points that your team sent over. I'm just going to read it, just so that we can talk this through a little bit. It says convenience and mental wellness are key. Gen Z is more likely to purchase food items that require minimal preparation, such as snacks, crackers and popcorn, and less likely to purchase seafood, eggs and ground beef Highly convenient, healthy, ready to eat options and easy to prepare are likely to resonate.

Mike Giambattista:

What struck me about that statement, though, was the tie between convenience and mental wellness, and I happen to hang around a large handful of Gen Z people, and I don't think I've ever heard it put that way, but I would say that in my experience, there is an absolutely strong, strong tie between those two ideas. They equate in, in large part, mental wellness. Convenience contributes to their mental wellness. I think older generations my own and older never really thought about it that way, but I'm certainly going to now I mean, learn from the younger folks, but I'm sure there are also other implications within the shopping environment to that idea. Mental wellness is a really big value for Gen Z. It's a big deal, and convenience certainly, as you found out, is a factor there. Are there other factors contributing factors to what's considered mental wellness that you think retailers or CPGs might start considering beyond convenience?

Maria Grand:

So as we talk to Gen Z and obviously they're still an emerging generation, they're still finding their footing in the market, so all of this could change and evolve.

Maria Grand:

But we see it with millennials as well that this idea of health is just inextricably linked and it's not about physical health or even mental health, it's really just health, and they kind of see health as a combination of physical, emotional, mental, financial.

Maria Grand:

Even so, you know, when you think about this younger generation, that's kind of how they're balancing all these efforts and that's what makes it really interesting when we talk about food, because we're used to thinking of convenience and physical health, so like we need healthy products to be convenient meals. Gen Z, though, kind of sees the convenience in and of itself, so it might be less about truly being, I'll say like, calorie conscious or low sodium or whatever the dietary restriction is. It's less about that and more about the convenience itself is a vehicle to health. I think that has huge implications for how we talk about health and engage with consumers and communicate some of the benefits that we can offer them through brands in a retail environment. These are also shoppers who tend to eat away from home, which is kind of very convenient but also not very financially savvy. So thinking about financial health fitting into that, I think that's a huge opportunity for retailers and brands to just begin engaging the new generation in a little bit different way.

Mike Giambattista:

Fascinating, so brands need to start thinking about Gen Z, in a way where the idea of health is much more broadly defined than just physical health. Or maybe even what might be mental or you know, that's a really important points.

Maria Grand:

Absolutely. It's a much more holistic definition than what we've seen in the past.

Mike Giambattista:

Generationally. I'm not going to spill the beans and let you know how old I am because, frankly, it doesn't matter. I'm one of them and I'm one of the older ones, um, but you've spelled out, uh, a handful of the, of the, of the, the differences that the generational strata tends to process, these ideas of, uh, mental energy and, um. You know, we talked a little about Gen Z and their preferences, millennials a little bit. But you know, gen x has always been a fascinating generation for me because they're behind me. I truly do not understand them at all and you know they're the next proximate generation, um, but I can look back on on gen z's and and millennials and kind of go, yeah, I kind of understand where you're coming from. So there's a bit of a static disconnect there. My own problem, I'm sure, but what are some of the other generational differences that you guys uncovered? Yeah, yeah.

Maria Grand:

so as we look at you know, I think a lot of the generational insights we have really do kind of exist on a spectrum and being able to trend these over time.

Maria Grand:

We haven't really seen an indication that it's primarily even driven by life stage elements to it, certainly, but there are also just shifts in that food engagement.

Maria Grand:

So, thinking about, you know, I'll focus on Gen X for a second Right, they have a more, I'll say, potentially like traditional, stereotypical, traditional engagement with a lot of the food in the grocery store. Right, their primary categories that they're engaging with are things like bread and eggs and all the staples that we tend to associate with. But we do see a little bit more, I'll say, experimentation in their behavior than we would with, say, the baby boomer generation. So baby boomers, fairly established behavior, but that Gen X is much more on the cusp of our millennials. And Gen Z are with, say, like international flavors, experimental flavors. So with those younger generations we see a lot of exploration, a lot of variety, a lot of inspiration, need Gen X, not quite to the same degree, but I'll say they kind of dip their toe in it, right, they, they tend to appreciate more international foods or, um, trying new flavors, a little bit less kind of standard uh variations of the product they're buying and a little bit more experimentation within some of those interesting.

Mike Giambattista:

I mean, the implications for this are are wild. I can't wait to have a follow-up conversation with you on this, as we've started to cause we'll. We'll put this out to our listenership and readership and see what kinds of comments we get back. But as I mentioned the beginning of the conversation, there's the. The implications for this understanding go well beyond grocery and into much, much, much broader categories. So that'll be fun to unpack.

Maria Grand:

I think the one point that I don't know that we've explicitly said although we've danced around it is this mental energy kind of deficit that customers feel like they have around food in particular.

Maria Grand:

Part of it is driven by a busier lifestyle, but part of it is driven because they care so much and they have really high aspirations and goals for themselves around what food should accomplish in their life.

Maria Grand:

They for those who are feeding other people other than themselves, that we often hear this, like I want to be it almost feels heroic to them. When they can accomplish all their food goals, when they can manage the preferences and the health goals and even just getting fresh food on the table for their family, that is a that is a victory. It is a highly, I'm going to say, emotional, personal, vulnerable moment for them when they are sitting there at the beginning of the week making a plan and figuring out whether they're going to be able to deliver on that or not. Or they get to the end of the week and things just kind of fell off the wheels that week and they didn't make it happen. It feels very personal and I think that is the emotional connection that customers have with food is really what's coming through in this report, more so than anything else, and I think that's just a really powerful opportunity to build connections with customers right. If you can make a customer a hero to their family, that's going to build that consistent. You've won Yep.

Mike Giambattista:

Yeah, yeah, fantastic. I'm really glad you brought that up, maria. Thanks so much for the time, really really appreciate this and looking forward to kind of unrolling the next version of this that you come out with. Of course, your team is keeping me very well informed of your research, so I'm sure I'll be talking to those guys soon. But really thank you for your time. I really appreciate it.

Maria Grand:

Thank you for having me. It was a great conversation.

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