23 Huge Misconceptions About the Grocery Business, According to Its Emerging Leaders

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23 Huge Misconceptions About the Grocery Business, According to Its Emerging Leaders

By Randy Hofbauer - 12/12/2018

As the years pass, so does the carrying of the torch in the grocery business – from one generation to the next – across varying roles, companies and sectors. And as a growing number of these next-generation leaders move into bigger roles to help shape the industry, their perspectives and ways of dealing with industry issues – from better-for-you products to grocery technology – both new and continued are growing increasingly valuable and worthy of sharing.

In November, Progressive Grocer named 25 of the top talents under 40 across grocery retail, suppliers and service providers, all of whom make up the inaugural class of the GenNext Awards, and all of whom were profiled in-depth this month. We asked them to share what they believe the largest misconception about the grocery business is – and what the reality actually is in terms of how they see it. An overwhelming number of them had insights to share.

Here's what they had to say.

Lizzi Ackerman

Co-Founder and CMO, Birch Benders

I think one of the greatest misconceptions is that conventional and mass retailers aren't willing to embrace new trends like paleo, protein, grain-free, etc. Although these trends might have been considered too niche for stores like Walmart, Target and Kroger five years ago, we've seen that conventional and mass retailers are now actively seeking innovative and differentiated brands in their categories because these products perform better than legacy brands. That’s also why we’re seeing more and more conventional retailers integrating their natural and conventional sets in a given aisle of a store instead of relegating natural products to a different aisle (as they used to do).


 

Darrell Anhel

Division Ecommerce Manager, Fry’s Food Stores/The Kroger Co.

The biggest misconception in the grocery industry is that we are trying to leverage advanced technology to enable a shift to a more autonomous ecommerce model abandoning brick-and-mortar stores and associates. This misconception is driven by the change in customers' shopping patterns and behaviors. With more and more customers channeling ecommerce and digital platforms for ease and convenience, many people believe the traditional brick-and-mortar store is a dying breed. The best grocery retailers understand how to stay relevant for their customers no matter what venue they choose to shop. Leveraging brick-and-mortar stores in combination with multiple ecommerce channels will be instrumental in keeping up with customers' ever-shifting demand while remaining profitable and relevant in the landscape.


 

Akin Akanni

Houston Division CFO, The Kroger Co.

When someone hears "I work for a grocery company," they assume that you work in a grocery store. Without a doubt, our store associates are important and necessary in our business but there is much more to operating a grocery company. I believe this stems from individuals outside of the grocery retail industry not being able to see outside of "the retail box," which is the belief that all pieces of the grocery retail industry, including roles and responsibilities, don’t have opportunity for growth or advancement. The reality is: The grocery retail industry is a vast job market with high stakes and a wide range of employment opportunities, such as digital and technology, accounting, legal, operations, engineering and a variety of store roles with leadership and growth opportunity. People see what they want to see, and I believe it is our duty as grocery retail leaders to not be complacent. We are more than a grocery store.


 

Jenna Arkin

VP of Innovation, Earth Friendly Products

I think there is a misconception that grocery stores and brick-and-mortar retail are becoming obsolete with the sharp growth in the ecommerce sector. The reality is: In-store retail can offer so much more to a consumer than just the exchange of money for a product. A trip to the store is an experience that can inspire, delight and entertain customers. Retailers that can provide an elevated experience to the consumer and also invest in the seamless integration of both online and physical shopping will be the most successful at meeting the changing demands of the modern shopper.


 

Abby Ayers

Manager, Retail Partnerships, Fair Trade USA

One of those misconceptions I hear is that grocery is boring and all about cost. I have seen so much change and innovation in the last seven years, from same-day grocery delivery to the explosion of organics to mainstream grocers personalizing messaging and offers to appeal to each unique shopper. I have not had one day that looks like another. Every day, my work brings brainstorming unique private brand products to create the treasure-hunt experience for daring Millennials or finding unique ways to connect the shopper with the farmer or worker responsible for making their favorite products halfway across the world. And I can assure you, it is only going to get more innovative, fun and meaningful with the development of technologies to meet customer demands of convenience, transparency and fairness for all. The future looks bright for those seeking a fun, meaningful career as retailers, and brands continue to do more to lead that change.


