Instacart Founder is Leaving

Instacart founder Apoorva Mehta has announced plans to step down as executive chairman and hand the reins to CEO Fidji Simo.

Once Instacart becomes a public company. Mehta will then exit the board of directors. At that time, Simo will take his place as chair of the board. Simo has served as Instacart’s CEO since August 2021 when Mehta took over the role of executive chair.

“Instacart has been my life’s work for more than a decade. Since I transitioned from CEO to executive chairman a year ago, I realized that I want to pursue a new mission and I want to do it with the same singular focus that I had while building Instacart. Stepping off the board will allow me to do just that,” Mehta said in a statement. “We have a high-caliber leadership team with Fidji at the helm, and I’m excited about her vision for the company and the expanded role Instacart can play for retailers for years to come. I remain confident in the enormous opportunity ahead and will always be a supporter of the team and company.”

The nation’s largest third-party grocery delivery provider, Instacart partners with more than 800 national, regional, and local retailers in North America and provides online shopping, delivery, and pickup from more than 70,000 stores in over 5,500 cities, reaching more than 85% of U.S. households and 90% of Canadian households.

Kroger’s Home Chef Opens New Production Center

Kroger’s Home Chef brand is expanding in the southeast with a new facility in Douglasville, Georgia. The new facility will provide more space and opportunities to serve the company’s growing customer base.

Home Chef’s new production center will be equipped with state-of-the-art features, including upgraded food-safe material design, cleaning processes, facility flow, and more. This will also be the first Home Chef facility to incorporate a full-service kitchen for cooking and batch production of ingredients to be used in the company’s meals. It will oversee the cooking of vegetables, starches, and grains, as well as in-house sauce production.

“Our Atlanta facility is a foundational part of delivering high-quality meals to our customers in the south and beyond,” said Erik Jensen, Home Chef’s CEO in a statement. “This new center will make our production and distribution even more efficient, so we can continue to bring fans easy, delicious recipes.”

Acquired by Kroger in 2018, Home Chef offers simple recipes in many formats, including Oven-Ready and Fast & Fresh meal kits to Culinary Collection for more adventurous home cooks and add-ons like protein packs, salads, desserts, and more.

Dollar General CEO to Retire

Dollar General CEO Todd Vasos has announced his plans to retire as CEO, effective in November. Chief Operations Officer Jeffery Owen will succeed him as CEO.

Vasos joined the company in 2008 — back when Dollar General was under private equity firm KKR’s ownership — as a division president and chief merchandising officer. From there he would take over the COO role in 2013 before becoming CEO in 2015.

Since Vasos became CEO, Dollar General’s sales have increased by more than 80%, and it has added nearly 7,000 new stores. Vasos is also credited with expansion into Mexico and adding more fresh food and groceries into its stores, including the launch of DG Fresh in 2019. DG Fresh is an operation to add perishable and frozen foods to its stores and the rollout of DG Fresh to all its stores was fully completed in 2021.

Dollar General plans to continue its expansion across the country by adding over 1,000 stores this year. Presently, the retailer has more than 18,000 stores in 47 states and had sales of over $34 billion in 2021.

Uber Eats Boosts Online Grocery Investment

Uber Eats plans to roll out an updated online grocery delivery experience, two years after it entered the U.S. e-grocery market.

Consumers in select cities will see new features in the Uber Eats app and website designed to make grocery shopping more convenient and dependable. This new functionality will include after-hours ordering, live order tracking and simpler item replacements for customers and improved support for personal shoppers.

Among the important new Uber Eats grocery delivery features is the ability to place orders whether stores are open or closed. Items that are ordered after hours are delivered in the first available window or scheduled at the customer’s convenience. Other additions include live order tracking and improved item replacement from the service.

With live order tracking, consumers will be able to monitor the shopping and delivery experience in real time, according to Uber. As a personal shopper scans and adds items to the cart, pays for the order at checkout and begins delivery, customers will be updated on the status of their grocery order as it happens.

