Page 21 - January_2019

In a sense, Omni-Channel calls on the production and marketing sectors to think less like traditional vendors to retail and
more like vendors to food- service.
peaches are not on the menu, the efforts are not likely to be very effective.
If you think about a product such as Chicken McNuggets, there were many points of interest in the development of that product. McDonald’s had a price point it wanted to retail at. McDonald’s wanted a product that could be produced with existing kitchen equipment. McDonald’s wanted a product that would allow people nervous about health messages regarding beef to have an alternative — and many other things.
In the foodservice segment at a retailer, this focus on the speci c needs of the retailer is already strong. If you want to sell a meat- ball sub to Wawa, it can be frustrating as a vendor’s sub may be superior, but Wawa, knowing its customers, has a speci c price point it needs to sell at and it has speci c margin requirements. A vendor walking in and trying to persuade Wawa to sell a sub for a dollar more than the number in the RFP is unlikely to be successful.
What this leads to is the idea that produce sales teams need more engagement
and expertise with speci c vendors. So rather than selling the product, the sales teams require reorganization to sell the client.
Of course, many large vendors have sales executives in Bentonville or Cincinnati, dedi- cated solely to Walmart or Kroger. Some- times these dedicated people actually have their own of ces in the buildings of a big customer. Even then, though, we often nd the sales teams are not fully integrated with product development teams able to create products that will please both the retailer and the ultimate consumer.
Partly this is because doing this requires expertise in consumer research, packaging, breeding and much more, and it is not easy to bring all this expertise together.
The commodity-driven nature of the produce industry also makes producers/ marketers hesitant to make this investment. They fear that even if they develop a product right for a retailer or restaurant, the buyer will switch to procure it from someone able to sell it cheaper – perhaps because the cheaper vendor doesn’t invest resources in client engagement and product development!
PARADIGM SHIFT
It is a reasonable concern but, ultimately an unsustainable position.
When this author’s family was in the supermarket business, the big concern was that a competitor would open a bigger, better supermarket right across the street. Today that concern is less. For a long time now, the retail industry has been moving to a more segmented focus, each concept being a channel to a different consumer at a different moment in time.
For the traditional supermarket, this is a big threat. You can be the best super- market in town, but your customers will be tempted to shop elsewhere at certain times if a Trader Joe’s opens nearby to capture the epicurian market; if a Whole Foods opens to capture health-oriented folks; a Fresh Market to go upscale; a Walmart super- center to offer everything in one place; a warehouse club to offer high volume at a discount; a dollar store to offer bargains; an Aldi and a Lidl to serve discounts; a delivery service such as Amazon Fresh or Fresh Direct to offer delivery convenience; and the local
PRODUCE BUSINESS / JANUARY 2019 / 21