Each year at The Global Trade Symposium, we take pride in having a thought-provoking Keynote Speaker:
TRADE BARRIERS, PROPERTY RIGHTS AND MONETARY POLICY: THE LATIN AMERICAN JOURNEY AND THE SEARCH FOR PROSPERITY
What we know about the prerequisites for prosperity and how liberty and property rights lay the foundation for mobility, commerce and success.
Presenter: Mary Anastasia O’Grady/The Wall Street Journal
THE PRODUCE MARKET TRANSFORMED: HOW THE SUPERMARKET REVOLUTION IN DEVELOPING COUNTRIES WILL CHANGE THE BUSINESS… AND THE WORLD!â€¨
How an ability to adapt to rapid change will define the winners in the 21st Century.
Presenter: Professor Thomas Reardon, PhD/ Michigan State University
TRANSFORMATIONAL INITIATIVES TO BOOST PRODUCE CONSUMPTION: GLOBAL TRADE AT THE INTERSECTION OF CONSUMER DEMAND
How do supply and demand intersect: Factors influencing consumer demand and global strategies to increase produce consumption.
Presenter: Roberta Cook, PhD/University of California, Davis
This year we bring from Down Under an American dynamo. A graduate of both the business and law schools at UC Berkeley… after practicing law, he ran marketing, sales and business development for Fresh Express. He was President and CEO of The Castellini Company – Club Chef, had numerous positions with Chiquita, including President of Chiquita-Japan and Managing Director of Chiquita’s Asian, Middle East and South Pacific businesses.
For the last seven years he was CEO of the Moraitis Group in Australia. He has broad experience, an incisive mind and a clear message to stand as the keynote speaker for the Global Trade Symposium: There is disruption in the fresh food industry; it involves many factors, and there are many responses required by businesses that hope to remain competitive or gain an advantage. We asked Pundit UK Editor Gill McShane to get the low-down:
formerly CEO & Managing Director
Q: You’re speaking about the global food industry at the upcoming Global Trade Symposium during this year’s New York Produce Show and Conference. Can you give us a sneak preview of what your presentation will entail?
A: I’ll cover the evolution to revolution in the fresh food industry in terms of how we arrived at the landscape today, as well as the current mega trends, the driving forces and how the future is shaping up. In particular, I will be looking at disruption in the fresh food industry space, the new consumer, chilled ready meals, food security, new investment themes and the China century. How businesses in the food industry strategically respond to these developments is critical for future success.
Q: What do you believe are the current mega trends in the food industry, and what’s driving these tendencies?
A: The current mega trends, as I see them, are the discount retailers, the values of the new consumer, retail formats, fresh chilled ready meals, eCommerce, global food security and feeding Asia. The Millennials, health, technology and global awareness are the key driving forces.
Q: You mention disruption in the fresh food industry – could you elaborate on this development and the implications or, indeed, opportunities it poses?
A: It’s disruption in the sense that new markets, products, services and innovations are emerging that will overtake the traditional market networks. In broad strokes they are: (1) eCommerce in terms of mobile apps enabled online shopping, (2) home delivery, and (3) fresh ready-chilled meals. The opportunities and risks are numerous for retailers, prepared food companies, wholesalers and producers etc.
Q: Consumer demands are constantly evolving. So, what does the ‘new consumer’ want and need today?
A: This is actually a complicated question, but if we focus on the ‘new consumer’, which is often referred to as the Millennials, their demands are arising out of their new caring relationship with food. We’re going from fast food to ‘slow food’. In summary, the new consumers want to know the provenance of their food – that their food is healthy, fresh, sustainable, organic and ethical. They want it to be authentic, but they want food that is exciting, ethnic and diverse, and which offers a shared experience. The desire to create is up, but the time to create is down, so they also want convenience.
Q: What does this mean for fresh fruit and vegetable players?
A: The fruit and vegetable world is responding with the increased production of organics, local, non-GMO, Fairtrade and Rainforest Alliance-type certifications, as well as more snackable products and superfoods, plus improved food safety and traceability.
Q: One of the biggest consumer requirements in this increasingly busy age is for convenience. How significant do you think chilled ready meals are in terms of providing the solution?
A: Chilled ready meals are the ultimate in convenience. While there is some consumer participation, convenient chilled ready meals offers a ‘chef inspired’, healthy and ethnically diverse eating experience at a fraction of the cost of in-restaurant dining. The chilled ready-meals space also includes such things as salads, side dishes, sauces, juices, dips, snack packs, fresh-cut fruit, kits, soups and antipastos etc.
Q: Can you explain what are the new investment themes you mentioned?
A: The new investment themes are being driven by the ‘disruptive forces’. Food security has made agricultural land and production investment unbelievably attractive over the past five years. Significant investment money is also aggressively chasing food technology and home delivery companies.
Q: The continued rise in the global population is placing huge pressure on the demand for food, particularly in Asia. What challenges does that pose for the future of food supply and food security?
A: It is global population growth compounded by changing Asian consumer preferences, increased disposable income, the rapid growth of Asian supermarkets and Asian agriculture production problems. Asia already represents well over 25% of global meat, poultry and fresh fruit and vegetable consumption and has the potential to reach 50% in the near term as GDP, urbanization and economic free trade areas increase.
As global demand shifts toward Asia, there will be increased supply pressure and rising prices on global supplies for Europe and North America. Retail purchasing practices will need to change and the distribution network may once again favor wholesalers/aggregators as ‘disruptive’ forces create new pathways to the consumers.
Q: You’ve said that the food industry’s response to this evolution is critical for future success. So, how can and should fruit and vegetable businesses react to these new market realities? What’s the key to survival?
A: It’s a bit different for every segment of the fruit and vegetable industry. But the fundamentals should remain the same: scale, quality, innovation, 52 weeks a year, flawless execution, adding value wherever possible and positioning your business with strategic partnerships and market-tested products in as many pipelines as possible to reach the consumer.
Q: Have you witnessed any successful responses already? Or, do you see any in the pipeline?
A: There are quite a few companies reinventing themselves with great success. Themes that they are pursuing include: convenience, fresh ready-chilled, commissary and direct store delivery (DSD) relationships with retailers, in addition to innovation around varieties and technologies as well as home delivery.
