Tag Archives: retail

Jim Yargrough, BSI
Retail Food Safety Forum

COVID-19’s Impact on Food Industry Reaches Far Beyond Supermarket Shelves

By Jim Yarbrough, Neil Coole
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Jim Yargrough, BSI

2020 proved to be the most challenging year for the food industry in decades, significantly testing the resilience of food supply chains. Many of the industry’s challenges stemmed from the spread and aftermath of COVID-19, forcing food organizations to adjust in new ways to maintain their supply chain continuity, integrity and overall resilience. Yet, at the same time, the spread of the virus also exacerbated known threats that the industry has grappled with for years, such as food fraud, theft and safety issues.

A recently released report about supply chain risks identifies the trends and associated risks most likely to impact global supply chains in the year ahead, and observed that the pandemic’s longer-term effect on food supply chains is expected to result in increased threats, including fraud, theft and safety issues.1 These threats will continue to have an impact in the future, requiring wider adjustments to continuity and resilience planning.

Stockpiling, Panic Buying and the Global Rise of Food Insecurity

As we all saw in local supermarkets and grocery stores in March 2020, panic buying and stockpiling created significant disruptions to supply chains that ultimately led to empty shelves.

According to the World Bank, last year as many as 96 million additional people were pushed into food insecurity across 54 countries. This number, combined with the “137 million acutely food insecure people at the end of 2019 across these countries, brings the total to 233 million people by the end of 2020.” Coupled with COVID-19-related supply disruptions stemming from challenges around movement restrictions of people and goods as well as illness-related plant closures and availability of workers in the food sector, job losses across all industries reduced household income, which has accelearted the number of people facing increased food insecurity.

Food Fraud on a Global Scale

Unfortunately, the risk of corruption by individuals working in a supply chain correlates with the risk of food fraud. Approximately 85% of countries with a high risk of supply chain corruption also have a high risk of food fraud. This can create scenarios that criminals can exploit, most commonly by producing substandard food for distribution in that country or substituting labeled products with potentially harmful alternatives.

For example, in India, adulterated dairy products, especially domestically produced milk, were often found to be linked with fraud reports, with some reports indicating that approximately 89% of milk products had been adulterated. Countries such as India sometimes have gaps in legislation and enforcement that can reduce the ability to detect and seize fake food, making this issue one that is likely to continue post-pandemic. Our intelligence reveals that gaps in legislation and inadequate enforcement of regulations reduce the ability to detect food fraud and lead to prolonging the threat.1 At the same time, criminals continue to outpace poor regulatory regimes and grow more aware of their opportunities and advance the sophistication of their tactics.

Other forms of food fraud, in particular smuggling and disguising provenance, are common and are bound to continue in countries where the price of food continues to rise to a point where it becomes economically viable for criminals to take advantage of higher prices and smuggle it across borders. It is also possible that criminals will benefit from lower levels of enforcement, allowing other fraudulent methods, such as adulterating labels or expiration dates or using substandard or alternative ingredients, to proliferate fraud schemes around the world.

Food and Alcohol Become Top Targets for Theft and Safety Issues

The spread of COVID-19 also resulted in an increase in targeting and theft of products considered unusual for cargo theft incidents—arguably the most pronounced shift in this area in the last year. Initially, thieves began to target essential goods with a much higher frequency as the limited supplies and spikes in demand drastically increased their black-market value. Thefts of products such as PPE and food and beverages increased in frequency worldwide, overtaking the theft of historically targeted goods more, such as electronics.

The increase of food, beverage, alcohol and tobacco commodities theft can likely be attributed to their increased value as a result of panic-buying, shortages and increases in consumption, along with the ease with which they can be sold on the black market. However, the increasing value of these items has not only created a greater vulnerability for theft, but also means these commodities are at an elevated risk for counterfeiting and food safety violations.

Unfortunately, COVID-19 significantly affected governments’ capacity to enforce food safety regulations, which means that some foods may not have been checked as thoroughly. As the spread of COVID-19 reduces, government resources will likely be freed to increase food safety controls. However, further virus-related complications may reintroduce this risk.

COVID-19’s negative effects on the food industry have been pronounced, but it is worth noting that there have been areas of positive impact, too. As the industry adapted in novel ways, industry leaders developed a more holistic awareness of resilience, embracing the benefits of agile innovation, including remote auditing, and adapting their pre-pandemic ways of working to focus on meeting consumer demand.

Furthermore, organizations within the food industry learned the importance of resilience and the ability to proactively identify critical suppliers to ensure that appropriate continuity measures are in place in the event of further unplanned disruptions.

As the world begins the next phase of reopening, and many food industries remain on fragile footing due to the economic impacts of the pandemic, it will be critical that they remain aware of the changing regulatory landscape, shifting supply chains and potential disruptions to ensure they remain resilient.

Reference

  1. BSI. Supply Chain Risk Insights Report. (2021).
Steven Blonder, Much Law
FST Soapbox

Food Litigation Trends Lay the Foundation for an Industry-Defining 2021

By Steven Blonder
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Steven Blonder, Much Law

The year 2020 brought with it continued court filings within the food safety litigation space, and it should come as no surprise the pandemic presented its own set of unique challenges. We’ve seen disruptions to the food and beverage supply chain, noteworthy changes with recalls, and continued developments in litigation specific to product labeling. These challenges have impacted everyone involved in the industry and laid the groundwork for what’s to come in 2021.

