Consumers have so many choices when it comes to buying fresh produce
The London Produce Show welcomes Jeff Jackson to its speaker line-up this week with a not-to-be-missed presentation on food and retail trends. Jackson has an unparalleled business background with Fresh Express and the Castellini Group in the US, Chiquita in Asia, Middle East, South Pacific and more recently the M Group in Australia. With a passion for the evolution of the fresh food industry and for global food security, he explores the influencers and trends to come up with strategies for the future. Here he gives Produce Business UK a taster about what he thinks UK retailers should be watching out for
You have spent a lot of time in your career understanding consumers. What are the characteristics of the new consumer?
Jeff Jackson (JJ): I think that the new consumer can be defined by four new dynamics now in play.
The first is the relationship that consumers want to have with food. They are seeking authenticity, inspiration, excitement, health and diversity.
Second, consumers are seeking specific attributes in their fresh food: for example, freshness, quality, ethics, sustainability, localness, healthiness or organics, convenience, functionality, safeness, provenance, “free from”, etc. etc…
Third, these attributes are proving the investment themes in creating new pathways for consumers from farm to fork. Consumers now have so many choices on how and where to buy their produce: supermarkets, discounters, hyper-local convenience stores, farmers markets, speciality retailers, box delivery schemes, online, farm direct, meals direct, and so on.
And finally, there is consumer polarisation. No longer loyal to one store or brand, consumers are seeking to save money on the basics, buying at discounters or online, while at the same time spending more money on more frequent shopping trips for fresh foods and inspiration in smaller, convenient, local stores.
So where does this leave retailers?
JJ: I’d say that retailers are facing a crisis. The retail supermarket chains are under threat from all sides. The centre of store is under threat from price wars, discounters and online. They are losing consumer loyalty and trust in their fresh offer, with consumers purchasing the “attributes” from new pathways and more frequently. They have not treated their fresh vendors well, squeezing margins and dis-intermediating the specialists. They have lost sight of their core competence of retailing, becoming focused on the supply vertical, on the “buy” not the sell, and lacking the industry expertise of staffing to be great merchandisers.
How do the retailers respond?
JJ: I am going to propose 12 strategies at the LPS for accomplishing what I think are now the three most urgent objectives for a supermarket chain.
First, capturing consumer brand equity in those attributes consumers are now seeking. These attributes should eventually be taken for granted as part of the retail brand architecture and no longer driving investment into alternative food pathways.
Second, capturing market share with the optimal footprint of “pathways”: local-fresh convenient stores, supermarkets and online.
Finally, flawless execution with fresh industry expertise and sufficient store level authority.
So what does the of the future retail scene in the UK look like?
JJ: The centre-of-store items such as long-life food, health and beauty, cleaning products, beverages, etc. will be where the big online battle will rage. At the moment there is a lot of noise about the discounters, but every retailer eventually becomes a discounter. Online commerce will eventually level the playing field. Click-and-collect will drive online sales past 20% with supermarket stores acting as flexible warehouses.
Meanwhile, the fresh “periphery” of store offer will be increasingly purchased in local neighbourhood shops offering meal inspiration, staff expertise, in store theatre, experiential shopping, grazing, sampling laboratory, town hall daily shop engagement, ingredients and grab-n-go. The very successful local stores will become the neighbourhood fresh-food hub.
Jeff revealed his 12 retail supermarket strategies are and what he has to say about global trends and disruption, the intersection of retail and foodservice, China, food security the rise of local urban supply and more at the London Produce Show and Conference, on June 3-5 in the Grosvenor House Hotel.