Dive Brief:
- In an interview with the San Francisco Chronicle, Phil Lempert, founder of SupermarketGuru.com, predicted that fresh produce may be untouched by the growing wave of online grocery and auto-ordering. Instead, he envisions that brick-and-mortar grocery stores of the near feature will feature mostly fresh foods, since shoppers will be able to pick up their dry goods from kiosks outside the store or have them delivered to their homes.
- “The center of the supermarket has been declining anyway,” Lempert told The San Francisco Chronicle. “So the supermarket becomes 20,000 to 30,000 square feet of produce. And the produce people are going to talk to (customers), and the fishmonger is going to be talking to (customers) ... and there’s a registered dietitian (customers) can ask about healthy foods or reading labels.”
- This shift in purchasing behavior could also give farmers markets a leg up over traditional grocery competitors, since they deliver the fresh, local products and authentic grocery experiences that shoppers demand. Still, some industry experts predict that in order to survive an Amazon-dominated industry, these independent growers will need to build an online presence or partner with other delivery services.
Dive Insight:
In order to meet consumer demand for convenience, the grocery industry has raced to automate, developing improved delivery models, ordering devices like Amazon's Dash Wand, refrigerated 24-hour product kiosks and employee-free store models. And while this trend is a good step forward for traditional retail, it contradicts a simultaneous consumer demand for authenticity.
The nutrition concerns that have been top of mind for shoppers have evolved into a more holistic concept — one that values the health and success of local communities and growers. Consumers today are willing to pay more for products that come from local farms or producers, especially if they are centered on initiatives that consumers identify with — such as commitments to animal welfare, organic farming or ethical labor practices. This evolving set of values directly benefits farmers markets, which have long operated in this niche.
Natural and organic grocery chains like Whole Foods and Sprouts became successful mainly because they provided branding and fresh produce and products similar to what is found at a local market, but in a traditional retail format more convenient for mainstream consumers. Now that shoppers are able to have their dry goods delivered, or get them through a click and collect program, making a separate trip to the farmers market for produce and other fresh offerings is no longer such a hassle.
“Traditional groceries in the long term kind of become a dinosaur,” grocery industry analyst David Livingston told The San Francisco Chronicle. “The whole business model just isn’t sustainable long term.”
But how long will this shopper patience last? The halo of authenticity that surrounds local growers is powerful, but as consumers become more accustomed to online grocery services, they may start demanding more accessible local fare. This could be a difficult transition for small producers to make on their own, especially if they are trying to reduce their carbon footprint.
It may be wise for local growers to seek partnerships with meal kit services like Blue Apron or Chef'd to reach a broader audience base and avoid costly investments in e-commerce models. Savvy social media campaigns are another way for small growers to market their brand and get consumers to come to them. In the digital age, a tantalizing photo of farm-fresh produce or homemade jam could go a long way.