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Urbanization and tiny houses could have a major impact on our industry. How will you respond?

A lot has been written about the urbanization trend in countries around the globe. The number of people living in rural areas has been on the decline for many years as populations shift to urban areas in support of jobs outside of agriculture. With urban areas come smaller living spaces. And while McMansions still represent a sizeable portion of new home construction in the United States today, urbanization and an aging population will likely lead to smaller living spaces over the decades to come.
Check out all the television shows and web sites featuring tiny homes with less than 1,000 square feet —many in the 300- to 600-square-foot range. With tiny homes come tiny kitchens, oftentimes sharing space with a home office or representing a major portion of a home’s main living space. With tiny kitchens come fewer and smaller kitchen appliances, and one has to wonder how this will impact the frequency with which we shop for food as well as future demand for refrigerated and frozen foods.
freezer-mergeSmaller housing units will likely lead to an increase in small shopping trips as consumers match shopping behaviors with daily product demand. With limited storage capacity in many urban housing units on the East Coast, there is a reason why one-roll toilet tissue sales have thrived. In large metro areas in countries like Japan, small food trips are the norm as shoppers buy just what they need for that day’s meals. Other important questions to ask: Will smaller housing units with limited space for perishable food storage translate into lower demand for frozen and refrigerated foods? Will the trend toward smaller homes have a negative impact on ownership of microwave versus conventional ovens? If consumers go without microwaves, will longer heating times for frozen and refrigerated foods prepared in conventional ovens hinder future sales?

From a retail format perspective, many small formats can thrive better in urban locations than they might in suburban or rural locations, but small trips and small packages don’t mean that big formats can’t win, too. Urbanization enables both big and small stores to flourish in support of higher demand created by population density.
Convenient shopping experiences and convenient meal preparation are themes that continue to resonate with many U.S. shoppers. Health and wellness advocates continue to stress that the amount we eat has as much or more to do with obesity levels as the lack of strenuous physical exercise. It would seem to me that some innovative frozen and refrigerated manufacturers will figure out how to combine these enduring trends into a smaller package at a premium price. Or just maybe we will see collaboration with an appliance manufacturer to create on-demand meals just like the Jetsons did in the futuristic ‘60s cartoon.

Todd Hale

Todd Hale

Retail insights thought leader Todd Hale is the former senior vp of consumer and shopper insights at Nielsen and now serves as principal at Cincinnati-based Todd Hale, LLC. A popular conference presenter, he also speaks at large and small company events — everything from board meetings to sales meetings to planning sessions. Todd’s discussions include the latest consumer and retail trends with insights on how manufacturers and retailers can enhance both near- and long-term market performance. He can be reached at todd@toddhalellc.com.

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