By: Doug Baker, Vice President, Industry Relations, FMI
In his upcoming book, Gary Hawkins, the founder of CART, shares a quote that perfectly encapsulates the transformative journey the food industry is on:
Our intuition about the future is linear. But the reality of information technology is exponential, making a profound difference. If I take 30 steps linearly, I get to 30. If I take 30 steps exponentially, I get to a billion.
Linear vs. Exponential Perspective
When envisioning the future, we naturally think linearly, anticipating gradual changes and predictable outcomes. The reality is that technological progress is not a steady march forward but a rapid acceleration into the unknown.
To put things in perspective, in 2022 food retailers allocated an average of 1.3% of their total sales—equivalent to more than $13 billion—to technology investments, according to FMI's The Food Retailing Industry Speaks. Food suppliers outpaced retailers, allocating 2.4% of their sales to technology, reflecting optimism about technology's impact on bottom lines.
Since 2019, the food industry has been experimenting with new technologies spanning various applications such as enhancing customer experiences, improving efficiency, addressing margin pressures, overcoming labor constraints, bolstering ecommerce capabilities, measuring productivity, reducing waste, expanding capacity rapidly, optimizing product offerings, and fostering innovation. In 2022, 85% of retailers continued experimenting with multiple technologies to elevate the customer experience.
Now, consider the exponential perspective. Imagine taking 30 steps linearly and finding yourself merely 30 steps ahead. However, taking 30 exponential steps results in an astonishing billion steps forward. This analogy perfectly captures the breathtaking pace at which technology is evolving.
Artificial Intelligence (AI) Leads the Technology Evolution
To flourish in an era of exponential technological growth, food retailers must wholeheartedly embrace innovation, adapt nimbly and relentlessly explore ways to harness the power of AI for their customers' benefit. While challenges loom large, so do opportunities, promising greater efficiency, enhanced customer experiences and a more sustainable food retail industry.
The 2024 FMI Midwinter Executive Conference provides a platform to delve into the exponential growth of technology, especially AI. We'll have Tech Exchanges and face-to-face time with technology service providers to explore how to enhance strategies best. The FMItech Pitch Competition will showcase visionary ideas from emerging technology companies. These innovative solutions have the potential to redefine the grocery industry, addressing challenges like automation, food waste, customer engagement and the digital value creation.
Ray Kurzweil's quote reminds us that the future of food industry technology is exponential, bursting with boundless possibilities limited only by our imagination. Join me at Midwinter to see how technology will create a more customer-centric, and sustainable future food industry.
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