Reset to Rebuild: The Influence of the Food Industry in a Low-Touch World

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Reset to Rebuild: The Influence of the Food Industry in a Low-Touch World

By Paul Larson - 08/24/2020

Food is a universal part of the human experience. People of all cultures use it to reflect and celebrate familial bonds, unique identities, community care and belongingness, spirituality, social activism, and an openness to learn. And these powerful gestures are the byproduct of a highly sensory process of choosing ingredients, preparing meals, and gathering together to eat and enjoy each other’s company.

But what happens to a high-touch tradition in a low-touch world? A wave of innovation rises across the food ecosystem — from food production to food retail and delivery — to reset business models for success while gaining consumer confidence.

Adapting the food ecosystem to dramatic consumer-driven shifts

The moment COVD-19 became a pandemic, the food industry changed forever. According to Accenture, approximately 50 cents of every U.S. dollar spent on food services evaporated once 94% of the American population were mandated to hunker down at home.

Food retailers that were up to the challenge pivoted their supply chain with tremendous efficiency — from processing, packaging, and lot sizes to relationships with retail customers. In a matter of days, they had the visibility to see the emerging shift, the tools to analyze potential risks and opportunities, and the agility to react swiftly.

How did these brands overcome extreme pressure on their supply chain to deliver what retailers and their consumers need at a time of historical upheaval, uncertainty, and stress? Based on insights from thought leadership presented at FMI Midsummer, success boils down to addressing four fundamental changes in consumer expectations for their food.

1. Increased concern over customer and employee safety

Over the last few months, many companies within the food ecosystem have adopted new business models to ensure the safety of their customers and employees. Curbside pickup, no-contact delivery, tamper-evident labeling and packaging, heightened food safety and sanitation policies, and more strict health and safety policies have become the norm. 

Full transparency, however, is still needed to help customers and employees feel more confident that the food and service experience is safe from everyone involved. When marketing messages, channels, and promotions are segmented based on level of fear or discomfort, the food ecosystem will understand how to advance their operations and communicate those upgrades as a genuine service.

2. Value-driven social awareness

There are a variety of reasons why purchasing behaviors across the food ecosystem is changing. The rising number of COVID-19 infection, increasing food prices, dramatic supply shortages, and employment uncertainty — all these factors and more are adding pressure on health and safety, financial security, and mindful spending practices.

Such sensitivity is already manifesting itself as people choose to frequent local restaurants and retailers, rather than going to regional or national chains. Yet, customers are also known for having long memories and rewarding food brands and retailers that donate to people in need, support employee well-being, and demonstrate social consciousness across their operations. Such care can go a long way in establishing a long-term customer following.

3. Growing preference for digital commerce with a human touch

Since the start of the pandemic, online and digital channels have exploded across the food ecosystem as customers cope with impediments to in-store shopping. But that doesn’t mean that the food ecosystem needs to sacrifice memorable aspects of the customer experience that engage all senses and bring joy, relaxation, and connection.

Businesses that understand individual customer roles, intentions, and sentiments when ordering online, through a mobile app, or on the phone and connect those insights to the overall experience are best positioned to provide meaningful customer engagement. 

4. Demand for locally sourced options

Disrupted food supply chains have inspired greater preference for local agricultural goods such as poultry and meat, fruit and vegetables, dairy, seafood, and grains. Both consumers and businesses want more reliable sources of food with shorter supply chains, and fewer people touching the delivered product. In return, producers and retailers can better access local products, which can become a critical asset to consumer buying decisions.

All these changes within the food ecosystem will have a lasting impact on the workforce, supply chain, and commerce. But more importantly, the entire food ecosystem should run operations that can evolve resiliently and are transparent enough to resonate with the customers and earn their trust – all while generating new revenue streams and reducing costs.

Paul Larson is an industry executive advisor for consumer products at SAP.

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