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Was 2018 the year that ecommerce dominated the grocery market? Which product category saw significant sales growth?

We will answer these questions and more in our picks for the top 8 grocery facts of 2018, ranked in order from craziest to least crazy.

#1: Transparency Rules

The age of transparency has dawned. Consumer interest in sustainability is growing. In 2018, 64% of U.S. households expressed interest in sustainability, which is up 4% from 2017.

Customers expect companies to disclose information about their food and share information about business practices. Grocery products that laud sustainable farming and social responsibility drive the highest sales growth.

Specifically, customers want to know all the ingredients in the food they purchase, how it’s made and what kind of pesticides/fertilizers are used.

As far as business practices are concerned, consumers look for companies to share about product changes, company values, business practices, employment practices, pricing decisions and about diversity/inclusion. (Read our Why Companies Should Be Transparent on Social Media blog here.)

And in case you missed it, the FoodPrint website launched on Oct. 18, 2018 to detail the environmental impact of the process behind getting food to the plate.

Significance: Customers, especially Millennials, take this information into account when they decide how to spend their money. Transparency about the product and the business may very well mean the difference between a sale and lost revenue.

#2: Customer Loyalty Exists

Customer loyalty doesn’t exist. This notion has become so commonplace that it becoming accepted as truth about the modern consumer.

And yet it is not accurate. Data released earlier this year shows that 8  in 10 shoppers say they are loyal or very loyal to their primary grocery store. More than 3 in 4 shoppers allocate over half of their household grocery expenditures to 1 store.

What makes grocery shoppers loyal? Product assortment, promotions and an excellent shopping experience. Note that price is not among the top three customer loyalty drivers. (Read our Are Grocery Shoppers Loyal? blog here.)

Significance: Most grocery shoppers spend most of their food budget at one store. Although most shoppers do go elsewhere to supplement their food needs, they do show clear preference for their primary store.

#3: Ecommerce Continues to Grow

Online grocery shopping is increasing in prevalence. Research released earlier this year shows the number of customers who bought groceries online more than doubled in the past year.

49% of U.S. consumers bought groceries online in the past year, up from 23% of consumers the previous year. Millennials and Gen X tend to buy the most groceries online among all the generations.

Convenience is the #1 reason shoppers like to buy groceries online. Consumers also say online shopping makes it easier to find lower-price products.

51% of those who didn’t shop with their local grocer said it was because their local grocer didn’t offer it. (Read our What You Need to Know About Grocery E-commerce for 2018 blog here.)

Significance: Ecommerce occupies a growing share of the market. Most online grocery customers are willing to buy online from their local grocers, if only it was an option. This is an opportunity for grocers to expand into the ecommerce space (if they aren’t already in it).

#4: Positive Retail Climate

Despite the growing threats from ecommerce and giants like Amazon and Walmart, most grocers are optimistic about the grocery retail climate.

More grocers expressed optimism in 2018 than in 2017, according to Progressive Grocer’s annual report.  In fact, grocer optimism hit its highest in five years this year. The percentage of grocers who said they were more optimistic about the retail supermarket climate for the past five years are:

• 51% in 2018
• 46% in 2017
• 33% in 2016
• 50% in 2015
• 40% in 2014

It’s not just grocers who are positive. The Consumer Confidence Index reached 138.4 in September 2018.  This number “hovers at an 18-year high,” according to Lynn Franco, director of economic indicators at The Conference Board.  This index measures the degree of optimism that consumers express through their spending and saving activities.

Significance: Consumer confidence is one measure of the economy, so it is encouraging to see this number so high in 2018. Grocers appear to be on point with expressing their own all-time high levels of confidence.

#5: Private Label Rising

Private label products are hot, hot, hot.

Private label brands are growing three times faster than national brands. The private label brand industry is a $166 billion industry that has outpaced national brands eight times over.

A Consumer Reports tester found that 58% of private label products were as good or better than national brands. 7% of all US households bought a private label brand product in the last year.

Customers who buy private labels make their selections based on their preferences for ingredients, manufacturing techniques and prices.  Millennials are the most willing consumer segment to try new products, but Gen X is driving the most private label product sales. (Read our Why Private Label Brands Matter blog here.)

Significance: Private label products are an excellent addition to a grocer’s product mix.

#6: Foodservice is Hot

Foodservice at the grocery store is trending. The average number of people who make dinners at home across all demographics are declining, according to The Power of Foodservice at Retail 2018 report released earlier this year.

Consumers are interested in healthy choices when they order meals, with the better-for-you category as  the most popular across foodservice shoppers. Most consumers learn about foodservice while they are at the grocery store. The 2018 foodservice report shows that a grocery store’s foodservice options need to be marketed more like restaurants because the battle to fill customers’ plates happens outside the grocery store.

More than 4 in 10 U.S. shoppers buys prepared foods from the grocery store. The grocery prepared food market is now at about an estimated $29 billion. Millennials, particularly those with children, show the highest preference for quick and easy meals. (Read more about foodservice at the grocery store in our Grocery Stores, Make Meals Easy (Here’s Why) blog here.)

Significance: Customers want quick and easy meals. If grocery stores fail to step up their marketing efforts to promote their convenient meal options, grocers will lose a share of consumers’ meal budgets to other alternatives to cooking dinner at home.

#7: Meal Kits Partner with Grocery Stores

As we mentioned in the above fact, more consumers crave a quick and easy alternative to making dinner at home. Several online meal kit companies partnered with major grocery stores this year, further reflecting this trend.

Kroger acquired the nation’s third largest meal kit company Home Chef for $200 million earlier this year. Hello Fresh partnered with Northeast Ahold Delhaize-owned supermarkets and Blue Apron piloted selling meal kits at Costco Wholesale Corp. stores on the west coast. Albertson’s acquired Plated in 2017 and announced it would have meal kits in hundreds of its stores by the end of 2018.

It’s not just grocery stores who demand meal kits. One in 4 U.S. consumers would try a meal kit. Meal kit spending is growing 3 times faster than other food channels.

Significance: Meal kits represent another opportunity for grocers.

#8: Snack Attack

Consumers are taking a bigger bite out of the snack food market.

Snack sales increased 3.4% from 2017 to 2018. The overall snack market is worth an estimated $42.5 billion.

Which snacks are consumers buying? Salty snacks saw the biggest growth, followed by snack and variety packs, fruit snacks, bars then nuts and seeds. Dairy products (yogurt and cheese, specifically) is the only snack category that decreased.

Read more about consumers’ snack preferences our Snack Attack: Capitalize on Cravings blog here.

Significance: Consumers are hungry for snack food. Salty snacks in particular represent an opportunity for grocers.