Charting a Path Forward for the Food Industry

By: Leslie Sarasin, President and CEO, FMI

The following is an excerpt from a presentation at the Midsummer Strategic Executive Exchange.  

As the food industry takes the important initial steps of learning from, building on, and moving beyond the novel challenges and circumstances COVID-19 has presented, FMI believes it is crucial that trading partners undertake a candid sharing of their unique perspectives and experiences. To be best prepared for serving a post-pandemic world, we must maximize our collaborative capabilities in the areas of omnichannel shopping, shifts in the shopper’s relationship with the kitchen, the customer’s deepening interest in food as medicine, and the growing consumer attention to key social issues that will impact food supply chain operations.

Omnichannel Shopping

COVID-19 circumstances forced us to learn to do nearly everything from the safety of our own homes - stream movies, conduct Board meetings, attend virtual events - and that list, of course, includes grocery shop. According to the 2021 U.S. Grocery Shopper Trends, before COVID-19, about half of grocery shoppers shopped some online; now two-thirds of them do. Of special note are Gen Z and Millennial shoppers, who reported double-digit increases in their online shopping frequency since February 2020. So what does all this mean regarding the conversations you should be having with your trading partners? I think it means we need to be realistic and acknowledge that online is a major factor shaping the future of food retail, and we must be honest with each other that omnichannel has created some role reversal, revealing some new options.

Shifts in the Shopper’s Relationship with the Kitchen

We are confident the pandemic-driven trend of home cooking will persist; even after home-sheltering and all gathering bans are completely lifted.  People will continue eating at home more frequently than they did before the pandemic to extend the benefits of table-time together they have rediscovered.  And this isn’t just wishful speculation on our part. In a previous U.S. Grocery Shopper Trends Tracker survey, we asked shoppers to predict their post-pandemic shopping behaviors. Significantly, almost half said they plan to continue cooking more at home, and for sure they anticipate eating at home more. To help this trend of in-home dining stick, retailers will need to ramp up their take-out capacity at their on-premise dining facilities, beef up their commitment to ready-to-eats, and make their deli options and meal kits shine.

The Customer’s Deepening Interest in Food as Medicine

The global pandemic elevated consumer interest in the connection between food and health to new heights. When asked about the health status of their eating this past year, 41% reported that their diet was healthy enough or as healthy as possible; that score is 14 percentage points higher than in the 2020 report. And the rating in the could be a lot healthier category reflects an improvement, registering 10 percentage points lower than last year. This data points to the momentum that's building in the Food as Medicine movement and that the time is ripe for food retailers to leverage their position as trusted allies in supporting it.

The Growing Consumer Attention to Key Social Justice Issues

FMI predicts a dramatic increase in consumer interest in the intersection of social justice issues and food. When asked to define what it means to have eaten well, 47% of consumers answered that it meant they ate foods and beverages produced in an ethical way. That number jumps to 64% among those portents to the future, Gen Zers and Millennials. For this reason and many others, we encourage food retailers to broach the touchy, often hard to define social justice subjects. Share with each other what you are doing to address diversity, equality and inclusion (DEI) issues within your companies and explore how together you can better communicate with consumers and other stakeholders about the steps being taken to address social and environmental concerns.

These are the tough topic areas that I challenge trading partners to address together so that our path forward is as free of potholes and unexpected hazards as possible. For more information, check out the full presentation available to registered attendees at www.FMI.org/Midsummer.