A fresh take for fresh food

Retailers and product suppliers point the way forward

Sales of fresh food at retail stores continue to stay elevated in 2021 compared with prepandemic levels, despite the continued recovery of the restaurant food service sector. But fresh food retailers and product suppliers won’t be able to just coast on their recent success. They are already facing new challenges. Explore the results of our survey of industry executives to see what’s coming next.

The 50,000-foot view

Deloitte and FMI—The Food Industry Association (FMI) recently polled 29 food industry companies and facilitated a roundtable discussion of senior executives who are leading fresh strategy at their companies. While the results can only be considered directional, the respondents did represent more than 20% of all grocery store locations in the United States and included product suppliers from a variety of fresh categories. Executives from these companies shared their strategic priorities, views on fresh food trends, and how they’re preparing for what’s next.

So far, it appears the shift toward eating at home is here to stay, which is great news for the industry. Most companies rate the fresh category as having the highest strategic importance to their overall revenue growth plans during the next one to three years. The industry isn’t shy about prioritizing their fresh food investments, either. More than 80% of survey respondents indicated that they are adding additional floor space, product offerings, and/or staff. But there are challenges that lie ahead.

A fresh take for fresh food

Fresh defined

Fresh includes fresh fruits and vegetables, meat, seafood, bakery, floral, and deli purchases. Fresh food is food that has not been preserved and has not yet spoiled. Fresh food does not include shelf-stable products or ones that do not have cold chain requirements.

Fresh priorities

Attracting labor and maintaining safety are the top-ranking priorities for the industry. Retailers are also asking for more from their product suppliers. Given the shortage of labor, suppliers are being asked to take on more preprocessing and value-added work prior to product entering stores. They are also being leaned on to provide richer digital content to fuel e-commerce shopping, as well as to provide taste and packaging innovation. When it comes to strategic and competitive themes, retailers prioritized three areas:

Staying ahead of fresh food trends

It is an exciting, yet challenging time for the food industry as consumers move counter to multidecade trends and eat more food at home again. Hopefully, the investment in fresh will pay dividends for years to come. But one thing seems quite clear: Food retailers and product suppliers are likely going to need to depend on each other and work more closely together than ever before in order fully seize the opportunity.

Download the full report to learn more.

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