During the New York Produce Show on December 11, industry leaders discussed key topics including retail trends and artificial intelligence. Maria Wieloch emphasized that rising food prices and customer expectations for sustainability are reshaping retail dynamics. Experts in AI highlighted its potential to enhance operational efficiency in retail settings, ultimately fostering a better shopping experience for consumers.
Educational sessions were spotlighted on a corner stage on the Javits Center trade show floor during the New York Produce Show. Each topic featured a panel of industry leaders, who shared their insights.
RETAIL TRENDS
Former retailer, consultant, and industry leader Paul Kneeland led a panel with three retail colleagues to discuss What’s Hot, What’s Not: Retail Trends and Opportunities.
Food prices that are 20 to 25% higher without increases in customers’ salaries are making lower margins at retail a new normal, according to Maria Wieloch, head of category management and business development at Sweden’s ICA Gruppen, with 1,300 stores in four formats.
“Shoppers also want a good price, plus sustainability, such as lower-cost organics,” Wieloch said.
CEA agriculture is becoming a more important supply source for Federated Co-Operatives, Ltd., in Saskatoon, Canada, which supplies over 160 co-ops across Western Canada.
“We typically source from California, but climate change weather issues make this more unpredictable. I’m seeing a lot more CEA greenhouses in Western Canada. Benefits are local, sustainability, and cost stability,” says Lindsay Young, produce category development manager.
Greater demand for packaged produce, juices, and fresh-cut fruit are top trends for Marc Goldman, produce director at Morton Williams Supermarkets, a 17-store chain headquartered in Bronx, NY. Other than that, Goldman says, “the new normal is that nothing is normal anymore.”
ARTIFICIAL INTELLIGENCE
The panel for the AI at Retail: How Can Artificial Intelligence Assist Operations at Store Level, hosted by Produce Business Publisher and Chief Executive Ken Whitacre included Jesse Himango, chief operating officer, Empower Fresh; and Michael Marzano, assistant professor of practice in food marketing, St. Joseph’s University, Philadelphia, PA.
Empower Fresh, which partners with independent grocers and wholesalers, offers tools and data that can help produce staff optimize their work days, and also can assist in staff training, food waste reduction and competitive positioning in the market.
As he uses experience and technology to help customers, Himango says he aids retailers and wholesalers in advancing how they conduct business by boosting efficiency and cutting costs. “I get to build the tools that I always wished I had as a retailer,” he says.
Empower Fresh is helping customers look at where they can benefit from AI, what works for them and how they can take steps to implement artificial intelligence in specific circumstances.
Himango says initial trepidation when it comes to discussing AI usually involves worry about the technology taking away jobs. “That’s not really the case,” he says.
Rather, because it can assume functions that are simple, but time-consuming, AI will free up more hours in the workday to spend on dealing with issues that require experience, thought and judgment.
“AI is going to make your job more effective, more efficient, less time-consuming, more productive,” he says. “It’s not going to really replace anybody’s job. However, I will say that somebody who adapts to AI, that person is probably going to take someone else’s job who is fighting it.”
As they learn about food marketing, says Marzano, whose experience includes stints at Nabisco, Kraft Foods, Cadbury, Mondelēz and Sysco, the approach he is taking with St. Joseph’s students is one of mutual efforts to “explore artificial intelligence capabilities” to discover where AI is most effective.
“I encourage them to use it for research,” says Marzano. “It’s a great tool for brainstorming. It’s a tool that still needs some validation. We do use it in class exercises for things like high-level, macro-level forecasting.”
Down the road, Marzano says, the application of AI will penetrate the entire supply chain in ways we’re just beginning to understand.
“We spend a lot of time trying to look at and understand what AI can do, not just for retailers, but for the consumer,” he says. “I think that’s where there is an opportunity, and I’m not sure it’s there yet, but AI has the potential to change how we shop and how we think of grocery shopping.”
The reality is, grocery shopping isn’t necessarily easy and gets more difficult for consumers who are dealing with special dietary needs. As they shop, Marzano says he watches consumers pick up products and try to read labels. If retailers build systems using AI to help consumers get the information they need quickly and more easily, they will get a positive response.
“This is where I think AI can help,” he says. “AI can know everything about every product in your store. It can tell the story of fresh as well as packaged.”
From the marketing point of view, retailers using AI can tap stored information about consumer backgrounds and habits to provide personalized information and inducements as they shop.
“It can know everything about recipes, it can know everything about health and diets and nutrition, and that’s just a wealth of information,” he says.
St. Joseph’s students worked with a Philadelphia retailer that was doing a pilot with an AI system that could provide that kind of shopper support. “It could do everything from helping shoppers to shop, including knowing everything about these products, everything about the pricing, the promotions and the location in the store,” says Marzano.
As noted, AI has been used in pricing operations for years, but it has become even more sophisticated over the past few years and is more readily available. As such, retailers can lean into AI to develop ever more effective pricing strategies.
“AI is very good at going through your history and saying, ‘hey, this price point generates the most units. This price generates the most dollars.’ It can be seasonal, too. It’s going to identify all these trends,” says Himango.
Himango points out that AI may be the key to dealing with a tough reality. Often, as the proportion of e-commerce sales goes up at a food retailer, the percentage of fresh goods sold declines because shoppers aren’t confronted with the sensory attraction of products, such as produce, meat and seafood.
“As e-com grows and AI explodes, how do we merchandise electronically and say the grapes are great, you’ve got to add this to your shopping cart? That’s what we’re going to have to evolve into,” says Himango.
