Kom klinic 2012 finala

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Speed: The Consumer is Changing Faster than the Food Industry can change

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  • Internal Analysis
  • Kom klinic 2012 finala

    1. 1. Speed: The Consumer is Changing Faster than the Food Industry can change Richard Kochersperger Summer 2012 1
    2. 2. Industry Gurus 2
    3. 3. Tell Me and I ForgetTeach Me and I Remember Involve me and I Learn Ben Franklin 3
    4. 4. 4
    5. 5. 5
    6. 6. Goals/Objectives• Reality Check: An American Economic Perspective• View of the Food Industry: Retail/Foodservice Competitive Landscape? – Winners and Losers – Impact Players – New Developments• Speed: Key Issues and Opportunities 6
    7. 7. Reality Check
    8. 8. Federal Spending 8
    9. 9. Reality CheckAmerican Employment??? 8.2• Available Workforce: 155 million• Unemployed/underemployed: 29.7 million• Real Rate: 19%• Rutgers Study: 2006-2011 – 27% of the graduating students have full time jobs – 33% are unemployed• The median family income dropped 39% since 2007 9
    10. 10. Reality Check
    11. 11. Reality Check 11
    12. 12. Reality Check• 1 in 7 Americans; 1/10 Canadians are challenged to feed themselves• 2 Billion people worldwide do not have enough food to eat!• 40% of global food resources are wasted – Not harvested – Spoils – Thrown away 12
    13. 13. The “Have” and “Have Nots”
    14. 14. Food Inflation6.6% 14
    15. 15. Industry Performance• Whole Foods: 9.5% • Wal-Mart:• Fresh Market 8.2% 2.6%• Costco 7.1% • Safeway: 1.0%• Dollar Tree 5.6% • Weis Markets: 0.9%• Target: 5.3% • Delhaize: Food• Food Inflation 5.2% Lion/Hannaford: 0.6% • Ingles: 0.1%• Publix: 4.2%• • Tops: 1.8% Fresh and Easy: 3.6% • Roundy’s: 2.1%• Ahold: 2.9% • Supervalu: 5.1% 15
    16. 16. Closing ThoughtExcellence is not a skill.It is an attitude.~Ralph Marston 16
    17. 17. 10 Food Companies Dominate 17
    18. 18. Food Retail Industry Graveyard 18
    19. 19. Food Retail Industry Graveyard 19
    20. 20. Food Industry E R 20
    21. 21. Food Industry E R 21
    22. 22. Food Industry Winners 22
    23. 23. Foodservice Industry Winners 23
    24. 24. Big Moves• Target goes to Canada: 130+ stores; rolls out P- fresh format across the US: 436/200+• Wegman’s moves into Boston/King of Prussia• 7-11 Targets the Big Apple• Wawa goes South to Florida• Agro Trade shows up in Miami• America runs on Dunkin’• Family Dollar opens 500 new stores; Partners with McLane• Supervalu to Close Ohio DC 24
    25. 25. Big Moves• Shop Rite grows in Baltimore• Harris-Teeter moves into Washington DC• Bottom Dollar to Eastern Ohio• Spartan intros Valuland• Aldi comes to Houston• Price Chopper Limited• Fresh Market opens in California• Couche-Tard acquires Statoil Fuel & Retail• Dollar General: 625 stores/40 DG Market• PFG buy Institutional Food House• US Food buys New City Packing 25
    26. 26. Consumer Reports 2012• 33% changed primary • Wegmans 88 store • Trader Joe’s 86• 43% looking for lower • Publix 85 prices • Fareway 84• 25% poor selection, long • Costco 83 lines• 17% employee rudeness • Harris Teeter 83• Not enough checkouts • Raley’s 82 • Hy Vee 82 • Stater Bros 81 • Winco 81 • Whole Foods 81 26
    27. 27. 2011 Retail Market Share Number of Dollar Share Annual Millions StoresTraditional Grocery 40,333 46.8% $480,138Total C Stores 152,513 15.4% $158,546Total Non Traditional 54,325 37.8% $387,529GroceryDollar Stores 23,418 2.1% $21,492Total All Formats 247,081 100% $1,026,215 Future of Food Retailing, 2011 Willard Bishop 27
    28. 28. Future Growth 28
    29. 29. Food Service Marketplace 29
    30. 30. Closing Thought• FMI2012: Supermarkets Must Adapt to Stunning Changes, Sarasin Says• The store as we have known it for the last half a century is being redefined.• "No one is safe from the vicissitudes of change that continually rock this industry, in which technological earthquakes alter the landscape daily and sometimes even hourly.“ 30
