As we enter into the New Year, food retailers and brands are faced with a myriad of new challenges: sustainability, transparency, undeniable price increases and the continued search for health and wellness. Here are some retail trends I foresee:
It's all about the garbage! It is not about local versus organic, although that seems to be where most of the debate still rests. We need to look at the larger picture and develop a more long term plan. Like most retailers and brands you care about the planet, perhaps even more than many of your customers. But whether it is about being green, figuring out how to measure the global footprint for your products and production facilities or just trying to reduce waste, 2008 will clearly be driven by the headlines that measure garbage.
With cities and states working on legislation to tax or prohibit certain kinds of food and beverage packaging, retailers have the opportunity to take a lead position and build relationships with the shoppers around sustainability initiatives.
Retailers cannot lose by taking a strong and vocal position to help clean up their cities. The time has come to learn from the past: retailers quickly embraced eliminating foods with Trans fats from their shelves, perhaps it is time to put in place universal guidelines for all products that are sold from our stores that include packaging quantity and materials as well as highlighting those companies that have favorable sustainable and footprint stories.
Where did this product come from? On the heels of a scathing report that not only questioned the systems and ability of the Food and Drug Administration on food safety, but also reinforced the fragility of the consumers image of our food supply, this year must be the year that confidence in our food supply is restored.
Tesco’s Fresh & Easy stores will no doubt force the industry to install similar systems which will enable the retailer in seconds to track an individual product’s path from farm to table with all the details necessary to determine a product’s safety.
Consumers are no longer accepting of the current way the food world and government is doing business: delays of weeks before we hear about millions of pounds of ground beef contaminated with E. coli, more than half a year to track a cow with Mad Cow Disease, and still waiting a year later for the final report on how bagged spinach with E. coli made it to our stores’ shelves.
Imported foods, whether they are from China or elsewhere, will have to not only meet the U.S. standards, but be delivered with guaranteed inspections to have our shoppers' confidence.
It’s how much? According to the USDA Economic Research Service, the average American spends just 10 percent of our household budget on food. When we look in context and analyze other developed nations we clearly see that we do have the cheapest food prices.
France, known for its food indulgences and passion, spends almost double - 18 percent, and the UK shopper spends even more, 22 percent. Japan, which is known for its stringent food safety and beef testing has its citizens spending 26 percent of their hard earned money on their foods and the country that many look to as one of this century’s developing business and technology leaders, India, finds its residents spending just over half of their income to eat.
I am not suggesting that we run out and increase our prices. What I am suggesting is that the drive to have the “cheapest food supply on Earth” is old-school and needs to be forgotten.
We need to first shift our resources, and produce foods and ingredients where we can insure the proper nutrients and safety procedures are in place - hopefully that occurs on American soil.
Second, we need to stop putting pressure on brands for a lower price. Having grown up selling commodity products (cheeses, canned meats and meats) as well as branded packaged foods to supermarkets buyers and purveyors in the Brooklyn, Bronx and Newark Terminal markets I can tell you first hand that pushing on price doesn’t allow for production or product innovation.
The aging of America is an old story that is worth repeating, as this year could be the “tipping point.” The 76 million Baby Boomers start turning 65 years old in 2010, and while the impact of this generation turning 50 drew lots of attention but little impact, this time it will be different.
As the generation born (and loving) the spotlight has entered into their sixth decade of life we are observing their incidence of major health ailments including diabetes, heart disease, high cholesterol and high blood pressure actually double. We are seeing television ads that spend more time on health warning disclaimers than on actually talking about the benefits of the medications. I would suggest that the antacids and scripts that deal with heartburn are about to be replaced, with whole grains and probiotics, leading many shoppers to understand that good foods with good science behind them, may in fact be the best cure-all.
This is the trend that bears repeating year after year – It’s all about relationships: relationships with our farmers, our suppliers, our peers, our associates and most importantly ... the relationships with our fellow shoppers.