Q: Given all of the changes you’ve highlighted, how do you see the future of the fresh produce industry shaping up?
A: That’s a good question, but one that’s difficult to answer considering the vast differences in each market and in each category. However, from my ‘one man’ think tank, I see the following general possibilities:
1. More local and protected environment production.
2. The return of wholesaler/aggregator importance to service ever increasing pathways to consumer.
3. Ever increasing importance on production and provenance in terms of non-GMO, food safety, ethical farming, sustainability, eco, organic and biodiversity.
4. More snackable produce solutions from the products themselves (berries, grapes, snacking tomato, easy peelers) to prepared and pre-cut produce.
5. More ethnic foods and superfoods such as kale, greens, seeds, grains etc.
6. More fresh chilled ready meal products and less commodity-loose products, even in pillow packs.
7. Potential global acquisition roll-ups like the food, meat and grain industries of yore.
8. More retail supermarket strategic partnerships with producers, and not only for supply but also for services, including DSD.
Q: And, finally, what key messages do you hope to drive home among the audience at the Global Trade Symposium?
A: The fact that what consumers want and how they spend has changed dramatically: That there is a convergence of fresh food meal providers occurring (restaurants, prepared foods companies and retailers). At the same time, the internet, mobile apps and home delivery are also fueling a convenience economy that is democratizing the distribution of fresh food. Meanwhile, feeding Asia and environmental factors will put ever increasing pressure on supply. The question is how will large food companies worldwide respond?
Sometimes people tell us that they don’t have time to come to events, but making time to engage with presentaters such as this is simply crucial. Because understanding and acting on the realities that Jeff Jackson is speaking about is the key to being successful a few years out.
The pro-active presentation will set a tone — just as a keynote should — for all our deliberations at the Global Trade Symposium.
Come join us.
If you already registered for The New York Produce Show and Conference, then let us know you want to add the Global Trade Symposium right here.
Register for The Global Trade Symposium and the rest of The New York Produce Show and Conference here.
Don’t forget, we have great Industry Tours and the “Ideation Fresh” Foodservice Forum, and you can find out about them here.
Jeff is bringing his wife, and Mrs. Pundit will be there, so sign up your spouse or companion for the Spouse/Companion program, including high tea at the Plaza Hotel — ask right here.
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The Global Trade Symposium and the broader New York Produce Show and Conference are about commerce, but more than commerce, they are about great minds exchanging industry intelligence; they are about building and strengthening the relationships that will ultimately lead to business success.
Come and join us in New York. Start learning how to do business better and how to be more successful in the years to come. Be a part of The Global Trade Symposium and the broader New York Produce Show and Conference.
It is commonplace now to hear experts declare that businesses must seek new markets, the so-called BRIC countries — Brazil, Russia, India and China — are often the focus of opportunity. Of course, recent restrictions on trade with Russia have taken the bloom off that particular rose and exposed some of the risks of dealing with new markets.
The other truth, though, is that although en masse the produce industry or a particular commodity may have to find new countries to handle increased volume, it is also true that most individual players don’t have such substantial market shares in so-called “mature markets” that they can’t win big by gaining market share. The problem in a settled market, of course, is that it is very hard to displace existing vendors. That is why the consulting community is just recommending that one should pursue the BRIC countries.
This perception of developed markets as “mature” or “settled” is not, however, an accurate assessment. We live in a world where new technologies such as Internet shopping and new retail formats — upscale, deep discount, warehouse and produce sections in drug stores, gas station mini-marts, ethnic retailers and many others — are causing a shattering of the status quo.
This is happening all over the world, including America, but it is in Britain — the grand pappy of mature markets, the elder statesman of standard-setting — that this fragmentation of the marketplace is taking place harder, faster and sooner than in America.
This vortex of change is opening new opportunities in the UK. Some of these are in foodservice, and we have a great presentation by Tony Reynolds to explain that transformation.
We also have a wholesale panel to talk about how the wholesale sector can be an international portal to transforming independent, ethnic and restaurant markets. Our panel includes Chris Hutchinson of Spitalfields Market, Stefanie Katzman of S. Katzman Produce, Gary Marshall of the New Covent Garden Market, Alan Siger of Consumer Fresh Produce, a Coosemans Worldwide company and Jin Ju Wilder of Valley Fruit and Produce.
At The New York Produce Show and Conference, we bring in a retailer from outside of the country each year, whose role is to provide a perspective different from the many US retailers at the show. This year, we are fortunate to have a UK retailer living at the vortex of incredible change.
Alistair Stone of Waitrose will be appearing on our “Thought Leaders” Panel at the Keynote Breakfast and give an important presentation on UK retailing at The Global Trade Symposium, as well as providing counsel to the students participating in the University Interchange Program.
We asked Pundit UK Editor Gill McShane to find out the agenda:
Buying Manager – Fresh Produce
Q: Most foreign suppliers have long concluded that there were really only four retailers to sell to in the United Kingdom: Tesco, Sainsbury’s, Asda and Morrisons. In reality, there are upmarket retailers, like Waitrose, the discounters, like Aldi and Lidl, and thriving wholesale and foodservice industries to supply. Why do you think this theory has come about?
A: For many years, the UK grocery market has been dominated by the big four retailers, with a combined share of well over 60%. They have scale and are good at satisfying their particular demographic. But those same consumers have become more demanding about where they shop in recent years, which is starting to challenge how loyal people are to their favorite grocer.
Q: Can you describe then what’s been happening in UK food retailing?
A: We are seeing the biggest change since the first supermarkets came onto the scene in the late 1950s. The market has been very much dominated by four retailers, who all have their differences but are still quite homogenous. We are starting to see increasing polarization coming into the market. At one end, you have experiential retailers like Waitrose, Marks & Spencer (M&S) and Whole Foods Market, and at the other end there are the value retailers, such as Aldi, Lidl and also Asda/Wal-Mart to a degree. Both ends of the scale are doing pretty well and growing market share. In the middle, however, the big four retailers are being squeezed and therefore need to demonstrate why customers continue to shop with them.
