Little Rock, AR – Jan. 2, 2009 – Food cost is estimated to have risen 12% last year and forecasts call for price increases to continue through 2009, making it the third year in a row that food prices rose faster than the overall U.S. inflation rate – which is now at is highest since 1990. Meanwhile one segment of the food industry, bulk foods, has historically delivered the goods to consumers for 15% to 35% less than traditional packaged goods. That difference is causing more consumers to purchase foods in bulk – and more retailers to add bulk food selections in their stores.
While many foods can be and are sold in bulk at grocery stores, the most common items are beans, grains, candy, coffee, cereals, pastas, spices and other dry foods. Recently some liquid foods such as honey and olive oil have entered the bulk food segment of the industry.
Bulk foods are sold without a printed package, and packaging is a significant cost that’s passed on to the food consumer. Using a box of breakfast cereal as an example, there is first the cost of the cardboard for that box, then the cost to print it. Transportation cost to get the cereal to the store is disproportionately expensive too, because the cereal settles in its box, rendering a truckload of packaged cereal to technically be only about 75% full of cereal, the other 25% being unused space inside the boxes.
Bulk foods, are delivered to the store in voluminous boxes or bags, not individual packages. The bulk food is then deposited into a transparent dispensing system that allows the consumer to get as much or as little as he wants. Stores provide bags for bulk foods, but they are usually inexpensive and unprinted.
According to the Bulk Is Green Council, the bulk food industry is growing at a rate of 15% a year, making it one of the hottest trends in the grocery business. The Bulk Is Green Council is a national non-profit organization advocating bulk foods for environmental and economic reasons.
“Not only is bulk food less expensive than its packaged counterpart, there is less waste because consumers can buy the precise quantity they want. They are the ones dispensing the product,” said Jim Clemons, the council’s executive director. “There is also a better assurance of quality. Bulk food doesn’t hide behind a printed package. Consumers can see the actual product and gauge its quality before they buy it. Buying bulk is more environmentally responsible, too,” he said, “because there is less transportation for distribution and less packaging hits the landfill.”
“In our company alone, we are installing bulk merchandising systems in about 50 new stores a month,” said Scott Johnson, president of Trade Fixtures, a manufacturer of bulk food merchandising systems. “That’s up from last year, and from the year before. We’re seeing a definite trend.”