By: Rick Stein, Vice President, Fresh Foods, FMI
Fresh food is a dynamic part of food retail — but the fresh journey isn’t all smooth sailing.
On the positive side, fresh is driving retail differentiation and engaging a wide range of shoppers. Despite this, the fresh industry is facing major hurdles such as winning with younger consumers; making progress with sustainability; and optimizing the use of technology such as artificial intelligence.
These were among key topics spotlighted at FMI’s recently concluded FreshForward conference in San Diego, our annual senior-level gathering for retailers, suppliers, and other stakeholders. I want to share some key takeaways that can help us address the hurdles.
Navigating Shifts in Consumer Trends
A panel on emerging consumer trends in fresh spotlighted the most important developments and the quickly changing perspectives of shoppers. Key trends cited include convenience; omnichannel; price and value; health and well-being; and multicultural. Fresh industry leaders were urged to leverage trend information from both traditional and nontraditional sources and make hard decisions about which aspects to focus on, because you can’t be all things to all people.
Meanwhile, the fresh foods sector needs to work harder to gain ground with younger shoppers, including Gen Z and young millennials (i.e. shoppers aged 34 and younger as of 2024), said speaker Jonna Parker, principal II and fresh foods team lead, Circana. Parker said, “Not only do both Gen Z and all millennials spend less on fresh foods than older generations; their fresh spending levels are declining.” Part of the challenge is that fresh is being out-marketed by other segments of the business, such as center store, which successfully promotes packaged goods as solutions for shopper needs in areas such as health and well-being, she explained.
Tackling Sustainability and Packaging
The complex nature of sustainability can lead the industry and consumers to become frustrated about making progress. Nevertheless, it’s important to push forward on the journey. A panel on this topic cited complexities that include a patchwork of regulations; the difficulties in meeting targets; and the need for collaboration among stakeholders. Panelists pointed to the importance of incentives to help spur progress. “We need to push for incentive structures in food and agriculture,” said Irving Fain, CEO and founder of Bowery Farming. “We can’t just rely on regulations.”
Optimizing Tech and AI
Technology and AI are playing important roles in fresh foods, a point emphasized by a technology panel. These roles include driving how customers interact with fresh; helping associates enhance customer experiences; and boosting operational effectiveness, said Matthew Adams, principal, Deloitte. Speakers underscored the importance of prioritizing applications that are on target for each organization’s needs and avoiding the temptation to choose ‘cool’ tech tools based on a fear of missing out.
Eyeing the Big Picture
FreshForward provided some good news about the economic picture. Leo Feler, chief economist at Numerator, speaking during a keynote session, dismissed the idea of a recession and added, “The consumer basket has actually become more affordable” as incomes have risen.
Meanwhile, on the fresh investments front, most food retailers are planning to increase the space they allocate to foodservice aspects such as fresh-prepared grab-and-go options, according to FMI’s latest research on The State of Fresh Foods, presented by keynoter Leslie Sarasin, the association’s president and CEO. In addition, nearly a third plan to increase labor allocation to foodservice.
Acting on the Insights
FreshForward, held in collaboration with Deloitte, is always full of insights to help guide retailers and suppliers in their fresh strategies. We’ll be publishing more takeaways from FreshForward in the near future — including key action steps identified by attendees during breakout groups. The fresh industry is stronger when its leaders gather for education, collaboration and addressing challenges.
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