(+1) 718-5225575
Whole Foods Market is a supermarket chain that originated in Texas and is now spread throughout the United States, as well as in Canada and the United Kingdom. For the American market, it represents a company that makes Corporate Social Responsibility a fundamental part of its entire value proposition.
Values like eco-sustainability and environmental protection are highly appreciated by American consumers today.
The product assortment meets high-quality standards, containing no ingredients deemed harmful to health or environmentally damaging by the company. Even the procedures for raising animals slaughtered and sold within the chain follow a strict set of eco-friendly guidelines.
There are some Private Labels (estimated at 10-20% of the total) positioned as quality, organic, and natural, providing an additional guarantee for consumers.
The offerings also include products designed for consumers with special needs, such as vegan diets, lactose-free, or gluten-free products.
In this way, the company serves as a reference point for these consumers; it should also be noted that these niches are currently expanding.
The typical customer generally belongs to the “Baby Boomers” category, which corresponds to the generation following World War II and has significantly contributed to the increased demand for consumer goods.
The typical customer is usually well-educated, concerned about environmental issues, leads a healthy lifestyle, and appreciates the company's philosophy. They are also willing to pay a higher price, recognizing the value chain offered by the store for products that are minimally processed; they also have a high propensity to spend and a middle-to-high income.
Size and Location of the Store
The stores in New York are located in highly strategic areas, with the store presented here being the most important and significant.
Setting and Display
The premises are well-maintained, nicely furnished with the use of warm materials like wood and modern ones like metal. Youthful and vibrant colors and hand-written wall signs reflect the company's eco-friendly image and core values.
In the basement, a classic grid layout is predominant (with the use of some islands: for example, in the cheese section). There are consumption setups: for example, a section dedicated to beers with a self-serve tap and coffee.
Commercial Offer and Assortment
The ground floor and upper level are dedicated to the sale, preparation, and consumption of ready-to-eat products. The selection of ready-to-eat products is vast: from sliced fruit to freshly prepared Japanese food, islands with soups or ingredients to create salads and cold dishes, and finally, counters offering hot dishes to be consumed immediately. The basement reflects the organization of a traditional supermarket.
Two observations can be made:
The first observation is dedicated to the recurring and exaggerated theme of eco-friendliness, organic, and “organic”. The term “organic”, not widespread in the European market, essentially represents our equivalent of organic. The USDA/organic product certification follows the guidelines established by the United States Department of Agriculture. The leading private label is “365 every day value” positioned as “value for money” where quality is represented by natural, organic ingredients and eco-friendly themes.
The second is the following. There is a wide offering of Italian products, through which Whole Foods supports and conveys its quality image, as well as communicates the values of organic and healthy eating (the pleasure of eating well at the table and staying fit). Italy is well represented in departments dedicated to: cured meats & deli, cheese, pasta & rice, condiments, oil and vinegar, jams and preserves, mineral waters, frozen foods. The offering of Italian products is populated by renowned brands as well as many lesser-known brands with medium-high price positioning. An example is the Seggioni brand (pasta, condiments, and preserves) representing the high-end.
Made in Italy is still, excellently represented in the cheese department, where we have higher price positioning compared to the French: well-known names such as Grana Padano, Parmigiano Reggiano, Pecorino Romano, Mozzarella di Bufala Campana, as well as lesser-known names like Lattebusche from the Veneto region.
Whole Foods has represented a true revolution in the American food distribution sector.
While the values and ethics of quality, healthy eating, and organic are deeply rooted in the cultural traditions of Latin-Mediterranean countries, so much so that they are perceived as obvious by us, this is not the case in the United States. With Whole Foods, the culture towards environmental sustainability, natural products, quality, and healthy eating is born and spreads
Given the observations regarding the commercial offer and assortment, Whole Foods represents a excellent opportunity to export Made in Italy.
Consider products that express a combination of territorial excellence, quality, healthy eating, attention to organic, and niches like gluten-free, lactose-free, or vegan diet foods.