There’s also change in terms of the pace of technology and the demand for new channels. UK retailing has been multi-format for a while with town-centre shops, out-of-town superstores, convenience outlets and online — we have an online-only grocer called Ocado, who Waitrose has close ties with. Much of the market growth now is coming from eCommerce and convenience; it’s not coming from the traditional big superstores. One challenge here is that these es.
Q: Just how different is the UK retail shopper today?
A: This immense change in the UK retail industry is being manifested in decreased consumer loyalty. The big shop once a week is not dead but it’s nowhere near as prevalent as it was three or four years ago. There has been an increase in the frequency of shopping and shoppers are more promiscuous — they’re shopping up to four times a week at different stores whereas it used to be once or maybe twice a week and usually only in one or two stores. So retailers now have to work hard to develop loyalty and create a point of difference.
Waitrose is exciting for consumers because of the experience of seeing wonderful products and trusting that they’re going to be lovely to eat, plus they’re priced very competitively and sold in an environment which is relaxing and offers great customer service.
Q: Despite being relatively small, Waitrose packs a punch and is proving successful. How do you fit into the market?
A: Our area of specialism is fresh food, and we can really drive a lot of volume on these lines, so long as they constantly delight the customer. Waitrose may only have a 5% share of the UK grocery market, but in fresh produce our share is about 8% and for certain categories like asparagus it’s well into double-digits. My team is composed of traders, and so they are always looking to buy well, but we are also always looking to find something that gives us a point of difference. We have a level of loyalty with our consumers because we sell a lot of really good quality products.
Waitrose also doesn’t wait for someone to come up with the next wonderful product. We may deal with the brokers, importers and marketing agencies, but we have very strong relationships with the growers and seed houses too, so we’re already there working with those who are actually developing new products, explaining what we think our consumers need. It’s very well forward-planned because it takes eight to 10 years to develop a new potato variety, for example, or a new type of apple. As an experiential retailer if we’re not doing that, we will lose our points of difference in the future. At the same time, we look to give our customers the day-to-day value they expect.
Q: In view of the need for UK retailers to create loyalty and develop a point of difference, what are UK retailers looking for in their international supply?
A: Standard-setting and specifications are big things in the UK. It’s a challenge to get people to meet not just European standards but actually the expected level for the UK, which is probably even higher. At Waitrose, we set the bar very high; we have good relationships with our growers and they know we expect a certain level of quality — we aim to source the best.
Q: What opportunities are there, then, in UK retail beyond the big four for those willing to work to achieve them?
A: Overseas suppliers have got to offer us something that we can’t get anywhere else and be doing something different to their competitors. There’s got to be a strong reason for us to go overseas if we can already get the same product from the UK or Europe. As you would expect, Waitrose buys a lot of produce from the UK and Europe because shipping is easier and prices are therefore cheaper. So if we go further afield, what’s the point of difference and why is it better?
Why our consumers would look for products from somewhere else, like the U.S. or Canada, would normally boil down to better quality, varieties, availability and perceived value. For me, the biggest single thing is having innovation in our categories, and the leaders in genuine innovation will be in demand.
Q: As you mention, Waitrose is a strong supporter of British produce. Where does that leave international suppliers? Is there room for both?
A: Of course, I want to buy British, but I will only buy if it’s good enough quality because I think it would damage the UK market by selling poor produce. Therefore, when I can’t get what I need from home, I’ll look elsewhere. UK consumers also expect to buy all types of fresh produce all year around. We don’t really have any gaps in supply, certainly not in vegetables and salads, although there are some gaps in some fruit categories, such as stone fruit and cherries. These gaps though are starting to close as we work closely with our suppliers on developments in stretching seasons.
Although Waitrose doesn’t work with lots of suppliers, those we deal with will be able to source from a worldwide network to fill those gaps. There are lots of produce items that UK farmers can't grow such as citrus, avocados, exotics and certain apple varieties. We procure from around the globe all year because shoppers expect availability of these items every day.
Q: With such high demands, do you think foreign suppliers are put off from selling to UK retailers?
A: It probably puts off those who don’t already have a good understanding of the UK market. Those that have traditionally supplied the UK are a lot closer to understanding what our requirements are, and, from a category management point of view, what the characteristics of individual businesses in the UK are, and what we’re looking for.
I don’t think it’s difficult to supply any market as long as you’re clear about what that market is looking for. Of course, there are some retailers in the UK that are more concerned about prices, but fundamentally it’s about doing what others aren’t. As a Waitrose buyer, I’m not solely focused on making higher margins or selling more volume, it’s about pleasing the consumer by selling better quality.
Q: Why should global exporters not eschew the UK retail market? What are they missing out on?
A: Fresh food sales are increasing in the UK as there is a lot of focus around health. I anticipate that the health trend will become more and more important in the future. For the best products, supermarket buyers will look to pay the right money, but they have to be consistently good so the consumer will buy it — consistency is vital.
As I said earlier, you also have to do what others aren’t doing. Just because you’ve got a really good product or brand in your domestic market, the odds are that in the UK or Europe there will already be someone doing a great job. So, you have to understand your competitors and where the gaps are because there will always be gaps.
Supplying the UK is also a great advert for businesses to supply a well-developed market that’s very discerning. I have suppliers overseas that highlight in their company literature that they supply Waitrose as a badge of honor. They use it in their marketing — the fact that if they’re good enough to supply the UK, they’re good enough to supply pretty much anyone.
Q: The upmarket retailers are doing well in the UK and you point out that Waitrose offers incredibly high quality, so are UK consumers really willing to pay more for better quality fresh fruits and vegetables?
A: Definitely, but you have to really demonstrate to them why products are worth the extra. People in the UK love food and they will trade up if it’s significantly better. UK consumers are becoming more demanding. Obviously they don’t want to eat anything that doesn’t taste good. They are increasingly conscious about waste and hate throwing food away too.
Over the past three or four years, food waste has reduced significantly in the UK, according to a report by WRAP, a non-governmental organization in the UK. People are only buying what they want. So, if food doesn’t taste good on the first purchase shoppers won’t buy it again. People will still always want value but as an experiential retailer, we want consumers to have a fantastic eating experience, even with a bargain.
