FMI Midwinter: The Future of Food Retailing
Amid a rapid pace of change, retailers must be prepared to redefine themselves – multiple times if necessary – or accept their inevitable decline.
That was the message from Food Marketing Institute President and CEO Leslie Sarasin, opening the first day of general sessions Monday at the FMI Midwinter Conference in Miami Beach.
“Our industry has never been as challenged as we are now,” Sarasin said. “Redefining moments are coming around a lot more quickly and more frequently than ever before.”
Sarasin said the food industry “must stop thinking in terms of a food chain … and conceive of all our suppliers differently. They are not links operating separately. They are interwoven strands.”
She continued: “Decisions must be made by industry-wide collaboration because one change affects all the others. Even when we redefine, we must maintain our historical focus on customer service.”
Further, retailers need to be prepared to serve consumers “in the format they prefer,” be it in-store or digitally, Sarasin said. “We’re only as good as our next innovation and that must involve efficiencies.”
Sarasin led a Q&A with restaurateur Danny Meyer, CEO of Union Hospitality Group and founder of Shake Shack and other eateries of various formats.
“You can learn a lot about people from where they buy their food,” Meyer said, noting that he always visits grocery stores when he visits a new city.
Meyer said food must live up to a consumer’s “pleasure-value quotient,” and that it “has to make you feel good, like somebody cared.”
Despite the rise in technology, consumers still demand hospitality, he asserted: “The more high tech we get, the more high-touch people crave.”
Hospitality is a competitive edge, he said, adding that “the customer must always feel heard,” regardless of whether they are right.
Acknowledging the importance of grocerants, Meyer told retailers, “Your stores increasingly will have to have eat-in opportunities. … The asset you have is access to the best possible food sources.”
The future of food
Mark Baum, FMI’s chief collaboration officer, moderated panel discussion about “The Future of Food,” featuring Mike Frank, VP global commercial at Monsanto; Kirsten Tobey, chief innovation officer for Revolution Foods, which creates healthy prepared meals for schools and retail; James McCann, COO of Ahold USA; and Joel Bourne, National Geographic journalist and author of “The End of Plenty: The Race to Feed a Crowded World.”
Frank said to meet the world’s demand for food, farmers will need to double their output over the next four decades within the same land footprint, “one of the most important challenges of the next 35 years.”
While Monsanto is a regular target of those who oppose GMOs and other agriculture technology, Frank said the industry needs to stop talking in terms of good vs. bad. “We need all agriculture systems to produce more and have less impact on the environment,” he said, calling GMOs “a very important tool, along with pesticides and breeding technology."
Bourne, noting that by 2050 it’s expected the world will double its meat consumption and fuel use, acknowledged that farming technology is needed to feed a growing population but there’s an issue of perception. Like how the backlash against the use of synthetic growth hormones in milk production helped drive the growth of organic dairy, Bourne said, “we haven’t seen the health and environmental problems that have been feared.”
Baum noted the irony of people who embrace technology for all parts of life except for food production.
Frank told PG after the session that Monsanto has websites that explain their technologies and dispel myths about it for consumers, and perhaps his company needs to partner with retailers to help promote these resources to grocery customer. “We think the vast majority of Americans are open-minded about this issue,” he said, calling it a “great opportunity for dialogue.”
McCann noted that, years ago, “customers were prepared to trust a company,” but now they have access to so much information.
“If we can provide really good information, customers can make informed choices,” he said. “It’s our role as an industry to enable that choice.”
People are becoming more aware of food, “but affordability is an enormous issue,” McCann said. “We need to find the blend that works so poor families can feed their children protein.”
Following a presentation by Dan Ariely, author and professor of psychology and behavioral economics, on how messages can influence behavior, a second panel took on “The Future of Shopping.”
Baum also led this group, consisting of Tom Philips, director of Deloitte Consulting; Bob Wheatley, CEO of Emergent Healthy Living; Tracey Massey, president of Mars Chocolate North America; and Brandon Barnholt, president and CEO of KeHE Distributors.
Philips outlined a new study conducted by Deloitte, GMA and FMI about how new factors have risen alongside the historic main purchase influencers of taste, price and convenience; members of all three organizations discuss this study in an exclusive interview that can be viewed at Progressivegrocer.com.
Barnholt noted that healthy eating or “smart snacking” has led some retailers to devote entire aisles to this concept, featuring products that cross categories.
All agreed that transparency is the overarching trend in all facets of food production and marketing.
See exclusive interviews from FMI Midwinter at Progressivegrocer.com
Follow reports from the conference on our website and on Twitter at @jimdudlicek, @JoanPGrocer and @pgrocer