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State of the Industry: 2016

Monday, 28 November 2016 | Posted in Fresh Summit by Renee Harrison

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.

Innovative ideas

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?

Personalised nutrition

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?

Demand Creation

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. 

To see the the full video reply, click here


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