Keeping Small Business in the Grocery Supply Chain with Tech-Enabled Wholesale Distribution
April starts this week and the world seems to have been completely upended by COVID-19.
The food industry was in the middle of a massive shift even before this era: a shift in consumer demand away from consolidation in the food system. Consumers have grown more conscious and aware. They want fresher, better-for-you food products with functional health benefits. They want personalization. And they want it all to be affordable and accessible with the click of a button.
A new wave of consumer behavior meant a new tech-enabled distributor was needed to meet the needs of consumers’ favorite new products as they made their way onto grocery store shelves. We started Pod Foods in 2017 to provide a distribution solution for the long-tail of emerging brands who at an early stage of growth needed transparency and affordability to thrive and grow in retail.
With a never before seen global situation drastically altering supply chains, access to capital, and buying behaviors of the entire nation, emerging brands everywhere are forced to fall back on what they do best — adapt and adjust quickly. Pod Foods is now accelerating our mission to create the future we want to see for the food industry and CPG distribution.
The Changes We’re Seeing So Far
- Heightened demand and changes in trending products
Grocery retailers, with quickly emptying shelves, have been at the front lines of exposure, while brands of all sizes have been working overtime to meet heightened consumer demand and keep product stocked. But even as shelves empty, clear shifts in buying behavior are apparent.
Trends have taken a sharp turn in favor of shelf-stable, dry goods and immune-boosters. Since the start of the pandemic, our data show staple products like milk, bread, and granola receiving a 500% uptick in demand while ready to drink products and fresh, prepared meals saw an overall decrease of up to 39% in recent weeks.
2. Surge in online retail
Consumers are looking out more than ever for doorstep delivery solutions as online retail struggles to keep pace with demand. Brands are refocusing their energies on Direct To Consumer as the internet becomes one of the main food sources for many.
3. Lack of viable discovery solutions and a focus on existing/repeat business
Traditional offline sales processes, demos, and discovery trade shows like Expo West that have become fundamental to new product placement and consumer discovery have been halted.
In the coming months, keeping the shelves stocked is the number one priority, but it leaves many to wonder what promising new and emerging brands can do to be discovered and how retailers can source the most relevant items moving forward.
The Changes We Predict
Ultimately, the industry is driven by consumers. The changes we are seeing now will find a new equilibrium. This is what we think will happen over the next few months and throughout 2020:
- Heightened awareness around health and sustainability will see consumers continue to demand better-for-you products and locally produced brands.
- A segment of consumers will become more price sensitive around these products as incomes fall and spending contracts.
- Direct to consumer or pick-up solutions for all retailers will become a requirement.
- There will be fragmentation in the supply chain as big food and traditional distributors double down on their most profitable business.
- The industry will need to adapt to accommodate new technologies and remote working across the board.
The Future We’re Contributing To
The traditional distribution system was conceived during a time of great need: WWII. The government created jobs for workers in food manufacturing plants; shipping systems were designed to send packaged food to soldiers across the world. This system is well equipped for today’s increased demand as it is meant to distribute the highest volume brands to retailers.
But the problems with traditional distribution in today’s world are also becoming hyper-apparent: the system is not optimized for small business and it’s not leveraging data and technology.
If we as a society want small food businesses and diversity in grocery to survive and thrive, and if we want to introduce more transparency and connection throughout the grocery supply chain, we need to create that infrastructure and future now.
Pod Foods is pioneering this new infrastructure.This is what we’re doing now at Pod Foods:
- Serving small and independent business
The strength in our economy lies in small business and the strength in our food supply chain lies in its diversity. It is imperative that all of us do our part to keep local and independent businesses afloat as they work to ensure that our grocery store shelves remain stocked.
As we champion small brands, we are also expanding our definition of what that means. Pod Foods can service brands in any region, in all categories, including packaged produce and larger independent brands that are looking out for nimble distribution and heightened control.
- Meeting consumer demand even as it shifts (health, accessibility, uniqueness)
Our solution allows retailers a full end-to-end distribution solution for the healthier, unique, up-and-coming brands consumers have grown accustomed to. Ultimately, as brands and retailers transact with more transparency and pricing control, the free market drives down shelf prices for consumers, keeping these products accessible and affordable.
- Improving the supply chain with technology and connectivity
Food distribution has long lagged in its adoption of technology, but as the world comes online in the face of stay-at-home orders, technology and transparency will become the heartbeat of food distribution. The appetite for data has always been strong, and it’s time for retailers and brands to leverage real-time sales information and analytics insights to make sound decisions quickly as they execute their daily tasks.
If you’re a brand or a retailer looking for a nationwide, flexible distribution solution, get in touch — we are here to support.
Pod Foods (@podfoodsco) is a tech-enabled distributor for emerging food and beverage brands.