The Lempert Report LIVE

Exploring the Impact of Grocery Store Acquisitions, the Rise of Water Enhancers, and Community Food Trends

August 21, 2023 Phil Lempert Episode 91
The Lempert Report LIVE
Exploring the Impact of Grocery Store Acquisitions, the Rise of Water Enhancers, and Community Food Trends
Show Notes Transcript Chapter Markers

Do you ever think about how your local grocery store impacts your community and your lifestyle? This episode of the Lempert Report LIVE will take you through the fascinating world of retail food industry, where we discuss Aldi's game-changing acquisition of Winn-Dixie and Harvey's. Fresh insights are waiting as we reveal how this move will reshape shopping habits in the Southeastern U.S. Learn about Hormel Foods' generous contribution of Spam to Hawaii's relief effort, and explore the empowering initiative introducing vertical farming to fire stations.

Is water the new canvas for culinary creativity? We'll probe this question as we explore the rise of water enhancers, a trend that's reinventing hydration. Discover the allure of flavors like birthday cake water, thanks to the viral 'WaterTok' trend on TikTok. Discuss with us the necessity (or lack thereof) of candy-flavored water and delve into the rising status symbol that is designer water bottles. The conversation gets real as we talk about the role of community in shaping food trends, from social media influencers to initiatives like the Garden for First Responders. Join us for an enlightening discussion that will make you ponder your next sip and your grocery run.

Phil:

Welcome to the Lempert Report LIVE, On today's broadcast. The retail earthquake that Aldi initiated by acquiring Winn-Dixie Hormel's Spam saves the day, literally. Indoor farming moves to firehouses. Another TikTok star wants in on the food biz, the upside of the water enhancement business. Hillary Clinton speaks out on . A. nd on the bullseye, you won't believe this move from Eggo Waffles. I hope you'll check out FoodNotPhones. com and join us for National Food Not Phones Day on September 19th. Let's get started. So, Sally, no question. Last week was a big week in food where Aldi surprised the entire industry by announcing that they were going to take over Winn-Dixie and Harvey's from southeastern grocers. It adds 400 stores to Aldi's already 2000 stores, bringing their total up to 2400. Once everything is approved, that's going to happen in the next year. But what's so interesting is the acquisition states. The geography is where Aldi has already been doing very well. They've gained market share there. They've converted shoppers and now being able to convert Winn-Dixie shoppers, who are typically value-oriented just like Aldi is, is going to be a huge plus for them. But I think the major difference here is what we've seen. Is the southeast part of the nation really getting a lot more young people Gen Z, millennials moving down there. This past year alone, more than 6 million people have moved down there. Population is now over 77 million people and I really think that this play is brilliant on Aldi's move. What do you think?

Sally:

Yes, the southeastern part of the United States accounts for more than 34% of the nation's populations increase, as you noted in your column last week, Phil, and that population increase, we're hearing, is because of jobs being created and the lower cost of living and the warmer climate is probably attractive to people. So it will be very exciting to see what Aldi's presence, more of their presence in the southeast does. We know Gen Z loves Aldi and there's a really large social media following in all kinds of different social media groups where people really enjoy sharing what the items are going to be each week at Aldi, and so it's what has started out as a cult following has become something even larger, I believe. So it will be exciting to see what happens for this retailer.

Phil:

And probably the most important thing that I'm watching now is the fact that Publix really owns Florida. Now, with Aldi taking over Winn-Dixie, I think that and they are going to convert some stores to Aldi's. Nobody knows how many stores are going to stay as Winn-Dixie's and how many will convert to Aldi, but if the Aldi DNA, which is focused on curation and private label, quality and environmental concern, if they can somehow insert that DNA through CRISPR technology maybe into the DNA of Winn-Dixie, I think that Publix is really going to be in for a major competitor that they've never seen. The other question I've got and what I'm watching is this the first move, even though the Aldi has not said that. It is that, as we're going to start to see the Kroger-Albertsons deal take place and we're going to see more stored divestitures on their end whether or not Aldi is going to use that same strategy to pick up conventional supermarkets and either run them as conventional supermarkets, as we'll see with Winn-Dixie, or convert those locations into Aldi's. What they're really buying with Winn-Dixie, besides a very loyal customer audience, are great locations. Winn-Dixie was one of the best real estate groups that was out there back in the 60's and 70's and have great locations, so that's one of the things that they're buying as well. We've all seen the disaster that took place in Hawaii and our heart and souls go out to all those people that are there, but Hormel Foods has done something extraordinary. What's that about?

