The Future of the Produce Industry in an Omni-Channel Marketplace

In the PMA 2020 State of The Industry, CEO Cathy Burns pointed out: "The Pandemic accelerated 10 years of E-Commerce growth in just 3 short months… In 5 years almost 60% of all U.S. households will be Omni-channel households." Omni-channel commerce is defined as a multi-channel approach to sales that focuses on providing a seamless customer experience whether the client is shopping online, from a mobile device or laptop, or in a brick-and-mortar retail store.

What will this mean for the Produce Industry, and what new business processes will be required to respond to this disruption? The produce industry can be divided into three broad segments: Retail Grocery, Food Distributors, and Grower/Shippers. The foodservice industry has been crippled by the pandemic and the most dire predictions project that up to 50% of the restaurants will not survive—many fear that much of this loss may never return. Companies in all segments are looking for ways to participate in the Omni-channel marketplace, meeting the customer where they want to shop.

We have already seen the lines blurring with grower/shippers and distributors shifting into direct-to-consumer selling strategies. Del Monte Fresh recently launched a consumer platform in the Dallas market, Chef’s Warehouse has followed suit, and in the protein industry, Perdue Farms has launched a national consumer-facing platform. The Omni-channel marketplace represents huge growth potential and many others are looking at ways to tap into this growth opportunity.

Today, the largest players in the grocery space with Omni-channel capabilities are Walmart, Amazon, and Instacart, who partners with most of the largest grocers. The lines between the segments in today’s Omni-channel market will continue to blur. Retailers will want to separate themselves from the competition by developing new, more seamless ways to sell produce online. Grower/shippers and Food Distributors, faced with the adverse effects of the economic downturn in the restaurant industry, are looking to diversify their sales base by expanding their Omni-channel capabilities.

What new business processes will be required by most of the industry in order to respond to this growing channel? New supply chains will need to be developed, leveraging AI technology that will evolve to measure and solve the challenges of these new capabilities, new fulfillment models, new delivery methods, and new digital marketing capabilities will all be required to meet the needs of consumers in this marketplace. Whether you’re selling directly to the consumer via brick-and-mortar or supporting sales in the online channel, a whole new set of capabilities will be required to support a seamless Omni-channel experience. Long-term business plans will need to be adjusted, resources must be shifted, and above all a significant paradigm shift for the members of the produce industry. The message here is now is the time to plan your strategy. As Benjamin Franklin said, “If you fail to plan, you are planning to fail.”

Craig Carlson is the CEO of Carlson Produce Consulting, LLC. For more on his services you can visit, www.carlsonproduceconsulting.com