The most notable impact the food industry has faced as a result of the pandemic has been the massive disruption of the food supply chain. Grocers and other retail food providers have seen an immense spike in demand, whereas foodservice locations, such as restaurants, universities, and hotels, have seen the exact opposite. This disruption to the supply chain has required regulatory agencies to take notice and implement temporary policies to support these businesses and consumers alike. Employees across the food industry supply chain, including agriculture and food processing, have further been classified as essential, leading federal agencies to issue guidance to these employers to help them assess COVID-19 control plans and protect their employee’s health. Further, safety concerns and bumps in unemployment compensation have imposed additional strains on worker retention and attendance.

Another interesting facet of the pandemic’s impact on the industry has been its influence in the product recall space. Believe it or not, companies have strayed from pulling their products off the shelf even if it subjects them to potential liability. Why is this? Because as mentioned earlier, the demand for food in the retail space has increased so much, it has become a necessary choice to avoid food shortages across the United States. Don’t worry, if a product possesses a health or safety threat, companies are still recalling those to protect consumers and address safety concerns, but voluntary non-health or safety related recalls may have become a thing of the past. For example, rather than recall a box of cereal or other dry good for not meeting a fill-line requirement, providers may elect to risk a false-advertising lawsuit to meet the recent shift in retail food demand.

Since 2012, there have been more than 200 class action lawsuits filed related to the labeling on food products. This past year, we observed a continuation of this trend. Class action lawsuits were filed addressing the authenticity of “all-natural” products or claims based on the “origin” of a product, while we witnessed a sharp decline in slack-fill lawsuits. Consumers are becoming increasingly aware of the ingredients in food products and are continuing to demand transparency from companies to disclose how their products are made. There has been a particular increase in claims related to the definition of vanilla—is it pure? Is it natural? The same goes for citric acid, a product that can be made naturally or synthetically. There has been continued debate within the industry about citric acid in its use within other products where some citric acid is naturally occurring either from citrus fruit, tomatoes or other fruits with citric acid. If all-natural citric acid is added into tomato paste to help with the taste, can the tomato paste still be classified as being all-natural, even if the use of citric acid is displayed on the label?

To help combat the discrepancies around all-natural products, the USDA is currently working on developing an official definition of “all-natural,” which upon its completion is anticipated to have a major impact on the labeling industry and the number of false-advertising class actions. This definitional development comes at a crucial time especially as plant-based protein continues to rise in popularity.

The next wave of claims are being filed related to plant-based protein products. These claims include trademark and First Amendment issues. For example, when is a burger, a burger? Everyone assumes a burger means a hamburger, traditionally deriving from beef, and there has been an increase in debate around when the sale of plant-based products infringe on the rights of ranchers selling traditional beef products. Can food created in a petri-dish claim the same title as products created through traditional harvesting methods? What about other genetically modified products? These issues will likely spawn additional litigation in the coming year.

Looking ahead towards 2021, we can fully anticipate cases addressing food labeling issues to continue. Historically many of these claims were filed in Northern California with one federal court there earning the moniker of the “Food Court”. Recent years have seen increased filings in New York and Illinois, but the coming year may see a decrease in cases filed in New York as a result of recent court decisions relating to pre-emption and a recent opinion of a federal appellate court disallowing the settlement of class claims on an injunction-only basis. California may also see changes in their total cases as food producers curtail product sales in California to avoid the ambit of Prop 65.1

2021 will continue to bear witness to the effects of the COVID-19 pandemic. The supply chain will continue to adjust to the varying demands of the public as they navigate safety regulations, and companies will maintain an “only-recall-if-absolutely-necessary” mindset. Many of the adjustments that businesses, consumers and regulators have had to make in light of the pandemic may also lead to long-term or permanent shifts. In fact, the Consumer Brands Association has identified a few select areas ready for change, such as the maintenance of flexibility in food labeling to ease the transfer process of products between foodservice and food retail providers. We just might find 2021 to be one of the most industry-defining years in the food safety litigation space.

Reference

  1. California Office of Environmental Health Hazard Assessment. (n.d.). Proposition 65. Accessed December 17, 2020. Retrieved from https://oehha.ca.gov/proposition-65
Are Traasdahl, Crisp
Retail Food Safety Forum

Is Programmatic Commerce the Next Wave in Supply Chain Tech?

By Are Traasdahl
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Are Traasdahl, Crisp

While COVID-19 exposed disconnects in the food supply chain, it also served as an overdue catalyst for rapid technology adoption. Food manufacturers, distributors and retailers were forced to grapple with consumer behaviors that—previously expected to occur over five years— changed within about five weeks. Faced with unprecedented demand, channel shifts and rapidly changing consumer purchasing behaviors, forward-looking brands and retailers have started to transform their business models to become highly responsive and agile.

A new approach called “programmatic commerce” may be the key to faster market insights and pivots. Taking cues from past attempts to digitize the supply chain from end-to-end, programmatic commerce uses artificial intelligence (AI) and machine learning (ML) to connect and unify critical business data across food manufacturers, distributors and retailers using common retail portals, BI and CRM tools as well as other data resources and platforms.

With a real-time unified view of channels and activity, programmatic commerce has the potential to create fully automated trade processes to optimize production, inventory management, logistics, promotions and more for both upstream and downstream supply chain activities.

