Use Produce Quality as a Tool to Overcome Price Increases
By iFoodDS Team
December 6, 2021
Fresh produce prices have been increasing throughout 2021 due to many different factors, from labor shortages and supply chain logistical issues to weather and rising transportation costs. While these are all valid reasons for produce inflation, a recent Deloitte study shows that many consumers feel prices have risen higher than “justified.” Grocery retailers do their best to provide fresh fruits and vegetables at a fair price, yet it’s difficult to mitigate negative consumer perceptions when prices continue to increase.
The majority of factors driving inflation are out of retailers’ control, but the solution might be within their control. If you’re concerned about customer satisfaction, the answer may be to focus on providing the best quality produce to your shoppers.
It’s not simply an issue of price. The Deloitte study also revealed that consumers are concerned about perishability. 60% of shoppers believe fresh food’s shelf life has decreased recently, and 72% consider food waste when making purchase decisions. While supply chain issues may be contributing to increased perishability, it could also be because consumers’ shopping habits have changed since the COVID-19 outbreak.
The Deloitte study found that consumers are still making less frequent trips to the grocery store than before the pandemic. According to this study from the NPD Group, shoppers are spending more during each trip as well. These shopping habits translate to a need for increased shelf life.
Consumers cannot stock up on fresh fruit and vegetables to the same degree as frozen food. However, while frozen food is gaining market share, fresh still dominates. An impressive 90% of consumers surveyed by Deloitte say eating fresh food makes them happy, compared to just 40% for frozen. It’s clear that consumers are still drawn to fresh produce, despite shelf life and price concerns.
Strategies to Increase Produce Quality
As a fresh produce merchant, what can you do to ensure the best quality fruits and vegetables for your shoppers? There are a few different strategies you can employ.
Improve Inventory Management
Fruits and vegetables should ideally be shipped out in order of pack date or harvest date so that the oldest produce gets put on the shelves first. This will help in maximizing shelf life for all of your products. Trying to manage this manually will be tedious and subject to human error. Consider implementing a digital solution such as PTI (produce traceability initiative) labels. There are many benefits to PTI compliance, including full transparency into the supply chain and the ability to traceback and traceforward instantly. PTI labels include information about the pack date, quantity and weight, country of origin, packer or shipper name and location, and the Voice Pick Code. All of this data is stored in an electronic barcode, which makes inventory management easier.
Additionally, investing in a solution that offers PTI-compliant labeling will help you comply with the proposed FSMA Rule 204 from the FDA, planned to go into effect in 2024. Early compliance enables a smoother transition and builds consumer trust.
Validate Your Distribution Centers’ Quality Controls
A study from the Royal Society found that the majority of produce quality issues only become visible at the grocery store. Researchers cited a study from the University of Florida Research Center for Food Distribution and Retailing to illustrate this point:
“Full truckloads of product were subjected to 4-hour delays in pre-cooling as well as no pre-cooling then sent from across the USA to a retailer for retail sale. The study showed that, even where there was almost 92% waste, the problem only became visible at the retail store.”
Consumers usually blame retailers when food spoils on the shelves. The reality is that these issues often start early on in the supply chain but may not be caught until much later. This is an important insight for retailers and makes the case for implementing a validation step in your quality control processes. Your retail QA team should perform additional inspections at the store upon receipt of shipments to verify the effectiveness of DC quality controls.
DCs should also consider performing tests to evaluate average shelf life for different commodities. This would give you valuable data that can transform your shelf life management practices. In other words, the retail and DC teams should be working collaboratively and sharing as much information as possible to help achieve greater quality. Instead of placing blame on any one step in the supply chain, focus on how you can holistically manage produce quality across the supply chain.
Trend analysis is more difficult with data that’s recorded manually. Implementing a more automated solution that includes analytics and reporting tools could help DCs and retailers collaboratively solve quality issues.
Increase Inspector Efficiency
Retailers rely on their inspectors to accept only the highest-quality produce, but have you evaluated whether your inspectors have the tools and training to do their jobs well? Here are some questions to ask as you analyze inspector efficiency:
- Do you have a database of images to illustrate acceptable product thresholds? This can help with training new inspectors and also takes some of the pressure off of veteran inspectors.
- Is data scattered in different places or stored in one centralized location?
- How long does it take to write a report when issues are identified? Can you make this process any quicker or easier?
You should also take a deeper look at past inspection data and identify trends that might help you better allocate your inspectors’ time and resources. For example, if you know certain commodities usually have issues, or have issues at certain points in the season, your inspectors can devote more attention to these commodities at critical points throughout the season.
Lastly, consider ways to make your inspection processes more efficient. Do you have a digital data collection process, or are you still relying on paper? Technology can enable your inspectors to instantly log any issues from a mobile device rather than going back to their office to fill out paperwork. This keeps them on the floor inspecting and boosts their effectiveness.
Build a Culture of Quality in Your Grocery Stores
Even if you take steps to improve your inventory management and inspection processes, you can still have some residual quality issues. Your in-store team needs to work collaboratively to manage the quality of produce on the shelves. The key components in any QA program, whether formal or informal, include:
- Efficiently managing storage conditions, including proper temperature, humidity, and refrigeration. Even as little as an hour outside of refrigeration can reduce the shelf life of certain commodities by days.
- Culling produce daily, twice a day if possible. It’s unrealistic to expect employees to immediately find and remove produce with issues, and you wouldn’t want to reduce your sales by throwing away produce with minor defects. However, visibly spoiled food is a major deterrent to your customers and should be dealt with on a daily basis. If you don’t have a dedicated produce quality department, consider training employees in other departments to fill this gap.
- Rotating inventory frequently. Don’t wait to sell most of the produce currently on the shelves before you add fresher inventory to the mix. Again, customers will be turned off if they see shelves filled with older produce. Their perception of your store may be that you have lower quality overall.
- Tracking inventory movement and average shelf life. You won’t have visibility into anything you aren’t tracking, so make sure you’re keeping a record of inventory movement and the shelf life for different commodities. After collecting several months’ worth of data, take a look at the aggregated data to see if you can identify any larger trends. This data will help you get a feel for how quickly certain commodities sell and how much time you have to sell them before they start to deteriorate. This will inform your buying decisions in the future so you’re ordering the right amounts of the right commodities at the right time.
Technology can help make your QA program more efficient. A growing trend is a “bring your own device” (BYOD) policy, where grocery stores allow their employees to use a personal device for work related tasks. In the future, employees may be able to keep track of produce quality using mobile devices.
As inflation raises the cost of food for consumers, improving your produce quality and reducing food waste will help you protect your brand.
Empower Your Quality Assurance Team with Tools from iFoodDS
If you’re looking for a more efficient way to monitor produce quality, consider our Quality Insights tool for grocery retailers and distribution centers. It completely digitalizes your logs and inspection processes and stores data securely on the cloud. This frees up your employees’ valuable time and gives you real-time visibility into your data. Learn more about Quality Insights by requesting a free product demo.