Experts Predict the Course of Retailing in 2017

Some Industry Experts Predict Produce Retailing in 2017

Produce News magazine recently called on five industry experts to outline their predictions for produce retailing in 2017. Those contributors were Bruce Peterson, president of Peterson Insights and longtime Walmart produce executive, Dick Spezzano, Spezzano Consulting Service and former Vons produce executive, Ed Odron, Ed Odron Produce Marketing Consulting and former Lucky Stores executive,  Steven Muro, president of Fusion Marketing, and Ron Pelger, of RonProCon Power Produce and former A & P executive.

In two articles, those experts outlined both broader-based operational predictions and followed up with more specific produce department future ideas.

MERCHANDISING TIP OF THE WEEK. In the January 9, 2017 Produce News article entitled “Retail Predictions for 2017,” these key ideas were shared:

The Impact of the New (Trump) Administration: Dick Spezzano began: “A relaxation of the rules by the Environmental Protection Agency and other federal organizations will make it easier for businesses, including retailers, to operate.”  Ed Odron expressed concern with one potential change: “The effort to increase the minimum wage could have a very big impact on the retail grocery sector. Supermarkets have been struggling to make a profit for a long time. A minimum wage in the $10-$15 per hour range would cut further into profits and erode innovation and training at the supermarket level.” Bruce Peterson expresses caution in the area of immigration reform: “During the campaign, the president was very vocal about immigration activities and how it affects national security. One of his ’targets’ was Mexico. The produce industry is already being challenged with insufficient labor, so how this will ultimately unfolds bears close watching.”  While all five expressed some concerns about potential trade policy changes, the consensus was that “There is a general disbelief that food production from Mexico will get caught up in a trade war. Food coming into our country is much different than cars or computers.”

The New Supermarket: The five contributors all agreed that supermarkets will get smaller in 2017, with “more online shopping, continued pressure on the traditional, conventional supermarket, and possibly a resurgence in mergers and acquisitions.” Ron Pelger elaborated: “ Look for those mega-sized supermarkets to shrink in square footage. Online shopping will be part of forcing it. Today’s consumers, and especially Millennials, want more of a convenient ease of in-and-out shopping rather than hiking in and out of confusing aisles. Smaller stores can offer it. Besides, smaller facilities cost less to operate, which is beneficial to retailers’ bottom lines.”  Spezzano expanded on the smaller store theme: “I expect the smaller store footprint to proliferate. Multiple SKUs of the same product in center store is wasted space.”

The initial article was followed by a second one on January 23, 2017. In that “Part 2” presentation, the five experts touted the  “continued growth and expansion of value-added products as well as a shout out for beets.”

 
Beets could be the new Craze: Pelger elaborates: “Anything ‘beets’ will be the new craze in the race towards health and nutrition, similar to the ‘kale’ kick. Beets—red, yellow, and orange—will be offered in a great number of ways. Bottled beet juice will expand in various varieties, similar to yogurt. Beets contain antioxidants and are loaded with heart-healthy benefits.” Spezzano concurs, but added: “Jackfruit could make a big move—if anybody can figure out what to do with it.” And Odron added: “I don’t think Brussels Sprouts have peaked yet. There is still an opportunity for a lot more growth with new products.”  He also predicted that both butternut squash and pomegranate arils will see significant sales increases in 2017.

Value-added Explosion: Peterson explains: “I think value-added will continue to grow, and the definition of what that is will expand. I marvel at the increase in juice (sales), which one could argue is a value-added product. With the increasing number of online shoppers, I see value-added as a more predictable way of ensuring consistency. And I see a significant increase in the convenience aspect of today’s shoppers. When you add the food safety component to this, I think it’s safe to say the value-added category will have a wonderful 2017.” Steven Muro added: “Convenience is the Number One driver in retail business today. That means utilizing technology for home delivery, faster service and checkout, and more innovative value-added items marketed at retail.” And he continued by pointing out the success of meal kit companies: “Meal kits, such as those marketed by Plated and Blue Apron, are doing very well. Why shouldn’t a retailer have them available for pickup? Retailers need to differentiate themselves and this is the perfect place to do it. I expect increased dollars to be spent on convenience.”

Locally Grown is Powerful: Spezzano explained this point: “The local food movement continues to resonate with consumers. In California, the impact is not as evident because of the year-round availability of fresh produce. But in areas where the fresh season is much shorter, the concept of featuring locally grown produce is compelling and I expect it to be a continued emphasis in the retail produce department.”  Peterson agreed, but added a note of caution: “It’s well known that retailers impose a different set of rules on major commercial producers than they do for small, local farmers. We are one food-safety crisis away from casting a bright light on this whole issue.”

So there you have it—five experts predicting retail in 2017. Great ideas and inspiration as we plan our year! Happy Selling!