The food industry showed up in Las Vegas last week with a clearly defined gaming plan. But it wasn't for slots or roulette.
Retailers exhibited a two-pronged approach to their businesses — on the one hand, monitoring daily economic swings and adjusting responses accordingly; on the other, planning big bets on how to resolve long-term challenges ranging from sustainability to consumer and management generational shifts.
These themes emerged from an FMI Show marked by new energy and a new location in the nation's gambling capital (see stories throughout this issue). The food industry gathered here in the midst of one of the most confusing business climates in recent history, a point underscored in FMI's educational sessions. Consumer confidence is registering low as food prices soar, credit is squeezed and jobs are less secure. Yet, supermarkets are still recording robust sales growth and profits.
The industry's response to today's economy is shaping up as a block-and-tackle approach. Retailers are making opportunistic moves, holding off on some price increases here, launching a new price promotion there. It's a strategy that reacts as needed to a moving target, today's economy, while waiting to see what's around the corner.
However, executives realize a different stance is needed for some key longer-range challenges that can't be left to chance. There was much talk last week on and off the trade show floor about the need for comprehensive solutions on food safety, and FMI promoted its new portal aimed at improving communication on recalls. There was more buzz about the next stages of sustainability as suppliers and retailers showed more sophistication intheir initiatives.
Likewise, the challenges emerging from generational shifts are getting more play. Denise Morrison of Campbell Soup Co. pointed out during an FMI session that Generation X is far smaller than the Baby Boom group — a fact causing concerns over a squeeze on the future availability of management talent. She called for companies to re-examine their cultures and “be disciples for the food business” to attract a new generation of associates.
Connecting with new generations of consumers is emerging as an equally important goal. In another FMI session, Lynn Dornblaser of Mintel International urged supermarkets to make stores more attractive to Millennial (21-30) consumers, who, for example, want more exciting displays and new kinds of sampling, she said.
Reaching out to younger consumers also involves meal merchandising, said Tim Hammonds, president and chief executive officer of FMI, during the Speaks presentation. Shoppers raised on eating at restaurants are now testing more in-home dining in this economy, but they haven't yet mastered the discipline of planning and preparing meals, he said. “We need to educate the next generation,” he said.
For now, retailers appear to have achieved a good balance between focusing on short- and long-term issues. But they need to stay vigilant, because challenges on the horizon can quickly jump to the front burner. That message was delivered clearly in plenty of conference sessions last week, and in this case, what is said in Vegas should not stay in Vegas.