Q: With so many changes taking place, how do you see the future retail landscape in the UK?
A: Whoever is selling food in the UK has to be aware of the trends such as shopper promiscuity and the role of technology as they’re only going to increase. Mobile devices are where people are going to do their shopping, so it’s only going to become more prevalent. The bigger, out-of-town shops won’t disappear, but there is probably too much floor space so it either has to be mothballed or become more experiential, with cafés and bakeries or wider assortments of non-foods, to make the stores more appealing to visit. Waitrose has spent a lot on hospitality, and our cafés are absolutely flying. We’ve also introduced ‘grazing,’ so shoppers have the opportunity to stop within the aisles to eat or drink — and we see that as a real trend coming down the line.
Growth in the UK will come from those channels where we are seeing movement right now, like eCommerce and convenience. The concept of ‘Click and Collect’ is developing too, because it is making life more convenient for time-poor people who are working longer hours. So, retailers with the best customer service will win, through options such as picking up groceries at tube stations or airports, or having no substitutions in online deliveries. Customer service will be absolutely key.
The UK retail market will be very different over the next two to three years, and those supplying the UK will have to embrace the changing relationships and demands too. It’s very exciting if you’ve got a clear strategy. At Waitrose, I believe we do — we’re about being experiential and offering wonderful food, customer service and value.
What this is all saying is that there is opportunity in change. Growth in sectors such as “experiential retailing,” “hard discounting” and “online” is obvious, but even more so, these trends lead to change among more conventional operators as they struggle to find ways to evolve and compete successfully.
It is a fascinating thought that there are large untapped markets even in the most developed of countries, and one can learn how to approach such issues at The Global Trade Symposium, co-located with The New York Produce Show and Conference.
If you are already registered and would like to add the Global Trade Symposium to your schedule, let us know here.
Register for the entire New York Produce Show and Conference right here.
We can help with hotel rooms here.
And don’t forget to inquire about our Spouse/Companion program here.
Find about the Regional Retail and Urban Agriculture Tours or the Ideation Fresh Foodservice Forum here.
Also we still have two booths available. Make one yours here.
Don’t forget you can make your organization shine by supporting a worthy activity at The New York Produce Show and Conference, ask for information right here.
We look forward to meeting up in New York.
Since the founding of The New York Produce Show and Conference, we have taken pride in featuring our University Interchange Program. This unique program involves bringing a faculty member from a prominent university to share the result of his or her latest research, thus both putting industry attendees on the cutting edge of knowledge and fulfilling the land grant university mission to disseminate information.
At the same time, we invite students from the same universities to participate both in the general trade show and conference and in a specific student program. The goal is to raise their knowledge and interest in the fresh produce industry. The program is co-chaired by Michigan State Professor Emeritus John W. “Jack” Allen and his brilliant wife Linda Allen, international marketing consultant, and the industry panel is chaired by a great triumvirate: Bruce Peterson, formerly of Wal-Mart, Reggie Griffin, formerly of Kroger, and Dick Spezzano, formerly of Vons. In addition, each year we have special “guest councilors,” who this year include Alistair Stone, Managing Buyer — Fresh Produce for Waitrose, and Jin Ju Wilder, Director of Corporate Strategy at Valley Fruit & Produce.
Students have come away inspired, and the industry has become more knowledgeable. Just take a look at some of the University Micro-Sessions we have presented in the past:
A Cornell Study On New York Wines Raises A Fresh Question: What Do We Mean When We Ask About Local?
AeroFarms, EcoSPACES and St. Phillip’s Academy Offer A Glimpse Of The Future On The New Jersey Retail Tour Of The New York Produce Show And Conference
Meet The Gastronomes — And Learn About Their Mission To Increase Produce Consumption — At The New York Produce Show And Conference
Perceptions And Misperceptions: Consumer Attitudes On Organic And Local — University Of Connecticut Study To Be Unveiled At New York Produce Show and Conference
Cornell Professor Miguel Gómez To Speak At New York Produce Show And Conference On Fruit & Vegetable Dispute Resolution Corporation
What's In A Name? Professor Brad Rickard Of Cornell Produces New Research That Indicates Shakespeare May Have Been In Error... On Apples At Least
Cornell Professors To Present At The New York Produce Show And Conference: New Ways Of Thinking About Local: Can The East Coast Develop A Broccoli Industry?
Professors From Cornell And Arizona State Universities To Unveil Generic Produce Promotion Research Results At New York Produce Show And Conference
Rutger’s Professor Ramu Govindasamy To Speak Out At The New York Produce Show And Conference… Research On Asian And Hispanic Produce Marketing On The East Coast Identifies A Profitable Opportunity
A New Hypothesis On Local: To Boost Sales, Sell It Through Supermarkets… Cornell’s Miguel Gomez Previews His Upcoming Talk At The New York Produce Show And Conference
What Makes Consumers Willing To Pay More? University Of Delaware’s Kent Messer To Unveil A Unique Synthesis Of Multiple Studies At The New York Produce Show And Conference
Immigration, One Of The Hottest Post-Election Issues, Will Be Brought To The Floor Of The New York Produce Show And Conference
Food “To Die For” May Do Just That… Seminal Study Encouraging The Eating Of Bitter Vegetables For Health To Be Unveiled At New York Produce Show And Conference
Vitamin D Enhancement In Mushrooms: Can This Be A Portal For The Produce Department Into Functional Foods? Professor Neal Hooker Of St. Joseph’s University Unveils The Latest Research At New York Produce Show And Conference
ETHNIC AMERICA: Opportunities For Growers, Wholesalers And Retailers In Ethnic Produce Items... Rutgers University's Dr. Ramu Govindasamy Unveils New Research
Pundit Mailbag — Professor John Stanton’s Presentation At New York Produce Show And Conference ‘Worth The Registration Fee Alone’
Research To Be Unveiled At The New York Produce Show And Conference Shows ‘Local’ Preference Versus Organic
The charter members of the University Interchange Program are Cornell University, Rutgers University and St. Joseph’s University. We had already spread the wings of the program, not only to more American schools but to the Universita Degli Studi Di Scienze Gastronomiche (University of Gastronomic Sciences) in Pollenzo, Italy, which joined us back in 2012.
