With the acquisition Whole Foods last June, Amazon made a big step in the offline world of fresh produce. These days the suppliers of the retailer have to work with this new reality, but the rise of Amazon in fresh produce will also affect many others in the fresh produce industry, whether they are doing business with WholeFoods or Amazon, or neither. At the Syngenta We Love Tomato Event, the effects of the rise of e-commerce on the fresh produce chain were shown and growers were urged to create a recognizable, branded product to deal with this new digital world.
Omnichanneling
Pierre Escodo, editor for Eurofresh Magazine, showed the rise of e-commerce in numbers in his presentation at the Syngenta We Love Tomato Event. Currently consumers may be hardly willing to buy fresh produce online, but the global market is growing.
China is leading in this development and has the most mature e-commerce market worldwide. In China, fruits are the most frequently purchased category online. Big online players are betting on the produce category to grow heavily: Alibaba, Tmall, JD.com, YHD.com and WeChat – all are investing in their fresh produce platforms. This is not done only digitally – on the contrary. Home deliveries are combined with the opening of fresh produce stores like HemaFresh, 7Fresh and Pagoda Fruit.
Fresh in focus at the new Chinese stores Hemafresh (Alibaba) and Pagoda
Combining on- and offline
It creates a multichannel retail market: home deliveries, combined with brick and mortar stores. “The brick-and-mortar retail market will not be taken over, but e-commerce is another distribution type to look into”, Pierre stated.
The retail market is not only affected by the current players going online, but also by the digital players going off-line. Outside of China, Amazon is doing this as well. Last year they took over retail chain Whole Foods and opened up their own offline store: Amazon Go. This last one stands out as a non-cash, non-cashier store and is showing how multi-channeling will become more and more real in the near future. Just this year they announced the delivery of Whole Foods Groceries to your house in only two hours. Consumers are to buy produce online and in brick and mortar stores.
Voice control urges you to create a brand
“Hello Alexa, I’m out of milk. Please order some, and get some bread too.” This has become reality for over 5 million people in the east of the US. With Amazon Echo they can order products by voice control. The order will be delivered to your doorstep and in the near future to your cooled mailbox, or even to your fridge: Amazon Prime and Amazon Key are to be remotely granted access to realize in-home delivery.
According to Edwin Paul Vels, retail expert, this is something to take into account. “A shopper orders milk by voice. Consumers aren’t ordering by the looks of a product anymore. Amazon suggests which milk they’ll get, based on ordering history and preferences.”
Artificial intelligence and customer focus
E-commerce might be a whole new world for the fresh produce industry, but the consumers of the future are born and raised in a fully digital world. Michiel Meekels pointed out how millennials are communicating on social networks with companies. “65% of consumers prefer using a messaging app and 50% of them would make a purchase via them”, he shows. Currently this is used already by for example pizza companies, enabling you to order digitally via WhatsApp.
According to Michiel, the rise of Silicon Valley in food definitely is not a temporary hype, but a trend: changing the way we live and the attitude we have towards something. “What you see with millennials is how important convenience is to them. In their use of techniques, they ask to solve their needs, their problem. 'No matter the cost, I’ll pay for it.' Neither Deliveroo nor Airbnb are the cheapest solution in the market, but they are convenient and therefore worth it.”
How to stand out online?
But how do you stand out in a market where the shopper has access to hundreds, maybe even thousands of products and where they buy food not by looking at it but by voice control? How to reach out to this willing-to-pay-super-digital-millennial and how to end up in their ‘Re-buy’ list?
According to Edwin Paul Vels, it urges suppliers in fresh produce to get away from the commodity market, to help your shopper recognize your product. “Prepare for the online shopper – start building a brand”, he stated.
Edwin Paul Vels, FMCG Consulting
Answer to trends: start with a brand. And show the health claims of tomatoes - but that's not necessarily an answer to the digitization of the industry.
Not easy
Rafa Povo, expert in branding in fresh produce, agrees with this vision and adds that it’s not only in the voice-controlled world that a brand will help you. “Most tomatoes on the online shelves are sold without a brand name. A consumer will have to choose via a photo. This doesn’t represent the final tomato. If you can make them choose via a brand name, you’ll do better. Also this will better your position at the retailer. Check out the shelves: Coca Cola is never missing – neither should your brand be.”
Rafa Povo, Matchpoint packaging and communication specialist
“It is not easy”, he warned, “but at the key moment, when the purchase occurs, your brand is what will help you. A customer has to trust what they buy, so their loyalty is very important. This is guaranteed by recognition and the memory of the product – all built around your brand.” According to Rafa, the Syngenta tomato Kumato is one of the few brands in the tomato industry promoted broadly. “It is not just labeling the product: it’s creating a full picture of the brand – on the socials, on the television. It is an investment – also in advertising. Showing your good product in the right packaging in the right brand name is how to have the consumer relate to your brand.”
