During PMA’s recent Fresh Connections: Chile in Santiago, Produce Marketing Association CEO Cathy Burns shared her perspectives on how the global fresh produce and floral industries can grow a healthier world.
Technology innovations in store and restaurants
Burns noted that the pace of technology innovation throughout the retail and foodservice supply chains is providing consumers with unique, memorable, and more convenient experiences. “From the Co-Op Italia store’s interactive merchandising displays to Amazon Go’s cashier-less convenience shops to restaurant robots that prep your meals, technology continues to disrupt traditional approaches to business,” she said.
While these high-tech experiences certainly provide a “wow” factor, human employees play an integral part in providing a personalized, customized experience.
Science and technology disruption
Technology also continues to play a key role across the global supply chain, especially as investment funding in agriculture remains strong, Burns observed. In Chile, partnerships are being formed between government, farmers, technology centers, and investors to spur even more growth in the agricultural economy.
Robotic assistants, such as pollinators or wheelbarrows, have been created to help ease some of the challenges in finding both human, and non-human, help in the fields.
Burns shared that advances in indoor farming, particularly the use of specialized lighting (LED) systems when combined with algorithms and data-harvesting computer applications, have made it possible for scientists to enhance the flavor of herbs, which may carry over into fruits and vegetables.
She also noted that the scientific innovations that have driven the plant-based food trend worldwide, which are being seen locally in Chile through The Not Company’s plant-based milk product, continue to grow in response to consumers’ sustainability concerns.
Another technology changing the produce and floral supply chains is blockchain, which provides both traceability and transparency. It digitizes information in a new way, helping solve for complex, many-to-many relationships and collectively making the system smarter.
“Programs like the Produce Traceability Initiative and the produce-specific Trellis framework PMA and Purdue University released last year are tools that are compatible with blockchain,” Burns said.
She also spoke to the industry’s need for a cultural shift around food safety.
“Especially in produce safety, we must adopt a ‘follow the science’ philosophy that embraces emerging technologies and all the tools we have at our disposal to turn produce safety from a reactive enterprise to a proactive approach.
“We believe that produce safety must be a cornerstone of an organization’s values, character and culture. It is those very values, character and culture that will determine how effective an organization's produce safety efforts are in the first place,” Burns said. “Produce safety isn't just an action; it's an attitude. Your produce safety program has to reflect your core beliefs. Nothing short of doing the right thing -- always -- is sufficient.”
Talent management opportunities
Turning to the industry’s ongoing need for fresh talent, a McKinsey Global Institute report found that by 2030, overall demand for technological skills will rise by 55 percent. Demand for social and emotional skills will rise by 24 percent.
Burns shared that millennials’ opinions about business’ motivations and ethics – which had trended up the past two years – decreased in 2018, as did their sense of loyalty. In 2018, only 48 percent of millennials believe businesses behave ethically and 47 percent believe business leaders are committed to helping improve society.
Because of this, 43 percent of millennials envision leaving their jobs within two years, while 28 percent seek to stay beyond five years. Gen Z respondents expressed even less loyalty, with 61 percent saying they would leave within two years if given the choice.
“Here in Chile, Llorente and Cuenca has found that HR and Talent departments are already at work on some of these trends, preparing to meet the needs of millennial employees, from providing training and development programs to improving culture and work-life balance and more. This is a great step forward in talent retention efforts,” Burns said.
Consumer trends and opportunities
Global grocery sales through e-commerce channels increased 30 percent last year, according to Deloitte. Countries leading this growth charge were China, South Korea, the United Kingdom, and France. The U.S. experienced 5 percent growth.
“Chile holds a 9 percent share of Latin America’s e-commerce market, despite holding only 2 percent of the region’s population,” Burns said. “In 2017, annual e-commerce sales in Chile amounted to $4 billion dollars, up from $2.8 million U.S. dollars in 2016. With Wal-Mart’s recent acquisition of Cornershop here, there may be more opportunities to grow fresh produce and fresh food sales through e-commerce.”
Consumers are changing their diets for both health and sustainability reasons. The number of consumers adopting vegetarian or vegan lifestyles is increasing, predominantly among young and diverse consumer groups. Currently 6 percent of Americans say they follow a strictly vegetarian lifestyle, while 3% identify as strictly vegan.
Not surprisingly, vegan and produce options increased their dollar share by nearly 2 percent between 2014 and 2017.
“While plant-based can certainly include fruits and vegetables, it cannot replace them in consumer diets and eating habits,” Burns said.
Demand creation for produce through culture
“While many of these trends are favorable to fresh fruits and vegetables, it is important to realize that we – and by we, I mean PMA in collaboration with you, the members and industry – must have a powerful, resonating voice in conversations where trends and culture are being set.,” Burns said.
The growth of social media, where food is an integral part of the cultural currency, gives produce and floral a platform to connect with consumers. Instagram has now made it possible to order food right from your smartphone.
More than 200 million daily Instagrammers visit a business profile each day. By October 1 last year, more than 297 million Instagram posts had been marked with the hashtag #food.
“On Facebook, which is the most popular social media platform in Chile, food is the number-one consumed video. Consider that viewers retain 95 percent of a message when they watch it on video, compared to 10% when reading it,” Burns said. “As marketers, think about what that means for your video content and social channels. Perhaps there are more opportunities here in Chile to meet and connect with consumers on Facebook – via video – to further engage them with fresh produce and floral.
She closed her comments with this advice for the Chilean industry: “There is no doubt that fruits, vegetables and flowers play an important role in cultural expression and well-being, an essential part of a healthier, happier world. But, even though we are popular, we have room and opportunity to increase fruit, veg and floral consumption for the health of our businesses. If we are going to grow a healthier world, we must continue to shape cultural influences and share the incredible work our industry does every day.”