{"id":10841,"date":"2021-07-13T17:42:05","date_gmt":"2021-07-13T16:42:05","guid":{"rendered":"https:\/\/yamatoscale.co.za\/public\/?p=10841"},"modified":"2022-03-11T11:29:00","modified_gmt":"2022-03-11T11:29:00","slug":"how-the-food-retail-landscape-is-changing-and-what-manufacturers-need-to-do-to-keep-up","status":"publish","type":"post","link":"https:\/\/yamatoscale.co.za\/public\/how-the-food-retail-landscape-is-changing-and-what-manufacturers-need-to-do-to-keep-up\/","title":{"rendered":"How to keep up with the changing food retail landscape"},"content":{"rendered":"<p>[vc_row][vc_column][vc_custom_heading source=&#8221;post_title&#8221; tag=&#8221;h1&#8243; size=&#8221;sz-l&#8221;][vc_column_text]Cast your mind back to 11th March 2020. This was when <a href=\"https:\/\/www.bbc.co.uk\/news\/world-51839944\" target=\"_blank\" rel=\"noopener noreferrer\">the World Health Organisation labelled Covid-19 a pandemic<\/a>. What happened next was reminiscent of a scene from a dystopian movie. People up and down the UK went into an irrational panic, rushed to supermarkets and cleared the shelves.<\/p>\n<p>The irony is that there was plenty of food to go around.<\/p>\n<p>But panic buying \u2013 a typical human response to a crisis \u2013 is not caused by food shortages but by fear.<\/p>\n<p>The strain on Britain&#8217;s &#8216;big four&#8217; supermarkets gave oxygen to the idea that shorter supply chains and home deliveries are the future.[\/vc_column_text][vc_single_image image=&#8221;10842&#8243;][vc_column_text]But, as we return to a &#8216;new normal&#8217;, while accepting that Covid is a disease that&#8217;s here to stay, it is clear that the UK&#8217;s leading supermarkets will continue to have a crucial role to play when it comes to feeding the nation.<\/p>\n<p>This blog will look at how the food retail landscape is changing, how food suppliers are adapting, and what manufacturers need to do to stay ahead of the game.<\/p>\n<ul>\n<li><a href=\"#key\"><u>Key changes to the food retail landscape<\/u><\/a><\/li>\n<li><a href=\"#how\"><u>How are supermarkets adapting?<\/u><\/a><\/li>\n<li><a href=\"#what\"><u>What do food manufacturers need to do to adapt?<\/u><\/a><\/li>\n<\/ul>\n<h2 id=\"key\">Key changes to the food retail landscape<\/h2>\n<p>First of all, it is important to state that the UK&#8217;s supermarkets are going nowhere soon.<\/p>\n<p>In April this year, <a href=\"https:\/\/www.thegrocer.co.uk\/results\/city-snapshot-tesco-profits-sink-by-28-as-covid-costs-bite\/655073.article\" target=\"_blank\" rel=\"noopener noreferrer\">Tesco reported a huge increase in sales<\/a>, from its stores and its online operations \u2013 which it adapted to meet growing demand. At Sainsbury&#8217;s, <a href=\"https:\/\/www.theguardian.com\/business\/2021\/apr\/28\/sainsburys-slumps-to-261m-loss-on-back-of-covid-costs\" target=\"_blank\" rel=\"noopener noreferrer\">grocery sales rose 7.3 per cent, while online sales more than doubled<\/a>.<\/p>\n<p>Profits at both supermarkets were hit hard by Covid-related costs. But, the point is, people still want to buy their groceries from supermarkets.<\/p>\n<p>However, there has been a big rise in the popularity of hyper-local and alternative food projects. In just two months, over 500 British veg box providers, with waiting lists ranging from 160 to 6,700 customers,\u00a0<a href=\"https:\/\/foodfoundation.org.uk\/wp-content\/uploads\/2020\/05\/Food-Foundation-COVID-19-Veg-Box-Scheme-report.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">delivered 3.5 million boxes<\/a>\u00a0of fresh produce to homes \u2013 more than double their usual sales.<\/p>\n<p>Local initiatives such as box schemes and online farmers&#8217; markets diversify what we eat and how we get it. This strengthens the resilience of the food system by reducing our dependence on one particular retailer \u2013 the supermarket.<\/p>\n<p>Retail analysis from IGD developed 10 hypotheses for how grocery retailing could change in a post-pandemic world. For any business involved in the process of getting food from farm to plate, these predictions are worth a look.[\/vc_column_text][vc_single_image image=&#8221;10845&#8243;][vc_column_text]<\/p>\n<h2 id=\"how\">How are supermarkets adapting?<\/h2>\n<p>Given that supermarkets are major customers for many food manufacturers, it is critical to know how they are changing.<\/p>\n<p>Supermarkets base their business model around the premise that most customers want to do one big shop every week. While this seems to be holding up, at least as far as online sales show, anecdotal evidence suggests that physical stores are nowhere near as busy as they were pre-pandemic.<\/p>\n<p>Given that full-year sales continue to increase for the major supermarkets, it&#8217;s unlikely that they will make any radical strategic changes in the near future.<\/p>\n<p>However, it would be foolish to think that changes are not being discussed behind the scenes.<\/p>\n<p>Some retail commentators have suggested that the big supermarkets may have to host farmers markets in-store, to inject theatre into the shopping experience and attract shoppers that way.