Last week, we had the privilege of presenting at the Groceryshop conference in Las Vegas. This four-day event was filled with great content and insights from grocery and CPG industry leaders, as well as research firms.  Best of all: it was in person!

The conference theme, “Gradually, Then Suddenly, Transformation Hits the Grocery Industry,” was the perfect backdrop for the challenges and experiences most grocers and suppliers have felt for the past 18 months.

Groceryshop 2021

The Groceryshop conference boasted an estimated attendance of around 2,000, which was great to see.  Participants enjoyed touring the expo floor where solution providers showcased the latest in grocery technologies. Our many conversations with industry peers covered most areas of the grocery business, and beyond excitement about getting back in person, most themes focused on innovations in the grocery industry to address a very changed consumer and supply landscape.  Wearing a mask all day wasn’t any fun, but the front-line grocery workers do it, so we kept that perspective firmly in check.

Throughout the conference, presentations and conversations focused on the following grocery innovations and trends:

Omnichannel Grocery

Mike Del Pozzo from Frito-Lay described omnichannel as “always everywhere.” While omnichannel is not new for most of the retail community, it is a newer concept for grocery. Traditionally, grocery retailers have focused primarily on the physical store. However, today there is an influx of pure online-only grocers, and the home delivery offerings that took off exponentially during 2020 are not going away.

How do grocery and CPG companies adapt? The common and important message was collaboration across internal associates, vendors, distributors, and customers.  The ecosystem of grocery retail must work together, and this tighter collaborative environment represents an industry change, not just a selling channel shift.  And it’s perhaps more impactful in grocery, given the fact that most consumers eat at least 20 meals every week.  As such, there are many more opportunities to be delighted (or disappointed) versus the once every month fashion shopping experience.

The Wellness Movement

Most times when you think of grocery it’s all about the food.  However, today’s environment is causing consumers to think about their overall personal health and wellness where food is only a piece of that puzzle.  Whether you’re talking about a holistic approach or mainstream medicine, the consumer is asking for a balance without multiple shopping trips.

As an example, Target launched their Good & Gather brand that is quickly becoming a fan favorite.  Rite Aid is relaunching a new store approach that balances consumer needs in a fresh new atmosphere with new offerings that look less like a pharmacy and more like a specialty retailer.   The last year has influenced consumers to think and buy differently, and the consumer goods industry is quickly having to adapt and innovate.

Sustainability and the Environment

Related to the personal wellness theme, the idea of lessening food waste and how we think about inventory management and availability to the consumer was a hot topic as well.  Conversations focused on how grocers and CPG companies can not only create a better and more sustainable business model, but also decrease environmental impacts across the board.  Grocers are looking at dynamic pricing opportunities that are triggered by inventory movements to markdown product, resulting in increased demand and reduced waste.  Others are optimizing assortments to adapt to customers’ needs and ensure all foods can be utilized even if not in their original form.

Viraj Puri from Gotham Greens spoke at Groceryshop about his company’s zero waste.  They utilize every bit of produce from the prime greens for grocery, to marketing the “ugly” (blemished) greens, to transforming the least fresh products into pesto or chimichurri.   We anticipate different maturity models in this space, but the focus will likely become more prevalent as this theme evolves.

Supply Chain Challenges and Fulfillment Options

We are all familiar with the supply chain issues that began early in the pandemic as panic buying cleared out grocery shelves and supplier distribution centers.  While much of the industry has recovered, broader supply chain issues have worsened, especially for imported products.  From a grocery industry perspective, some of these challenges can be mitigated with strategic changes in assortment and category management to keep product on the shelf.

Maintaining price and margin is critical as transportation and commodity costs have increased.  With the growing focus on sustainability, there are significant opportunities in the “regenerative grocery supply chain,” with innovative suppliers doing more to protect and renew the environment.  Some suppliers, such as Bowery Farming, are opening huge green houses for growing fresh vegetables close to urban environments.  Such strategies can cut the shipping distance for some food from thousands of miles to 20-30 miles, while also almost doubling the productive shelf life of many items.  Further, urban delivery options are increasing, with a focus on the “ride share” concept: consumers pick their delivery day and grocers ensure the most efficient route and time.  These tactics reduce environmental footprints and overall costs.  Certainly, balancing sustainability with expected convenience will continue to be a hot topic.

Overall Groceryshop was a valuable experience – for sharing, learning, and networking.  Some of the virtual conferences over the past year or so have been adequate, but there’s nothing like seeing old friends, meeting new acquaintances, and having informal in-person interaction. Further, we very much appreciate Joe Laszlo, Price Padget, and the entire Groceryshop team for arranging and managing this much-needed event.

If you have any questions about any of these grocery trends, please reach out to us. We would welcome the opportunity to discuss any of your challenges or ideas.

Authors

Clay Parnell, President & Managing Partner

Clay Parnell
President & Managing Partner

Amanda Astrologo, Partner

The Parker Avery Group is a leading retail and consumer goods consulting firm that specializes in transforming organizations and optimizing operational execution through the development of competitive strategies, business process design, deep analytics expertise, change management leadership, and implementation of solutions that enable key capabilities.

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Published On: September 27, 2021Categories: Amanda Astrologo, Clay Parnell, Events, Grocery, Innovation