“Uber has always been known for convenience — tap a button, get a ride, or get your food whenever you’re hungry. So, our focus on that has made it possible for consumers to now also get their groceries on their own time, because we know life doesn’t really happen on a schedule,” Therese Lim, senior director of grocery and new verticals product at Uber Eats, said during a press conference.

New Amazon Fresh Store Highlights Private Brands

Private brands play a big role in Amazon’s fast-growing brick-and-mortar supermarket chain. Happy Belly, Amazon Kitchen, Fresh, 365 by Whole Foods Market and Aplenty are given prime shelf space throughout at the new Amazon Fresh store Oceanside, N.Y. The 47,000-square-foot store is the first Amazon Fresh in New York. It joins about 36 others across six states and Washington D.C. that have opened since the e-commerce giant launched the banner in August 2020. More stores are planned.

Themed endcap displays are strategically used to promote Amazon’s own brands. On opening day July 14, endcaps were devoted to 365 condiments, Aplenty salty snacks, and Happy Belly baking products.

The store features Just Walk Out technology. Overhead sensors and cameras recognize products that shoppers take off shelves. Shoppers can skip the checkout line and simply walk out of the store with their groceries. Their Amazon accounts are automatically charged after they leave the store.

Dollar Chains Seeing Increased Traffic

Research company reports retail traffic at discount and dollar stores in the second quarter of 2022 remains high and inflation pressures continue to impact shoppers.

According to the company’s 2022 Quarterly Index, the four major discount and dollar chains (Five Below, Dollar General, Family Dollar, and Dollar Tree) saw a combined 8% increase in visits compared to Q2 2021, a 20.5% increase compared to Q2 2019 and a 13.2% increase from Q1 of this year.

In the report, wrote “In Q2 2022, weekly visits to dollar and discount stores were up relative to 2021 and increased significantly relative to 2019.” The report also added “The dramatic rise in YoY weekly visits reveals the long-term advantage the pandemic gave the category. In the early days of COVID, dollar and discount stores were one of the few retail categories that remained open as essential businesses, which led many shoppers to discover the value priced one-stop-shops – and these shoppers have been coming back ever since. Meanwhile, the increase in YoY visits indicates that the category still has some room to grow.”

Family Dollar saw the largest increase, with 16.3% in year-over-year (YoY) visits in Q2 2022, followed by Five Below at 10.2%, Dollar General with 8.5% and Dollar Tree  at 5.9%. also explained that YoY and Yo3Y increases could also be a result of new dollar chain locations, as several retailers grow their store fleets.

Catalina: Inflation Sending Consumers to Private Brands

According to a new study from Catalina, inflation has consumers seeking out private label brands, especially in categories such as baking mixes and soup.

“The data clearly indicates that shoppers have become more price-sensitive and value-driven in recent months,” said Sean Murphy, the firm’s chief data and analytics officer.

The private-label growth highlights many of the current consumer trends, Catalina noted.

For example, private label categories that saw double-digit sales increases included baking mixes (+40%), soup (+17%), prepared foods (+12%), dried vegetables (+11%), and canned fish (+10%), indicating that consumers are seeking out convenient options to help them prepare multiple meals throughout the day, according to Catalina. While the report found that pandemic-fueled baking trend may have begun to wane, shoppers are still seeking out small indulgences, such as private-label baking mixes to help fill their need for cakes and cookies.

“The rise in unit sales of store brand staples like canned fish and soup indicates consumers are looking for affordable lunch and dinner solutions,”​ said the report. “While the pandemic-fueled trend of scratch baking has declined, baking mixes remain popular, with shoppers increasingly opting for store brand mixes.”​

Other categories that showed increases during the same 6-month period vs. one year ago included baby food and cereal, which experienced more modest unit sales growth of +6%. The study looked at sales during the same 6 month period between January 1 to July 17, 2022 vs. the same period last year.

Amazon Denies Reports About Private Label Exit

Amazon has denied published reports that it plans to discontinue or reduce its many lines of store brand products.