The Chain: Offer and Clientele
Trader Joe’s is an American retail supermarket chain, born in Monrovia, California, from an enlightening idea of its founder who, before venturing into the convenience store sector soon to be dominated by Seven Eleven, changed his entrepreneurial idea and achieved success by creating a chain of supermarkets across the United States with a unique value proposition. Today, with a total of 295 stores located in America, it represents one of the largest companies in the food distribution market.
Size and Location of the Store
The size of Trader Joe’s is equivalent to a total of 100 square meters, consisting of a single floor divided into aisles.
Setting and Display
During the visit to the Union Square store in New York, composed of only one floor, it was observed that the supermarket lacks the dining and detailed care present at Whole Foods located nearby. The products are presented under the Trader Joe’s brand and give the sense of a small neighborhood store, as the company itself wants to convey. The materials used in the store's construction are economical and aim to promote the concept of environmental protection. The refrigerated area, in addition to occupying an aisle, is placed against the wall and constitutes a predominant part of the supermarket's product display.
Commercial Offer and Assortment
Trader Joe’s offers a product in line with the organic (organic) vision in vogue in the United States, which seeks safer, more nutritious, and tastier food than conventional food. One of the critical success factors, as it was for Whole Foods, was involving the consumer in sharing environmental values and supporting various environmentally friendly campaigns. The products included in Trader Joe’s offering consist of 80% products bearing the company name.
Selling unbranded products is a strength for Trader Joe’s to relaunch and assert its name in the market, and it also requires its suppliers not to advertise the agreement with the chain.
The simplicity of understanding the product's origin comes from the brand name written on each product that bears the different variants of the American Joe, ranging from Mexican José to Italian Giotto to Chinese Ming, and so on. The lower price compared to competitors essentially originates from the unbranded products purchased directly from the market of small and medium-sized local and international companies.
The Trader Giotto’s branded products are found in the merchandise categories of pasta, sauces, preserved products, cheese, oil, and balsamic vinegar.
For all Italian products, the area of origin is not specified; only the label Product of Italy is present on the packaging, while others, although having an Italian brand name, do not have any definition of the country of origin.
The transparency regarding the product's origin is not the best and is often confusing. For example, in ready-to-eat products, the lasagna is always labeled with an Italian brand name even though its origin obviously comes from the United States. The products are simple, with frozen goods being one of the most substantial parts within the supermarket since there is no fresh food section
The clientele is mostly made up of young people and students who want to save on groceries, with the price of all products being about 30 percent lower than those sold by Whole Foods, and sales being higher per unit of space. It is easily observable by taking a walk inside the supermarket that even at non-peak hours, there is a significant crowd. A person holds a sign indicating the start of the queue to let people know the actual waiting time.
The combination of good food and affordable price has convinced consumers to shop within their stores and retain loyal customers, allowing the company to expand its revenue. Its popularity has carved out a significant space in the food distribution sector, with sales steadily increasing to over 9 billion in 2012.
The Chain: Offer and Clientele
Fairway is a chain with a purely New York DNA, founded in 1930, now boasting 11 stores in the New York area and a revenue of around 800 million dollars, growing strongly in recent years. It is recognized for its vast selection and high quality of its products. The chain, born as a family store, has now become a giant in the food sector, able to offer consumers a valid alternative to the major American supermarket chains in New York.
Size and Location of the Store
Wide entrance at street level and store at basement level, 1500 m^.
Setting and Display
The sales path is the classic supermarket layout. Grid layout with entrance on the fruit and vegetable section. Some rotating sales islands dedicated to in-depth exploration of the merchandise categories. During the visit, there was an island dedicated to tasting the wide selection of olive oils.
The shelves are modern, with a preference for the use of metal, developed vertically and rather simple.