Now, along with the launch of our sister show, The London Produce Show and Conference earlier this year, we are pleased to announce the expansion of the program to incorporate a great school from the United Kingdom.
The School of Agriculture, Food and Rural Development at Newcastle University will be bringing students and the head of the undergraduate business program and a Senior Lecturer in the Agribusiness Management program, Diogo Souza Monteiro, who will present some of his latest research. Along with the group will be Emeritus faculty member, Paul Weightman, who arrived in America back in February 1964 with $50 and a research assistantship at Cornell, and who left after completing his PhD at Cornell and earning a USDA grant to determine impacts of EEC/EU enlargement on US exports of farm products.
We asked Pundit Contributing Editor, Keith Loria, to find out more:
Diogo Souza Monteiro
Senior Lecturer in
School of Agriculture,
Food and Rural Development
Q: Introduce yourself to those coming to The New York Produce Show and Conference — what is your current position and job in the industry?
A:I am originally from Portugal and have been involved in the agro-food industry since 1994, when I finished my studies in Animal Science at the University of Evora and a post-graduate program in Agro-food marketing in Spain.
I had the privilege of working in different institutions throughout my career now spanning 20 years. I started working for the Portuguese Ministry of Agriculture; I worked for a coffee company; and in 2000, I joined academia.
After two years teaching in an agricultural college in Portugal, I got my PhD from the University of Massachusetts in Amherst, and then took a post in Food Marketing at the Wye College and the Kent Business School. Last July, I became a senior lecturer in Agribusiness Management and the Director of the Agribusiness program at the School of Agriculture, Food and Rural Development at Newcastle University in England.
Q: How did your background prepare you for the position at Newcastle?
A:I had the privilege of having a variety of experiences and working in different locations. First, my international education equipped me with the knowledge to develop the teaching and research programs required by Newcastle. Our school is very interdisciplinary, and my background enables me to be a mediator of discussions between colleagues from different disciplines.
Also, my public post made me very aware of the challenges of designing and implementing policy. Moreover, my experience in the private sector gave me a number of stories and examples of situations that inform both my research and my teaching. Finally, the fact I was exposed to three different education systems certainly helps me understand the pros and cons of the UK system and see how it can be improved with tested practices from other locations.
Q: Talk about your main interest and expertise in the research you do.
A:Throughout my career, I observed how agricultural and food products became increasingly differentiated. I noticed how differentiation was mainly related to information on an attribute.
When I worked for the Portuguese ministry of agriculture, we were promoting regional foods on the basis of their quality, which was associated to a local name. But we were also in charge of organic farming. Since consumers cannot infer the quality of products from different origins or different processes without some sort of label, the premium associated to these products critically depends on the availability of information.
Early in my career, I was mainly interested in helping producers, namely those in economically depressed regions in Portugal, to increase their incomes by investing in the quality of their products. In time I started realizing how important the information was and how it was a critical element of quality.
Thus, during my doctoral studies, I shifted my interest to understand how consumers, industry managers and policy-makers gather, use and value information to make food choices. So my area of expertise is the economics of information applied to food markets.
Q: What did you learn from your years in the public and private sectors?
A:I learned consumers are prepared to pay more for foods with what economists call credence attributes. On the basis of such products is some piece of information that needs to be readily available, relevant, clear, meaningful and trusted.
Now, for economists, the existence of accessible and free information for all market players is critical for the existence of competitive markets. That is, efficient markets require perfect knowledge. In real markets this is hardly the case, rather information asymmetries prevail. Therefore, reducing information asymmetries and improving its levels in the market will lead to better decisions and, eventually, more efficient markets.
Q: What is the overall goal of the research you do?
A:The overall goal of my research is to find how we can reduce these asymmetries in food markets. Specifically, I have done work on the economics of traceability, that is, understanding the incentives and limitations for sharing information on food quality attributes across food chains.
What I found is that firms are reluctant to share information they have with their partners. There are good reasons for this to happen, as there are commercial and legal implications associated to the knowledge information provides. After all, information is power and gives you a commercial advantage.
More recently I have been working on how to improve access to nutrition information in retail environments. My colleagues and I have been working on the use of IT technologies to aid consumers’ access and process information associated to food choices regarding nutrition attributes of food.
Q: What will be the subject of your talk at The New York Produce Show and Conference? Why did you choose this topic as an important one?
A:My talk will be about my most recent nutrition information work. This is from an ongoing collaboration with my colleagues Ben Lowe and Iain Fraser from the University of Kent, in the UK. We have conducted three surveys assessing which IT technologies would grocery shoppers most be willing to use to get information on the overall nutrition value of their shopping baskets, how to convey such information and what other information they mostly sought.
I will be mainly reporting what we found but also what we learned about this topic. The reason why I chose this topic is because I believe the use of technologies by consumers is only going to increase in the future, and it offers important opportunities but also has some challenges. In a sense, these technologies empower consumers as they have immediate access to information on their fingers, which should enable them to make better choices.
It also reduces asymmetries and contributes to market efficiencies. However, there must be an incentive for firms to develop and offer these services.
Q: There’s been a great deal of talk about mobile technologies in retail environments of late. What are you finding to be the biggest buzz in this area?
A:I am not very familiar with the most recent buzz in the US, however from my discussions with American colleagues, one of the issues coming out was whether or not to block Internet signals in the stores as consumer were using their cells to compare prices of products available online.
There was a concern over transfer of brick-and-mortar shops to online sales. There is also much interest on the concept of portable shops enabled by smart phones and tablets. This may be the next level of online sales.
Q: Tell about your recent studies in this area?
A:Our most recent study looked at how the hypothetical provision of a calorie counter on a handheld device with which consumers could track the amount of calories they put in a shopping basket changes the nutrition value of the shopping trip.
We developed an experiment with 12 different treatments where consumers were given a task of buying foods on a meal basis. We then checked if the type of shop (planned or fill in), time pressure and whether the calorie counter was available changed the total number of calories consumers end up with in their shopping baskets.
