As the industry continues to grapple with the implications of the Whole Foods-Amazon merger, rumors abound that Kroger and Target are flirting with a marriage of their own while a majority of big grocers have rushed to ink partnerships with Instacart. E-commerce is unlikely to go away anytime soon, so grocers are wise to invest in that area. But for food retailers looking for deeper insight on how to build better consumer resonance, an answer lies in an unlikely place: an announcement from Panera Bread about how well its grocery-store soups sold in 2017.
Panera announced last week that its line of refrigerated soups surpassed the $100m sales milestone in 2017, a 27-percent increase over the prior year that qualifies the fast-casual giant as one of the heavy hitters in the refrigerated soup space.
On first glance, this piece of news feels a bit like corporate chest-thumping; after all, $100m is a fraction of the $5.8bn that IRI, a Chicago-based market research firm, estimates Americans spent on canned soup last year. However, the growth of Panera's retail soups comes alongside the growth of the refrigerated soup category and the grocery store perimeter as a whole, indicating that fresh soup is an important chapter in a larger story about how Americans are shopping in 2018.
In 2013, consumers spent $116bn on food in the perimeter of the store — that is, the part of the store where produce, deli offerings, seafood, prepared food and bakery items are sold. By 2017, that sales figure jumped $140bn, accounting for 30.5 percent of the $425bn food and beverage business and 54 percent of the industry's growth.
Enjoy curated articles directly to your inbox.