Emerging Issues: Identifying Challenges to Food Retailing Jan 02, 2018 By: Mark Baum, Chief Collaboration Officer, Food Marketing Institute Change and disruption are no strangers to the food retailing industry. Over the past 25 years, new players—from so called “category killers,” to discounters and online retailers—have entered the ‘grocery market’ and broadened the definition of food retail. Despite increasing competition, the traditional grocers who remain have proven repeatedly that they can survive and thrive by constantly improving operationally and leveraging a deep personal connection to their customers. Today, however, disruption is occurring at an unprecedented speed, and food retailers of all shapes and sizes will have to address these new challenges. But in a business with a constant battle over pennies on the dollar, it is often difficult to find the time to look up from the day-to-day operations of the business and see what’s coming in the next few years. This is where FMI adds significant value to its members and their trading partners. Through our Emerging Issues initiative, we identify issues that have the greatest potential to affect the food industry in the next three to five years. With the help of our strategic partners at Oliver Wyman, we have gathered insights and will be sharing perspectives from focus groups, breakout sessions with the FMI Board of Directors, a survey of our members, and interviews with forward-looking executives in the food retailing industry. We share these findings with you so that in your pursuit of excellence you can focus on the now, while also being able to look up and ahead. In addition, this initiative will help inform FMI’s Strategic Plan and set its agenda for future programs and services. Having identified the highest priority emerging issues, FMI will determine how best to leverage its core services to deliver value to its members, whether through government relations, food safety, thought leadership on total store collaboration, or by acting as the voice of food retail. After synthesizing findings from external research and internal focus groups, FMI has identified five major categories of emerging issues: new consumerism, artificial intelligence/technology, workforce, new marketplace, and food production: These issues are far-reaching and intertwined. The future presents new obstacles, but it also presents opportunities for those who are able to identify and help to shape those changes, early on. Food retailers have already noted that consumer preferences are changing, and they have begun to implement plans to respond to the new product choices and services their customers demand. More so than changing assortment, however, the way the new consumer shops is changing faster and in significant ways, forcing food retailers to reimagine industry boundaries, the role of technology and best uses of their brick-and-mortar assets. The demand for omnichannel retail and constant technological advancement will change the way companies operate, with competitive advantages going to those with strong data and analytics capabilities. As a result, food retailers will compete more against other industries to attract new talent, not only to support traditional workforce roles but also to meet these newer technical demands. Finally, in the new era of both globalization and localization, food retailers must keep the issue of food safety top-of-mind, and this area will become even more challenging and complex in the years ahead. As we have worked through the process of identifying these issues, we have also considered how the issues will impact our agenda going forward. Look for us to leverage our core services to provide you with resources and education that will help you determine the path forward to respond to the disruption in the food retail industry.