Supermarket Wellness Watch: Jet, Peapod and Whole Foods eye new opportunities

The food retail industry is reeling from disruption. Consumer preferences are changing so quickly that companies are having trouble keeping up. Industry consolidation is producing out-of-the-box deals, such as Amazon’s recently announced agreement to acquire Whole Foods.

However, if industry players feel daunted by all the disruption, you wouldn’t know it from the all-star panel of retail executives at the recent Fancy Food Show in New York. The speakers represented companies including Jet/Walmart, Whole Foods and Peapod/Ahold.

The panel addressed a wide range of topics, including the importance of omnichannel operations and how wellness will play across shopping platforms.

Audience members were left with the impression that the glass is half full — that new opportunities trump challenges. Online was seen as a way to deliver on the promise of wellness.

“Customers have strict diets and need specific products,” which isn’t always easy to accomplish with brick-and-mortar stores, said Monica Schechter, the specialty and international food category manager for Jet.com and Walmart.com. “It’s easier for customers to search and filter online. It’s exciting because we’re now able to help them more with personalized service.”

She said the industry has been in e-commerce 1.0 but is now moving toward 2.0. “We’re looking at a situation in which we can understand your preferences and use technology to help you discover new products to match your profile. Millennials want to try new products.”

At Peapod, a unit of the large Northeast retail chain Ahold USA, a move like Amazon-Whole Foods isn’t daunting, said Tony Stallone, VP of merchandising for Peapod.

“I’m not nervous about Amazon-Whole Foods,” he said. “We’ve been in e-commerce for 27 years. We see more changes coming. All this reinforces our strategy of being both a brick-and-mortar and e-commerce retailer. We want to be everywhere where the customer is.”

He said the future might bring more solution-selling approaches to brick-and-mortar stores. “Stores are laid out by aisle, but in the future, it may be by solutions, such as gluten-free,” he said.

He sees health-and-wellness sub-trends coming on strong, including food as medicine, with ancient grains as an example.

Panelists pointed to online shopping as a solution for bringing healthier and higher-quality foods to communities that lack good food stores. Increasingly, consumers across the country are becoming more aware of how food plays into health, panelists said.

There’s a greater emphasis and awareness about plant-based foods, said Cathy Strange, the global executive coordinator of specialty and product development and innovation at Whole Foods.

“We’re seeing customers with needs,” she said. “Some of it is lifestyle and some intolerance. The plant-based foods trend will continue to grow to satisfy those needs. As those products taste better, you’ll see an evolution around that.  There are a lot of cool products.”

What advice do these retailers give to suppliers of new products?

Jet’s Schechter said the key is for suppliers to focus on collaboration.

“We want to work with brands,” she said. “Help us meet you and learn about your products and how we can partner together.”

In walking the aisles of Fancy Food Show, Schechter considered how products might translate to a business like Jet’s.

“I focus on how can we build it online, where you’re not as restricted by space in carrying items.”

The panel, moderated by Supermarket guru Phil Lempert, was a reminder that the future of retail is not a black-and-white topic. Companies need to focus primarily on the customer, rather than the delivery platform. Online and brick and mortar will both have roles to play. Health and wellness has a crucial role, with new opportunities online. And the winning companies will need to understand consumers intimately.


David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries. To read last month’s blog post, click here
 
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