 

Justin Comparetto

President and Owner, Just Ryt Foods

A major misconception in the grocery retail industry is that pre-made or boxed goods are an inferior product to those that are freshly made. When manufacturing pre-packed goods, you need to place great detail on the entire process to ensure the cleanliness of the product so that it stays fresh for a duration of time. Additionally, higher-quality ingredients are also used so that a customer is guaranteed a fresh taste each time. With fresh products, there is opportunity for error since the turnaround is so quick and can lead to a product being contaminated.


 

Julie Divis

Quality Manager, Pre Brands

Of the grocery retail industry today, I believe the greatest misconception to consumers is that local is always better. We have been given this mindset that the quality of the products must be higher if it is sourced just down the road or within the same state. While supporting a local economy is important, high-quality products can come from anywhere around the world.  The key is to understand the best growing and sourcing region for that product, as that will ultimately dictate the quality of the product. Take our brand for example – we at Pre are a Chicago-based company, but our beef is sourced from Australia and New Zealand. Although grass-fed and -finished beef can be found in the United States, the temperate climates of Australia and New Zealand provide beef with a far superior taste and eating quality. Always do a little research on the products you are buying to determine if local is in fact better – because it is not always the case. In my book, quality wins.


 

Seth Fridley

Assistant Director, Health, Wellness and Home, Hy-Vee Inc.

I believe the most common misconception in the grocery industry right now is that brick-and-mortar is being taken over by online grocery shopping. The reality of it is that consumers are looking for an experience when they are grocery shopping. If you look at the successful European grocery stores right now, it's all about the "wow" factor. Grocery shopping is a family outing instead of a chore. North American grocery stores, especially Hy-Vee, are really driving the experience-driven concept with bars, restaurants, professional chef-taught classes, clothing and so much more, all within a grocery store. You can’t have the same experience with online shopping. As long as we continue to listen to what our consumers want from us, the grocery industry will thrive in brick-and-mortar.


 

Jessica Harris

Senior Marketing Innovation Manager, Earthbound Farm

In 2017, a researcher at the Harvard Business Review said that only 10 percent of consumers love to cook, while 45 percent are "on the fence." The grocery industry has interpreted this as a desire for more narrowly defined convenience foods that make it easier for consumers to heat and eat or eat on the run. I believe this is too superficial an interpretation of this research. Based on our extensive consumer research, I believe the reason consumers may respond that they are "on the fence" about cooking is not a hatred of cooking but rather a lack of confidence. In a world where Instagram’s perfectly plated culinary creations could make Julia Child question herself, the average consumer's despair at ever attaining such perfection negatively impacts the motivation to cook. As brands, we need to provide products and content that continually inspire and empower these consumers because with that approach, we can drive trips and baskets sizes, meaning better sales for brands and retailers alike.


 

Diana Haussling

Director, Shopper Engagement and Activation, The Campbell Co.

The retailer landscape was once a very rudimentary environment. Consumers relied on TV and print ads to drive their decision making at shelf. National brands led the charge with powerful media campaigns and guerilla marketing tactics. With the consumer landscape changing from Boomer- to Millennial-driven, retailers need to be savvy and agile to vie for shopper engagement. Contemporary decision making is no longer about a "meat and potatoes" dinner at 5 p.m. After-school activities, dual working households, and shifting eating habits all contribute to an evolved retail environment. The intersection of technology and personalization has led consumers to make more informed decisions. We must meet shoppers where they are, engaging them on social media, utilizing GPS technology to connect with them in-aisle, and delivering assortments that are curated to the geography, socioeconomics and ethnographies of the neighborhoods in which we do business. One size no longer fits all.


 

Vincent Kitirattragarn

Founder and CEO, Dang Foods

A common misconception of the grocery retail industry is that it's low-tech and old school. The reality is we still get faxes but progressive companies automate everything, from ordering to category management.


