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LARRY LUND
Market Trends: How New and Old Public Markets Stay
Relevant in Today’s Competitive Marketplace
PrincipalReal Estate Planning Group
PUBLIC MARKETFOOD TRENDS
Larry Lund
Principal, Real Estate Planning Group
Chicago
312-751-1250
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
Emerging Trends in FoodA
rtic
les
Source: REPG search of Google Scholar by terms in specific years March, 2015
Going out to eat is likely to keep increasing
%43.2%
20.1%
35.8%
1961 1990 2013
Global move to ready meals
Source: USDA Economic Research
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
Farmers Markets fastest growing food distribution channel
Po
pu
lati
on
Source: U.S. Census 2012, USDA-AMS-Marketing Service Division, and REPG
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
Big Changes in Food athome 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%
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
Merchant wholesalers consolidating to increase efficiency
$,000
Source: U.S. Economic Census, 2012
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?
Locavore Movement & Globalization
What’s Local?
• Oxford American Dictionary -250 miles
• Whole Foods 7-hr drive
• U.S. Congress <400 miles
• State of Vermont 30 miles
• Boston Public Market – State.
Why Local
• Freshness 82%
• Support Local Economy 75%
• Knowing Source 58%
Source: USDA Economic Research Service
Globalization15 multi-national companies
control 30% of supermarket sales
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 Produce Arcade
Eataly, Roma, NYC, Chicago, San Francisco, TokyoHarrods Food Hall, London
Granddaddy and Newest Entrant into Food Halls
Grocery stores want to be restaurants
Whole Foods Market –Wine Bar Mariano’s Market – Oyster Bar
Mercado de San Anton 4 levels- Madrid
Customers will shape market
French Market, Chicago
You do not get to select your customers, your customers choose you!
Milwaukee Public Market
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?
