9th International Public Markets Conference - Larrry Lund
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Session -- Market Trends: How New and Old Public Markets Stay Relevant in Today’s Competitive Marketplace Larry Lund is Principal of Real Estate Planning Group in Chicago, Illinois.
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9th International Public Markets Conference - Larrry Lund
- 1. LARRY LUND Market Trends: How New and Old Public Markets Stay Relevant in Today’s Competitive Marketplace Principal Real Estate Planning Group
- 2. PUBLIC MARKET FOODTRENDS Larry Lund Principal, Real Estate Planning Group Chicago 312-751-1250 Larry@REPG-Lund.com
- 3. Convergence in global food demand and delivery- “Convergence is apparent in most important food expenditure categories and in indicators of food system modernization such as supermarket and fast-food sales” – U.S. Economic Research Report, 2008
- 4. EmergingTrends in Food Articles Source: REPG search of Google Scholar by terms in specific years March, 2015
- 5. Going out to eat is likely to keep increasing % 43.2% 20.1% 35.8% 1961 1990 2013
- 6. Global move to ready meals Source: USDA Economic Research
- 7. Sales at U.S. food service places ready to surpass grocery stores Source: U.S. Census Monthly Retail Sales and Food Service Report, March 12, 2015 1992 2015
- 8. Farmers Markets fastest growing food distribution channel Population Source: U.S. Census 2012, USDA-AMS-Marketing Service Division, and REPG
- 9. Food service segments shares remain constant 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1997 to 2013 Other – 2.3% Recreation – 4.1% Stores/Bars – 4.5% Institutions – 7.2% Full-service Restaurants Limited Service Restaurants 40.9% Share 37.0% Share 36.1% Share 41.3% Share Total 77.4% Share Total 77.9% Share
- 10. Big Changes in Food at home buying 63.3% Share73.9% Share 1997: Farm, Wholesale 6.4% Home Del./mail 3.8% Other Retail 4.6% Mass Merchants 1.7% Warehouse 3.4% Specialty Food 2.2% Other Grocery 1.2% Conv. Stores 2.7% 2013: Farm, Wholesale 5.9% Home Del./Mail 2.9% Other Retail 4.8% Mass Merchants .5% Clubs & Super Ctr. 16.3% Specialty Food 2.6% Other Grocery 1.1% Convenience Stores 2.7%
- 11. Food Hubs • Aggregation, distribution, and marketing of source identified products to size-appropriate infrastructure • Mostly sell to Restaurants, CSAs (Community Supported Agriculture), and their own retail storefronts • 75% are located in Metro Counties, half are in counties > 1 million people. • Less than 10% Hubs (2013) require GAP (Good Agricultural Practices) or GHP (Good Handling Practice) certifications. • Less than 5% have sales over $10 million vs. Average produce wholesaler $15.2 million. Only half of Foods Hubs are economically viable. Source:Wallace Center, 2013 National Food Hub Survey
- 12. Merchant wholesalers consolidating to increase efficiency $,000 Source: U.S. Economic Census, 2012
- 13. U.S. changing demographics change food spending • Average household size declined from 2.63 (1990) to 2.54 (2013) • Nonfamily Households increased from 29.3% (1990) to 33.9% (2013) • Little planned eating • But more restaurants and prepared food to take home. • What does a Public Market look like that meets this customer’s needs?
- 14. Locavore Movement & Globalization What’s Local? • OxfordAmerican Dictionary -250 miles • Whole Foods 7-hr drive • U.S. Congress <400 miles • State ofVermont 30 miles • Boston Public Market – State. Why Local • Freshness 82% • Support Local Economy 75% • Knowing Source 58% Source: USDA Economic Research Service Globalization 15 multi-national companies control 30% of supermarket sales
- 15. What is the role of today’s market is it a place to buy food, eat, or hybrid? West Side Market Hall, Cleveland West Side Market, Cleveland ProduceArcade
- 16. Eataly, Roma, NYC, Chicago, San Francisco,TokyoHarrods Food Hall, London Granddaddy and Newest Entrant into Food Halls
- 17. Grocery stores want to be restaurants Whole Foods Market –Wine Bar Mariano’s Market – Oyster Bar
- 18. Mercado de SanAnton 4 levels- Madrid
- 19. Customers will shape market French Market, Chicago
- 20. You do not get to select your customers, your customers choose you! Milwaukee Public Market
- 21. Questions you need to ask • Why do you want to develop a “public market”? • Who are your customers? Markets have two Customers! • What do your customers want? • How will the Market be economically sustainable?