As the produce industry continues to face logistical challenges — labor shortages at all levels, skyrocketing prices, shipping delays and spotty store shelves — that no one could predict, solutions and innovations arise out of necessity.
“With every challenge comes opportunity,” said Matt Morgan, executive vice president of produce at Farm Journal, Lenexa, Kan. “Organic produce has seen 6% growth in the past year.”
Morgan introduced a panel discussion, “Coming Attractions: What's Next for Grocery and the Shopping Experience,” looking at where grocery retail is headed, with highlights on physical stores, online shopping and shopper behaviors. The Feb. 1 chat was part of seven education sessions at the Global Organic Produce Expo, held Jan. 31-Feb. 2 in Hollywood, Fla.
Chicago-based FoodMix Marketing Communications conducted a consumer behavior study to help food businesses adjust to all the issues that have arisen since March 2020.
“I think we are all shocked by how the pandemic has changed our business,” said Nadine Baarstad, FoodMix vice president of client development. Organics are leading the way, the study showed. “Consumers are wanting branded organic produce, and 70% are willing to pay 6 to 10% more for it. They want safer, fresher, convenience and value-added.”
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Maintaining freshness and quality in delivery is more critical than before, as more than 9% of grocery shopping is done online now, compared to a bit more than 3% before 2019, said Nathan Romney, chief product officer of iTrade Network, Dublin, Calif. The company handles $120 billion annually, servicing large retail and foodservice companies. With a network of more than 5,000 food and beverage trading partners, iTradeNetwork manages end-to-end supply chain solutions, from perishables procurement and quality to traceability and spend management.
“(Consumers) are increasingly dissatisfied with the quality they buy online or on their mobile app. That whole experience with quality changes your perspective on that retailer, with what they order,” Romney said.
Growers and shippers need to pay attention to how their product is being represented within the store, whether online or brick-and-mortar, but also after that. Consumers are rating and reviewing products online, enabling crowd-sourcing to inform their purchase decisions.
Also, the growing share of online shopping means sharing the best information about your product and brand is important, as shoppers are making decisions based on what they read rather than what they can touch, said Ray Connelly, vice president of supplier strategy at Los Gatos, Calif.-based Procurant. The supply chain and food safety e-commerce platform deals with large retail grocery stores and suppliers worldwide to improve communication, lower costs and increase efficiency.
“People are not buying an apple because they're grabbing it. They're seeing it on their phone and reading about it. Information is how your brand is going to be judged,” Connelly said.
Consumers want you to share: How do I know this product is safe? Was it grown sustainably? Did I treat my workers fairly? Can I validate these points?
Shoppers used to go to the store 4 p.m. Friday through Sunday evening, said John Pandol, director of special projects at Pandol Bros., a Delano, Calif., grower-shipper and marketer of grapes and other produce, plus an importer and exporter.
“Retail timing has spread out,” he said. “People are going back to buying restaurant food, hot and cold salad bars, fresh-cut food. People want the experience of shopping.”
Consumers are buying more at the store, but they're going less often, so bigger packaging may sell better, Connelly said.
He expects e-commerce to settle down a bit but gradually trend up “and up,” he said. “As those younger people get older, married and have babies, their digital world will change it for all of us.”
All the panelists agreed that the people buying organics are the same shoppers with a heightened concern for sustainable packaging.
But besides the practicalities of sustainable packaging innovations, suppliers must consider macro auto-fulfillment centers with robotic arms.
“How do I design a package for that?” Pandol said.
Of course, the more packaging one has, the more real estate available to share their brand or farm story to the shopper — especially compared to the bulk item sticker.
When it comes to freight and distribution issues, a lot of retailers are moving toward shifting the responsibility onto the supplier, and they want more real-time tracking and cost-management data, both Romney and Connelly said.
“We see a trend that suppliers are more taking control of their supply chains,” Connelly said. “We're moving to paid-on-delivery, and I think that trend is going to continue. Think about how you're going to build that delivery program. You take control of the truck. You take control of the temperature. The whole notion of quality, good arrival, loading: It's under your control.”
The age of reinvention is the age of the app, and in grocery, it's the retailer's app.
“If you can do it on your phone, it's a real thing. At the Targets of the world, the Albertsons, they use their own app. The store experience is driven through the application,” Connelly said. “Consumers don't shop as much through a third-party app. They shop with a store that controls a store environment through their own application.”
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