Handing Your Supermarket the Keys to Your Health

Twenty years ago, it took a map to drive from Amsterdam to Oberdorf in Switzerland. Nowadays, we trust apps such as Google Maps to lead the way. Some 20 years from now, we will likely just tell our car where to go. Consumers like to outsource the stress of navigating to a trusted party. And they’re used to it by now. Yet, with regards to healthy food, those same consumers are more or less left to their own devices.

Full-service supermarkets are recalibrating their service models. Back in 1999, the services of full-service food retailers still consisted of wide aisles, a broad assortment, and friendly personnel. Since then, service offerings have been expanded with the introduction of more convenient formats like ‘to go’ stores, foodservice elements, meal boxes, and recently even hot-meal-delivery. The recent acquisition of online platform FoodFirst by Albert Heijn is a clear indication that supermarkets are looking to take their service proposition even further and sell ‘mental convenience’ as well.

“We want to be the supermarket that helps customers with a healthier lifestyle,” said AH CEO Marit van Egmond in response to the takeover. Considering rising Body Mass Index (BMI) scores throughout Europe, making a healthy choice is not that straightforward for consumers. Even though the current offering in nearly all supermarkets suffices for a healthy diet, not many consumers consistently make healthy choices. This could be due to an overwhelming assortment, a lack of time or interest, or the often contradictory information on what healthy food is in the first place. Food retailers like Albert Heijn are more than happy to become the consumer’s trusted advisor here in exchange for a higher customer loyalty and lower price sensitivity.

This new ‘advisory’ role radically changes the position of food retailers in the value chain. The supermarket used to be the end of an efficient supply chain, providing a marketplace for many food producers. Food retailers may have tried to steer consumer choices for ages, but they always did so indirectly, through shelf positioning and category management, for example. In their new role as trusted advisor (and certainly when they will be delivering meal boxes or hot meals) food retailers are increasingly making purchasing decisions on behalf of their customers. This implies that they can no longer be a considered a partner for brand suppliers any longer. Instead, food retailers become the customer.

There is a distinct difference between providing an outlet to the consumer and acting on the consumer’s behalf. Consumers buy based on emotions, which is where intangible brand values such as image or tradition come in play. But food retailers have no interest in these emotions.They will go for objective criteria such as ingredients, nutritional values, price, and availability to feed their algorithms.

Only if consumers specifically ask for their favourite brand will food retailers be inclined to incorporate such preferences in their decision models. From a brand perspective, marketing is perhaps even more important than before in order to generate consumer pull. Given that it is becoming increasingly difficult for brand manufacturers to directly communicate with the consumers on the supermarket floor, we expect an increased interest in all forms of community marketing by branded food producers (see also our report on online communities). But food producers may also try to (re)gain the consumer’s trust themselves through, for example, launching target group brands.