Commercial Offer and Assortment
From the entrance, the emphasis on communication about convenience is immediately clear: given the abundance of displayed products and the prices clearly communicated with large fonts and signs. The large and deep section dedicated to fruits and vegetables plays an important role: communicating freshness, product quality, and store convenience. Continuing along the purchase path, we notice that:
Within the supermarket, there is a large space for products intended for special consumer categories (such as those with food intolerances) or Kosher products specifically designed for the Jewish public. The offering of Italian products is quite extensive and deep. For some categories, there are dedicated focuses on different regions. There is a significant presence of products from smaller brands. Additionally, there is a wide selection of products labeled as organic or whole grain. Fairway also offers a Private label oriented towards “value for money”, for example, for olive oils, there is a wide assortment of the private label with imported products (Italy, Spain) and with designations of controlled origin.
Fairway has a large fresh department and a large dairy department.
Italy is well represented in dairy products with the presence of grana padano, parmigiano reggiano, pecorino romano, mozzarella di bufala, asiago, and taleggio.
Fairway is considered by New Yorkers as one of the best supermarkets for quality and convenience. It represents a great potential for the distribution of food products from small and medium Italian enterprises (given the high presence of smaller brands, the depth of categories like pasta, oils, vinegars, condiments, canned tuna, and anchovies) and the focus on the concepts of organic or whole grain products.
The Chain: Offer and Clientele
The company, which operates primarily in the Northeast of the United States with approximately 30 stores, is part of the larger Atlantic and Pacific Company with 16 stores in the Manhattan area alone, occupying a stable position in the mind of the American consumer, placing it on the same level as Whole Foods for the quality of the products sold. The clientele that regularly frequents the Food Emporium supermarket has a medium-high income and obviously does not mind paying a higher price for the products they choose.
Size and Location of the Store
The store visited has a square footage of about 400 square meters, a few steps from Union Square, and has an underground parking lot that allows its customers to shop on their way back from work. A crucial factor in attracting consumers who do not have time to find parking in the area.
Setting and Display
During the visit to the Union Square store, developed on a single floor, it can be noted that at the entrance, before the actual supermarket, there is an area reserved for ready-to-eat products, the quality of the food sold inside the store corresponds to that of Whole Foods with prices in the same range. The environment is warm, rich, and inviting, a supermarket that combines the features of a small boutique in display and the size of an out-of-town supermarket.
Commercial Offer and Assortment
Within the supermarket's offer, there are internationally renowned products and others that are less known and come from small and medium producers worldwide.
There is a Food Emporium proprietary line branded “Via Roma” selling products sourced from Italy.
The price is generally high compared to the same products from other competitors. The product line offered by the brand in question ranges, of course, from pasta to sauces, cheese, and other products that come from Italian cuisine and fully reflect the values and characteristics of homemade products. The packaging faithfully adheres to Italian traditions, with various figures of elderly people recalling the old culinary culture that wants to remain unchanged over the years. Besides the Italian brand, there are other brands offered within the store, including:
The proposed offer seems to aim at high-quality products with medium-high prices that, however, the consumer often does not perceive. Analysis of products with Italian labels within the supermarket often leads to contradictions, with some products bearing Italian names like Giorgio, Mario Batali, also present in other supermarket chains, misleading the consumer about the product's origin.
Besides tomato sauces that can often be mistaken for Italian products, as for preserved products, there have been cases where it is difficult to determine the product's origin. Transparency in this American chain is not the best, especially for certain product types. Although organic products are sold within the supermarket, the eco-friendly concepts are not stressed or highlighted as clearly as they were at Whole Foods Market or Trader Joe’s.
Conclusions
Eating well and staying in shape appears to have more space in the offer, but the products seem to be those of any other large supermarket chain. Also, for this reason, as reported by several news outlets, it seems that the parent company wants to sell the 16 stores in Manhattan, precisely because of declining revenue over the past 10 years. The customer profile is very similar to what is found at Whole Foods, but consumer loyalty is much lower, negatively impacting Food Emporium's revenues.
The Chain: Offer and Clientele
The Garden of Eden supermarket chain was founded 25 years ago and today has 6 stores in the New Jersey and New York area.
