Decades ago, customers would call their local grocer to place an oder and have it delivered. They would ask for staples such as cheese, milk, bread and dishwasher soap and look to their grocer for suggestions on what to serve dinner guests.
The advent of retail technology is essentially allowing grocers to create that same tailored experience. “With all of our artificial intelligence and e-commerce, aren’t we just trying to go back to where we were before?” asked David Donnan, a senior partner at A.T. Kearney, during his presentation at the 7th Annual Canadian Food and Drink Summit in Toronto last month.
Today grocers are using data and artificial intelligence to build trust with their customers and offer the types of experiences and service levels that previously existed, he said. “What we’re trying to get technology to do we already had,” said Donnan.
Moving forward, food will play an even more pivotal role in shaping the relationship between consumers and grocers. Here’s how:
New understanding of nutrition
Traditionally, consumers defined food in terms of culture, said Donnan. For instance, those of Greek decent eat Greek food and Italians eat Italian food, he said. Today’s consumers, however, are defining themselves in terms of the diet they’re on: vegetarian, vegan, gluten-free, etc. In fact, 49% of consumers subscribe to a specific diet or health program and it’s forming what Donnan called “food tribes.” Policy makers are taking notice (the recently revised Food Guide) and food retailers are putting a greater emphasis on healthy and plant-based foods in store.
Value versus values
“In college we looked for free food, now we’re looking for food free from antibitoics and artificial flavours,” joked Dannon. Generation Z is the primary demographic driving the popularity of free-from foods, he said. Sixty-five per cent are interested in knowing more about where their food came from and how it was made. Some of the most searched topics online relate to ingredients in our food, the impact of food on health, and food safety, he said.
And, when it comes to values, smaller, local brands with stories to tell are the ones capturing the hearts and minds of consumers. Counterintuitive as it may seem, it’s a trend that large consumer packaged goods companies are trying to be part of. Mondelez, for instance, has been shifting its focus from “power brands” to lesser-known regional brands to fuel growth. “We’re seeing the diminishing of globalization, and the resurgence of local branding is becoming important,” said Dannon. “Local doesn’t mean distance, it’s about knowing where [the product] came from.”