    31. 31. Amazon.com• Sales: $48 Billion • More e-books than• 55% North America hardcover and• 45% International paperback• Profits: $862 million • Wide variety of products: clothing,• Inventory Turnover shoes, sporting 11/33 days goods, FOOD!• Accounts Payable 72 days 31
    32. 32. Amazon Supply 32
    33. 33. Amazon Supply 33
    34. 34. Amazon: My Habit 34
    35. 35. 35
    36. 36. 36
    37. 37. Amazon: Zappos 37
    38. 38. Amazon Quidsi 38
    39. 39. Amazon: Kiva 39
    40. 40. 2015: 3 largest in the World rd 40
    41. 41. Continuous Innovation, 2020+
    42. 42. World’s Largest E-Commerce Co 42
    43. 43. • Walmart serves customers more than 200 million times per week at more than 10,231 retail units in 27 countries through 69 banners• WalMart employs 2.2 million associates globally, including almost 1.4 million in the United States.• Walmart is one of the largest private employers in the U.S., the largest in Mexico and one of the largest in Canada as well. 43
    44. 44. Wal-Mart Financials 44
    45. 45. Supercenter Source of Volume 13% Other Each new Walmart Supercenter Mass averages $1.7million in sales per week 33% 32% (roughly $900,000 in supermarket item All Grocery volume). Other Chains 22% If Walmart takes 5% to 7% of the $710 Walmart billion grocery industry in 2012, Walmart Discount will add $35 - $50 billion Stores Over 75% of Walmart Supercenter volume is being captured from retailers in other major channels. Source: A.C. Nielsen Channel Service 45
    46. 46. 46
    47. 47. 69 different bannersthrough out the World 47
    48. 48. Wal-Mart GrowthFormat Actual Projected Projected 2012 2013Large >60,000 153* 120 130Format sq.ft.Medium/ <60,000 1 30 90Small sq.ft.Sam’s Club 9 9 15Total 163 159 235*43 remodels to Supercenters 48
    49. 49. Walmart Innovations• Experimenting with grocery home delivery – San Jose, San Francisco, Chicago.• Introduced ‘Goodies’ – Subscription service for new products not carried in inventory 49
    50. 50. Farmers Markets2011: 7,175 50
    51. 51. Target • 462/200 stores P Fresh • 5% Redcards Rewards • Move into Canada • City Target: Chicago, NY, Seattle, SF, LA • Shopping on the GO • 5% of profits to back to communities 51
    52. 52. Target Move to Food 52
    53. 53. Which Food Store? 53
    54. 54. Walgreens 54
    55. 55. Walgreens 55
    56. 56. Walgreens 56
    57. 57. Trader Joe’s• 370 stores• $8.5 Billion sales• 4,000 sku’s• $1750 sales/per sq foot• Eclectic mix/Treasure Hunt• Hawaiian Shirts• Great Customer Service 57
    58. 58. 58
    59. 59. Dollar Stores 59
    60. 60. Tesco 60
    61. 61. Tesco Lost $1.2 billion 61
    62. 62. Wegmans 62
    63. 63. When thereIs no vision, the peopleperish! 63
    64. 64. The Consumer Drivesthe Food Supply Chain 64
    65. 65. Customer’s Perspective• Anytime: 24/7/365• Any Place: Format• Anywhere: geography• My Way! 65
    66. 66. Future Food Shopping 66
    67. 67. Self Checkout 67
    68. 68. Scan-Bag-Go! 68
    69. 69. Scan IT! 69
    70. 70. Robot Shopping 70
    71. 71. Next Generation of ShoppingTry on clothes in 3D, share photos with friends, and store wish-listed items on smart phones 71
    72. 72. Next Generation of Shopping 72
    73. 73. QR Quick Response BarcodeA QR code (abbreviation for Quick Responsecode) is a specific matrix barcode (or two-dimensional code) that is readable bydedicated QR barcode readers and cameraphones. 73
    74. 74. Virtual Stores 74
    75. 75. Automatic Shelf ReplenishmentEdeka/Witron:Germany 75
    76. 76. Drive Through: Europe 76
    77. 77. Drive Through: Auchan 77
    78. 78. Food Comes to U! 78
    79. 79. Everyone wants a piece of your business! 79
    80. 80. Substitution: Big Box for Small Digital for Both 80
    81. 81. Evolution of E/M/F Commerce 81
    82. 82. E/M/F Commerce 82
    83. 83. Evolving Marketplace 83
    84. 84. E Commerce: Segmented 84
    85. 85. Free Shipping: E Commerce 85
    86. 86. % of Total Category Sales Online 86