To achieve the potential of programmatic commerce, real-time or near real-time data sources must be easily integrated, unified and displayed. This is in stark contrast to previous attempts to create end-to-end supply chain visibility, which often required custom or manual integrations, had costly and lengthy implementation requirements and necessitated custom reporting.

The programmatic approach is already gaining traction, enabling retailers to leverage AI and ML technology to optimize supply chains. But the real value is in taking it one step further—to tap into rich customer data, understand rapidly changing consumer behaviors and ultimately—to predict and personalize shopping experiences at scale.

Tracking and Adapting to Evolving Consumer Journeys

Consumers increasingly demand greater choice, control, personalization and transparency and companies must continuously create, track and manage a 360º view of customers’ shopping journeys to stay ahead of these trends. Fortunately, real-time data and analytical capabilities are available to supply the critical information they need to implement a programmatic commerce approach.

Among the shifts companies must track as a result of COVID-19 is the explosion in online grocery shopping. In November 2020, U.S. grocery delivery and pickup sales totaled $5.9 billion and a record high 83% of consumers intend to purchase groceries online again, signaling this trend continues as the pandemic lingers on.1 By 2025, online grocery sales are predicted to account for 21.5% of total grocery sales, representing more than a 60% increase over pre-pandemic estimates.2 A permanent shift toward online grocery shopping can be expected as consumers’ shopping and fulfillment experience continues to improve.

For consumers still shopping in stores, the pandemic also drove switches in primary physical store locations. In the United States, an estimated 17% of consumers shifted away from their primary store since the start of the pandemic.3 This was driven by increased work-from-home, which eliminated commuting routes and made different store locations more convenient, including ones closer to home.

Given the multitude of changes impacting consumer journeys during the pandemic, it is imperative that companies track relevant purchase drivers and considerations of each purchase occasion, while also taking into account their recent shopping experience. This creates the need for consistent, seamless and relevant experiences across both digital and physical channels that aligns all touchpoints with the consumer as part of their “total commerce experience.”

Multiple retailers are already pursuing this approach in the hope of retaining their “primary store” status across the totality of their consumers’ shopping experiences. Walmart recently launched a new store format to help achieve “seamless omni-shopping experiences” for its customers through a digitally enabled shopping environment. Customers can use the Walmart app to efficiently find what they’re looking for, discover new products, check pricing, and complete contactless checkout.4 Data tracked on these customers can eventually be used to create personalized recommendations and in-store activations and assistance based on their purchase history and in-store experience.

Conversely, the “digital store” is also being reimagined to align with consumers’ in-store experience to create a seamless shopping experience. For example, personalized meal planning service The Dinner Daily now offers the ability for its members to order recipe ingredients directly from Kroger and other Kroger-owned stores through The Dinner Daily app.5 Integrated data from multiple shopping platforms and consumer touchpoints can provide food manufacturers and retailers with shopper profiles, consumer experiences, and purchase history along with inventory status and other inputs to ultimately build personalized customer experiences and enhance shopper loyalty.

Applying Programmatic Commerce to Deliver Personalization to Consumers

Once armed with real-time data in a uniform format from sources ranging from consumer search analytics to retailer promotional pricing, a programmatic commerce approach can provide companies with predictive understanding of demand and supply to optimize decision making from raw materials through production through retail or direct-to-consumer.

Using online grocery shopping as an example, consumer personalization can be delivered through the accurate prediction and display of items relevant to each shopper based on shopping history, preferences, current cart selections, and other inputs such as real-time availability, marketing promotions and more.

Innovations are already in the market, including Halla, a data science company that developed a grocery-specific personalization algorithm that works with grocery retailer e-commerce platforms to create smart recommendations based on understanding of individual shoppers’ product usage and preferences.6 Another example is the Locai Solutions digital grocery platform, which applies AI to personalize recipe recommendations based on consumer preferences and purchase history and determines ingredients and quantities needed for easy incorporation into their shopping cart.7

The Path Ahead: Accelerating Technology Adoption in the Food Industry

AI and ML are already reducing waste across supply chains and enabling consumer personalization. However, currently only about 12% of retail decision-makers feel they are very effective at providing these experiences to customers and only 10% have access to the real-time data needed to achieve this goal.8

Modern programmatic commerce platforms (see Figure 1) can effectively bridge information gaps, improve inventory and distribution to prevent shortages or overages and help companies be data-ready to meet actual demand. Beyond this, a programmatic approach unlocks the next stage of customer satisfaction and loyalty, personalizing the experience during and after the pandemic.

Programmatic Commerce Platform visualization
Figure 1. Programmatic Commerce Platform visualization. (Courtesy of Crisp)

References

  1. Bishop, D. (2020). Tracking Online Grocery’s Growth. Brick Meets Click.
  2. Mercatus. (2020). The Evolution of the Grocery Customer.
  3.  Briedis, H., et al. (2020). Adapting to the next normal in retail: The customer experience imperative. McKinsey & Company.
  4. Whiteside, J. (2020). Reimagining Store Design to Help Customers Better Navigate the Omni-Shopping Experience. Walmart.
  5.  Corke, R. (2020). Our Online Ordering Connection for Kroger is Here. The Dinner Daily.
  6.  Halla. (2016). Halla Grocery Solutions.
  7. Locai. (2018). Locai Meal Planning.
  8. Bluecore. (2019). Align Technology, Data, And Your Organization to Deliver Customer Value.

