Online sales may be cannibalizing brick-and-mortar sales in grocery categories.

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A challenge facing the food and beverage industry is tracking retail sales as the market becomes increasingly fragmented and competitive.

“With the changing retail landscape, measuring consumption is not as simple as it used to be,” said George Zoghbi, chief operating officer of the US commercial business for the Kraft Heinz Co.

During an Aug. 3 earnings call he was asked about Nielsen data showing sales volume down for snack nuts, shelf-stable juices, coffee and powdered beverages. He said the Nielsen data mentioned were covering traditional retail outlets and some mass merchandisers and club stores, but the data were not covering hard discounters, some big club players and almost the entire e-commerce channel. E-commerce sales at Pittsburgh-based Kraft Heinz, although they make up about 1 percent of total sales, are growing at a 60 percent rate, he said.

More coffee is being bought online, not just by consumers but also by companies wanting to stock their offices.
Online sales make up less than 3 percent of total food and beverage sales, and the percentages vary by category, said Sam Gagliardi, senior vice president of e-commerce for Information Resources Inc., a Chicago-based market research firm. More coffee, for example, is being bought on-line, not just by consumers but also by companies wanting to stock their offices, he said.

US retail ground coffee sales were $9,451 million in the 52-week period ended July 9, down 0.3 percent from the previous 52-week period, according to IRI data covering supermarkets, drug stores, mass market retailers, military commissaries, and select club and dollar retail chains.

“We do not see in-store growth returning here in the foreseeable future,” Gagliardi said of overall consumer packaged goods. “In fact, we largely believe, especially when it comes to food, that most of the sales that are happening on-line are cannibalizing the in-store sales.”

New York-based Nielsen estimates e-commerce sales make up about 8 percent of total consumer packaged goods sales, said Jordan Rost, vice president of consumer insights.

E-commerce sales make up about 8 percent of total consumer packaged good sales, according to Nielsen.
“With foods and beverages, it’s a little bit lower than that,” he said.

“I think where we have seen some of the early developments with food and beverages in particular are with center-store categories, generally the packaged foods,” Rost said. “We see particular development in the snacking categories — so nuts, crackers, snack bars.”

He added, “The brick-and-mortar trajectory is still trending downward, and e-commerce is growing so fast.”