Specialist
Former divisional VP, at Whole Foods Market Inc
Agenda
- Key organic and natural food trends and themes in the US grocery retail market
- Competitive landscape, and key demographics, geographies and retailers including Kroger (NYSE: KR), Walmart (NYSE: WMT), Whole Foods (NASDAQ: WFM), Sprouts (NASDAQ: SFM), Trader Joe's and Fresh Market
- By-aisle analysis of centre store, dairy, frozen, beverages, snacks, deli and produce, and assessment of margins for private label vs branded items
- H2 2019 outlook – supplier relationships, growth trends and potential M&A
Questions
1.
Could you highlight any key trends or drivers and estimate the growth in popularity for organic and natural food in the US grocery market?
2.
In which aisles or segments would you say there is the greatest demand for organic alternatives, and how do you think shelf space allocation could potentially change in the next 3-5 years to accommodate more organic alternatives? If we could start with the dairy category and additionally if you have any thoughts as it relates to A2 milk?
3.
What are your thoughts on the shortage of aseptic beverage capacity in the US and the popularity for oat milks, and what is your outlook for capacity in the future?
4.
Which segments do you think are the most resistant to organic alternatives? When do you think a consumer is less likely to spend more for the organic vs the non-organic, and how do you think pricing for fresh produce plays into this?
5.
How would you estimate the margin difference for private label organics vs branded? What are your thoughts on Kroger’s Simple Truth brand and other offerings in this market?
6.
Are there any national grocers you think would be unlikely to limit their approach to organic? How would you compare the pricing of offerings from Trader Joe’s, Sprouts and Whole Foods?
7.
What organic offering strategies have you seen from CPGs such as Kellogg’s, PepsiCo and Coca-Cola, and what else do you think can be done across food and beverages?
8.
When thinking about the Beyond Meat IPO from processor, Tyson, do you expect the scale of growth for Beyond to continue? What do you think will be the next brand or product to have that type of growth, and how sustainable do you think this is in the future?
9.
What are you seeing in terms of how packaging companies are sourcing their own organic ingredients? Are any of the traditional sourcing companies starting to invest more in organic, or is this still fragmented? Would you highlight any other scale platforms beyond Tradin or SunOpta?
10.
What are your thoughts on the uptick in online grocery for natural and organic alternatives and how would you compare traditional grocers against direct-to-consumer models such as Thrive Market?
11.
What headwinds or hurdles would you expect this market to face that might slow down volumes, such as production costs for organic vs non-organic or regulation around labelling?
12.
How does demand in the US organics market compare with global markets? Are there any international market trends that you could foresee coming into the US market?
13.
You mentioned that traditional processors are building facilities. Do you think they could acquire platforms such as SunOpta or Pipeline Foods, or would they be more inclined to build it out organically themselves?
14.
What would you estimate is needed for a player such as Dean Foods to convert its facilities to be plant- based, how might this conversion differ for oat milk, almond, soy, hemp and others, and what do you expect will be the next thing in terms of this conversion?
15.
On what potential timeline and at what cost would you estimate a dairy plant could be converted to a plant- based facility?
16.
Do you foresee any other potential M&A scenarios involving CPGs or retailers, perhaps including Sprouts? Which other mainstream grocers are looking at e-comm platforms?