 

Rick Williams, JPG Resources
FST Soapbox

COVID-19: The Impact on 2020 and Beyond

By Rick Williams
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Rick Williams, JPG Resources

COVID-19 has had a major impact on the food and beverage industry this year, contributing to everything from bare shelves and supply chain issues to changes in consumer behavior to plant shutdowns, and to historic grocery cost spikes. We continue to experience changes every day, along with challenges that must be overcome. Lessons from the last year can prepare us for the years ahead, but only if we learn to adapt and anticipate.

Nearly all parts of the supply chain have been impacted, from raw material sourcing and packaging shortages to manufacturing plant shutdowns to logistics capacity to bricks and mortar store operations to consumers. At the onset of the pandemic, major industry trade shows were cancelled and postponed, along with demos and in-person sales meetings, leaving the future of shelf resets with a dark cloud hanging above them. Staying in touch virtually with buyers and providing updates proved to be a best practice and will continue into 2021.

To keep things running smoothly on the manufacturing side, assets from some logistics providers were redeployed to where they were needed most, and with consumers dining more from home, the industry saw a huge move from food service to retail, which we will touch on a bit later. Moving into 2021, brands should ensure their raw materials and supply inventories, especially those that are imported, can cover any potential and unforeseen disruptions. It is critical to prepare well in advance of shortages or surges, specifically in at-risk chains.

Despite the attempts to mitigate against shortages, even the most well-known brands faced major out-of-stock issues and consumers turned to alternative, smaller brands. The shortages came from an increase in pressure from consumers stocking up on items, not from a lack of supply as many believed. Manufacturers increased hours and scheduled capacity on production lines to maximize efficiencies to keep up until things returned to normal. When possible, production lines were reconfigured to distance operators and shifts staggered to limit contact between teams. Senators even introduced the Food Supply Protection Act to help strengthen the chain, protect workers and reduce waste, as per the United States Senate Committee on Agriculture, Nutrition and Forestry. Despite these efforts to keep shelves stocked, the unprecedented time presented smaller brands the opportunity to gain new loyal customers. The transition to e-commerce became an avenue for increased exposure for brands and continues to prove to be a vital option to explore if they have not already.

The retail sector made major headlines this year. In an effort to avoid crowds and follow stay-at-home orders, many consumers began shifting their purchasing behaviors. With today’s technology, it has been easier than ever to shop via e-commerce platforms, whether grocery pickup, delivery or takeout. We experienced temporary out-of-stocks at brick-and-mortar stores and increased wait times on deliveries due to fulfillment shortages. Consumer reaction to these changes—including stocking up on staple products such as paper towels and toilet paper—caused spikes in grocery costs. April saw the largest monthly increase in food at home indexes since February 1974, according to the U.S. Bureau of Labor Statistics.

Food service has not been exempt from the impact of 2020. With less dining out and more eating at home, restaurants, bars, college cafeterias and stadiums have had to adapt with major shifts in business operations, traffic and income, and practically hit a standstill. In September, the National Restaurant Association reported that nearly one in six restaurants, or about 100,000 nationwide had closed permanently due to the pandemic. Restaurant management had to amend all aspects of operations, including their takeout procedures and other established programs.

In order to survive, restaurants have been creative, building welcoming and distanced environments, and delivering new services to diners. The use of technology will play an even bigger role, now more than ever, to limit touch points. QR codes for menus and contactless ordering and payment options will become the new norm for establishments, if they have not already. Going into 2021, some restaurants are even revamping menus and finding ways to turn them into CPG products, a new trend that is sure to take off in the new year. In April Shake Shack announced a ShackBurger Kit, complete with all the ingredients necessary to cook the chain’s signature burgers using the same ingredients as the dine-in experience, but from the comfort of home. More recently, in November, Chipotle introduced its first digital-only restaurant, which will handle only pickup and delivery orders. Many local restaurants have adopted new best practices to serve their patrons and stay in business. When in-person dining was suspended in the spring, one of our favorite neighborhood restaurants began offering takeout for the first time. Initially, they required patrons to come in the restaurant to sign their ticket and pick up their order. They evolved into a totally online ordering and payment process, including tip, and masked touchless curbside pickup. They have continued this even as in-person dining resumed. We can expect to see more tactics like these, loyalty programs and digitized experiences in the coming year.

It is impossible to be certain what 2021 will bring, but what we do know is that it will require proactive planning and preparation. Learning from 2020 will play a pivotal role in survival for some brands, companies and establishments, and mitigating against breaks in the supply chain until we return to a sense of normalcy. The good news is the food supply chain has proven to be very robust and resilient. How we react to changes in the next few months is critical to maintaining a strong and secure supply chain to ensure we continue smooth operations.

Mike Owen
Retail Food Safety Forum

The Changing Psychology of Grocery Shoppers

By Mike Owen
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Mike Owen

The grocery sector has always been the bedrock of traditional brick-and-mortar retail, and it is no surprise why. How many people have wanted to check first-hand the ripeness of a tomato or how fresh the lettuce looks? The up-front examination is everything.

