Alternative wholesale outlets for food products

Learn more about alternative wholesale outlets for food products based on the preferences of generations and access to food stores.

Businesses looking for wholesale outlets for their food product need to rethink their strategy. Traditional grocery stores are now competing with supermarkets, mass merchandisers, warehouse clubs, dollar stores, online retailers, and farmer markets, according to a February 2013 Mintel report titled Grocery Retailing.

Although Mintel, a market research firm, found supermarkets to still be the most popular retail channel for buying groceries, Millennials (age 13-33) are showing an increasing shift toward mass merchandisers, warehouse clubs, and drug stores for grocery purchases. In 2012, the US Census Bureau reported that Millennials represented 24.7 percent of the U.S. population. Close behind them are Gen Xers, ages 34-48, who explore nontraditional outlets for their food and drink needs, according to The Food and Drink Shopping Experience report by Mintel.

In addition to the generational impact on grocery retail trends, Mintel’s Grocery Retailing report found that consumers in food deserts are also impacting the success of non-traditional food outlets. Food deserts, according the United States Department of Agriculture, are defined as parts of the country with limited access to fresh fruit, vegetables, and other healthful whole foods. The Mintel report said about 25 million consumers living in these food deserts often rely on corner stores or gas stations for their grocery supply. Both Walgreens and Supervalu are striving to capture this market through plans by Supervalu to open 250 new stores in underserved food deserts and Walgreens to open 1,000 stores in similar communities, according to Mintel.

Regardless of where consumers shop for groceries, Mintel reports, the vast majority of primary grocery shoppers believe lower prices as important, followed by easy and fast shopping, checkout, and, lastly, a location near their home.

The MSU Product Center, in partnership with Michigan State University Extension, provides supply chain and market analysis assistance to help Michigan entrepreneurs develop and commercialize high-value, consumer–responsive food products. For more information, visit the MSU Product Center website or call 517-432-8750.

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