Q: From the data you collected, what were the most significant findings in your research?
A:We are still examining the data collected but the results suggest that respondents do not seem to improve their performance by having the calorie counter, when compared with the group that has just calorie information. So, our initial hypothesis doesn’t seem to be confirmed.
However, we need to look at the results more carefully. Our focus groups did suggest that the calorie counter did make them more reflective on their choices. We need to check whether the times taken to make each choice change significantly as consumers progress on their shopping. If the times increase, it may be that the counter may help consumers realize the consequence of their choices, which may help them in future shopping occasions.
Q: What do you hope attendees learn and get out of your talk?
A:I hope attendees understand that providing access to mobile technologies adds value to the consumer shopping experience, as it enables consumers to meet their budget or health goals. For years, marketers have been talking about the idea of personalized marketing — that is… give each consumer exactly what he wants or aspires to.
The use of mobile technologies, especially when associated to loyalty cards, allows consumers to reveal to retailers exactly what they want, which can then be used to tailor for those preferences. Also, these technologies may enable retailers to establish a relation with each individual consumer. The challenge is to make this is a non-intrusive way.
Q: What are you looking forward to about the New York Produce Show as a whole?
A:I am looking forward to learning more about the new trends in the produce industry, to find out what the issues being faced by different sectors in the food chain and what solutions are being offered to address some of the challenges of securing a varied and sufficient volume of food to meet the increasing world population.
Q: You will be bringing four students from Newcastle with you? What opportunities do you feel they will get from this visit?
A:They are extremely motivated and excited about this opportunity. They are looking forward to interact with American and other international firms present in the show and learn about their challenges. Hopefully, they will have a chance to secure some internships or even jobs with such organizations.
They are also very excited about the possibility of interacting with their peers from North American universities. We went through a careful process of selection, and all our students have some experience of work at different levels of the industry. I am sure they will be engaging and open to share their experience as well as learn from others.
I am doing a review of the Agribusiness program and one of my goals is to make it more visible internationally, so this is a great opportunity for us. I hope this can be the beginning of an annual tradition for our best students.
The role of information in markets is an often-overlooked element. In a sense, perfect information makes for perfect markets, but information has a cost, so over investment in acquiring information does not make sense.
One of the great problems of democracy is that although an educated electorate will likely produce far better governance, the cost/benefit analysis is such that it doesn’t pay for any individual voter to invest a great deal in such education. After all, how many elections are decided by a single vote?
Here the issue of giving out information such as calories is problematic because the calories in a package don’t really matter very much; it is the amount one eats that matters. In other words, if one chooses to eat one hamburger each week, buying a package of frozen hamburger patties that contains four patties is no better for you than if you buy a package with eight patties. In addition, calories are a crude measurement. Arugula is low in calories, but man does not live by arugula alone, so how is one to react when one learns that arugula has fewer calories than berries? These two items are not actually very competitive.
We don’t know which stores are considering blocking internet signals — though we have had experiences where we couldn’t get a signal in some stores but didn’t think there was a conspiracy to block the signal. We all know that stores such as Best Buy are challenged because they serve as the show room for the Internet. So people come out, look to make sure they like the product, then buy from a cheaper source.
Blocking the Internet is not likely to stop that. It actually seems more likely to convince people the store is overpriced.
Perhaps the answer is that the business model has to change and manufacturers will have to pay a fee to have their products displayed as they benefit no matter how the sale is conducted.
Exploring ways retailers and the produce industry could benefit from mobile technologies is certainly cutting-edge, and we are very pleased to welcome Diogo Souza Monteiro and Team UK to The New York Produce Show and Conference.
Come join us in New York. You can register right here.
Bring your spouse or companion; ask about the great spouse/companion program right here.
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Don’t forget about The Global Trade Symposium on Tuesday. Ask about it here.
Also remember, Thursday is the “Ideation Fresh” Foodservice Forum and we have fantastic panelists to talk about the latest trends in foodservice. We can get you info here.
We have tours of Manhattan retailing, New Jersey and Yonkers suburban retailing, Brooklyn retailing and Urban Agriculture, Hunts Point and the Philadelphia Market, all on Thursday – Let us know what you are interested in right here.
We have exactly two booths left to sell. If you want a place on the trade show floor, let us know here.
And opportunities to show your support through sponsorships still exist; let us know here.
But above all, come to Manhattan and "be a part of it," as we all join to welcome the first British University to the program and to Celebrate Fresh!
The intersection of the produce industry and the foodservice industry has long been a contentious place:
* Major shippers looking to build their brands have resisted the commoditization that most foodservice involves.
* Many shippers, who would love to sell to foodservice, haven’t the capability to develop menu items and persuade operators to use produce items they don’t already use.
* The time frames foodservice operators work with, where from concept through testing, through franchisee trials, through rollout… can often be measured in years, doesn’t fit with the time frames most shippers operate under.
* There is also the dilemma of what is still mostly a commodity business — if a shipper does invest in the culinary expertise and sales program to get, say, apples on the menu at some chain, what assurance does that shipper have that the restaurant chain won’t decide to buy the apples from someone else who can be cheaper because they don’t carry all that R&D and sales overhead?
Here in the US, a major industry effort to double produce use in foodservice, jointly conducted by the Produce Marketing Association (PMA), the National Restaurant Association (NRA) and the International Foodservice Distributors Association (IFDA) — which we wrote about here, here, here, here, and here — has simply collapsed, partly because there is very little data available as to what foodservice usage of produce actually is, and partly because the NRA was interested more in political protection from being attacked for causing obesity than its members are interested in changing America’s eating habits.
Chefs and executives at foodservice operators have many a concern over produce as well. Years ago, Jim Ratliff became chairman of PMA while working for Hilton. When we asked him why he decided to be active in a produce association, as his purchasing included so many different foods, he explained that produce accounted for about 10% of his purchases and about 90% of his headaches!
Be that as it may, foodservice is the future: one of the longest-running trends in the food industry is that a larger and larger percentage of food dollars is being spent on food outside the home. This is not only traditional restaurants, but schools, corporate cafeterias, nursing homes, hospitals, etc. In the US today food purchased outside the home exceeds 50% of dollars spent on food, but the volume is smaller — perhaps 25% smaller because food in restaurants etc., often incorporates a lot of services and so is more expensive.
