Before we dive in, I wanted to share the latest piece in my interview series with Joe Rotondo from Smearcase. I have had the pleasure of getting to know Joe over countless events in the NYC CPG community. From coffees to happy hours, I have enjoyed learning his POV on retail from the CPG lens. I figured you would too! I am so excited to share this conversation about the brand he has founded, Smearcase, which is a frozen cottage cheese dessert.

This is the second conversation (first edition here) in an ongoing series with movers and shakers in the retail industry. Have anyone you want to hear from? Please be sure to drop their names 👇

Every quarter or so, Dan Frommer from the New Consumer partners with Coefficient Capital to provide a pulse of what’s going on from a customer POV. This time, they also partnered with Instacart to get the data, adding a fascinating layer to the analysis. In the past, I have shared some of my favorite anecdotes, so I figured would run it back! Full report is here for those interested - I highly recommend checking out Dan’s work if you enjoy this newsletter!

When I laid out my predictions for 2026, the first prediction I shared was around consumption, specifically that hydration and fiber were going to be big for 2026. According to the customer data from this, Water (#4) and Fiber (#5) are aspects customers are going to want to consume more of this year, with fiber growing pretty fast compared to last year. It makes sense, too. These are areas in which customers are deficient and want to improve their health. With all the focus on health, it was only a matter of time before these areas received focus.

On the flip side, regarding less consumption, I think it is fascinating to see Alcohol not in the top items consumed less. Coming from the alcohol industry, there was a lot of chatter regarding the future of that industry, and whether consumption was truly declining. I will leave that for another conversation, but it is interesting to see the “vice” people are focusing on, actually, is sugar. If you include Candy and Sweets, that means in this survey, 58% of respondents indicated they want less sugar. Feel like this is an area that is definitely being underdiscussed.

As part of this research report, they did a fascinating deep dive into people’s opinions on beverages (discovery, preferences, etc.). What stood out to me, however, was the discovery method and how much retail and other in-person connections make a difference. Social media and other online opportunities are a big factor too, but at the end of the day in-person makes a big impression. It would be interesting to deep dive into these answers and understand the different touch points or connectivity throughout. Did someone see a social post, then go to retail and see it? Or vice versa? There are a lot of multi-dimensional touch points in discovery. I think that is something that gets missed throughout this process, all the different touch points that lead to a discovery. A tough web to untangle!

The final section of the report focused on customer behavior toward online grocery shopping, and it had fascinating insights. For starters, online grocery has been growing, but a lot of that growth has been led by older generations and lower-income people. In terms of future growth, it seems that Gen Z and Millennials are where that will happen. However, an underlying conflict exists. First, people actually like shopping for groceries, although that can still be transferred online. Second, people think groceries should have the same prices as in-store, but the reality is that there is more costs associated with grocery delivery. Something is going to have to give. It will be interesting to see who concedes first, consumers or retailers.

Luckin Coffee is a fascinating story. Founded in Beijing in 2017, it went through a massive fraud/accounting scandal in 2020-2021. After that, the company replaced most of its top management and removed its former chairman, chief executive, and other employees who carried out the fraud. In its place, Luckin Coffee is now being run by the Chinese private equity firm Centurium Capital. Since the new management, the company has really taken off; its core product is super small-format, grab-and-go coffee stores. In fact, it already has nine locations open in the US, with more along the way. Now, it is seizing the opportunity that Nestle is trying to sell off many of its non-core assets to purchase Blue Bottle Coffee. The cost was roughly $400M, $300M under the current valuation. It will be interesting to see how Luckin integrates Blue Bottle into the business, as Blue Bottle is more of a premium offering. However, Blue Bottle has shown the ability to operate in more of a small format model in NYC’s Moynihan Train Hall. It will be very interesting to follow along.

Sak’s Fifth Avenue, and its associated companies, recently went through bankruptcy. The retailer has struggled to adapt to the new retail world for clothing, let alone the increased competition from eCommerce. As part of bankruptcy, they just announced a go-forward plan. Here are some of the highlights:

Not a pretty picture or story. It will be very hard to turn around from here, but some have been able to do it.

Early on, for CPG brands, they need to differentiate themselves from the competition. One major way is to build a distribution channel that most brands will never touch. I have seen everything from food service to military bases to something in between. Smash Kitchen, a condiment company that launched exclusively in Walmart, has been expanding its reach. This week, it announced a partnership with American Airlines to feature its condiments on board. As part of this process, Smash Kitchen created the packets you are used to seeing in food service for this partnership. I think this partnership is super smart because it drives trial. It also expands them into food service, which I strongly believe is an underrated channel.

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