Sally:

Yes, Phil. As part of the relief effort, Hormel Foods, their Spam brand, is sending more than 265,000 cans of their canned meat products. They have also created a t-shirt that says Spam Brand Loves Maui. They're selling this t-shirt as part of raising money and in all, with their cash and their product donations, they're donating about a million dollars to help people out in Maui, which we know that they are going to need a lot of help to rebuild there.

Phil:

Yeah, we've seen other retailers or other distributors, like Spartan Nash, also sending aid there. But Hormel and Hawaii is the capital of spam, going back to World War II when it was fed to the soldiers, and good for them for doing it. I wish they'd do a little bit more. Now all the proceeds, 100% of the proceeds from the t-shirt, is going to the Aloha United Way and the Maui Fire Relief Fund. I like that, but you know, 265,000 cans of spam is a lot. Five trailer loads just to give you some idea. But every year they sell about 7 million cans of spam on Hawaii. So Hormel, great. Kudos! Love it and send a couple more trailer loads there. I think they need it and they deserve it. So vertical farming has now another outlet and it's fire stations. This started in Milwaukee, Wisconsin, and the Garden for First Responders has had a vegetable garden at one Milwaukee Fire Department for about two years. Now they're expanding it and what they're doing, which I love, which is so interesting besides just growing these lettuces and these herbs, they're giving it to underprivileged people who, frankly, don't normally get produce. What they discovered which I never really thought about, but it makes sense is, while there might not be good supermarkets in food deserts, there are firehouses, and whether they're growing, you know, in the garden adjacent to the firehouse or indoors like this. I really think that this is a fabulous program that I hope expands.

Sally:

Yes, me too. It's been wonderful to see the trend of community gardens growing around the United States in all different kinds of ways, and this is just another really innovative way to incorporate a garden into a community that needs it. I also love the fact that they are engaging teenagers in the area to come and help work the garden and be a part of keeping that up and also distributing the food. So that's a great effort for the community and the young people and giving them new skills and obviously, you know, giving them something really positive to do as a contributor to society.

Phil:

Absolutely. And the Milwaukee Fire Chief, Aaron Lipski. I love what he says. He says that he has an obligation not only to keep people safe from fires but to also keep them healthy. You know we need more people like that. So, fire Chief Lipski, congratulations, keep the program going and your role model for us all. Talking about role models, here's for me at least, you might disagree, Sally, but this is the antithesis of a role model. Charli D'Amelio, who's a TikTok star. She and her sister and their family's TikTok account have more than 400 million followers. Charli has the second most followed account on TikTok. I took a look at some of her videos and a lot of them are about Beauty, looking good, dancing I mean, just having a good old time. She's the spokesperson for Cerave Cosmetics or Skin Moisturizer. She's also a spokesperson for Dunkin' Donuts. I'm not exactly sure how that happened, but what their family just announced is they're going into the food business Yet another celebrity, whether it's on TikTok or elsewhere, wanting to be in on the food business. Just remember what happened to Mr Beast here, and it's called Be Happy Snacks. Now they got a $5 million investment from a VC firm and the CEO, who's their father, Mark D'Amelio, has announced that they're gonna do it. They got $5 million, but they have no idea what the first product is gonna be. They say it's gonna be a snack food of some kind, but who knows? And for me it's a real disconnect. I give them so much credit for getting these 400 million followers. Good for them. The videos are, you know, they're cool, they're funny, they're fun, they're somewhat educational, but I don't get the connection with food, do you?