Restaurants are also often the way new foods become popular; many a person sampled kiwi tart at a fancy restaurant before they ever saw a kiwi.
For producers, this means that a mind-shift is required to access markets, especially more mature markets. Innovative producers have to look for points of entry, and the very fact that foodservice is growing and changing means opportunities exist.
That is why we are so pleased that Tony Reynolds is joining us from the United Kingdom. His company is right at the epicenter of these issues. He will be participating on the “Thought Leaders” panel and in our “Ideation Fresh” Foodservice Forum, but he will kick off his time in New York with a presentation at The Global Trade Symposium, which will point to the transformational UK foodservice/catering scene as a portal for entry into a UK market that is now presenting significant opportunities.
We asked Pundit UK editor Gill McShane to find out more:
Waltham Cross, Herts
Q: Many global exporters have a perception of the United Kingdom’s produce market that is 20 years out of date, and, as such, believe their only option is to sell to the four major retailers. What would you say as a major force in the UK foodservice sector? What does your industry have to offer international suppliers of fresh fruits and vegetables?
A: Interestingly, just this week it was announced that traditional grocery retail sales in the UK have fallen for the first time in 20 years. So, growth at the big retail players is certainly stagnating, whereas there is definitely growth within foodservice for the foreseeable future.
To put that into context, the total eating-out market in the UK has grown by 2.4% on average per year over the past three years, according to statistics from foodservice insight provider Allegra. Looking forward, the total UK eating-out market in the UK is set to grow by around 3.2% per year for the next three years. Within that, the branded restaurant sector and branded fast food chains are both set to grow by around 5.9%, whilst branded and managed pubs are forecast for even greater growth of around 7.2% – all at the expense of the independent sector.
The statistics are pretty bullish. Within all areas of foodservice, there will be winners and losers because the marketplace is so competitive, but we believe that because our core business is around the larger branded chains, Reynolds is well placed for the future.
Q: For what reasons should global exporters tap into the foodservice channel in the UK? In other words, what are they missing out on by not exploring opportunities in UK foodservice?
A: In foodservice, there are potentially opportunities to sell a much more diverse range of products than perhaps in the traditional retail channels. For instance, the Asian and Mexican restaurant businesses are growing phenomenally well in the UK, which is quite exciting. So there’s a fantastic opportunity for anyone supplying products suitable for these markets.
Also, the eating-out market in the UK is always looking for the new, latest thing. There’s a breed of modern chefs in the UK that like to experiment with food and introduce new ideas to their menus. And it’s not just in the Michelin-starred restaurants, although that’s where a lot of these trends start. London has such a vibrant eating-out scene, and these new trends spread quickly, so it’s not long before the national chains roll out the trends in their operations too.
There are real opportunities in UK foodservice for global suppliers to bring something new or different to the UK and demonstrate innovation with new varieties or fresh produce items. It’s also an opportunity to spread risk. Foodservice is certainly another supply avenue for any exporters looking at the UK.
Q: What would you say to those who believe the UK foodservice industry to be focused only on local and seasonal produce? What role does and can international produce play?
A: There’s an expectation from consumers to eat local or British produce when they visit restaurants. But as a country, we have limitations around what we can grow, so what we produce in the UK will only ever make up an element of operators’ menus, and they will always have to be supported by imported produce. But, according to the UK Department for Environment, Food and Rural Affairs (Defra), produce grown in the UK only makes up 23% of what we eat, so there is a huge opportunity for imports.
Also, some UK produce is over-subscribed. Take apples, for example, the UK volume is eagerly gobbled up by the big retailers. That means UK produce is often more expensive than imported alternatives, even at the height of the domestic growing season, such as UK asparagus versus Peruvian asparagus.
Ultimately, we have to offer our customers a choice whether they want provenance or a better price, and, of course, we want to sell more British produce where we can – we believe it's the right thing to do. But it depends on where their business sits and what their offer is. If they are more price-competitive, then the likelihood is that price will be king, whereas if their positioning in the market is more about premium quality, provenance and sustainability, then they will probably want British produce. Importantly, we let our customers decide.
Q: You mention ethnic restaurants as an area of opportunity for international exporters. Are there any other specific opportunities? For instance, is the UK foodservice industry looking to fill any gaps in supply or looking for more volume of any particular fruits or vegetables?
A: There’s a real big buzz around healthy eating in the UK. So, there’s been an emergence of quite a few fast food operators focused specifically around healthy eating, many of whom Reynolds supplies. These are particularly popular in and around London. That’s certainly an opportunity for foreign exporters to supply functional foods with specific nutritional qualities, so the operators can sell and market the benefits to their consumers in the form of a superfood or detox salad for example. It’s certainly a growth area, and fresh in general is very much a big buzzword in the UK – fresh is definitely considered best!
Q: With fresh produce playing such a big role in the healthy eating drive within the UK, are you seeing an active approach among foodservice players, such as restaurants, hotels and schools, to increase their orders and availability of fresh fruits and vegetables?
A: Firstly, we work with many fast-growing and emerging brands, and this outlet growth is driving some of the increase in demand for produce supplied by Reynolds. There have also been a number of recent initiatives and changes to legislation in the UK that are helping to drive the consumption of fresh produce, which is great news for the industry. Since September 2014, primary school children in the UK receive free school meals for the first three years of education, so the uptake of hot school dinners has increased significantly. In general, school meals are now more balanced, and children are eating more fresh and seasonal food.
The Soil Association also runs a Food for Life award that is primarily aimed at the education sector, but we’re seeing it being used more and more in business and industry catering as it gains momentum. A key element of the certification is promoting seasonal and fresh produce to diners, as well as promoting provenance, which is great news for Reynolds.