However, the COVID-19 pandemic has accelerated a change in the psychology of grocery shoppers. Health guidelines that have encouraged lockdown and working from home have focused the mind of many people on health consciousness with a need to keep financial stability in the throes of unemployment or furlough. Purse strings are tightened, more home cooking and fewer luxuries mean there is no longer a need to buy specialty products when basic provisions can be met at home.

Home Is the HQ

Staying at home has meant larger purchase sizes, which has led to fewer trips to the supermarket, bigger basket/cart size when you get there and an increase in private label purchases. People have also become more conscious of what they are putting in their bodies.

Social distancing has made many consumers resort to online grocery shopping. As long as there is availability, at a right price and an efficient delivery time, consumers are prepared to forego their normal habits for the sake of convenience and time saving. There is also no denying the surge in online purchasing for groceries during the pandemic. Interestingly, the market has seen an exponential increase in conversion in the over-50 age group—a group that may have ordinarily resisted this activity.

Health Concerns Sway More People to Shop Online, Regardless of the Product

According to Accenture, there is expected to be a 160% increase in e-commerce purchases from new and low frequency users. The vast majority of consumers who have increased their use of digital and omnichannel services, such as home delivery, curb-side pickup or shopping via social media platforms, expect to sustain these activities into the future.

The Wunderman Thompson Future Shopper Report 2020 highlights that online shopping—and shopping on Amazon in particular—is a popular choice across most industry sectors (including health and pharmaceutical, entertainment and toys); 30% of those purchasing luxury products and 40% of those buying groceries would never buy these products online. But with lockdown measures still firmly in place for most countries, consumer resolve is likely to be tested, and loyalty to physical stores continues to wane.

Consumers are taking stock of their own concerns in terms of home cooking and shopping for local produce and the process for reducing food waste. They are also taking more time to decide what they will need for food or grocery items, and it is likely that many choices will be made before consumers enter the supermarket, as much of the research is done online for product information.

Research undertaken by Bazaarvoice revealed a 21% increase in online orders in March 2020 versus March 2019, with 41% of respondents stating that they were currently shopping online for things they would ordinarily shop for in-store. By April, they were spending more time and making more purchases online, which pushed groceries out of the number one essential category. This may have been due to people getting used to spending longer periods of time at home, moving past the essential necessity phase, and as a result, product shortages have eased, and different product categories are being prioritized.

Changing Expectations for Greater Online Grocery Shopping Experiences

Every generations’ lives and shopping behaviors are now intertwined with digital commerce. They are driven even more strongly by factors such as range, ease, speed and convenience. Online grocery shopping—both delivery and pickup—is cheaper, reducing the number of trips that keeps shoppers out of stores, where personnel are also at serious risk of infection.

And for retailers, inserting a row of fresh vegetables on websites such as Walmart Grocery or Amazon Fresh to the same grid style as they use to sell laptops or smartphone cases can look clinical and confusing to consumers. Food shoppers want to touch the tomatoes. Slicing the grocery store up into individual, pixelated goods doesn’t feel like grocery shopping anymore.

Relevant Accurate Product Information Is the Key

In an article in The Atlantic, Bryan Leach, CEO of shopping promotions company IBotta, predicts: “Shoppers won’t lose the ability to manipulate the avocados, pick something up on short notice, or just browse aimlessly for meal inspiration”. Retailers will have to up their game to provide improved customer experience in product presentation and selection.

Some online grocery retailers are already providing online menus and the ingredients to cook for specific meals. Internet-grocery fetchers might come to be seen more as the small shopkeepers of the turn of the century, or the community-supported agriculture services that deliver fresh, local goods or provide specialized groceries or services.

By serving optimal E-commerce sites that provide specialized product information either through chatbots, specialized product range and knowledgeable staff will further enhance the experience and value.

Some companies such as Fortuitas and Javelin Group are supporting retail brands to provide more accurate product information to their E-commerce websites with the help of product information management systems. The provision of consistent data in an omnichannel environment means that up-to-date product knowledge and availability can be accessible on an on-going basis leading to better trust and online sales.

While access to marketplaces such as Google, Amazon Fresh and Ocado continues to grow for grocery products during the pandemic, some marketplaces have defined the following tactics to keep customers engaged through the use of product information.

1. Prevent Panic Buying With Product Badging

Brands can bring more responsibility to the shopping process on marketplaces like Amazon, Google and online retailer web catalogues by using product information to discourage panic buying through the addition of social cues. These can have a big impact on how customers view brands and products. Through this product badging, where, for example, you limit the purchase of essential products per user, consumers can shop more responsibly and feel more in touch with the brand as a ‘caring’ provider.

2. Promote Stay at Home

Offer a unique opportunity to improve customer experiences by promoting product categories that are most popular at a given time. Stay at home and work from home lifestyles are presenting new and unique requirements for users. There is a need to create relevant product categories designed for work from home and promote them on your website.

3. Back-in-Stock Notifications/Recommendations for Similar Products

Creating a landing page with relevant recommendations for similar products that other users have purchased can serve as a way to improve customer experience on your website.

There is no doubt that COVID-19 has changed the grocery purchasing mentality for purchasers, and it is likely to develop further during the pandemic. It is whether many of these habits are likely to remain post-COVID? What is certain is that increasing accuracy of product information will be key to a continued growth for sales both online and in-store.

