For Grocery Retailers, Automating Quality Processes Means Stronger Supplier Partnerships, Improvements in Product Quality, and Greater Consumer Loyalty
By Minos Athanassiadis
February 10, 2021
Over the last few years, new studies have provided consistent evidence that the quality of fresh produce in grocery stores has become increasingly important to consumers. Even before the consumer arrives in the produce section, they have likely already decided which store to shop at based on noticeable differences in produce quality.
Consumers are also changing the way they shop for groceries, with the COVID-19 pandemic contributing greatly to the acceleration of certain behavioral trends. In 2020, retailers witnessed more growth in e-commerce as consumers sought affordable, safe, and timely alternatives to in-person shopping. Curbside pickup, subscription boxes, and grocery delivery services experienced drastic expansion, and emerging studies are predicting many of these changes are here to stay. A recent Deloitte study found that 68% of younger, higher-income “contemporary” consumers had purchased at least some fresh food online versus only 9% of older “conventional” consumers. With so many consumers drawn to the ease and safety of online shopping, retailers will need to focus on delivering fresh, high-quality produce to both in-store and online shoppers in order to exceed consumer expectations and increase loyalty.
For grocery retailers, sourcing and selling high-quality produce means greater sales as well. Not only do shoppers spend more in the produce department when they are delighted by the quality and freshness of fruits and vegetables, but they also contribute to higher sales in other departments. Consistent, high-quality produce also has a strong effect on consumer perception. According to a 2018 study by McKinsey & Company, “There’s an undeniable halo effect: if shoppers perceive high quality in the fresh-produce department, their perception of the retailer’s other departments improves as well.”
Woolworths, the largest grocer in Australia with more than 1,000 stores, is one of many grocery retailers who has witnessed these trends. “Our customers are telling us that fruit and vegetables in particular from our fresh department are the most important thing when it comes to quality,” says Scott Davidson, former Head of Produce at Woolworths and now Managing Director of Woolworths’ BWS business. If retailers want to stand out in a competitive market, investing in the quality of their fresh produce is of the upmost importance.
Delivering consistently high-quality produce to consumers isn’t easy though. Many grocery retailers have inconsistent and inefficient inspection processes, a general lack of technology to help do the job, and limited visibility into the historical performance of their suppliers. Quality issues are often found after the fact, forcing grocers to choose between selling low quality product, spending extra labor to trim and cull product in store, marking it down to sell quickly, or tossing it. This in turn negatively impacts consumer perception and profitability. Missed quality issues and a lack of quality data also push retailers to make subjective decisions about suppliers. Not only does this make it difficult for retailers to foster positive supplier partnerships, but it also leads to unpredictable quality, increased shrink, customer dissatisfaction, and lower profits.
Technology can solve many of these problems. Food quality management solutions like the iFoodDS Quality Insights application automate the inspection process and use data to help grocery retailers strengthen supplier relationships, improve product quality, and bolster customer loyalty. The end result? Satisfied customers and increased sales throughout the store.
Grocery retailers know that inspection resources are limited. Prior to the COVID-19 pandemic, the food industry was experiencing labor shortages in food safety and quality roles, due in part to a lack of interest in these roles. “As older workers head toward retirement, the field is seeing a lack of interest among younger workers,” said AIB International Vice President of Operations-America Stephanie Lopez in an interview with Quality Assurance and Food Safety Magazine. “There is a general lack of interest in manufacturing and a lack of awareness among college students and recent graduates about careers in food safety.” This has led to a shortage of workers with the skills necessary to be successful in safety and quality positions.
In order to maximize the effectiveness and efficiency of limited quality control resources, inspectors need to be focused on potential problem areas. Having the ability to standardize across inspectors and distribution center locations can significantly improve inspection consistency. Retailers are also faced with the challenge of how to get novice inspectors up to speed quickly. By equipping inspectors with easy-to-use tools for quality scoring, novice inspectors can become pros in no time, reliably turning out expert-level inspections.
Woolworths has been using the iFoodDS DC Insights platform since 2013. For Brice Lamarque, Agronomy and Quality Manager at Woolworths, having the inspection process on a mobile device has also made the entire process more efficient. “All of our specifications are already on the device, so we can do those assessments much faster. We can actually flag certain products where we know we’re going to see some issues with them due to seasonality,” says Lamarque. By focusing on deliveries with a higher likelihood of issues, overall rejection rates will increase, and only high-quality produce will arrive in the store. This ultimately leads to less shrink and greater consumer loyalty.
With a digitized inspection process in place that enables consistency across distribution centers and inspectors, grocery retailers can start to drive supplier accountability by instantly sharing quality information with their trading partners and associates. A quality management solution like DC Insights bolsters these important conversations with online analytics that give instant access to trend reports and dashboards on quality, as well as supplier scorecards and benchmarking tools. Having the ability to compare the historical performance of suppliers results in more impactful, less subjective decisions over time. Furthermore, it fosters stronger relationships between retailers and their suppliers.
“It is a competitive market out there for quality produce and everyone wants the best for their stores,” says Todd Berg, Vice President of Product Management at iFoodDS, “but only those grocers who consistently verify quality and who share inspection data in real time with their suppliers will receive the very best.”
The value that consumers are placing on fresh produce is growing. Trends in consumer behavior are showing that not only do consumers choose their grocery store based on the quality and freshness of fruits and vegetables, but they also spend more when the quality is high. For grocery retailers aiming to stand out in a competitive market, delivering produce of the highest quality is crucial. As more shoppers move online for their shopping experience due to the COVID-19 pandemic, retailers will need to place an even greater emphasis on consistently supplying excellent-quality produce in order to retain customers. Digitized quality management solutions like the iFoodDS DC Insights application offer retailers the tools to foster better supplier partnerships, source the highest quality product available, and optimize inspection resources. All with the end result of increasing consumer satisfaction and sales.