At the same time, we all know that food prices have been increasing in recent years, and against a backdrop of rising costs in other areas, such as energy prices and rent, foodservice operators have been looking to reduce their food bills. Many have used a degree of menu re-engineering as a strategy, which basically means reducing the size of the expensive component of a dish to save costs. For example, they’re offering a smaller steak and adding more salad or vegetables instead. That is positive news for our industry, too, while it still offers value for money for the customer because the plate still remains full. Our food development team has been able to help customers with this process, which helps us add real value to our service.
Q: Can you describe how the foodservice scene has changed in the UK over the years with the explosion of variety, the growth of national chains, ethnic diversity, etc.?
A: There have been a number of key trends in recent years with the explosion of large restaurant brands that have grown quite quickly at the expense of independent operators to a large extent. That’s been the same across the restaurant, pub and hotel industries as consumers generally seem quite comfortable with brands and, of course, economies of scale help, especially in a recession.
The variety of eating-out establishments has increased immensely, particularly in London. London now has perhaps the most diverse food offer of anywhere in the world. You really can eat pretty much any cuisine type you can imagine and some you probably couldn't imagine! The trend has partly been driven by population diversity in London, I believe.
It’s a very competitive landscape, and some believe that bubble will burst at some point but right now the eating-out market is thriving. Food quality has also improved beyond recognition, because there's nowhere to hide with the increasing popularity of social media, and consumers are more savvy than ever about what food should look and taste like, because they are better traveled. But it's not just restaurants – general standards in UK foodservice have improved massively and the quality of food on offer is getting better and better.
Q: How does the foodservice supply chain work today?
A: Typically, supply is no longer sent to the major food markets like 10 or 20 years ago. Most wholesalers and importers manage their own warehouses today, and the majority of produce is contracted directly. It’s all about having a secure and robust supply chain and not leaving things to chance.
Reynolds sources directly and all of our produce is contracted. It’s the only way to be really. Security of supply is really important to us, as is food security. It’s absolutely critical because we can’t afford to let our customers down. For international supply, we may work with cooperatives or specialists rather than directly with the growers themselves, but it depends on the category. It’s fair to say there is a move towards sourcing more directly from growers, much like in the UK retail industry.
Q: What is required in terms of quality, audits etc.? In other words, what are you looking for in a supplier?
A: It goes without saying that everything has to be legal, safe and of appropriate quality. All of our suppliers work to farm-assured or GlobalGAP standards. Reynolds is also fully accredited to British Retail Consortium (BRC) standards. Traceability is really important to us, so these standards are essential. We also require consistent sizes, quality and specification week in week out because our customers demand it and both their and our reputations demands it. We contract prices and volume with our suppliers for a six-month period so they know where they stand. We then pass the stable price onto our customers so they can fix their menu prices for the same period, guaranteeing their margins.
Q: So, would you say that UK foodservice operators are looking for the same standard and quality of food as UK retailers?
A: Certainly, and for some products we are perhaps looking for even higher quality. Take avocados, for example. Our customers need to know that the avocados are really ready to use because they’re using them to serve to customers that day, and an unripe avocado simply won't do. Produce also needs to be ultra-consistent, and everything is checked by our technical team when it comes into our warehouse.
Our supply needs to turn around really quickly too – 24 hours is the absolute longest turnaround time, so produce has to be just in time and fit for purpose. In that sense, some customers come to us because we are specialist greengrocers. For instance, they might want a particular sized and shaped strawberry to go on top of a cake or gateau. We work with our customers to a specific brief so we need suppliers that can act accordingly.
Q: As one of the UK's leading fresh fruit and vegetable distributors and fresh produce suppliers to the foodservice industry, what is Reynolds doing to encourage more global exporters to work with you? Are you looking to attract any country suppliers and/or produce items in particular?
A: We’re keen to speak with any growers with the sufficient scale to supply the UK – providing they have the appropriate accreditations, of course. Our doors are open, and we’re always keen to make new relationships. The foodservice industry is growing, and essentially we offer an avenue for a larger basket of products and different products. So, there are certainly opportunities for growth. As a business, Reynolds is also looking to forge long-term relationships rather than working to the general trading mentality that you might see elsewhere.
Q: What do you see as the next steps for the UK foodservice industry? Where does the sector go from here?
A: On the supply side, we are seeing a reasonable amount of consolidation. Some of the large operators are looking for consolidated offers for their deliveries of food and drink. For some, it’s all about driving efficiencies and reducing costs. However, there are still huge opportunities for specialized fresh suppliers who are able to offer more than just the cheapest, whether it’s fresh produce, meat, fish or dairy. It’s about being able to offer knowledge expertise in your field, the best customer service and bespoke [customized] solutions. That’s very much where we see Reynolds – it's my family heritage!
It wasn’t all that long ago that talk about the food scene in the UK was an oxymoron. There was fish and chips, bangers and mash, shepherd’s pie and, in general, a limited assortment that appealed mostly to those who took it in with mother’s milk. Today, however, the food scene in London rivals any in the world, and each block seems to have a new restaurant, a new take on a cuisine and a new level of interest and excitement.
Part of this is that London has changed, and the ethnic diversity now represents people from all corners of the globe and, they, of course, bring their culinary delights and demands with them.
Tony also refers to the growth of chains and a professionalization of the industry, which creates volume opportunities.
All together this speaks to new points of entry into traditional markets, new opportunities to see produce, to boost consumption and to build business opportunities.
We hope you will join us at The Global Trade Symposium to discuss how foodservice can be an opportunity to enter new markets and grow your business.
If you are already registered and would like to add a Global Trade Symposium registration, please let us know here.
To register for the Symposium and the entire New York Produce Show and Conference, please go online here.
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And New York is magical this time of year so bring that special somebody to the Spouse/Companion program by getting info right here.
Also remember, Thursday is the “Ideation Fresh” Foodservice Forum and we have fantastic panelists to talk about the latest trends in foodservice. We can get you info here.
We have tours of Manhattan retailing, New Jersey and Yonkers suburban retailing, Brooklyn retailing and Urban Agriculture, Hunts Point and the Philadelphia Market, all on Thursday – Let us know what you are interested in right here.
We have two booths left to sell, and then they are all gone. Let us know your interest here.
And we have opportunities for you to support the program with a sponsorship and enhance your corporate reputation right here.
Looking forward to seeing you in New York.