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A new survey indicates consumers are spending more on fresh food, but retailers need to do more to respond.
According to the “Future of Fresh” survey from Deloitte, in the past two years, two-thirds of consumers have increased spending in the fresh food category. Over 60% of consumers spend up to 30% of their average monthly grocery budget on this category.
However, most fresh food retailers are in the nascent stages of implementing more advanced technologies in response to heightened consumer demand. For example, 38% have partially or fully implemented artificial intelligence (AI)-based warehouse management to monitor fresh food stocks, with only 3% using in-store technologies that allow consumers access to product information with a smartphone. Furthermore, only 9% are using big data and analytics to identify actionable insights and trends, and only 4% are using blockchain to track the movement of fresh foods throughout the supply chain.
The most common barriers to technology implementation for fresh food retailers and manufacturers include the extent of time required to implement technology (78%) and a lack of skilled workers (28%). For retailers, key challenges to managing are spoilage (32%), product pricing (16%), and shelf life (15%). Storage is also a key concern for both manufacturers (20%) and retailers (24%).
Looking at drivers of fresh food purchases, the survey found 92% of consumers cited cost as an important aspect in their purchasing decisions. Eighty percent of consumers actively seek healthier versions of the food they purchase, and 77% avoid preservatives and chemicals in their food. When purchasing perishables, 58% of consumers actively consider sustainability aspects, such as local sourcing, recyclable packaging and water neutrality.
“Despite the prominence given to fresh foods in stores, growth rates are not living up to their potential,” said Barb Renner, vice chairman and U.S. consumer products leader, Deloitte LLP. “Retailers should better understand and centralize management of the fresh food category to help address the issue from not only the consumer demand side, but also the manufacturing and retail side.”
Deloitte surveyed 2,000 consumers and 153 fresh food industry executives.