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Racing Ahead: How the Pandemic Pushed Grocery Stores into the Future

October 2, 2020
By Kristie Sigler

I recently had the chance to attend FMI’s Fresh Forward three-day virtual meeting about the state of the fresh sections (produce, meat, dairy) of the grocery store. After being bombarded daily with new research studies, it was wonderful to hear from grocery CEOs, senior section managers and industry researchers about their perspective and to talk with others in breakouts about what we have been experiencing. With many clients in/supplying this space, I know how difficult these past six months have been. The group was united in thinking the shift to grocery over foodservice will continue for the foreseeable future. More importantly, key themes provide whitespace for many in the food industry to consider, including:

Digital Ordering is here to stay: The need for safety during the pandemic shifted many to online ordering/click and collect. Susan Schwallie from the NPD Group noted this led the grocery industry to exceed and maintain 2025 digital ordering projections. Consumers have switched stores for the ease of online ordering, and note order accuracy, quality of fresh items and ease of ordering as their key satisfiers. While this seems like great news, it also presents many challenges. How will consumers find new products when they aren’t walking the store? How can brands influence meal planning when consumers’ mental cookbook will drive list making? And what’s the right balance of experience and efficiency for future store design?

Cooking for one to 10: Families with children make up just about 40% of U.S. households and are very heavy grocery purchasers. With a significant shift to retail from foodservice, households of singles, couples and multi-generations outnumber the families with just parents and children in the home and their food experiences, and needs, are different. Foundational meal planning, cooking and food storage skills are needed. Recipes need to be written for flexible servings and/or provide ideas on how to use ingredients in other food ideas. Not only do we need dinner at home, we need breakfast, lunch and snacks as well. And package sizes need to meet many needs with only one spot on the shelf.

The safety/sustainability continuum: There is no doubt pre-pandemic we were rapidly moving to a more sustainable food system — from the farm to the table. And the shortages seen in the early stages showed consumers the challenges of managing a food supply chain. Kevin Holt, the CEO of Ahold Delhaize USA, shared recent research from Hartman showing this has led to a 15-point jump (from 28% to 43%) of consumers saying sustainability is very important. But concerns about safety have pushed consumers to pre-cut, pre-packaged produce and meat. How to meet a new safety standard with a stronger push for sustainability will drive innovation in the next several months.

The upside — the solutions needed to address the above present opportunities for the entire farm to table value chain. And the changes in consumer behavior beg for a much stronger table to farm value chain to ensure a safe, secure supply. Big data, shared systems and metrics are needed to solve all these challenges, and these challenges present new business building opportunities for brands willing to rethink the entire “eating at home” process.