We have followed FreshDirect, the New York-based online grocery delivery service for a long time. This is partly because it is a cutting-edge firm that may have already revolutionized the future of food retailing and partly because FreshDirect CEO Jason Ackerman’s parents live a few houses down from the Pundit.
We have run many pieces related to FreshDirect, including this early one:
New York's FreshDirect Succeeds When Most Online Grocers Have Failed
…And this one that analyzed the role online services play in serving the consumers’ desires for fresh:
Can Online Mean Fresh To Consumers?
We have had produce executives from FreshDirect on the Perishable Pundit’s “Thought Leader” panel at The New York Produce Show and Conference, so were most pleased when we learned that a FreshDirect executive would be able to present at The London Produce Show and Conference. We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:
Long Island City, New York
Q: We’re thrilled you’ll be presenting in London. FreshDirect has been a true innovator in web-based delivery of perishable products, a medium that has baffled other retailers. What is the focus of your talk?
A: It is centered on the important role of social media and the innate overlap with an array of partnerships FreshDirect has fostered; looking at how social programming has evolved at our company in the past year.
Q: For context, can you start by providing an overview of FreshDirect as a foundation for recent developments?
A: FreshDirect has been around since 2002. We made our first delivery to Roosevelt Island in July that year. Now we’re a leading online fresh food grocer in the U.S., delivering premium quality fresh-from-the-farm foods and brand-name groceries directly to the doors of customers in the greater New York, New Jersey, Connecticut metro areas and the greater Philadelphia, Pennsylvania area, including Delaware. We’ve cultivated unique relationships with suppliers and farmers around the world to provide customers with the best-tasting, freshest, top quality foods and meals.
Q: In FreshDirect’s infancy, other web-based food ventures were crashing and burning, yet FreshDirect would turn out to be a shining exception. You may appreciate a Perishable Pundit Q&A piece we ran back in 2009, revealing reasons behind FreshDirect’s success amid a competitive market landscape, and its visions moving forward.
How did you become involved with FreshDirect, and what are your responsibilities?
A: I’ve been at the company 4 1/2 years. I started as a produce analyst. I was looking at inventory and helping to forecast buys, working a little bit on assortment, but mostly day-to-day buys and forecasts. Numbers are not my friend.
Q: I’m sure you’re modest on that front…
A: I did that about nine months and quickly found there were opportunities in the produce category that needed attention, and I felt I had the skillset to work on those things. I started working on vendor relations and looking at assortment, and promotions, working on the set up and layout of our online storefront.
This all melded into an associate category merchant position, still in produce, and I did that for about a year and a half. Then I was exploring ways to incorporate my food marketing background. While at Cornell University, I studied what they called food industry management, but it really was food marketing. I wanted to get into that realm of it, so I had a conversation with the Chief Marketing Officer.
I had been running promotions specifically for produce and was doing a fairly good job at that, so he recommended a position where I would work on overarching promotions for the company at large; some high level marketing promotions that touched on all the different departments.
In addition, I ended up being the cover person for PR and community outreach because they needed someone in a pinch. So I was working on all our community relations, and I was working closely with our PR agency. This was at a time when we were starting the process of moving our facility to the Bronx, becoming a friendly neighbor and community member.
I was coming into the world of social media on my own, and realizing there was a world of opportunity there. I pitched myself for that role, and wanted to revise the social scene at FreshDirect, and I got it, becoming the social media manager for a year.
Q: What social media opportunities did you pursue?
A: My first task in that position was to launch an Instagram account. We have over 6,500 followers today. This was significant organic growth. You can’t put money behind increasing your Instagram followers at this point. So this was really nice.
Then we’re on Facebook and Twitter, Google Plus, and Pinterest.
I’ve had a lot of fun working with different partners; community organizations, brands, bloggers, food artists… lots of ways to leverage what we’re doing at FreshDirect with people who know and love and are excited about food, and the collaboration between the multiple entities to give our customers a way to have a mouthwatering experience.
So that was an extremely exciting and rewarding role. It was bittersweet to leave it, but now I’m a marketing manager working on our partnerships. It’s a whole new way of thinking for me. I was able to stay kind of high level in my last role, and now I’m in the weeds, with detail, and still working with third parties, which I love. I enjoy collaboration, so it has that component but in a very detail-oriented way. I’m very fresh in this position, just about a month, and enthusiastic to see where it takes me.
Q: How important in this day and age is social media?
A: At this point, it’s an integral marketing lever. FreshDirect is very excited about talking to millennials in a different way than we have before, and staying relevant to them. Millennials are most certainly at the forefront of social media, especially in the day of mobile, where people are on their phones all the time, you’re waiting in line, and you’re waiting for the subway… I’m in New York, so I see it all the time. People are constantly flipping through their phones. Being present and being able to connect with anyone, but especially millennials… it’s a vital piece of staying relevant and top-of-mind.
