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TABS ANALYTICS BLOG

Online Shopping in the U.S. and U.K. Take Center Stage in Food and Beverage Study

Even though eCommerce still only accounts for a small portion of sales in the food and beverage market, the ability for consumers to purchase items on the web and then pick them up at a local retailer has been driving online shopping growth in the U.S. during the past year. While U.S. online sales increased by 13 percent since 2016, this channel is still just a drop in the bucket compared to the predominance of brick-and-mortar retailers. And it has a long way to go before it can be considered a success – like eCommerce is in the U.K. – based on established retail loyalty norms.

That’s just one of the findings that TABS CEO Dr. Kurt Jetta shared last month when releasing the results of the TABS Analytics 5th Annual Food and Beverage Consumables Study, which for the first time expanded to include analysis of the U.S. and U.K markets.  The study looked at similarities and differences that exist between the two countries, and if any U.K. trends could potentially foreshadow things to come in the U.S.  

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Kurt Jetta Featured on CBS Sunday Morning in Online Grocery Shopping Trends Segment

 
Online grocery is growing 15% annually and is expected to top an estimated $12 billion in sales this year, but is this merely a drop in the bucket when compared to the $800 billion consumer packaged goods industry? Some argue that it's not and point to the growth of companies like Amazon, Safeway and Whole Foods, who are offering online grocery delivery. Proponents further point to meal kit delivery companies like Blue Apron, who is selling over 8 million meals a month to subscribers.
 
TABS Analytics' CEO Dr. Kurt Jetta begs to differ.
 
In a recent interview with CBS Sunday Morning, Dr. Jetta spoke with CBS News correspondent Anna Werner and provided his thoughts on online grocery and the issues it faces in gaining wider consumer acceptance.  
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The 2 Clear Signs That Show Online Grocery Is Failing

Dr. Kurt Jetta, TABS Analytics' CEO, was recently interviewed by Tim Simmons of PLMA Live to discuss the TABS 2016 Food and Beverage Study findings on online grocery.

While there is no disagreement between the TABS study and industry estimates pointing to online grocery's current share of 1.5 to 2.0 percent, the contention lies with the future growth of the industry. Dr. Jetta does not expect the exponential growth that others in the industry are predicting for the coming years. He goes one step further and declares that online grocery is failing, as things stand currently.

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Back To The Future: Online Grocery 5 Years Later

So it appears that TABS is five years late in noting that online grocery is failing.

About a month ago, we made that declaration during our Food and Beverage Study webinar. That statement has been met with much resistance throughout the industry.

But it’s something that’s been said since at least 2011, when Forbes/Investopedia ran this article citing 10 reasons why online grocery is failing.

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TABS 2016 Food & Beverage Trendspotter

2016 Edition Special Points of Interest

 

  • Snacking On The Rise
  • Healthy Snacking Trends
  • Insights On Millennials
  • Consumer Trends 
  • Probiotics Becoming Mainstream
  • Ingredients Innovation

 

 

 

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Consumer Deals Still Drive Food And Beverage Sales

 

In our second infographic from the 2016 TABS Analytics Food & Beverage Study, we wanted to call out some "old-school" ways that still deliver results for food and beverage consumables categories. Key findings are highlighted below, including:

  • Grocery has the highest share of consumers purchasing regularly (and the highest overall penetration)
  • As we've highlighted previously, online grocery continues to struggle to break the 2 percent share mark
  • Consumers purchasing food and beverage consumables respond well to retailer promotions
  • Trendy, often-touted concepts like organic food and beverage products and online show rooming are yet to be mainstream

 Some things indeed are "old" because they stand the test of time and still work.

Click here to view as a PDF.

 

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TABS CEO Questions the Long-Term Viability of Online Grocery

Yesterday, noted CPG Industry blogger, Kevin Coupe of Morning News Beat picked up the TABS Analytics Food and Beverage Study webinar and provided some commentary. We’re grateful for Mr. Coupe’s contributions to CPG, and are happy that he was willing to engage with the TABS Analytics findings.

 

Mr. Coupe disagreed with the TABS analysis, presented by TABS CEO and founder Dr. Kurt Jetta, that online grocery is underperforming. “I think it is absurd to suggest that there is no path to success for e-grocery and that it is a failing concept,” Mr. Coupe said.

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TABS Analytics Finds Online Grocery is Failing, Except for Amazon

 

Only 4.5 percent of US consumers shop regularly online for groceries; 69 percent of US consumers never shop online for food and beverage consumables

 

Shelton, CT – September 14, 2016 –The TABS Analytics Fourth Annual Food and Beverage Study found once again that online grocery shopping continues to be weak, with just 4.5 percent of consumers regularly purchasing food and beverages online compared to 78 percent of consumers regularly purchasing food and beverages from brick and mortar grocery outlets. Although regular online grocery purchasing increased by half a percentage point since the 2015 study (from 3.9 percent in 2015 to 4.5 percent in 2016), it has yet to break five percent in the four years TABS has conducted this study.

 

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Online grocery purchasing rate is low, and loyalty rate is even lower

 

TABS Analytics completed its Food and Beverage Categories Study in August 2016. This first infographic from this consumables study reveals some not-so-flattering details about the current state of onine grocery purchasing.

  • The ecommerce share in food and beverage categories remains low. 
  • Even with heavy investment behind improving online grocery shopping from retailers across the country, penetration declined in the past year.
  • The lone bright spot has been the slight gain in share for online grocery thanks to curbside pickup.

 

Click here to view as a PDF.

 

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Are Canadian Heavy Buyers Different from Their U.S. Counterparts?

 

Following our previous blog post highlighting results from our September 2015 survey of Canadian consumers buying food and beverage consumables products, we wanted to dive a bit deeper into the findings and look at heavy buyers and their underlying demographics (households who buy 11 times or more per year across 15 consumables categories).  

By far the biggest predictor of heavy consumption patterns is the presence or absence of children in the home. Only 13 percent of households without children reported they purchased these consumables heavily, while 45 percent of the households with kids were heavy users (a 3-fold increase!). This suggests that companies would get the best results by targeting households with children rather than the 18-to-34 year olds that many marketers believe are the most desirable target.

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