Specialty brands, innovative products are the new lifeline for the center store, Catalina research finds

01-May-2018 - Last updated on 01-May-2018 at 13:08 GMT

Contrary to popular belief, the center of the grocery store is not dead, but rather, when well-curated, is an emerging destination for shoppers seeking innovative brands that cater to their specific health and lifestyle goals, according to new research from consumer data company Catalina.

“The general perception of the center store … is that it is declining and participation and engagement of that retail experience isn’t what it used to be,” Marta Cyhan, head of marketing at Catalina told FoodNavigator-USA. As a result, she explained, many brands that traditionally have been stocked on shelves in the middle of the store are looking for placement around the perimeter where they believe shoppers are more active. But, she added, they may not need to.

She explained, new analysis by Catalina’s VP of Global Analytics Stan Turek, found “those declines aren’t as significant as we though they would be,” and in fact 99% of all shoppers purchase something from the center-of-the store in 2017. In addition, she pointed out, the average consumer visits the center store 60 times per year, which is down only one trip per shopper per year on average.

“What is refreshing about this data is that it shows the center of store can still generate the impressions and traffic that brands and retailers want” to drive purchase, said Turek. He added it also shows that traditional grocery stores can hold their own against “all the headwinds” of ecommerce that can deliver traditional center-store items direct to consumers’ homes, and value discounters that limit assortment in order to keep prices down.

What types of products are wining at center store?

What has changed, however, is the types of products and categories that are drawing consumers to the center of the store, Cyhan said.

“What consumers are looking for in the center of the store is different than it was maybe 10 years ago. Now what is driving that shopper … is they are more looking for niche products that meet their specific tastes or lifestyles,” she said.

Turek added that traditional grocers are better positioned to showcase these products than ecommerce, where discovery can be limited by recommendations based on past purchases and awkward browsing tools, and by smaller format discount stores that don’t have the space for as many new or untested products.

Indeed, according to the research, niche subcategories in grocery are seeing increased trips and small CPG brands below $1 billion in sales are now the main drivers of new shoppers and trips to the center store.

For example, Catalina found non-fat/low-fat/lite ice cream saw a “dramatic” 66.9% increase in dollar sales and 32% increase in consumer trips in 2017, driven in part by a desire for a healthy indulgence. This is reflected in the fast rise of relative newcomer Halo Top, which developed a new subcategory of low-sugar, high-protein ice cream, according to the report.

Similarly, high demand for healthier beverages is helping to drive up sales of sparkling water and seltzer 12.6%, according to the report. Like the ice cream aisle, this growth can be attributed in large part to newer brands, such as La Croix, which helped “reinvigorate” the category with on-trend flavors, according to the report.

Not all the growth in center-store is coming from small brands and startups, though, Cyhan said. She noted large legacy brands that are evolving products to call-out previously niche attributes, such as gluten-free or organic, also are winning.

For example, she said, Birds Eye is a longtime frozen aisle player which saw a bump in sales with the launch of innovative platforms, such as its Superfood Blends, organic offerings and by adding protein to some of its offerings.

Lessons learned

Reflecting on the research’s findings as well as who is succeeding at center store and who is not, Cyhan recommends brands and retailers who want to take full advantage of the opportunity in the middle of the store need to:

Offer something new or a fresh take on classic product to help catch shoppers’ attention;
Offer premium ingredients and tell the story of how the products are made or sourced as a way of overcoming consumers’ perceptions that the center store is not as fresh as what is offered around the perimeter;
Offer similarly branded products in adjacent categories to help drive foot traffic up and down the aisles and engage more frequently with shoppers in the same trip; and
Use shopper purchasing data and personalization to engage the shoppers who are more likely to try new products or who are seeking the attributes offered by a company’s specific products.