    87. 87. On Line Food Sales 87
    88. 88. Social Media 88
    89. 89. Social Media 89
    90. 90. Mobile EcommerceSocial media marketing is going to blow the shinglesoff the roof once people really figure out how to useit Megan O’Connor, Levi Strauss 90
    91. 91. Mobile Ecommerce• Mobile Stats:• 5.9 Billion subscribers• 8 Trillion SMS messages sent in 2011• 11+ Billion apps downloaded, 1 in 4 never used again• The number of mobile searches quadrupled in the last year• 8.49% of global web site hits come from mobile 91
    92. 92. FCommerce 92
    93. 93. F Commerce 93
    94. 94. Ipad/Tablet Changes the World 94
    95. 95. Future Connectivityhttp://www.youtube.com/v/uIzNmVMOYm0&fs=1&source=uds&autoplay=1 95
    96. 96. Key Observation• “Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein 96
    97. 97. Complexity
    98. 98. 98
    99. 99. Food Logistics Issues• Shortage of Human Resources• Energy• Environmental/Sustainability• Technology• Urbanization• Ethnic Demographics• Speed: the ability to react to make decisions, quicker, faster, more effectively than your competition! 99
    100. 100. Work Force Shortage 100
    101. 101. Driver Shortage• Estimates: As high as 400,000 by 2015• Government regulations will eliminate at least 5% of the drivers• Increase in freight rates at 5%/yr for inbound products• Increase in inventories to prevent outs due to shortage of drivers• Outsourcing will not solve the problem! 101
    102. 102. DC: Automation Take Fingerprints off the Box! 102
    103. 103. Transportation• Improve driver performance through education and training• Intermodal/Rail• Collaboration/Consolid ation• DSD strategy• Customer Incentives 103
    104. 104. Energy 104
    105. 105. Energy 105
    106. 106. Alternative Fuels Natural GasElectric 106
    107. 107. Green Supply Chains 107
    108. 108. Smart Way Transportation• Aerodynamics• Super Singles• Auto Tire Inflation• Low Viscosity Lube• Hybrid Power• Automatic Transmission 108
    109. 109. Technology 109
    110. 110. Expanded Bar Codes 110
    111. 111. Temperature Sensors 111
    112. 112. RF-ID Alive and well!! Developments: – Eliminate the check out process at the store – Improve inventory management – Reduce mistakes unloading products inbound/outbound – Monitor temperatures throughout supply chain – Minimize paperwork 112
    113. 113. Control Towers• Proctor/Gamble, Sysco, Walmart, Supervalu• Centralized Traffic and Transportation• Incorporates sophisticated software to analyze/see all routes/equipment; inbound and outbound• Optimize entire supply chain: Visibility and Control• National Bids• Convert to customer pick up• Full Trucks/Balance workload 113
    114. 114. Satellite CommunicationsV to V: Cars, Trucks,Airplanes, Trains 114
    115. 115. NanotechnologyContamination Sensors Pesticide ReductionAnti microbial Packaging Tracking, Tracing, Brand ProtectionImproved Food Storage TextureEnhanced Nutrient Delivery FlavorGreen Packaging Bacteria Identification and Elimination 115
    116. 116. Urbanization 116
    117. 117. Urbanization • Traffic • Smaller Stores/Trucks • Road Restrictions • Parking • Noise Levels • No Docks • Security • Congestion 117
    118. 118. Urbanization 118
    119. 119. U. S. Demographics 119
    120. 120. U. S. Demographics 120
    121. 121. Rise of the Ethnic Focused Retailer 121
    122. 122. Speed: The Consumer is Changing Faster than the Food Industry can change 122
    123. 123. Future FCPG Industry Supply ChainCommand Center InformationControl Tower Retailers ??????Strategic Hub Information The Consumer Information Suppliers Distributors Third Party Manufacturing Alliances, Network Partners Regional, global plants Bulk, Semi-finished, Information Filling Finishing, Information 123
    124. 124. Closing Thought• It’s not the strongest companies that survive, nor the most intelligent, but the ones most responsive to change! 124

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