FMI Briefing

FMI, the Food Industry Association, last week had a press briefing where they talked about what grocers can expect in inflation and food prices in 2023. And basically, Andy Harig, FMI's Vice President of Tax Trade and Sustainability led the press briefing and basically said that inflation is gonna remain on food prices this year. And maybe next year they'll finally come down. But even though we've seen prices decrease, it takes a while to get into the food system. So if your price of soy and wheat goes down by the time that feed gets to the cows and the poultry and so on, could take a while. So, Ricky Volpe, who's an associate professor at Agribusiness at Cal Poly, great guy, really smart, said, we're not gonna hit it this year. Maybe next year prices will come down. FMI also surveyed a bunch of consumers and found that 48% of them in February said they're very concerned about rising food prices. That's up eight percentage points from October. And 43% surveyed also in February said they're worried about having enough money to pay for the food they need, which is up from 35% who answered the same question based in October. So we really have a conundrum here where consumers are very concerned about the prices of food because of the supply chain. It takes a while to see these prices decrease and these experts, from FMI and and Volpe are saying not gonna happen this year. Probably gonna happen next year. Hopefully. 

Sally: Hopefully. And you know what else is interesting is seeing how shoppers are shifting more and more to private brands. So the retailers are in a great position here, that have their own brands, to promote those brands to their shoppers. Because more and more shoppers are starting to trust those brands and think that they are of equal quality of the brands that they have have bought historically. 

Phil: Absolutely. And there's, I guess, it was Loblaws who started it with President's Choice many years ago that really upped the quality of store brands to exceed the national brands. I'll never forget Dave Nichols who was at that point, the CEO of Loblaws, his favorite product was their chocolate chip cookie. And what they did is they looked at the number one brand of chocolate chip cookies, and I'm gonna get the numbers wrong, but let's say each cookie had 10 chocolate chips in it. Well, he'd said, we're gonna put in 15, just to, to make it better. And it really worked very, very well. So, good for all these store brands that are really upping the game as it relates to quality. You look at Aldi, you look at Trader Joe's, you look at a lot of the Kroger products, they've really done a great job. 

Phil: And there's no reason why consumers shouldn't try, store brands. I know that the brands who are watching us and listening to us don't want to hear that. But the reality is that there's been more innovation on private brands than there has been in a lot of the national brands that are just going for brand extensions and they're really not being very innovative.