Confronting The Future

PMA's leader indicates the fresh produce industry's forward moves.

Change continues, at lightning speed, along virtually every single link in our supply chain. The sophistication of our consumer, rapid advances in technology and the growing complexity of our marketplace are just some of the forces ushering in a brand-new world for our business. Those that cling too long to the traditions of our past are in danger of being left behind. A Chinese philosopher said it best hundreds of years ago: Those who don't plan for the future will get the one that shows up. Have you been surprised by the future already?

So what do we need to consider as we confront the future? Keeping pace with a changing market and an evolving consumer requires a fresh orientation. Our past was shaped mostly by relationships, deals made by a handshake, yet in this new future, we are defined as much by what we know as who we know. We're now working with Supply Chain 2.0, a supply chain beginning and ending with the consumer. It's global in nature, with new markets and growing regions emerging in countries around the world. In fact, it could also be called a Supply Web, given the interconnectedness of the supply chain in our industry.

New technologies have become a powerful force in reshaping our farms, processing and receiving, and in our connections with consumers. Retailers have been induced to implement new formats and concepts beyond the traditional store. Challenges in food safety point to how complex our world has become and make our goal of increasing consumption seem even more daunting. If we are to create value out of this complexity and redefine how we grow, we must face the future squarely.

The Challenge of Consumption

Consumer food shopping continues to reflect the economic uncertainty swirling around us. Supermarket profitability has reached new lows as the trend toward bargain shopping continues. The Food Marketing Institute reports that in 2011, consumers reduced their shopping trips to 1.69 trips per week, the lowest number in 62 years. Increased consumption seems an obvious solution to improve prosperity for retailers, suppliers and everyone in between. However, we have learned from experience that there is no magic formula. Increasing consumption is hard; the flat numbers over the past 20 years have certainly driven that point home.

Despite this uphill battle, the stars appear to be aligning for produce. We are at a tipping point where we're starting to see major shifts in demand for fresh produce on menus — and not just in the United States. In country after country around the world, healthy diets including fruits and vegetables are being promoted at the highest level of government and in public and private partnerships. Just one example is how PMA's Chilean Country Council joined together with Chile's First Lady, Cecilia Morel, in an effort to promote healthy fruit consumption in schools.

Here in the United States, the Department of Agriculture has been an important advocate for increased consumption of fresh fruits and vegetables, currently testing its $20 million Healthy Incentives Pilot, which is set to increase fruit and vegetable consumption among Supplemental Nutrition Assistance Program recipients. First Lady Michelle Obama is indeed moving, with the creation of the Partnership for a Healthier America. She recently shared a stage with retail executives whose companies — including Walmart, Supervalu, Walgreens and independents Browns, Calhouns and Kleins — signed commitments to bring fresh and healthy foods into urban food deserts.

Yet despite such activity, consumption is still not moving in the right direction. A Johns Hopkins survey reports that consumers are simply not eating enough fruits and vegetables. Fruit consumption is steady, but according to the survey, even counting french fries, vegetable consumption is headed in the wrong direction. Where's the missing link? We must find the answer, because we are about to confront novel challenges as a new generation of consumer emerges into the marketplace.

A New Marketing Age

Part of the answer may come in the form of a quiet revolution taking place all around us that significantly impacts our ability to connect with consumers. Welcome to the world of Consumer 2.0, the digital native, the first generation of consumer truly different from their parents. Coined by Michael Prensky back in 2001, the terms “digital native” and “digital immigrant” illustrate the differences between consumers who were born and grew up in the digital age and those who had to adapt to the Internet as adults.

The digital native, born between 1980 and 1994, has never known a world without Internet access and the ability to interact globally with multiple sources. They're already changing the landscape by contributing to the rise in single-person households. In the United States alone, this market is 90 million strong. They are the most sophisticated, connected consumer our supply chain has ever seen.

‘Research tells us that today's consumer prefers to hear what to eat rather than what not to eat.’

This age group represents challenges as well as potential. According to the University of Kentucky, only 25 percent of them eat five servings of fruits and vegetables a day. Similar low consumption rates for this age have been reported in other countries around the world. On the upside, some market observers believe this group will contribute to the growing rise of breakfast for restaurants as well as the grocery take-home market.

They are the customer of our future, so we must ensure we speak their language. This multitasking consumer is totally immersed in a culture of information sharing and is used to creating content rather than passively being communicated to. They may be young, but their global connections have made them sophisticated beyond their years. They make purchasing decisions not so much in the real world, but through social networks.

These complex consumers aren't just purchasing food; they're evaluating their food choices. Produce isn't a simple commodity. This is a key point industry must understand, to better understand the consumer. Their search for authenticity considers health and wellness, locally grown, fresh, and sustainable. The story influences the purchase. To reach them, retailers are redefining the shopping experience through social media and connecting the consumer to their brands in both the real and virtual worlds. As an industry, it's essential for us to connect our story with these digital natives.

Moving Forward

So how do we build these connections? Consider how quickly social media has changed the way consumers interact with the marketplace, and certainly how retailers and foodservice operators look at connections. From online reviews to food bloggers to food truck tweets, there are new tools in the marketing toolbox.

Though traditional marketing rules have changed forever, the tools aren't as thorny as they seem. The challenge here isn't the in the why, it's in the how. You start where you always have, with your business plan. Social media is an exciting, interactive, engaging delivery vehicle, but no marketing campaign begins by choosing the delivery vehicle first. Putting together the right tools under a well-thought-out marketing plan can help create an identity, take back a brand, develop new relationships and enhance existing ones.

The first rule of marketing is to find out what's important to your audience. Research tells us that today's consumer prefers to hear what to eat rather than what not to eat. Retailers are responding by integrating health merchandising and messaging into the physical store as well as in their online presence. Using all of our tools will help us to stay connected to consumer trends, understand what those trends mean to our business and respond to consumer demands. We must defy a commodity classification that says we're not unique, that we have no story.

Our story is one of connections, collaboration, community, renewal and innovation. We must strive to stay just a bit ahead of where our business is going. We must anticipate the new paths we need to travel to get there. It may be a bit intimidating, but we are an industry that knows how to deal with intimidating circumstances — we would consider anything else boring. As we face this brave new world and grow together, let's not just confront, but also seize, our future.