Q: It’s helpful in this industry to have young people hip and savvy like you, the newer generation, to stay on top of all this!
A: It’s funny. Even since I’ve been out of the role, which has only been a few weeks, there’s new programming that I haven’t stayed on top of because it’s not my day job anymore. It’s constantly evolving, and ever-changing. It’s so fast-paced, and something is in one day and out the next. Pinterest is adding advertising, and brands are getting on Snapchat. Brands are using all these different channels to reach the consumer and stay as relevant as possible.
Q: How does this social media explosion tie back to fresh produce? Do you have examples you can highlight?
A: Absolutely. FreshDirect is so centered on our sourcing stories, and in the way we cultivate relationships with farmers and ranchers and fishermen. We can show the lengths we go to get fantastic products that are great for the earth and for the body, and great for the producer and the customer. Social is an ideal way for us to highlight those stories. We created a hash tag WTFresh (What The Fresh). It’s an opportunity to showcase outside the box. Maybe people haven’t heard of these products — in most case a produce item. So, something like Buddha’s Hand Citron; it’s a crazy multi-fingered, bright yellow piece of fruit. Most people probably never heard of it, and if you see it, maybe you’re a little scared of it, and then wonder what you do with it.
Another example is kumquats. People are less familiar with these items, so it’s nice to be able to spotlight those and give inspiration on how to use them. Additionally, we had a hashtag, SourcedByFD. This was following and chronicling the travels our merchants make. So they go to Chile and New Orleans for shrimp, Nebraska for cattle, California for blueberries and peaches, Ecuador for bananas, and then the local regions as well. And they’re constantly going on these trips to develop strong ties and partnerships with producers, so it’s great to give insight into that. It’s a medium in our marketing plan to help us get our message across.
Q: Are there ways to measure the impacts of these social media levers, in terms of sales?
A: That is a little harder. There are ways you can track your links and understand how many people are clicking through the link you provide on a post on Facebook or Twitter. Instagram is a little harder to measure the impact. For instance, we did an Instagram takeover, where in one day we worked with a local pizza company and showed five different photos of behind-the-scenes images of their products, and in that one day, their products went out of stock on our site. So, while it’s not a perfect metric, it does show we’re showcasing products telling a story, and then people are reacting and buying those products.
It’s very suggestible. We were selling against a product not in house yet, which is always a nice thing to do, so it was fantastic. Sometimes we sell where you can buy a piece of rhubarb listed on our site, which we know is coming in our facility tonight on transit from the farm. For the pizza example, we were selling ahead, so the pizza wasn’t even made yet.
Q: It doesn’t get fresher than that.
A: That’s the idea, to provide the freshest product possible.
Q: Are you involved in FreshDirect’s creative website shopping experience, such as letting consumers know what items are freshest and tastiest to order that day, and frankly which ones are not…
A: I used to do that when I was on the produce team, but I’ve since pulled out of that area. For the talk in London, I’ll focus on what we were just hitting on, the ways social media is such an integral marketing lever at this point. It’s incorporated across all the channels and it’s fully integrated, the way we’re able to connect with our customers, and insights into the great lengths we’re taking.
With the launch of Instagram and the revitalization of our blog, we have a new way to give insight into our sourcing stories. Before Instagram, we’d put banners on the site, and have it link through another page and tell a story about the producer.
Q: That sounds much more time-consuming, and perhaps a distraction for busy customers trying to complete their orders…
A: It didn’t coincide well with the shopping experience. It took away from people trying to get in and get their products in their cart and make their order. So when they’re on social, they’re more apt to pay attention. Maybe they’re in a more relaxed scene, and it’s easier for them to digest information and get little quick soundbites. It’s not this whole thing they need to read up on, this high level, top flying story… And I think there is something really powerful about that; especially for a food retailer. We’re not going after Bon Appetite magazine. We’re making great strides in creating our own content and telling our own stories.
Q: Since this sneak preview is going in our online publication, we have an opportunity to provide links to some examples of how you’ve capitalized on social media.
A: That’s a good idea. Let me gather some for you. [Editor’s note: Allen provides numerous social post examples for readers to link to here]:
We’re Celebrating With This Tangerine
Ken, Our Specialty Food Merchant, And His New Buddies
Our Produce Team Is Visiting Pine Barrens Native Fruits
Big Fish, Happy Seafood Buyer
Our FD Seafood Team Is On Their Annual Trek To Alaska
The Editorial Staff Is Hard At Work
Ultimate Cheese Cleanse For Foodies
The Dress Debate Is Bananas
Here’s To All Men, Happy Father’s Day
Sweeten Up Your Summer Skewers With Stone Fruit
Q: What ideas are in the pipeline?
