This week in grocery, food giants sell off major divisions and grocers take on QSRs.
As food costs rise, some of the largest producers are selling off significant chunks of their business. For instance, agricultural giant Dole announced in a Tuesday (Jan. 31) press release the sale of its fresh vegetables division to Fresh Express, a subsidiary of competitor Chiquita.
“We believe the sale of this division will strengthen our financial position and increase the group’s focus on and investments in our core activities,” Dole Executive Chairman Carl McCann said in the release.
On the other side of the transaction, Chiquita Chairman Jose Luis Cutrale Jr. noted in the release that combining Fresh Express and Dole’s fresh vegetables division will “help partially mitigate the recent period of inflationary pressures experienced throughout the produce, food and beverage sectors,” citing challenges posed by the labor market and supply chain, among others.
Similarly, major food and beverage company Danone appears to be finding its dairy business prohibitively costly to operate. The company announced in a press release last month that it is exploring options, including a possible sale, of its U.S. dairy brands, Horizon Organic and Wallaby.
“Seen through the lens of our Renew Strategy, which requires us to stay disciplined in how we allocate our resources, [these brands] fall outside our priority growth areas of focus,” CEO Antoine de Saint-Affrique said in the release.
As grocers, convenience stores and restaurants compete for consumers’ food spending, Giant Eagle, a grocery chain with more than 400 supermarkets and convenience stores across five states, is taking on fast-food brands with a drive-thru location.
The grocer’s convenience store subsidiary GetGo Cafe + Market opened its first newly built location with a drive-thru lane Thursday (Feb. 2), as the retailer announced in an emailed press release Tuesday.
“This location is unique as it’s our first GetGo built from the ground up to feature a drive-thru,” Brandon Daniels, GetGo public relations manager, said in a statement. “We’re all about fresh food, and with this drive-thru lane, we’re thrilled to bring the Mentor community our delicious made-to-order menu with the convenience you’d expect from GetGo.”
The move comes as grocers step up their prepared food offerings, looking to meet consumers’ increasing demand for lower-priced alternatives to restaurant meals amid inflation. Research from PYMNTS’ study “Digital Economy Payments: Consumers Buy Into Food Bargains,” which drew from a July survey of nearly 2,700 U.S. consumers, found that 37% of consumers bought prepared food on their most recent grocery trip, up seven points from the 30% of consumers who had done so back in November 2021.
Kroger continues to grow its in-house delivery network in an effort to secure customer loyalty with eCommerce convenience. The company announced in a Wednesday (Feb. 1) press release the opening of a new facility in the Miami area.
“We are thrilled to connect more Floridians to the Kroger Delivery shopping experience, which brings thousands of digital coupons, valuable fuel points and the freshest products directly to customers’ doors,” said Bill Bennett, Kroger vice president and head of eCommerce, said in the release.
Indeed, grocers widely believe that delivery options are key to consumer loyalty.
Research from PYMNTS’ study “Big Retail’s Innovation Mandate: Convenience and Personalization,” created in collaboration with ACI Worldwide, which drew from a survey of 300 major retailers in the U.S. and U.K., found that 76% of grocers think consumers would be very or extremely likely to switch merchants if they were not able to order products for delivery.
Plus, data from the July edition of PYMNTS’ ConnectedEconomy™ series, “The ConnectedEconomy™ Monthly Report: The Rise of the Smart Home,” which drew from a May survey of more than 2,600 U.S. consumers, found that one in four consumers order groceries online for home delivery every week, and 40% do so every month.