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    Digital Discussion Dominates Executive Enclave

    GMA Leadership Forum explores hot issues for retailers and CPG companies.

    By Jim Dudlicek, EnsembleIQ
    Amit Singh, president of Google Enterprise, urges companies to leverage the web to build their brands.

    From the opening keynote address by the president of Google to the individual sessions led by retailers, CPG manufacturers and consultants, the importance of becoming ?digitally mature? in today?s fast-changing business landscape was the pervasive theme of the recent Grocery Manufacturers Association (GMA) Leadership Forum.

    Held at the historic Broadmoor resort in Colorado Springs, Colo., Aug. 23?24, the forum hosted some of the heaviest hitters from across the grocery industry to discuss e-commerce, executive talent acquisition, food safety, collaboration and analytics, product recalls, changing demographics, sustainability, social media, ethnic marketing, and regulatory issues.

    Succeeding in Grocery e-Commerce

    Leaders at Peapod, Kraft and Instacart discussed the tipping point that online grocery has reached in North America and how the market can deal with new growth opportunities.

    Key drivers of grocery e-commerce are freshness, quality, convenience, urbanization and connectivity. The group shared recent research showing that 70 percent of U.S. consumers are willing to try buying groceries online, while a third of shoppers are willing to pay for same-day delivery.

    Michael Brennan, SVP and COO of Skokie, Ill.-based Peapod, noted that e-commerce is a combination of grocery, logistics and the internet, although few companies have mastered all three: ?If you get the balance right, there?s a ton of demand.?

    Nilam Ganenthiran, head of business development and strategy for San Francisco-based Instacart, said barriers to consumer acceptance of online grocery sales lie in shoppers? perception of quality, speed, choice and ease. He added that e-commerce ?removes friction and makes bigger baskets easier.?

    Unlocking consumer insights is a ?continuing journey,? noted Tom Corley, EVP and president of U.S. sales and foodservice at Northfield, Ill.-based Kraft. ?E-commerce has growth written all over it.?

    Big Shift in Technology, Demographic Trends

    Consumers are spending more time with digital than traditional media, so companies need to deliver experiences that translate to digital content.

    That was the crux of the issue as discussed by Lisa Hammitt, VP of marketing for San Francisco-based Salesforce.com, and Karen Sauder, national industry director for food, beverage and restaurant at Google, in Mountain View, Calif.

    Retailers and CPGs must understand consumers? purchasing criteria, Hammitt stressed; they need to leverage digital for cultural relevancy and turn data into insights.

    Sauder noted that constant changes in technology can slow down organizations, because ignorance begets slowness.

    By 2017, Millennials will surpass Baby Boomers in purchasing power, according to data the panel presented, and half of Millennials live a ?three-screen? lifestyle ? a great segue to the session led by Erin Liber of Cincinnati-based Dunnhumby-USA, who noted that Hispanics as well as Millennials will be driving future shopping trends.

    Liber poked holes in some misconceptions about Millennials; to wit, they?re strong shoppers of center store (particularly canned soup) as they struggle to strike a balance between freshness and convenience. Meanwhile, Hispanics are least engaged in center store, but are strong in dairy, meat and bakery.

    At one of the last Saturday breakout sessions, a panel of representatives from Google, IRI and Boston Consulting Group shared findings of their joint initiative on e-commerce. ?The CPG industry is fast approaching a tipping point,? says the executive summary of the group report. ?Companies need to plan for a ?1-5-10? market in the U.S. over the next five years.? This means that digital?s current 1 percent penetration of the U.S. CPG market will likely expand to 5 percent by 2018 and could go as high as 10 percent, presenting both a challenge and an opportunity. Further, the path to purchase is fragmented, with shoppers regularly switching between digital and physical channels. CPG companies will need to serve multiple retail models as e-commerce continues to evolve.

    As far as technology is concerned, according to Google?s Paul Gormley, ?The future is here ? it?s just not evenly distributed.?

    That means companies need to work harder to become what Amit Singh, president of Google Enterprise, calls ?digitally mature.? As Singh explained in his opening keynote address, this means leveraging the web to build brands by engaging at scale, employing collective intelligence, working collaboratively and in real time, using data as a core element, and developing technology that?s easy to use.

    Reaching Consumers Across Channels

    On day two of the conference, the discussion on the importance of digital continued. A panel led by Fox Television host and tech consultant Shelly Palmer debated the impact of ?digital disruption? in the retail space, a term Palmer derided, since this has all but become the norm.

    Digital content must have value, or shoppers ? especially the coveted Millennial Moms ? will opt out, the panelists warned. ?All it takes is one of us to screw it up, and then we all have a challenge? in reaching them, said Doug Rozen, chief innovation officer at New York-based Meredith Xcelerated Marketing.

    The rate at which technology is developing and becomes readily available to the masses should be an asset to smaller companies looking to gain an edge ? or at least not wholly lose out ? to new competitors. For example, Palmer said that local independent grocers could leverage the availability of Uber where available and use it as their home delivery vehicle to compete with Amazon Fresh.

    At one of Sunday?s closing breakout sessions, a panel of CPG and retail executives discussed growth priorities among leading CPG companies as revealed by the latest Consumer Analyst Group of New York (CAGNY) study. Topping the laundry list: executing the ?perfect store,? a goal that obviously requires the buy-in of retailer partners.

    GMA Awards

    GMA bestowed several awards during the course of the forum, honoring new products, marketing and lifetime achievement.

    On Sunday, the group presented retired Walmart president and CEO Mike Duke with its 2014 Hall of Achievement Award, the association?s highest honor. ?His visionary leadership has had a profound and lasting impact on the companies, communities and consumers he has served during the course of his impressing career,? GMA President and CEO Pamela Bailey said of Duke. The previous day, GMA and its Advisory Council awarded two 2014 CPG Awards for innovation and creativity. The Division A award, for companies with sales of less than $3 billion, went to San Francisco-based Big Heart Pet Brands for its development of Milk-Bone Brushing Chews to improve canine oral health. The Division B award (sales over $3 billion) went to PepsiCo?s Frito-Lay team, based in Plano, Texas, for its ?Do Us A Flavor? interactive campaign designed to bring younger, tech-savvy shoppers to the mature Lay?s potato chip brand.

    By Jim Dudlicek, EnsembleIQ
    • About Jim Dudlicek As editor-in-chief of Progressive Grocer, Jim Dudlicek oversees daily operations of the magazine, spearheads its signature features, produces PG’s monthly Trend Alert newsletter on center store issues, moderates its regular webcast series, and writes and comments about a wide range of grocery issues. A food industry journalist since 2002, Jim came to PG in June 2010 after covering the dairy industry for 7½ years, during which time he served as chief editor of Dairy Field and Dairy Foods magazines. A graduate of Marquette University, Jim is fascinated by how truly progressive grocers inspire consumers to enjoy food, transforming the industry from mere merchants into educators that can take the most basic of all necessities and turn it into something profound and life-enhancing.

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