Opinion: Finding workable solutions for produce in an online world
By Oster & Associates president Bev Oster
Retailers have been worried for the past several years about the shifting shopping patterns of today’s consumers, as the impact of their approach to buying becomes increasingly apparent in the world of food purchases.
The relationship between the population and the food they consume is dynamic, so why wouldn’t the way they buy that food also fluctuate with the times?
We have seen the trends that eating habits have migrated. A much larger portion of the population is now mindful of healthy eating with a focus on organic and a concern for the ingredients in packaged foods.
At the same time, the purchase of prepared foods has increased, providing a way for many families to “buy time".
Economics have put a squeeze on smaller retailers who have less control over increasing overhead, so markets have consolidated. The entrance of discounters into the grocery business has meant people often buy in greater quantities to achieve savings. And the proliferation of store brands has squeezed the margins for traditional brands.
At the same time, the produce industry has expanded its focus on branding products that traditionally were commodities.
Now we’re facing the challenge of online shopping and what that means for fresh produce. Online shopping for produce can include everything from produce specialty sites to CSA (community supported agriculture) memberships to the ability of consumers to do all their grocery shopping digitally.
It can also include the produce that comes in those boxes of food that get delivered in menu-sized portions to cook gourmet meals on your own.
What does this mean for the produce industry? While there’s not one answer that fits all situations, these shifts cannot be ignored, particularly in light of the fact 30% of Millennials (age 21-34), 28% of Generation Z (age 15-20) and 22% of Generation X (age 35-49) say they are already ordering groceries online for home delivery.
Most of the produce that is sold through large online grocery outlets is sold as commodities. There can be a distinct lack of choice for the products you buy, so the purchasing will often be for bananas, eggplant or oranges, without regard to brand choices that are now a part of the brick and mortar experience.
However, if we look at it from the consumer point of view, they may feel that their current market only provides them with one brand of tomatoes, peppers or onions, so they don’t understand the difference. It will, therefore, be important for the produce marketer to develop programs that will help the online retailer who is carrying their particular brand of okra or green beans to promote their items through “in-store” ads, recipes and menu ideas.
Remember that where there is a new challenge, there is also a new opportunity if we seize it early.
While we can definitely say online food purchasing is a growing trend, we need to also be cautious about not discarding our current programs for retail sales and consumer communication. There are, and will continue to be, many people who like to go into a supermarket and buy what they want to go home and cook immediately.
Traditional stores are still less expensive. They offer sensory experiences such as the aroma of the bakery and the color and texture of the produce. They offer the ability to taste, touch and pick individual pieces of produce. And many consumers just enjoy the experience of shopping for their fresh produce.
Traditionally, fresh produce is the main driver for consumers in finding a supermarket. With this being the most important part of the equation for 75% of consumers, the online experience will need to provide extremely good quality at competitive pricing to thrive in this arena. And the more that individual produce companies can work with online retailers to find good solutions for the online buyer, the more this will become a workable solution for everyone.