Target is turning its focus away from packaged and processed foods in hopes of turning its stores into a go-to grocery destination, the Wall Street Journal reports.
Rumblings of changes in the grocery department began earlier this year amidst the Minneapolis-based corporation's massive layoffs and restructuring. But now major food suppliers are starting to find out what this actually means for some of their staple products, such as cereals and soups.
Target officials told suppliers (including General Mills, Campbell Soup, Kellogg and Kraft) that the retail chain won't be putting emphasis on promoting their staple products like they had in the past, and this shift to offer more Millennial-attracting products could mean less space on the shelves for their goods, the Wall Street Journal says.
“That doesn’t mean that mac and cheese is being eliminated, but clearly assortment is being shaped around what consumers are looking for,” CEO Brian Cornell told the Wall Street Journal in a recent interview.
Last month, when the retailer announced it had hired veteran grocery leader Anne Dament as its Senior Vice President of Merchandising to focus on repositioning Target's food business, the company said it would be shifting its focus to "better-for-you" options – yogurt, granola, wine and craft beer, specialty candy, premium sauces and oils, and coffee and tea.
Target will also expand its natural, organic, locally grown and gluten-free offerings in the hope of making the chain a food destination.
This isn't good news for the big name food manufacturers, which have seen slumping sales in recent months as consumer tastes shift toward fresh and natural options. That's led to consolidating and layoffs at some companies, Marketplace reported.
In an effort to "woo back consumers," Marketplace noted some manufacturers have started offering fresh food products – like when General Mills announced Cheerios will be gluten-free, or when it acquired organic food company Annie's.
The Wall Street Journal notes companies that are keeping up with what consumers want will still find a place on Target's shelves – Campbell acquired Plum Organics baby food, and General Mills' Yoplait business meets Target's urge to offer healthier foods.