Sudip Saha, Future Market Insights
FST Soapbox

Five Trends Defining the Food Industry Post-COVID

By Sudip Saha
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Sudip Saha, Future Market Insights

Food retailers and the entire food and beverage (F&B) industry are now operating very differently than they did some six months ago. The pandemic has brought immense shifts in supply chains, imposed new hazard controls, and—perhaps most importantly—turned consumer preferences upside down.

To accommodate these changes, food manufacturers, retailers, restaurants and others stepped up to innovate and secure the continuity of their services. But now, as many industries begin to drop the notion of ever going back to what once was, it’s time we started thinking about how many of the newly introduced processes will stick around for the long-term.

What will be the main trends defining the food industry as a whole post-COVID?

Adopted Habits Aren’t Going Anywhere

The pandemic brought radical changes to our everyday lives, and it’s clear that many of the newly adopted behaviors won’t disappear overnight. Consumers will continue to rely on grocery retailers to keep them both fed and healthy while expecting minimum disruptions and a high respect for safety regulations—both in terms of handling and the state of delivered products.

Take-home grocery sales grew by 17% between April and July, breaking the record for the fastest period of growth since 1994. Online grocery shopping also gained popularity while managing to engage entirely new demographics. Some 10% of baby boomers now say they would buy more groceries online once the pandemic is over—compared to 34% of Gen Xs and 40% of millennials.

Due to consumer hyper-awareness of safety and sanitation, the whole food industry will continue to be defined by safety practices. Sanitizing common surfaces like keyboards, door handles, tables and chairs regularly will remain the norm. Beyond “manual” rules such as the mandatory use of facemasks, requirements such as regular health checks could boost the adoption of technology across the industry—transforming not only customer-facing interactions but also the processes behind the curtain.

Technology as an Enabler

Every crisis sparks innovation, and the food industry has certainly proved this thesis. Technology has become the ultimate aide, enabling interactions that would otherwise be impossible. These include contactless ordering, payments and pickup—processes that are likely to stick around even beyond COVID-19.

At the same time, the pandemic accelerated the usage of innovations that previously struggled to become mainstream. This includes virtual tipping jars or mobile order-and-pay, such as the options introduced by fast-food giants including McDonald’s, Subway, KFC, and Burger King.

There’s an obvious appetite for F&B companies to further incorporate technology. For example, the Coca-Cola Company is rolling out a touchless fountain experience that can be used with a smartphone for contactless pouring. Heineken, on the other hand, turned to virtual tech to launch a new product—a cardboard topper for multipack beer that will eliminate plastic from millions of cans. With travel restrictions hindering the mobility of engineers, the company leveraged virtual technology to install the new machinery needed at its Manchester-based factory.

But it’s not just solitary innovations; the market has already seen new AI-based technologies that help food businesses better manage risk in their workforce. Food manufacturing, distribution and provision require many different touchpoints; by predicting, monitoring and testing the health and safety of the workers involved in these processes, companies can ensure they keep their operations running, even if another wave of COVID-19 hits. Solutions like these will be crucial when looking to add another layer of safety that goes beyond mandatory governmental regulations.

Food Safety Revamped

Even though COVID-19 is transmitted through airborne respiratory droplets, and the risk of contracting the virus through food is low, people around the world are concerned about the possibility. After all, 40% of people are more careful about washing unpackaged fruit and vegetables than before the pandemic.

The pandemic has already made societies rethink various established concepts, such as wet markets or the consumption of wild animals. The pandemic could, therefore, lead to changed behaviors, and newly imposed rules such as formalizing small and micro food enterprises, provisions for direct sales by farmers, leveraging technology to ensure safety, and investments in a more robust food infrastructure altogether.

Such changes could also irreversibly affect street food—a sector that is bound to feel the hit of COVID-19. Particularly in countries with diverse street food culture, one of the emerging trends will be the rise of gourmet street food brands that can provide both great taste and high hygiene standards.

Food Sustainability to the Forefront

2020 will be a year of reckoning for the world’s food systems. The pandemic exposed the flaws of the global food supply chain that continues to be highly centralized and operating on a just-in-time basis. This is why we have seen panic food runs, urgent supply shortages and high amounts of food waste as many businesses were shut down overnight. In developing countries, several agencies expect that a “hunger pandemic” and a doubling of people starving could happen unless serious action is taken.

As we rethink the underlying principles of the food industry such as safety and supply, other concepts such as transparency and visibility into product sourcing and manufacturing also come into the spotlight. Consumers across the globe are more likely to prioritize offerings that are healthy and locally sourced than they were before COVID-19.

Food produced with the overuse of chemicals in monoculture cropping systems and large-scale animal farming significantly impact the availability of natural resources and cause substantial greenhouse gas emissions. Added to that, practices like industrial animal farming that operate with large numbers of livestock in confined spaces are a breeding ground for viruses, and have been linked to prior outbreaks such as the outbreak of swine flu in 2009. They also enable the spread of antibiotic-resistant organisms due to the common overuse of antibiotics administered to prevent infections caused by cramped living conditions.

Consumers are increasingly aware of this: Nearly 25% of Americans are now eating more plant-based food. As we move forward, diverse food companies are likely to tap into this trend, resulting in great opportunities for plant-based, nutritious, local, and even healthy DIY meals and products. For example, an Australian food producer has recently announced the launch of a new proprietary product range that will offer the first vegan ready-to-drink protein shakes on the Australian market.