A: There are companies that are doing a really good job of integrating social and customer content. Anthropology is a great example, where it’s actually pulling in photos from people using different hashtags. Say I bought a new dress and I think it looks great… I can put a photo on Instagram and use a hashtag and Anthropology will pull that into its site and showcase the dress.
This is something we looked into. So, I could be grilling salmon with asparagus, I could upload a photo of that on Instagram, use a hashtag and then on the salmon page, “look what our customer Tenley made for dinner last night.” It’s giving inspiration to other customers. So we’re putting the power in our consumers’ hands.
There’s a world of opportunity and we’re only scratching the surface.
Q: I’m embarrassed to tell you I’ve never used Pinterest or Instagram or Snapchat. My kids joke with me that I’m in the dark ages!
A: It’s really interesting to look at social and the differences between the generations. I’m 28, and my mom only knows about it because I’ve told her about it, and she doesn’t understand Snapchat at all. It’s kind of a cool way to connect the generations. We’re able to show them these new products. It’s not something off-putting to older generations but something they can embrace as well. It’s a nice way to share our food, and inspirations and stories. And it’s relevant to everyone. It’s a way to reach into the masses and connect with the people in the know.
A large part of our target market is millennials; early 20s to mid to late 30s, in the food scene. They’re talking about food, hosting parties at home, and food has become a center focus.
Q: You fit right into that target market! Your enthusiasm throughout this interview is refreshing, and attendees certainly are in for a lively and forward-thinking presentation.
A: I’m very passionate about food and FreshDirect, and social media. I’ve spoken at Cornell the past two years, and people are highly engaged, and ask lots of questions. It’s a fun topic by nature. I’m really excited about building social connections and being a part of The London Produce Show.
Tenley is in the hippest part of the produce industry -- social media, marketing and FreshDirect, but she has producer side roots. Her father is none other than Jim Allen, President, CEO at The New York Apple Association, a charter exhibitor at both The New York Produce Show and Conference and The London Produce Show and Conference and an association charged with protecting the interests of the apple growers of New York State.
So Tenley is the perfect person to bridge the gap between the grower and the consumer, by using an intermediary such as FreshDirect.
So many important issues are raised by how the industry deals with this space.
What are the opportunities for producers to develop their own brands through social media? Can retailers that are not online still use these tools in a way that will keep them competitive with on line services and, as online food-ordering services proliferate — Amazon , Google and others are all eyeing the space — can such tools differentiate one company from another?
And how does the industry use these tools to relate to digital natives? Come to The London Produce Show and Conference – definitely bring your tablets and smart phones — and learn some cutting-edge lessons on how these tools can be used to connect with consumers now and, increasingly ,as time goes on.
You can learn more about The London Produce Show and Conference right here.
This is a small brochure we created that showcased the event from last year.
Please register at this link.
And, remember, we have a great “better-half” program; you can learn about it here.
You get the most out of the event by staying onsite at the headquarters hotel. It maximizes networking and thus the value you take out of participating. Get discounted rooms at the headquarters hotel right here.
We have exactly two booths left if you want to participate as an exhibitor, so please let us know here.
And sponsorship opportunities allow you to position your company as a leader; find out about opportunities right here.
We look forward to seeing you at The London Produce Show and Conference!
Our piece — What The FTC Doesn’t Know May Hurt Us…Sysco/US Foods Merger Is Pro-Consumer Judge Has Opportunity To Let A Thousand Distributors Bloom — brought an objection from a most knowledgeable reader:
OK, the Pundit deserves three strikes with a wet noodle for being flippant on this one. Having grown up in the produce distribution business, keynoted many a distribution firm’s annual meetings and facilitating several share groups related to produce distribution, we knew better than to make it seem so easy.
In fact, it is very difficult. Organizing procurement, ensuring food safety and many of the things Max mentions in his letter are exceedingly difficult to do well.
Yet, to some extent the very existence of an organization such as Pro*Act lends credence to our point.
The FTC’s basic claim is that a merger of Sysco and US Foods would allow the merged company to dramatically raise prices and pocket the profits. In order for that to work, there would have to be a long period in which others could not enter the business.
For example, if Airbus and Boeing were to merge, they could, theoretically, raise prices on large passenger jets. It would take many years, possibly decades, before anyone else could design new airplanes. The Airbus A-380, for example, began development work in 1988 and finally made its first commercial flight in 2007! So that is almost two decades for an established aircraft manufacturer.
We doubt that Sysco/US Foods is a monopoly at all, precisely because regional or specialty distributors such as Pro*Act members are there to compete right now.