Sally:

Well, first of all, I hope they know what product they're going to be putting out, because they've said that it's coming in the Fall, so that's really right around the corner. So I hope they have something on deck to release, and I will be interested to see what they come out with. I think what we have here is, you know, one of the finest examples of a personality, a social media personality, really growing into an influencer career. And Charli D'Amelio was one of the first viral personalities on TikTok with her dancing. So it is very interesting to see what opportunities come to these social media personalities and what types of businesses they like to get into. Tiktok is obviously a very popular space for food and food trends, and there are all kinds of wonderful personalities on TikTok that are making videos and showing us how to make things, or shopping in stores and showing us how to shop, and so it is a popular space for that. So I'm not surprised that they have decided to enter that arena.

Phil:

Not surprised. Let's see what happens. Great story in the Atlantic last week by Amanda Mull. Drinking water is easy. She talked about how we've moved away from carbonated, sugar laden drinks to water, but really it's the water enhancers that are really changing the face of how people are drinking water. They might have their own bottle of water that they fill up either tap water or bottled water from home. They're carrying them around. I see more water bottles than ever before, instead of plastic water bottles that get thrown out and stay on landfills for the rest of our lives. What she talks about is the fact that more people are using these water enhancers for one or two reasons either low calorie flavor enhancers or sports drinks or vitamin enhancers. It seems that this water enhancer business is really growing tremendously. Also, talking about TikTok, there's a subset of TikTok called WaterTok, and users mix and match the different powders and syrups into recipes. Inside giant insulated water bottles there's tips on how to make tap water taste like birthday cake. This has hit TikTok as well. But she questions, and I would agree do we really need our water to taste like Skittles or Jolly Rancher? Why can't water just taste like water?

Sally:

Yes, this is a great article and I can really relate to her talking about when she was younger, not drinking plain tap water. Very often I kind of had the same experience. I never had a water bottle growing up, and my kids go to school with a water bottle, a full water bottle, every day. But we've been told now for several years that we need to drink more water for all kinds of health reasons. It does seem one way, a really easy way, to increase your positive health efforts is to drink more water. I also think it's a very good point that she's made in this article about the popularity of water bottles. The Yeti water bottle is almost like a status symbol in some ways. It's a pricey water bottle and people like to have that to show that they've got that Yeti water bottle, and there are some other ones that are really popular. It isn't surprising to me that water enhancers are popular, because we are more and more not wanting to buy that plastic bottle of water. You can just drop that enhancer in your tap water and you have something a little bit fancy or drink.

Phil:

Yeah. The interesting thing for me, though, is a lot of people aren't looking at the ingredients on those water enhancers. For me that's caused a little harm, whether it's an artificial sweetener that's in there, or artificial colors or additives and so on, just because it tastes better, or just because you're adding vitamins or some nutrients to your water. As always, read the label first. Today on Food Not Phones, Hillary Clinton's essay, the Weaponization of Loneliness, is a notable piece of work that challenges us with the statement to defend America against those who would exploit our social disconnection. We need to rebuild our communities. She begins, as you might expect, saying that the question that preoccupied her and many others over the past eight years is how our democracy became so susceptible to a would be strong man and demagogue. Obviously, it's a lot about politics, but she cites the Surgeon General's advisory, the exact one that motivated us to start the Food Not Phones Initiative and movement, and one that again reports that, according to the Surgeon General, when people are disconnected from friends, family and communities, there are lifetime risks of heart disease, dementia, depression and stroke skyrockets. Shockingly, prolonged loneliness is as bad or worse for our health as being obese or smoking up to 15 cigarettes a day. Researchers also say that loneliness can generate anger, resentment and even paranoia. It diminishes civic engagements and social cohesion and increases political polarization and animosity. Unless we address this crisis, Murthy, the Surgeon General, warned we will continue to splinter and divide until we can no longer stand as a community or a country. Sally, it seems like the Surgeon General advisory has motivated a lot of folks, from us to Hillary Clinton. Obviously, her essay relates to politics, but what can we learn from what she has to say in this essay?