A New Way of Dining

The restaurant market has been one of the direct victims of the pandemic but has shown impressive elasticity in adapting to the new realities. Many businesses have introduced service extensions such as deliveries and take-outs, as well as pop-up grocery stores. Enjoying great popularity, some of these options will stick around far beyond the pandemic.

However, there’s a counterforce hindering significant expansion: The simple fact that many consumers discovered a new joy in cooking. A recent study notes that 54% of Americans are now cooking more than they were before the pandemic, with 35% saying that they “enjoy cooking more now than ever.” But at the same time, 33% of consumers say they’re getting more takeout than before the pandemic. This implies that the post-pandemic normal will likely see a shift toward eating at home more often, whether that means cooking or takeout and delivery.

Therefore, restaurants are likely to continue diversifying their services, experiment with food bundles and DIY meal kits, or even luxurious in-home chef visit experiences as an alternative to high-end restaurant dining.

The past crises have shown that economic uncertainty is directly linked to changes in demand for private-label and value brands. After the 2008 financial crisis, 60% of U.S. consumers were more interested in reasonably priced products with core features than in higher-priced, cutting-edge products. So while luxury dining is not completely disappearing, it could take on other aspects.

In Denmark, for example, a two-Michelin star restaurant is moving to serve burgers. In China, a country that many look to as the model for the post-COVID world, there has also been a clear push toward more affordable dining as well. Hot pot and barbecue venues have been thriving, particularly among customers in their 20s and 30s. Many fine dining restaurants, on the other hand, have started offering affordable lunch menus or have cut prices to correspond to the current value-conscious behaviors.

It’s clear that the future of food retail and the F&B industry will be significantly marked by the pandemic. Its prolonged nature will also cause the newly adopted habits to become further solidified—and many processes will adapt to match them. For example, while contactless deliveries were accelerated in the past months, businesses are working hard to make them as efficient as convenient as possible, making it unlikely that such investments would be erased overnight, once COVID-19 is no longer a threat.

Checklist

2020 FSC Episode 1 Wrap: Food Defense & Food Safety Culture Go Hand-in-Hand

By Maria Fontanazza
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Checklist

Yesterday marked the beginning of the 2020 Food Safety Consortium Virtual Conference Series. Episode 1 featured Food Defense Foundational Planning Elements: Strategies, Insights and Best Practices. Led by Jason Bashura, senior manager, global defense at PepsiCo, food defense experts from manufacturing, retail and the government shared different perspectives on the FSMA Intentional Adulteration rule; how to develop a food defense plan; the key role that food safety culture plays in food defense; education and training; and establishing awareness of and combating various threats to the food supply, including the insider threat.

Especially eye-opening was the information presented by Robert Norton, Ph.D. of Auburn University about the threats against the food supply (a “target-rich environment”) and the range of adversaries and their motivation for disrupting the food supply.

Summer of 2020: Hot Topics Include FDA Inspections, Records Retention, and New Technology Era

By Food Safety Tech Staff
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10

Is Food-Grade always Food-Safe?

9

Important Restaurant Food Storage Safety Tips You Need to Know

8

How a History of Slow Technology Adoption Across Food Supply Chains Nearly Broke Us

7

FDA Unveils Blueprint for New Era of Smarter Food Safety

6

FDA, CDC Investigating Multistate Cyclospora Outbreak Involving Bagged Salads

5

COVID-19 Leads Food Companies and Meat Processors to Explore AI and Robotics, Emphasize Sanitation, and Work from Home

4

FDA Announces Inspections Will Resume…Sort Of

3

Sustainability Strategies for the Food Industry

2

Top Three Visibility Challenges in Today’s Food Supply Chain

1

The COVID-19 Record Retention Conundrum

Food Safety Consortium

2020 Food Safety Consortium Preview: Food Defense Foundational Planning

By Maria Fontanazza
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Food Safety Consortium

Tomorrow kicks of the 2020 Food Safety Consortium Virtual Conference Series. The episode features Food Defense foundational planning elements: Strategies, insights and best practices. The following are some highlights:

  • Food Defense Strategies and Best Practices with Jason Bashura (PepsiCo), Raquel Maymir (General Mills) and Clint Fairow (Archer Daniels Midland Co)
  • Food Defense in a Global Context with Robert Norton (Auburn University)
  • Spotlight on Retail: Food Defense Resources & Opportunities with Larry Lynch (National Restaurant Association) and Jennifer Pierquet (Association of Food & Drug Officials)
  • Food Defense Plans: Perspectives from a 3rd Party Auditor

You don’t want to miss this session! The event begins at 12 pm ET. Haven’t registered? Follow this link to the 2020 Food Safety Consortium Virtual Conference Series, which provides access to 14 episodes of critical industry insights from leading subject matter experts! We look forward to your joining us virtually.

Pratik Soni, Omnichain
Retail Food Safety Forum

Top Three Visibility Challenges in Today’s Food Supply Chain

By Pratik Soni
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Pratik Soni, Omnichain

To say that COVID-19 has been disruptive would be putting it mildly. The pandemic’s sudden and seismic impact has brought major upheaval across industries—the food industry and its supply chain included.

There was the initial panic buying that drove upticks in consumer demand for which few manufacturers and grocers were prepared, resulting in widespread product shortages. With restaurants closed, distributors and suppliers were left with considerable excess inventory—most of which ended up as waste and losses. Inside production sites and plants, many had to try and maintain their output with a reduced workforce, even as demand continued to climb. Meanwhile, some plants unfortunately have had to shut down operations on account of employees testing positive for COVID-19.