But if, in fact, Sysco was able to make these incredible profits in a particular city, another distributor would start serving the area, with Sysco’s high profits serving as an umbrella that justifies bringing in product from a more distant location than would usually make sense.
So to give an example, normally San Diego distributors price their products so that Los Angeles distributors cannot compete economically. The high gas cost and extra driver time make the LA distributors uncompetitive. But if Sysco raises prices in San Diego because it has a monopoly due to the merger, then a Los Angeles distributor can compete.
Yet, under the worst possible circumstances, where there are no nearby facilities, the barriers to entry are still not very great precisely because a new firm sensing opportunity could join Pro*Act and compete with Sysco!
In other words, one doesn’t have to build a direct procurement organization; one doesn’t have to start from scratch with a food safety program; one doesn’t need to guess what technological platforms to use. Pro*Act and other member-supported distribution groups are there to help!
In addition, because the foodservice distribution business is regional, one doesn’t have to have the capital, the labor etc., necessary to serve the whole world at once, as a wide-body aircraft manufacturer has to do.
So, while we apologize for making the food distribution business look too easy — from the court’s point of view, the industry has far lower barriers to entry than industries such as a wide-body jet manufacturing.
Nothing is easy in life, and the people who work hard to make food distribution work are the lifeblood that connects producers and consumers. Hats off to every person involved.
Many thanks to Max Yeater for pointing out the Pundit’s failure to make the difficulty of world class distribution crystal clear.
We received a number of responses regarding our piece, New Jersey Prepares To Define Local, But Do We Need To Penalize Retailers? How The Initiative Will Hurt Jersey Farmers And Consumers Vic Savanello Speaks Out.
One thoughtful writer is passionate about local. In fact, we’ve previously published Beth Feehan, Director, New Jersey Farm to School Network, on this very subject in a piece titled, Pundit's Mailbag — Buying Locally Grown And The Freedom To Choose Otherwise.
This time, after reading what Vic Savanello, Director of Produce & Floral at Allegiance Retail Services and President at The Eastern Produce Council, had to say, she wanted to share some “food for thought” with the industry:
Beth’s passion is obvious, and we are lucky to have people like her in our midst. Her drive to build a better world is inspiring.
This all being said, it is worth noting that there is a large gap between what we wish were so and what we know is so. To mention a few points:
1) We have little evidence that getting more produce into schools actually makes children more likely to consume large amounts of fruits and vegetables when they are older.
2) We have little evidence that eating more fresh produce as children reduces obesity when these children become adults.
3) Whether produce is grown in state, in nearby states, in distant states or in foreign countries, the produce is grown by “actual human beings” and often on “family farms.”
4) Because local does not naturally mean “within state boundaries,” if one wants to order produce from a particular state, one must specify that.
5) Price is not the only factor in purchasing, but it is not established that eating only local increases consumption. In fact, because New Jersey does not grow many wonderful produce items — mangos, avocados, bananas and pineapples to start — and grows others only seasonally, it is at least reasonable to think that children brought up to always eat delicious produce wherever it may come from will have higher levels of consumption later in life than children taught to always seek out local produce.
6) Programs such as Jersey Fresh are wonderful rallying points for a state’s industry. These programs may even increase consumption of in-state produce within that state. But the evidence is pretty scant that the sum total of these programs across the country increases total consumption of fruits and vegetables.
Beth’s supposition is that “New Jersey farmers are trying to make sure that when a store says something is local, there is an explanation of what that the definition of local is.” This may be true. But the proponents of these rules are also biasing the process by saying that if you stick to produce grown only in the state of New Jersey, there is no need to define local. The farmers could just as easily ask retailers to post their definition of local: In state, within 100 miles of the store, within 200 miles of a distribution center, grown in the USA, etc.
And finally there is a question of what the penalty should be if things get messed up. Few would argue against fines and even imprisonment for those who intentionally go out to deceive consumers. And, in fact, we already have a panoply of laws and regulations that can lead to large fines or put people in jail if they, for example, label product falsely.
If, however, a supermarket chain labels product as local, buys it from 100 yards over the border in Pennsylvania or New York and fails to put up signage explaining this — is this a serious problem where we should start hitting retailers with fines?
And do New Jersey farmers really benefit if their produce gets declared “not local” by other states in retaliation of this rule?
That New Jersey farmers deserve a voice is beyond doubt. But in exercising this voice, they should be aware of how other states may react to this move, to how larger markets benefit them and to the dangers of making everything a law.
Nutrition labeling on fresh produce is still a voluntary program. Because compliance has always been so high, the FDA never felt the need to make it mandatory. If there must be a state definition, wouldn’t it make sense to make it a voluntary guideline and avoid the whole issue of imposing fines and consequences?
Many thanks to Beth Feehan of the New Jersey Farm to School Network for weighing in on this topical issue.