<\/p>\n<p>If people are moving away from a sizeable weekly food shop, then everyday essentials may have to be placed close to supermarket entrances to lure people inside.<\/p>\n<p>It has even been suggested that supermarkets will need to introduce new, specialist aisles, though precisely what these should stock is up for debate.<\/p>\n<p>For the moment, food manufacturers can take some comfort in the fact that many European farmers prefer to sell their produce to supermarkets, despite retaining less than a third of the retail price for their produce. This is because it is more efficient and reliable.[\/vc_column_text][vc_single_image image=&#8221;10844&#8243;][vc_column_text]In what is a highly regulated industry, the supermarkets themselves will also want to continue to do business with reputable food processors because they can depend on them to supply properly inspected, hygienic and safe food in the correct weights and measures.<\/p>\n<p>However, some changes will happen. Here&#8217;s a list of things to look out for:<\/p>\n<ul>\n<li>Supermarkets will need to make their physical stores more flexible to accommodate extreme trading cycles.<\/li>\n<li>There will likely be a stronger focus on operational efficiency, especially given that an average UK supermarket stocks only one day&#8217;s worth of fresh produce.<\/li>\n<li>Automation and robotics are almost certainly on the way in, with a move away from the labour-intensive retail theatre, over time.<\/li>\n<li>Online food shopping will continue to grow.<\/li>\n<li>Supermarkets will invest heavily in expanding their fulfilment capacity for online sales.<\/li>\n<li>New entrants into online food shopping, attracted by the enhanced growth opportunities.<\/li>\n<li>With continuing political and financial uncertainty and concerns about how the pandemic will play out, cash-rich companies may seize the opportunity to embark on M&amp;A activity to achieve economies of scale.<\/li>\n<\/ul>\n<p>Indeed, in early July, the UK&#8217;s fourth-largest supermarket <a href=\"https:\/\/www.bbc.co.uk\/news\/business-57705253\" target=\"_blank\" rel=\"noopener noreferrer\">Morrisons agreed to a \u00a36.3bn takeover<\/a> by Fortress Investment Group, the US private equity owner of Majestic Wine. While there are still hurdles to be cleared, Morrisons&#8217; board has unanimously recommended the offer.<\/p>\n<p>The messaging from Fortress is that this will be a long-term investment and that it is not looking to precipitate dramatic change. It has said it would support the existing strategy of Morrisons&#8217; management. Areas for development include the supermarket&#8217;s online offering.<\/p>\n<p>Fortress has also sought to pre-empt and assuage any concerns about the impact its takeover would have on the business, its workforce and supply chain. But suppliers to the supermarket chain should view everything that is said with caution, and be prepared for sudden changes.<\/p>\n<h2 id=\"what\">What do food manufacturers need to do to adapt?<\/h2>\n<p>Looking ahead, the issue is whether the food manufacturers and supermarkets can rely on the availability of raw materials imported from the EU and around the world. And this is where food manufacturers potentially face the most pressing issues.<\/p>\n<p>In Britain, only around <a href=\"https:\/\/www.gov.uk\/government\/statistics\/latest-horticulture-statistics\">17 per cent of fruit and vegetables are grown locally<\/a>, with the rest coming from cheap international trade.[\/vc_column_text][vc_single_image image=&#8221;10846&#8243;][vc_column_text]Presently, it is unclear how dependable the supply chains of raw materials will be. <a href=\"https:\/\/yamatoscale.co.za\/public\/whitepaper\/the-impact-of-covid-19-and-brexit-on-the-food-processing-industry\/\" target=\"_blank\" rel=\"noopener noreferrer\">Covid-19 and Brexit have already impacted workers&#8217; availability<\/a>, and there may be longer-term problems in producer countries due to Covid disruption.<\/p>\n<p>Transport is another potential area of concern. If logistics companies suffer due to staff shortages, food manufacturers may face raw material shortages, <a href=\"https:\/\/yamatoscale.co.za\/public\/how-to-overcome-brexit-challenges-in-your-production-line\/\" target=\"_blank\" rel=\"noopener noreferrer\">impacting their productivity<\/a>.<\/p>\n<p>Therefore, food manufacturers need to carry out thorough audits of their supply chains, identify weak links, and line up alternative suppliers.<\/p>\n<p>Another area of concern is to make sure you have the right equipment and that your production lines are flexible enough to switch to processing different products, as swift changes in consumer demand are almost inevitable.<\/p>\n<p>The starting point here, is to formulate an <a href=\"https:\/\/yamatoscale.co.za\/public\/equipment-maintenance-plan-a-guide\/\" target=\"_blank\" rel=\"noopener noreferrer\">Equipment Maintenance Plan (EMP)<\/a> to ensure your machinery is fit for purpose and in good working order. Given the likely increase in unpredictability, ensuring you have a stock of the major spare parts seems sensible. To ensure that you are as prepared as you can be, the best thing to do is work out who should be in charge of spare parts management and <a href=\"https:\/\/yamatoscale.co.za\/public\/the-benefits-of-spare-parts-management-for-your-production-line\/\" target=\"_blank\" rel=\"noopener noreferrer\">how to establish a programme for managing spare parts effectively<\/a>.