In the time since the outbreak, the food supply chain has stabilized to an extent. Store shelves are continuously being replenished with products. Restaurants have started reopening with new health and safety measures. Yet even as the industry takes gradual steps toward recovery, the underlying problem that led to the magnitude of COVID-19’s impact persists: Lack of visibility. There was lack of visibility into supply and demand and what was happening upstream and downstream across the supply chain, which prevented timely, proactive action to optimize operations in face of disruption.

Looking ahead, participants across the food supply chain will need enhanced end-to-end visibility so that they can work together to get ahead of the curve. As part of gaining this visibility, they will need the transparent exchange of information and cohesive collaboration to adapt especially as the food industry continues to see shifts in consumer behavior and the marketplace in the wake of COVID-19—particularly in the following three key areas.

Food Distribution

While food producers have been working tirelessly to keep grocery store shelves and restaurant kitchens well stocked, there continues to be fluctuating availability on certain products, such as eggs, dairy, poultry and meat. This has led distributors and suppliers to increase their prices when selling these goods to stores and restaurants, who have had to then pass the additional costs on to consumers through their own price increases and surcharges, respectively. One report from CoBank, a cooperative bank part of the Farm Credit System, notes there could be as much as a 20% increase in the price of pork and beef this year due to supply issues.1 Many grocers have also implemented purchase limitations on consumers to combat shortages.

These downstream implications stem largely to uncertainty in the supply chain, with stores and restaurants unsure about available supply upstream and when they can expect to receive shipments. But if there was clearer visibility and transparency between production, distribution, transportation, food service and retail, then all parties could better anticipate and plan for supply shortages or delays. For instance, if a meat processing plant has to temporarily close due to cases of COVID-19, they can immediately communicate to the rest of the supply chain so that parties downstream can readily find alternative sources and minimize any necessary price inflations or other implications to consumers.

Consumer Demand

Even with the reopening of restaurants, people will likely choose to cook more of their meals at home. It was a trend that began with restaurant closures and will continue for the foreseeable future as consumers remain cautious of dining out. While this may bring tough times ahead for the food service industry, the grocery sector is seeing a huge lift in business. Research from restaurant management platform Crunchtime shows that, towards the end of June, restaurants were only seeing 64.5% of their pre-COVID-19 sales levels.2 At the same time, a study by Brick Meets Click and Mercatus reveals U.S. online grocery sales reached a record $7.2 billion in June, up nearly 10% over May.3

For food companies and brands, growth in the grocery sector has presented a challenge in the way of demand planning and forecasting. I’ve personally spoken with several company executives who have seen significant upticks in orders from their grocery channel partners—an increase for which they didn’t forecast—and are now struggling to adjust production levels accordingly to avoid the risk of excess production that would lead to unnecessary costs, wastes and losses. In such instances, real-time visibility into transactional activity and stock levels at the retail level would help production planners improve the accuracy of their forecasts and enable them to think steps ahead before orders come in and thereby optimally balance supply with demand. Stores would remain well stocked and the supply chain could flow in a more efficient and profitable way for all participants.

Food Handling

Without question, public health is the number one priority right now. Participants at each point in the food supply chain today need to communicate with each other, as well as to consumers, that they’re following best practices for social distancing, disinfecting and other precautions. It’s not to prevent the possible transfer of the virus via actual products, as the FDA notes there is currently no evidence of transmission through food or packaging. But rather, it’s to build greater confidence in the food supply chain—that everyone is doing their part to support individual and collective health and safety, which in turn prevents possible facility closures or other case-related bottlenecks that would inhibit consistent supply to the market.

There also has to be confidence that, amid these countermeasures for COVID-19, companies are still upholding their commitments to food safety, integrity and proper handling. What can support that confidence is data—shared data from every point in a product’s journey from source to shelf. The data should be transparent and available to all supply chain participants as well as immutable so that it is tamperproof and fully traceable should there be any problem, such as mislabeling or a foodborne illness. The data ultimately holds everyone accountable for their role in ensuring a safe food supply chain.

To achieve the level of visibility outlined above, the food industry will have to break away from legacy processes involving the siloed management of operational systems and databases. Instead, the disruption seen during COVID-19 and ongoing shifts in the marketplace should encourage companies to consider digital transformation and technologies that can enable a more cohesive and nimble food supply chain. These are technologies like blockchain, which provides a decentralized, distributed ledger to publish and share data in real time. Moreover, artificial intelligence that can leverage incoming real-time data to guide next-best actions, even when the unexpected occurs. Personally, I always return to the notion that the supply chain is a team sport. You need visibility to know what each team member is doing on the field and how to align everyone on a gameplay. The digital solutions available today offer that visibility and insight, as well as the agility to pivot as needed to obstacles along the journey from source to shelf.

References

  1. Taylor, K. (May 6, 2020). “The American meat shortage is pushing prices to unprecedented heights — here’s how it could affect your grocery bill.” Business Insider.
  2. Maze, J. (July 7, 2020). “As the coronavirus resurges, restaurant sales start slowing again.” Restaurant Business.
  3. Perez, S. (July 6, 2020). “US online grocery sales hit record $7.2 billion in June.” TechCrunch.