The Guidelines for Fresh Produce Food Safety is a new essential resource for growers, packers, wholesalers, retailers, trainers, consultants, auditors, standard owners and regulators, ensuring greater certainty and consistency in the development, implementation and auditing of fresh produce food safety programs.
The Guidelines includes information and tools for use across the fresh produce value chain for Australia and New Zealand. FPSC’s consultation with the fresh produce industry identified this as a high priority investment.
The immediate benefits to the fresh produce industries in Australia and New Zealand is an up-to-date reference resource that supports the harmonisation of food safety practices and programs.
Other resources available
The Understanding the Gaps Literature Review Project (UtG) examines five priority areas identified by the FPSC in consultation with industry, government and the research community. It provides fresh produce industries in Australia and New Zealand with an up-to-date exmaination of the scientific literature and highlights priority questions for industry for further research.
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By 2025, the food industry will see major shifts in the distribution of consumers’ food dollars. As a result, the structure of the foodservice and retail sectors will continue to evolve into having large market shares for premium products as well as affordable items and a small market share for mid-tier foods and venues once marketed to the middle class.
Total food industry sales will likely increase by more than $700 billion, reaching $2.06 trillion by 2025. While retail and foodservice will share the new growth equally, Technomic projects notable share gains by fresh-format and limited assortment stores, online channels, independent restaurants and small chains, and supermarket fresh prepared foods. These shifts are a reflection of the changes in consumer demand. Within foodservice distribution, alternative channels, namely club stores and online will be 16 percent of market share, compared with 12% in 2014.
Food companies will have to make upgrades in their food sourcing, IT infrastructure and people to keep up with trends.The following models developed by Technomic can guide industry’s investments.
The NEW Consumer Model
- Consumers will be more ethnically diverse but also polarized in terms of age and income.
- They will be interested in upscale food experiences or in maximized value.
- Consumers (and trade customers) will demand that companies be totally transparent about business practices and corporate social responsibility
- Consumers will value healthful food (fresh, GMO-free, local, organic, minimally processed, etc.), and corporate social responsibility.
- Older and younger consumers will drive urbanization, favoring independents, digital channels for food and specialty distributors.
The NEW Food Supply Model
- Consumer demand for fresh food and clean labels will shift food production to more organic and sustainable production and require a supply chain that focuses on fresh and local.
- National distributors will dominate the supply chain for retailers and restaurants, but specialty distributors will carve out a sizeable niche.
- Consumers and regulators alike will push for radical transparency from suppliers and food brands.
The NEW Economic Model
- Escalating occupancy costs in urban markets will require restaurants and retailers to trim building footprints but maintain sales levels.
- Partnering with players in the digital space or building separate fulfillment centers for off-premise sales and delivery will enable brands to harness big data and keep store-level economies efficient.
- Industry regulations won’t let up, adding layers of volatility to input costs. Brands should stay flexible through integration of in-store and consumer tech.
The NEW Labor Model
- Staffing models will bow to popular pressure against low wages. Brands will trade higher wages for lower turnover and relief from bad PR.
- Progressive investments, like Starbucks’ tuition assistance or Whole Foods’ onsite clinics, will be tools in the contest to attract the best talent.
- New technology, from labor scheduling software to digital ordering and fulfillment services, will help contain labor cost inflation as sales increase
In preparation for the transformation, Technomic advises that food companies including produce need to focus on the following five areas.
Reimagine, Reinvent, Reallocate, Repeat. Consumers have already begun to shift what and how they buy in response to evolving demographics, changing priorities and new realities in the economy and in the food supply, resulting in their moving away from traditional brands and venues. People and capital will need to be reallocated to growth channels and categories, which over the next decade will include a more healthful food supply built on fresher offerings and digital platforms for buying and distributing those items. New offerings must be acceptable to health-conscious consumers and accessible to anyone via online, mobile or digital means.
Act small to grow big. If they are to accelerate their pace of change and their speed to market, food companies must think and act like a small company – or acquire brands nimble enough to meet shifting demands quickly. Corporate strategies must increase a brand’s relevance to and coverage of emerging nontraditional channels, as well as growth segments like supermarket fresh prepared foods, group purchasing organizations and independent restaurants. The “less is more” ethos will play out in productivity initiatives and efficient restaurant and store designs that fight skyrocketing food, labor and other operating costs.
Embrace digital and big data. Companies must build their research and predictive analytics teams for customer insights because the challenges of the next decade, including consumers’ demand for greater transparency and food integrity; falling profit margins; and disruptions to the supply chain can be mitigated with data-driven solutions. Commerce and communication will continue to migrate online and to mobile devices. Food brands need to develop their capabilities in these channels or partner with experts to turn today’s transactional data into tomorrow’s winning strategies.
Anticipate and plan for the demand for a health-focused food supply. Consumers’ definitions of health will continue to evolve, and descriptors like ‘fresh”, “local” and “sustainable” will lose their elitist associations and be demanded by all consumers, not just the affluent or activists. Noncommercial segments like schools and healthcare are demanding fresher, natural and local food. Companies must move their food offerings to higher levels of health and food safety before their key accounts begin to request them. Revamping the supply chain to meet this demand will span everything from manufacturing and sourcing processes to packaging to where plants are located and how their deliveries are scheduled.
Boost your CSR quotient. Radical transparency will be the price of entry for consumers, not just on food companies’ ingredients labels, but also on their brand identity as good corporate citizens. Food companies will have to audit their policies on people, products and the planet. They will need to address everything from antibiotics and pesticides in the supply chain to carbon footprint to employee compensation – and be ready to show leadership in at least one of these areas.