Sally:

Yes, I think there's a great deal to learn here. You know what she's talking about about being involved in your community, about civic engagement, about what is happening reinforcing what the Surgeon General said and what is happening with our youth that you know, suicide rates are up, depression and anxiety is up. You know, in our young and our young communities, and this is very scary, she's also talking about in here how about how we've declined by 70% in our in-person interactions with friends and that is that's a frightening number to hear and I think we all should be a little bit on alert as far as the social media engagement. The amount of time we spend on our phones and really spread the word of making more of an effort to gather around the table, to share meals together, to have conversations and, to, you know, really look at each other and enjoy each other's company. That's why w e've launched this Food Not Phones campaign, so hopefully we can get more people on board to just try this out, to just set that phone down when you're sitting at the table with your family and friends and see what kind of positive results you can get.

Phil:

So Clinton, when she was First Lady, wrote a book. It takes a village. And in it, obviously it is well over a decade old, she says she envisioned that a lot of these changes to to raise families healthily and successfully would happen at home, such as families turning off screens and spending more time together. So forget the politics. It's not about Clinton or not Clinton, or Trump or not Trump, but it's a worthwhile read for this article. We'll post it on the Food Not Phones website. Please check it out and I think we're gonna hear from a lot more people about loneliness and what you can do in the food industry is support our initiative Food Not Phones. It doesn't cost a thing. Just go where we're all committing to put down our phones during our mealtime, starting September 19th. Join us, along with the industry leaders, the FMI Foundations family meals movement, Acosta group, Hy-Vee, The Association of Retail and Consumer Professionals. Every day we have more people reaching out to us who want to be our partners and we're bringing them all on. So this list is going to get a lot longer. Check it out at food not phones. com. Thanks Sally. On today's bullseye. The Kellogg Company teamed up with Sugarland's Distilling Company to create the Eggo Brunch in a Jar of Sippen Cream. It's a liqueur that blends the flavors of toasted Eggo waffles, sweet maple syrup, rich butter with a hint of smoky bacon. Between the juggle of constantly changing schedules household errands, family outings or busy workdays, it can often feel impossible for parents to find moments that they can savor for themselves, said Joe Beauprez, Marketing Director with Eggo. Eggo Brunch in a Jar makes it easy for parents to kick back when they're not caring for their little ones. So whether parents want to punch up a weekend brunch or just savor some of those classic brunch flavors like, obviously, Eggo Waffles during their downtime, this feel-good Eggo-inspired liqueur is the perfect treat, he says. Well, Brunch in a Jar is designed to be enjoyed throughout the year, they say, but you must be 21 or older to purchase either one. Both Eggo-inspired Sippen Creams are volume. To give you some idea, most wines are around 10% to 12%. Beers range from anywhere from 3% to 11%, depending on a craft beer. On Eggo's website, they also suggest a recipe of one and a half ounces of the egg brunch, adding blood, orange juice, coffee syrup, spiced chai and another two ounces of rum. And that's just one of the numerous recipes that they offer, all of which includes adding more alcohol. Now, I've not tasted Eggo Brunch as is, or in any of their recipes, and frankly, I don't intend to. The entire concept I find to be yet another brand promotion with little reason behind it. I have nothing against Eggo Waffles. Of course I can't remember the last time I ate one but this isn't going to bring me back to the brand. In fact, for me it's just a major turn off. I can just see a Sunday morning breakfast where Dad makes Eggo waffles with strawberries and cream for the kids and then sits down with their mom to have their egos in liquid form. Now that's not bonding. Frankly, it's a cheap shot to sell more alcohol in the breakfast day part. I don't think Bloody Mary's have anything to worry about, but I think that those people who buy Eggo Brunch may have a lot to worry about. The Eggo Brunch in a Jar is available at select retailers nationwide and online in select states. Check it out, try it, let me know what you think about it and we will post your review right here. Thanks for joining us.

Sally:

Be sure to visit supermarket guru. com for the latest marketing analysis, issues and trends, and don't forget to join us back here next Monday at 2:30 pm Eastern for more.

Aldi's Expansion and TikTok Star's Venture
Water Enhancers and Importance of Community