Since the beginning of its entrepreneurial activity, the Garden of Eden chain has gained great approval and today boasts an excellent reputation thanks to its offering of high-quality products.
As the company states: Garden of Eden stores represent the “culinary mecca” for a category of consumers who pay attention to health and follow a healthy diet, composed of high-quality foods.
The products in the assortment come from national, regional, and international markets. They are selected by the purchasing office following principles of quality and refinement to meet the needs of a clientele attentive to health, quality, product origin, and with a medium-high spending capacity.
Visit the Store: 7 E 14th St, New York, NY, United States
Size and Location of the Store
Street-level store, about 300 m, classic commercial path with a strong prevalence of fresh products and exclusively food items.
Setting and Display
From the outside, there is a noticeable preference for a classic setting and furnishing reminiscent of an old European food shop. Wood is the most used material, both outside and inside the store: boiserie walls, counters, grid displays, and warm, natural-colored wooden display tables.
The setting is very relaxed and enriched by some details recalling the Italian rural tradition from the past generation: wicker baskets hanging from the ceiling, garlic braids. The almost bucolic environment conveys a general idea of freshness and high quality of the food. The background music is predominantly Italian opera or other popular music like “pizzica”.
Commercial Offer and Assortment
Upon entering, the display of fruits and vegetables is particularly well-curated, forming compositions placed on large woven wicker baskets.
Proceeding with the cheese and deli section. In the center of the display are oils, vinegars, condiments, pasta, and finally desserts, and bakery. Prices are not clearly displayed, and often the consumer must take the package off the shelf to study it and search for the price tag.
This represents the supermarket's positioning and the characteristics of its quality-oriented rather than price-oriented clientele. The products are mostly from medium-small companies. The offering of Italian products (such as oils, vinegars, and cheese and deli) is one of the deepest and most varied in New York, with well-known brands, lesser-known brands, and specific local origins. Suffice it to say that Garden of Eden is perhaps the only chain offering the IGP Alto Adige speck in its assortment. Fresh products dominate the commercial offer, and there is an offering of ready-to-eat foods.
Conclusions
Among all the supermarkets presented in the sample, Garden of Eden seems to be the most aligned with the profile of the European consumer. Furthermore, the chain's small size, high attention to product quality, and search for regional excellence make Garden of Eden an ideal commercial partner for small and medium-sized companies.
The Chain: Offer and Clientele
The Associated supermarket chain, with more than 250 stores across the United States, represents an old-established supermarket for the American market and, more specifically, for the New York market, always close to the profile of the American consumer. It is the largest independent supermarket chain in the New York City's five boroughs and generally in the Western area of America.
Founded in 1954, it is still a private company; it has changed its offering over the years, including ethnic products in its stores, thus expanding its range of offerings to satisfy the growing Hispanic population and other ethnic groups in the New York area that are increasing as a percentage of the total population.
Size and Location of the Store
The supermarket visited has a square footage of 300 meters, divided into aisles that segment the store by product category, with the fruit and vegetable section and deli counter oddly positioned at the end of the customer's purchase path.
Setting and Display
During the visit to the supermarket near Union Square, it feels like entering a typical American pharmacy where household and personal hygiene products are predominantly sold, with only partial food products. The shelves and product display follow a fixed scheme repeated in all the store aisles. Both from the inside and outside, it seems fundamentally a supermarket that falls into the economy category.
Commercial Offer and Assortment
In the offering proposed by the American-origin supermarket, the majority of products come from multinational and large companies with a lower price than competitors due to significant volume. Regarding Italian products, it can be said that there is an overwhelming majority of products with internationally recognized labels; there are also two private labels held by Associated that offer customers an affordable product generally known by the average supermarket customer. The consumer found within the store is predominantly white, although this partly relates to the area where the chain's stores are located.