"We never seriously considered closing our private label business and we continue to invest in this area," a spokesperson for Amazon stated in response to the reports, adding, "just as our many retail competitors have done for decades and continue to do today."

The Wall Street Journal reported the company planned to exit or severely reduce its private label business as a reaction to government inquiries into the company. Amazon’s private label business includes 243,000 products across 45 different house brands as of 2020. Some of its brands include AmazonBasics, Solimo, Wag, Presto!, Aplenty, Happy Belly, Amazon Essentials, Mama Bear and Wickedly Prime.

The Wall Street Journal article said that low sales had led to Amazon considering cutting back its private label ranges by as much as half, if not eliminating them altogether. However, according to  research from Marketplace Pulse, Amazon offers a similar number of products as it has for the last two years and no noticeable cutbacks have happened. Fifty-six percent of all online retail purchases in the U.S. are through Amazon, according to a study earlier this year by PYMNTS.

The article said that the marketplace began cutting items during the last six months, following a review by Dave Clark, Amazon's former CEO of Worldwide Consumer, who recently left the business to become CEO of Flexport.

Rising Costs Lead to Ingredient Reformulation

Nearly 90% of manufacturers surveyed by TraceGains said higher ingredient prices have shaped the way they are doing business today. For many, this includes modifying or creating new formulas altogether and making research and development cuts.

In TraceGains “2022 State of Supply Chain Disruption” report, which surveyed more than 300 food and beverage manufacturers, the report found new product development and formula modifications have been critical to compensating for higher ingredient prices, according to the report. Thirty-seven percent of companies acknowledged modifying more than 20 formulas. A quarter admitted to modifying between six and 20 formulas.

Two-thirds of companies also said they were forced to raise prices in the last two years. Almost 50% halted production on some products. Another 46% said they have been unable to keep up with consumer demand. Respondents were evenly split between CPGs continuing to innovate and those making R&D cutbacks.

TraceGains also asked respondents about lessons learned for the future. Increasing supplier diversity was the most important strategic shift followed by leveraging contract manufacturers. Nearly 7-in-10 companies said they plan to expand their supplier networks in the next 24 months. Some 41% plan to change or eliminate product offerings altogether.

“As consumers, we feel the pain of supply chain issues each time we walk out of a grocery store,” said Gary Nowacki, chief executive officer of TraceGains. “This survey sheds light on the problem directly from a CPG brand’s perspective and lets other food and beverage companies know they’re not alone in this fight. Forward-thinking brands have used this unfortunate time as a wake-up call to modernize antiquated operations and those who already have are much better positioned to mitigate disruptions with as little impact as possible.”

Private Brand Sales Continue to Surge

Private brand sales continue to rise into the second half of 2022. According to IRI, store brands gained 11.6% in dollar sales in July, while national brands increased 5.5%.

The past three months were especially strong. Store brands gained 11.6% in July, 11.4% in June and 9.8% in May, an average of 10.9%. Year to date, store brand sales are up 9.1% and national brand sales are ahead 5.5%. This is the seventh straight monthly 2022 report from IRI that indicates dollar gains for private brands.

During July, 16 of 17 departments showed store brand dollar growth, with only tobacco posting a decline. Liquor and beverages showed the strongest growth with 27.5% and 22.9%, respectively. Meanwhile, refrigerated (18.4%), deli prepared (13.9%), produce (10.5%) and the frozen department (8.7%) all showed solid growth.

On average, overall dollar share for the first seven months of 2022 came in at 18.2%, an increase over the 17.7% share in 2021 for store brands in all the major channels. Likewise, unit share was 19.9% for the first seven months, an increase over the 19.6% in 2021.

While unit sales continue to decline for both national and store brands throughout 2022, store brands are showing relatively better sales traction than their branded rivals. In July, national brands suffered a 4.7% decrease compared to a year ago, while private brands came in a little better, at minus 1.5%. So far in 2022, private brands averaged -1.8% unit decline while national brands had suffered a -4% drop.

The recent statistics are available for members at in the IRI Unify section. Members can find information on 317 categories and 967 subcategories, as well as statistics from 17 departments.