Food industry deals with disruption on an unprecedented scale: IGD
This disruption provides many challenges for companies, but also more opportunities to win.
From bitcoin, blockchain, robotics and artificial intelligence to climate change, sugar taxes, social and political change, the food and grocery industry is dealing with disruption on an unprecedented scale, according to Joanne Denney-Finch, chief executive of international grocery research organisation, IGD.
In a speech delivered at the Checkout Conference 2018, Joanne Denney-Finch outlines how companies in the food and grocery industry can survive and then thrive amidst such disruption, “The food and grocery industry is continually grappling with wave after wave of disruption, ranging from new technologies – developed at lightning speed - to wider social and political developments happening across the globe. Indeed, it could be said that the last ten years will be judged as a period of relatively stability, compared with what the future holds.”
Denney-Finch continued, “In the future, I’m convinced that by building upon three vital skills, grocery businesses will be able to manage all this disruption, build for the future and will emerge on the other side as thriving businesses.”
The three key skills the IGD chief executive outlines are:
Do the ordinary, extraordinarily well
“Food companies will always need excellent everyday management from ensuring products are handled safely to providing excellent customer service. Companies must keep some of their best people focused on the basics while others drive innovation and implement change.
"Another golden rule is to always put the consumer first. If you know what consumers want and how to deliver more of it, your company will always have a strong sense of direction. The most successful consumer goods companies in the world have reached their position through their ability to translate consumer insights into a steady stream of product and service improvements.”
Harness the seismic trends
“Of all the big developments in technology, the one that I think is going to drive the biggest changes in our industry is artificial intelligence – it’s evolving even faster than the internet and mobile technology did twenty years ago. Voice controlled devices, like Alexa from Amazon or Apple’s Siri want to be your digital best friend. They talk and listen, learning to anticipate your needs and automate the mundane tasks.
“Each week there are new examples of devices getting smarter, linking up, creating and sharing data, communicating through voice and delivering new services. The consumer benefits are obvious – shoppers can save time by being directed to products they enjoy, chores are removed from the worry list and all this is scheduled for maximum convenience and around your own personal routine.
Joanne Denney-Finch went on to explain what this means for food and grocery, “Grocery shopping can be divided into two components – there are products that are routine like milk, bread and toothpaste, then there are products that we choose spontaneously like fresh food and treats. Artificial intelligence means that the routine products can be automated, automatically arriving to the home, workplace or another convenient click and collect points. Technology makes this possible and I think we can assume it is going to happen.”
The IGD Chief Executive goes onto explore what this means for the spontaneous part of shopping, adding, “Tomorrow’s stores will mainly feature fresh food, food-to-go and new products with special events and more ways for shoppers to taste, learn and discover. Stores will have more individual character, with layouts built around showcasing products and helping people to build their meals quickly with healthy lunch zones and breakfast bars.”
Operate with agility
“The big technology companies like Amazon and Google are successful because they are fast-moving with adaptable business cultures. They generate a mountain of ideas and then they experiment, all while keeping a fixed vision of where they want to get to. That’s how they evolve so quickly – they adapt or stop the failures and scale up the successes, so they’ve found a way to retain the speed of a business start-up.
“This is a challenge for all of us in the food and grocery industry – the need to become more agile, to innovate, experiment, learn and adapt very quickly. The key is to keep investing in your people and empowering them to make those frontline decisions. Set a series of micro-goals along the road to your vision and ensure you celebrate every success. Use real-time data, keep refining your forecast and make sure everyone is kept up to date – these are the behaviours of the most agile companies.”
Joanne Denney-Finch concluded, I urge everyone to enjoy the challenge of dealing with disruption. People that overcome big challenges deliver amazing results. You have the opportunity to live in exciting times, face defining challenges, show your leadership qualities and build a better future. It doesn’t matter if you don’t have all the answers yet, nobody does, what’s important is the passion, the bravery, the energy, the openness to change and the desire to keep building your skillset. Dig deep, find these qualities and go build the future.”