 

Daniel Knox

Category Analyst II, Giant Food

I feel there is misconception around the quality of store brands versus national brands. The reality is that in recent years, national brands have become synonymous with the status quo, failing to innovate as the market shifted. This has given retailers opportunity to deliver consumers the unique flavors, and innovative takes on national products, that they desire. Store brands, while more affordable, can also be the highest quality product on the market. Growth in private label has driven retailers to expand their presence in-store and across other channels. A good example is Kroger’s recent deal with Alibaba, growing their private label distribution and brand recognition globally.


 

Lindsay Koch

President, Koch & Associates

Many people believe that their groceries "magic" themselves onto grocers' shelves. They have no concept of the unbelievable number of touchpoints, paperwork and people that come together to get their favorite CPG items into their home. Supply-chain technologies are becoming better every day, leveraging artificial intelligence to improve the process and reduce costs, but it’s still a really expensive and time-intensive process to get everything correct and coordinated between the vendor, carrier, warehouse and store shelf. Actual retail people in stores are still key for success, especially when correcting automatic replenishment systems, tag issues or promotion reflection. Omnichannel has made it even more interesting, with a ton of chains competing over what is (today) a very small piece of the CPG pie but will position retailers to be ahead of the digital data revolution compared to stores and chains that aren’t ahead of the digital curve.


 

Jill Lester

Health and Wellness Pharmacy Practice Coordinator, The Kroger Co.

The greatest misconception is that the grocery retail industry does not often provide customers with meaningful information on eating healthy. At Kroger, we are incorporating health, wellness and nutrition to provide unique offerings to help our patients and customers better understand the benefits of healthy eating. A great example of this is our OptUp app.


 

Patrick Mateer

Founder and CEO, Seal the Seasons Inc.

A few years ago I started noticing that anything nutritious and healthy was marketed as a superfood. Our obsession with "superfoods" created unrealistic expectations that foods on their own have superpowers to transform consumers' body, mind and spirit. Our frame of reference on diet is distorted because we use "food" to label any and all unhealthy and over-processed edible concoctions. The reality: blueberries, sweet potatoes, blackberries, broccoli and Brussels sprouts are the foods our grandparents grew up with. Let’s correct the script: Twinkies, Twizzlers and corn syrup are rotten foods. Eat real food again!


 

David Mell

Managing Director, RBC Capital Markets

One of the greatest misconceptions in my view is that the independent grocer is irrelevant in today's market. The prevalent stereotype is the independent is overpriced, runs under-invested in stores, and remains woefully behind in technology. The reality is the vast majority of independents operate viable, modern stores that have adapted to the changing landscape. These operators have evolved, successfully and defensibly differentiating themselves by focusing on superior service, local knowledge and tailored offerings, often as the ethnic, produce or perimeter specialist in a market. Further, by partnering with scaled, supportive wholesalers, independents are able to offer competitive prices while leveraging technology from the latest startups to effectively compete with national chains. Given the accelerating pace of change, these entrepreneurs will have to continue to defend their consumer relevancy proactively, but with $132 billion in collective sales (according to the National Grocers Association), independents clearly remain an important and relevant force in today's market. 


 

T. Bliss Pierce

Global Consumer Insights Expert, General Mills

Sometimes, we try to use an Old World lens to answer New World problems. We see the data and the trends and we explain it with ideas that are familiar to us. So, what’s the great misconception? That we can win in the future without slowing down long enough to truly understand the problem that we are trying to solve today.  We spend a great deal of time talking about "food trends," digital disruption, consumer targets, eating occasions and channel blurring, but it is often through the lens of what has existed in the past. We root ourselves in the comfort and familiarity of what has happened before consuming ourselves with what’s changing, how fast it's changing, how long we think it will continue to change and miss the chance to slow down for a chance to deeply understand what problem consumers are trying to solve today.


 

Jordan Poff

Cincinnati/Dayton Division Ecommerce Manager, The Kroger Co.

