The future of marketing and distribution of food

Predicting the future is filled with pitfalls. What may be apparent to any individual within a specialty is frequently incomprehensible to those outside that specialty. Many specialties may collide in the future such that small misunderstandings in distant fields can profoundly influence what will happen next within an area of expertise. Life rarely moves in straight lines. It is so much easier to be critical of other projections and so much more difficult to make one’s own.

In 2003 I made a series of predictions about the future of fresh fruit and vegetable handling (1)—my research specialty. Of the sixteen predictions I made, nine seem to have generally come true, two were clearly wrong and the other five are indeterminate. This month my blog is focusing on the future of shopping for food. Last week I reviewed the book The Future of Shopping by Snoeck and Neerman. Today I take a stab at food marketing and distribution, next week Don Schaffner will look at food safety and the following week will address the future of food waste and how it can be decreased.

Meal kits have become popular in the past decade. Companies like Hello Fresh and Blue Apron provide a weekly delivery of meal solutions providing fresh and processed ingredients with recipes in an insulated box to prevent spoilage and safety problems. At an average price of $10 or more in the US, they are expensive. The market is becoming crowded with competitors offering precut, organic, local, and less-processed alternatives. Another option cuts out the drudgery of food prep by delivering oven-ready meals. Less expensive kits with more processed, less perishable ingredients are also likely to emerge. “Fresh” and “whole” are more ambiguous descriptors than “unprocessed,” but some services may take a hit if it becomes apparent that there are questionable chemicals as stated components of sauces and other meal ingredients in the kit.

 

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The main innovations to meal kits may be in the mode of delivery as much as in the contents of the kits. Drones and driverless vehicles are likely to see some applications, but the regulatory issues with respect to traffic both in the air and on the road and how to deliver items into an enclosed area could cause difficulties. Striking a balance between the amount of packaging waste generated needed to prevent food waste will continue to be the primary challenge. I predict that kits in some form will be with us for several years but primarily for the affluent consumer with offerings from a limited number of large companies probably offering a wider range of meal options.

Grocery delivery is an option for busy people or shut-ins. It certainly makes sense for those who would rather point and click at shelf-stable products than travel up and down crowded aisles. Perishable items such as fresh fruits and vegetables or fresh-baked breads may require a stop on the way home from work at a supermarket, produce stand or bakery. The advantage of the supermarket is the single stop. Fierce competition is emerging between delivery services featuring a personal shopper and grocery chains for consumer dollars. Most chains have some form of home delivery, but it is not clear yet if it represents a profitable enterprise long term for the individual store. Once again, perishability becomes an issue. Allowing the consumer to select a 30-minute delivery window could help overcome perishability problems. I suspect that some chains will find a sweet spot and specialize in home delivery while others will abandon the opportunity. Specialty delivery services will continue to serve those who can afford it.

Restaurant delivery has been around for a long time. Pizza, anyone? Companies like Grubhub and Uber Eats have taken it to new levels. Fast-food companies are getting in on the act with delivery by drones or autonomous vehicles to drop-off locations for final delivery. Pizza chains have replaced many of their restaurants with baking locations for a delivery hub or pick-up. Keeping hot items hot, cold items cold, and fresh items fresh distinguishes a superior service from a mediocre one. Time is of the essence. Pizza delivery is here to stay, but will the novelty wear off for other meals and can an in-home dinner replace the in-restaurant experience, particularly for upscale meals? Beyond pizza, I see this as an occasional option for most people; a treat for affluent, aging shut-ins; but not a major source of American meals.

Farmers markets will continue to permit direct interaction between growers and consumers, although not all sellers at the market are growers. Expect to see more meat, fresh fish, cooked dishes, fire-baked pizza, and other non-produce items for sale in these locations in the future. Specialty items such as homemade gluten-free baked goods, exotic doggie treats and potions to improve health will also continue to expand to the counter-culture atmosphere that pervades many markets. The logistics that accompany such efforts on the part of the sellers generally lead to higher prices for fresh fruits and vegetables while the quality is usually, but not always, better than what can be found in a local supermarket. Many of these markets tend to be dominated by a white, affluent clientele. Efforts are being made in some regions to provide access to areas with lower incomes and to allow purchases by food stamps (see a discussion on the topic in chapter 7 of Food Justice).

