Good morning, my name is pam grey and my teammates are Our topic is the food industry – specifically the demand side of foodsome of the companies we focused on Safeway, wegmans and publix
We will share our research with youI will take you through the Key TrendsHugo will walk us through how this industry is affected by economic, social and environmental impacts and some solutionsConnie will show us Why the industry needs to move in the direction of sustainabilityRick will talk about What type of frameworks can be used to facilitate sustainability in this industry And Yetunde will close it out with our team’s predictions and recommendations
Approximately 1.6 trillion dollars is spend on food in the US each year – this industry touches almost every American. This is how we hunt and gather for ourselves and our families. We spend about 12% of our income on food. Add process flow – instead of trading post and general store.
Some of the key trends that stood out for usPrice Increases of food commodities this coupled with the rising oil prices has a significant cost impact on food and margins – hugo will talk more about this laterTransparency/food safety – consumers are demanding to know more about their food supply chain – remember when 550 million eggs were recalled or ecoli scare in packaged spinach. Consumers are wanting more regulation around food safety and more transparencyFood manufacturers are developing products that are deemed healthier– beverage manufacturers are putting vitamins in our water and bread companies are adding fiber to our English muffins. Bacardi’s rum flavor with aloe in it.Going “green” – this is evident by larger and more predominant organics sections fresh foods and dry goods. According to a deliot study The Grocery format had the highest number of green product purchasers, so this is where the retailer are trending - There is also a shift toward Private label and value shopping – trader joes is a good example of successful private label.Mergers and acquisition to increase – big companies like pepsico and nestle can only grow by purchasing smaller ones and taking over their market share
KPI’s and metrics are simply too complicated for the average grocer.FMI is helping their members move forward by offering several “guidelines” – they even have a carbon footprint calculatior for their members on their websiteA few but not a multitude of assitance in the space helping to provide frameworks for grocersAccording to Jeanne at FMI – 2 examples of industry leaders are wegmans an publix. I also wanted to point out that safeway cares about you
PredictionsBased upon the industry trends, the food industry is heading towards higher prices for food while simultaneously the industry is attempting to become more sustainable in areas such as food safety, transparency, and healthier consumer products. However, if it has not been clear up to this point from colleagues slides, the food industry is an inherently wasteful industry with impacts ranging from social to economic to environmental. Companies in the food industry are beginning to understand that the less waste they accumulate the more money the industry will save in the future. In addition, from a demand side perspective the customers want this. The greatest opportunities in the various areas we listed are in increased efficiency and productivity especially with regards to transportation and packaging, employee relations from a holistic perspective, and building customer loyalty, specifically as it pertains to educating the consumer about sustainability and food.Our recommendations:In order for the industry to capitalize on these “greatest opportunities” for growth companies need to use FMI and its framework as a model for the industry in terms of guidelines and best practices both internationally and domestically. Also we believe companies should look to such innovator leaders as Wegmans, Safeway, and Publix as case studies for implementing best practices in a food industry retail environment that will lead to a more sustainable industry.
Food Industry RetailPam Grey, Hugo JuradoConnie Kwan, Rick Wells Yetunde Schuhmann
Agenda1. Trends2. Impacts3. Why Go Green4. Frameworks5. Recommendations
3. Financial BenefitEnergy Efficiency –Building - reduce 3-10% = $8000 per year –Transport - one mpg gain = $7000 per yearRecycling – FMI members- $50 million in revenueShift in Supply Chain –Less packagingEmployee Engagement
Industry Framework?No Industry Wide Common FrameworkThe Basics-Low hanging fruitOpportunity-Several areasDollars -Sustainability is a presented as a business decisionTrend-Members Sharing within the Industry
Guidelines and Best PracticesInterview with Food Marketing Institute - “Overcomplicated” for the average grocer - Carbon Footprint Calculator - Common KPIs are a challenge to findGroups and Associations in the Space - Grocers association - Global packaging projectBest Practices - Wegmanns - Publix - Safeway
Predictions & Recommendations Where is the Industry Heading High food prices Sustainability Greatest Opportunities Today Increased efficiency and productivity Customer loyalty Employee relations Recommendations FMI framework Best practices of innovators in the industry
References•http://www.safeway.com/CMS/includes/docs/2009%20CSR%20Report.pdf• http://www.gmaonline.org/downloads/wygwam/sustainability-balancing.pdf•Institute, F. M. (n.d.). FMI Sustainability Starter Kit. Retrieved February 26, 2011, fromFMI.org: http://www.fmi.org/docs/sustainability/sust_exec_summary_toolkit.pdf•Institute, F. M. (n.d.). Perserving the Planet Through Programs that make Business Sense.Retrieved February 25, 2011, from FMI.org:http://www.fmi.org/docs/sustainability/Sustainability_Initiative.pdf•Shea, R. (2011, January). 2011 Supermarket Trends: Good for Food Manufacturers andRetailers, Tough for Consumers - Seeking Alpha. Retrieved February 3, 2011, fromhttp://seekingalpha.com/article/247930-2011-supermarket-trends-good-for-food-manufacturers-and-retailers-tough-for-consumers•Analyst Study on Safeway Inc. and Whole Foods Market Inc. - Grocery Stores IncreasingHealthy Eating Options as Customers Battle With New Years Resolutions - Barrons.com.(n.d.). . Retrieved March 17, 2011, from http://online.barrons.com/article/PR-CO-20110208-906581.html