The most common misconception of the grocery retail industry is that it is "boring" or "outdated." In my personal experience, having worked in the grocery retail industry for over half of my life, this misconception could not be any further from the truth. This industry is extremely fast paced – not only does it need to serve the customers most basic needs; feeding their family, it must adapt almost daily to our customers ever changing needs. In the past year Kroger has continued to evolve, expanding its ecommerce business, introducing self-driving cars, creating meal solutions for families, increasing fresh food options in our retail stores, introducing Zero Hunger | Zero Waste, and starting selling Our Brands products in other countries through Alibaba's Tmall platform – and through other retailers like Walgreens. The grocery industry is changing almost daily. Working at the company that is leading those changes couldn’t be further from "boring" – it's exhilarating. The most exciting part: This is just the beginning.


 

Cara Pratt

VP, Customer Communications, Product Strategy & Innovation, 84.51˚/The Kroger Co.

Competition has always been fierce and has triggered retailers to act nimbly; it’s just showing up more visibly today than ever before. Why? Customers now have the opportunity to make new choices – not just where they shop, but how they shop. Retailers with a clear purpose, deliberate strategy and rich data have the opportunity to create competitive advantage. They have leveraged these assets to make customer-driven decisions, delivering against the core tenants of retail marketing. Today, customer expectations have soared, and the best retailers will deliver. Technology is driving a new speed of change. For example, grocery retail is using machine learning and artificial intelligence to influence operations (inventory management, price optimization, etc.) and create personalized experiences and more. Grocery retail is disrupting the advertising ecosystem by more effectively (and transparently) executing media to create customer connections. Grocery retail is also using robotics to improve the supply chain. There hasn’t been a more exciting time to be in grocery retail – make sure you’re ready for a wild ride.


 

Kevin Schnell

Store Director, Skogen's Festival Foods

There is a tendency to believe that we have the same routine each week and nothing really changes. The reality is that change is everywhere, and we need to be looking for it and embrace it: changes in seasons, changes in shopping trends, new items, new technology and ever-changing competition. Even within a company, there are different market dynamics. What might not be successful in one store could be the next big thing in another region. A new item or process might not have caught on previously, but we need to take another shot to see if the dynamics around us have changed enough where it will now be successful.


 

Bo Sharon

Founder and CEO, Lucky’s Market

That the main goal of the grocery retail industry is to sell groceries. Sure, we are all helping move products from fields, farms and kitchens to a customer’s home. And for some players in the industry, that’s where it starts and stops. But for an ever-growing number of producers and retailers, selling groceries is actually a means to an end. We’re passionate about retail, but we're more passionate about the power of food and its potential to positively impact communities, personal health and the planet. We don’t just sell groceries. We make and sell products that help others live life to the fullest. Period. I can’t think of a more noble or worthwhile profession.


 

Amy Souers

Area Sales Manager Combo, Coca-Cola Consolidated

The greatest misconception of the grocery retail industry, from a consumer’s standpoint, is that grocery makes a lot of money. Many don’t realize that it is a low-margin industry. The majority of our products return margins in the cents per case vs. dollars per case. Specifically for Coca-Cola Bottling Co. Consolidated, we have seen an unprecedented cost of goods increase this year, and we have had to adjust our strategy and operating system accordingly. In our business, every penny matters, and every company is looking for ways to be more efficient, spend less on operating costs, and yet continue to sell more product. The companies that are able to adapt to the changing market and changing consumer demands while still operating efficiently will be the companies who have the greatest success.


 

Stacy Vossberg

VP of Innovation, Insignia Systems

The belief that the physical store is dead and will only play a small role in the future of grocery shopping is the biggest misconception. The rapid growth in ecommerce has resulted in hundreds of millions of dollars being invested to improve the online experience with very little attention being given to the physical shopping world. Brands and retailers must also dedicate resources to improving the shopping experience in their stores. This ranges from how they simplify shopping to help customers get in and out, to how they offer services and experiences that will engage shoppers and drive loyalty. Ecommerce is a huge part of future shopping, but in my opinion, the winners will ultimately be retailers and CPGs who figure out how to integrate the physical and digital world to inspire shoppers and drive sales.

About the Author

Randy Hofbauer

Randy Hofbauer

Randy Hofbauer is the former digital and technology editor of Progressive Grocer. He has more than a decade of experience as a content strategist, researcher and marketer, almost all of it covering CPG retailing. His insights and work have been cited in a nu Read More