fresh organic vegetables
A week of vegetables delivered to a nearby location from an organic farm

An alternative to visiting a farmers market is the delivery of a box of fresh produce weekly in season to a nearby drop-off point through a CSA (Community Supported Agriculture) service. Online advice for storage and recipes that incorporate unusual vegetables are provided by more advanced operations. This type of arrangement is beneficial to the grower. The consumer saves time but has little or no choice of what is in the box each week. The other problem with most CSAs is that one size of box fits all. For a large family, the solution may be two or more boxes each week. For a small family, there are always the neighbors. Look for more customization of boxes by larger farms such as selection of preferred items, and availability of half boxes. I would not be surprised to see small, regional distribution companies organize farm collectives to expand offerings while streamlining deliveries.

Supply chains move food and ingredients from where they are produced to where they are purchased, processed or incorporated into formulated foods. It is within the supply chain that both middlemen and minimum wage workers reside. The middleman can provide one of a number of functions including transport of items between distribution points, breaking down big shipments into smaller ones for transport directly to individual stores, and making sure that the right amount of material ends up at its ultimate destination. This person must find buyers for excess material and suppliers for shortages. Along the way laborers are tasked with harvesting, grading, sorting, loading, unloading, storing, processing, mixing of ingredients, stocking, packing and cashiering. In any such chain, a consistent source of supply is critical as consumers are not amused when their favorite food is not available for purchase at an acceptable level of quality.  The middleman keeps the items moving in an efficient manner while the underpaid laborer helps keep the price of the raw produce or finished product affordable.

The supply chain is controlled by the corporate buyer of the supermarket, restaurant, or processor who sets the price of goods moving through the chain. Increasing demands by consumers who scan the net for the lowest possible price drive buyers to squeeze every bit of value from the chain keeping wages and prices down and profits up. Some major corporations feel more comfortable owning the entire chain while others find more flexibility in subcontracting out various functions to smaller companies. Major battles are ahead between social advocates pushing for a living wage for workers in the system and corporate interests who are concerned mainly with the bottom line. Look for wages to increase some but not to the desired levels while prices rise, particularly on perishable foods like fruits, vegetables and meats.

Healthiness and sustainability. Americans have moved in their definition of nutritional health from getting sufficient nutrients to not eating too much food and the wrong kind of food to avoiding foods with too many ingredients, particularly those that sound like chemicals. Big and Little Food will continue to respond with cleaner labels and more marketing hype of questionable health benefits. Government regulations and law suits will attempt to stop the more outrageous claims while nimbler companies will stay one step ahead by changing their marketing strategies.  Expect food columns on the internet to push more fresh fruits and vegetables. Delivery of fresh produce will increase in more affluent areas with increasing demand, but delivery to areas that do not provide economic benefit to the supplier will decline.  Affluent consumers will only buy visually attractive fresh fruits and vegetables with rejected produce flowing to less affluent areas and food banks.

Much greater emphasis will be placed on sustainability as concern grows about global climate change and environmental responsibility becomes recognized as a moral virtue. How consumers will be able to determine which whole foods have been harvested and handled sustainably will be difficult. Terms like ‘fair-trade,’ ‘fresh,’ ‘local,’ ‘natural,’ ‘organic,’ ‘pure,’ ‘real,’ ‘simple’ and others convey environmental benefits that are really too often a form of greenwashing. Processed products face an even greater challenge even though the extended shelf life can actually reduce food waste relative to a whole, perishable food that is discarded. Every time a perishable food is trashed, each environmental input from the seed or birth to the garbage can is also wasted. Seals of approval such as bird-friendly chocolate or shade-grown coffee can help as long as the seal actually relates directly to sustainability and not just the perception of sustainability.

Next week: Food Safety Challenges in the Modern Food Delivery World by Donald Schaffner

References

(1) The future of quality. R.L. Shewfelt and J.D. Henderson, 2003. In Proceedings of the International Conference on Quality in Chains, Waginingen, The Netherlands. Acta Horticultruae 604(1):49-57.

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