<\/p>\n<p>Make sure that you know <a href=\"https:\/\/yamatoscale.co.za\/public\/how-do-i-keep-my-checkweigher-operating-smoothly\/\" target=\"_blank\" rel=\"noopener noreferrer\">how to keep important machinery such as checkweighers working correctly<\/a>.<\/p>\n<p>And given the intense scrutiny that food manufacturing is under, it&#8217;s critical to carry out a <a href=\"https:\/\/www.food.gov.uk\/business-guidance\/hazard-analysis-and-critical-control-point-haccp#food-safety-management-procedures\" target=\"_blank\" rel=\"noopener noreferrer\">Hazard Analysis and Critical Control Poin<\/a>t (HACCP) analysis. This will <a href=\"https:\/\/yamatoscale.co.za\/public\/an-8-step-guide-to-metal-detecting-in-the-food-industry-and-why-its-so-important\/\" target=\"_blank\" rel=\"noopener noreferrer\">help you identify locations where contaminants could enter the production line and decide on the appropriate inspection equipment you need, such as metal detectors<\/a>, to eradicate the risks.<\/p>\n<p>If your HACCP identifies contaminants that can&#8217;t be detected by standard metal detectors, such as bone, plastic and glass, then you&#8217;ll need to install an x-ray machine.<\/p>\n<p>X-ray systems go a step further by offering the capability to detect metal and non-metallic contaminants such as glass, mineral stone, calcified bone, high-density plastics, and rubber compounds.<\/p>\n<p>Indeed, it could be that <a href=\"https:\/\/yamatoscale.co.za\/public\/could-x-ray-become-the-product-inspection-standard-in-manufacturing\/\" target=\"_blank\" rel=\"noopener noreferrer\">x-ray becomes the product inspection standard in manufacturing<\/a> due to its superior functionality.<\/p>\n<p>One of the most advanced x-ray machines on the market is <a href=\"https:\/\/yamatoscale.co.za\/public\/yamato-scale-launches-its-most-advanced-x-ray-inspection-machine\/\" target=\"_blank\" rel=\"noopener noreferrer\">the YX20, which is flexible across all formats, can be programmed with unique algorithms that can accommodate special and one-off applications<\/a>, and its high-speed and wide-format widths suit any production environment.<\/p>\n<p>This is the type of flexibility that leading manufacturers need to consider in today&#8217;s fast-changing food market.<\/p>\n<h2>Looking ahead<\/h2>\n<p>So much has changed in one year. And it&#8217;s still changing. As the world evolves, the food supply chain is looking to the COVID-19 retail landscape to prepare for the future.<\/p>\n<p>As the IGD analysis showed, consumers are becoming increasingly savvy. The issue of plastic-wrapped vegetables in supermarkets will not go away, so manufacturers need to collaborate with their supermarket customers to develop alternatives.<\/p>\n<p>The winners will be those manufacturers willing and able to invest in their production lines, to the point that they are as future-proofed as possible. There is enormous emphasis on supermarkets&#8217; ability to be agile and willing to make changes on the fly, as consumer demand can shift overnight.<\/p>\n<p>Food manufacturers need to think of new ways of servicing these fast-moving changes, and those less willing to embrace fast-paced changed may find themselves lagging behind their rivals.<\/p>\n<p>If you need support in adapting to the changing demand of the food retail landscape in your plant, we can help. We offer a range of solution to help you improve quality and productivity and overcome any challenges you may be facing.[\/vc_column_text][vc_btn title=&#8221;Get in touch to speak to an expert advisor about what we can do for you&#8221; size=&#8221;&#8221; align=&#8221;centered&#8221; link=&#8221;url:https%3A%2F%2Fyamatoscale.co.za%2Fpublic%2Fcontact%2F|title:Contact||&#8221;][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The way we shop for food has changed radically over the last year. Manufacturers need to know how to adapt to the changes.<\/p>\n","protected":false},"author":1,"featured_media":10843,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10841","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/posts\/10841"}],"collection":[{"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/comments?post=10841"}],"version-history":[{"count":3,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/posts\/10841\/revisions"}],"predecessor-version":[{"id":12231,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/posts\/10841\/revisions\/12231"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/media\/10843"}],"wp:attachment":[{"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/media?parent=10841"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/categories?post=10841"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yamatoscale.co.za\/public\/wp-json\/wp\/v2\/tags?post=10841"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}