For some stores located in neighborhoods with a high percentage of people from other areas of New York, the offer changes and adapts to the demand of consumers of different origins, an example being the Hispanics present in Manhattan, Brooklyn, and Queens. A strength of the American chain has been adapting to the context in which it was inserted, varying its range for each store within the supermarket to make it as closely aligned as possible to consumer demand was crucial in the growth of the chain's revenue, which has been able to respond to the diverse consumer categories from an ethnographic profile. Conversely, there is not particular attention to gluten-free and organic products, as is present at Whole Foods or Fairway.
The space allocated for Italian products is not as vast as other stores, although the offering includes well-known brands like Barilla, De Cecco. For tomato sauces, internationally recognized brands are also present. In general, fresh products within the supermarket are not predominant, while frozen products occupy a larger portion with their refrigerated counters.
Unlike most supermarkets we visited, fruits and vegetables are placed at the end of the purchase path, although this feature is not common to all Associated stores. There seems to be a general lack of attention to satisfying consumer desires.
Conclusions
In reviews of the supermarket, it is repeatedly emphasized that the food quality in the offering does not have significant qualitative value and often lacks the necessary characteristics to fully satisfy it. However, the simplicity and versatility in buying products quickly at medium-low prices ensure the supermarket continuous visibility within American groceries stores.
Even with just a single visit to New York stores, it is immediately apparent how distribution formats, products, merchandise categories, and consumers themselves differ completely from what we are accustomed to seeing in Italy.
Faced with a shelf of canned products, one encounters extravagant packaging, formats, and flavors that may seem strange and unfamiliar to a customer coming from abroad.
The 454-gram pasta boxes, tuna cans flavored with different tastes to enhance their flavor, or rather the numerous food variants that every supermarket is somehow obliged to sell to ensure that no cultural branch of the population feels marginalized make the American mass distribution a unique panorama that needs to be identified and studied for its numerous offerings.
In the market research conducted through visits to some supermarkets in the Manhattan area, it is immediately clear that the concept of a supermarket in America is very distant from the Italian one and has undergone a kind of evolution over the years.
The American supermarket, with its notable differences that can be easily identified from chain to chain, however, has similar characteristics; thinking of the cases of Whole Foods and Trader Joe’s, for example, one can discover that both have firmly sided in favor of Green and Eco-sustainable themes, but their offer targets two different types of clientele.
Another feature that distinguishes the American offer is undoubtedly the presence of real restaurants/takeaways within supermarkets where one can consume a meal previously purchased inside the supermarket. In some supermarkets, it plays a central role, and indeed ample space is left for the area with prepared dishes and a dining area.
These areas are generally frequented by people who want to consume a cheaper meal than a restaurant's and at the same time want to eat a more substantial and healthy dish than what can be found in takeaways along the road back to work. This is just one example of the countless peculiarities that distinguish distribution, customers, and products sold in America.
It is therefore difficult, based on these premises, to think that a product that has been successful in Italy can be launched in America and be accepted and successful without needing a revamp, for packaging, format, and the value proposition one wants to convey to the customer.
Entering the American mass distribution market means investing time and money in creating a new product that knows how to adapt to the characteristics and tastes of American consumers, fits into the price range in line with the needs of mass distribution and its customers, and can be competitive with the other products present in the offer.
Acknowledgments
The research on New York supermarkets was conducted by two brilliant researchers from Bocconi, to whom we at ExportUSA New York, Corp. extend all our appreciation:
Filippo Signoretti
and
Mattia Costan
ExportUSA offers a well-established market research and product positioning service. We put our experience and direct contact with importers, distributors, and representatives in numerous sectors in the United States to use.
https://www.exportusa.eu/market-research-exportusa.php
Branding Services for the American Market: ExportUSA adapts, or {re}adapts your product and prepares it for the American market
https://www.exportusa.eu/re-branding-exportusa.php
ExportUSA takes care of ensuring that your products adhere to FDA standards. We make sure that all food products, cosmetics, medical devices, and dietary supplements comply with FDA regulations.
https://www.exportusa.eu/fda-compliance-exportusa.php
ExportUSA opens US incorporated companies in all of the United States. We can open both LLCs and corporations
https://www.exportusa.eu/opening-a-company-exportusa.php