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The annual State of the Industry at Fresh Summit, USA addressed highlighted opportunities and challenges facing the fresh produce and floral industries, from technology to branding to talent management.
Technology in the industry
Technology is a key area for innovation in the marketplace. In the past year, we’ve seen smart refrigerators, ovens and lunch boxes, which can take photos, log meals and nutrition information as well as provide recipes.
Implications for our industry from these devices are clear: Consumers will be able to better keep track of their produce usage and perhaps be inspired to increase their fruit and vegetable consumption as a result.
These technological advances apply to the field, too. In six years, agriculture drones are expected to be a $3.7 billion business.
And investments in ag tech startups surged to a record $4.6 billion last year, nearly double the investment total from 2014. Ag tech startup SunCulture has developed a solar-powered solution by designing and installing drip irrigation tube networks and solar panels on farms. It also provides training and brings in agronomists to maximize yields. – with some yields increasing by as much as 300 percent and generating water savings of 80 percent, compared to other local production methods.
In California, the winning concept for new school design was a preschool combined with an urban farm. Rather than having an on-site garden plot, the entire school is a farm. A farm-and-school idea is already coming to life at The Academy for Global Citizenship in Chicago, where a new campus is being built to include a three-acre farm and renewable power system. There, students learn about food production and sustainability.
Kimbal Musk, the younger brother of Tesla Motors visionary Elon Musk, is a proponent of building “learning gardens” at schools with the ultimate goal of creating 100 per city. Such gardens have correlated with improved nutrition and higher test scores.
Earlier this year, Target announced it is fast-tracking food innovation, especially in its fresh food offerings, as part of its drive to help consumers learn more about the food they eat. By shining a food spectrometer onto an apple, Target can identify the fruit’s molecular composition.
And with enough data, the machine could tell you exactly how old an apple is, how many calories it contains, what nutrients are present inside it, and even subtle nuances in taste. Target is currently putting industrial-strength scanners in its distribution centers to start building its food database.
In China, online platform Fruit Day is using light spectrum technology to grade the sweetness of individual oranges at its packing plant. From there, the oranges are then labeled, so consumers know how sweet they are before buying them online. The goal is the same as Target: enhancing the consumer experience and building customer loyalty.
What more can you do to provide consumers a consistent eating experience?
An increasing interest in sustainability has driven consumers to pursue foods with a lower environmental impact, like fruits and vegetables, rather than those with a higher environmental impact, such as meats, cheeses and fish. Jackfruit has been getting notable coverage as a meat alternative because of its high protein content.
Several locations in the United States, such as Michigan and Los Angeles, are now issuing “prescriptions” for fresh fruits and vegetables, to combat conditions such as diabetes, high blood pressure and high cholesterol. These prescriptions, or vouchers, are redeemable at farmers markets and retail stores.
Customisation is key
Bowls are growing in popularity, driving sales of vegetables in restaurants. Flavor profiles (especially hot spices) and preparation style (shaved Brussels sprouts, spiralized zucchini, cubed butternut squash) are important factors for consumers.
How are you reimagining the ways your produce items can be prepared and eaten?
Growth of branded fresh produce at retail
Since 2011, the dollar share of branded produce has climbed from 28 percent to 36 percent, and branded produce sales have experienced 12 percent compounded annual growth over the last five years.
While more than 1,000 brands were sold in the produce department last year, just 32 achieved sales of over $100 million. And in terms of marketing spend, two brands alone accounted for more than 60 percent of produce advertising dollars.
This speaks to how only a few marketers have truly engaged consumers, especially millennials and Gen Xers, by shifting from product-focused campaigns to ones emphasizing consumer experience, connection, and engagement.
How can you integrate your marketing into consumer technologies?
Floral consumption at retail
Buyers are looking to increase floral sales through supply chain collaboration, better category management, use of scan data, and improved staff training. PMA members are currently working on a coding initiative that will significantly increase the usefulness of floral point-of-sale data – like we did in the 1990s with produce data.
Attracting, developing and retaining talent
A recent study found that 80 percent of millennials ranked purpose and meaning in their day-to-day work as the most important thing. But only one-third of business leaders think purpose should guide decision making—for example, in how they hire and retain people, or in how they think through new opportunities. This disconnect has serious implications for talent retention.
Deloitte’s global 2016 Millennial Survey found that 66 percent of millennials expect to move on to a different employer by 2020. Reasons for leaving include a perceived lack of leadership skill development and feelings of being overlooked, along with larger issues around work/life balance, the desire for flexibility, and a conflict of values.
This generation of managers will be instrumental in creating a people-first workplace that includes more frequent and informal feedback systems, according to Chip Espinoza, author of Millennials Who Manage. They’ll also create an environment that supports a work-life blend because in their minds, they don’t mind accessing their work life during their personal life, but they also want to access their personal life during work. Emotional intelligence and empowerment are also important to millennials.
Are you building loyalty among your millennial employees?
Getting out in front of consumers, grabbing their attention, and creating demand for fruits and vegetables was the intent of the FNV initiative and its pilot programs in Fresno, California, and Virginia Beach, Virginia.
Initial research conducted after the pilots ended found that 70 percent of consumers claimed they consumed and purchased more fruits and vegetables after seeing the campaign.
Another example comes from a study conducted by Ohio State University, which found that branded marketing tactics - from commercials to banners in the cafeteria - nearly triple the likelihood of a child choosing to eat vegetables at lunch.
Findings like these complement the intent of the ‘eat brighter!’ movement, where Sesame Street characters play a key role in fresh produce marketing.
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