Monday, October 31, 2016

What do cars and grocery have in common these days? If you answered lots of digital-driven innovation rocking the traditional model, then you read my mind.

A recent Economist article summed up all of the competing innovations in today’s car market – self-driving cars, intelligent cars, ride services like Uber and Lyft, car share services instead of ownership – as “The Race to Reinvent the Automobile.” A similar “race to reinvent grocery shopping” is underway as digital innovations in the marketplace compete for consumer’s attention, and the outcome depends on how consumers react and respond.

Retailers and suppliers are like observers at the racetrack, foot on the rail, racing form in hand, trying to figure out how to handicap the race – here’s a tool that will help.

Dueling innovations in the marketplace

Digital influence and online shopping options have clearly produced a significant uptick in the competition for share of both mind and wallet.

Digital influence is big – and bigger than many realize. It impacts 31% of food and beverage sales according to Deloitte. These influences include a wide range of communication platforms such apps, sites, and social media – from idea generator/sharers like Pinterest, AllRecipes, and Facebook, to savings apps like Ibotta and Cartwheel, to new information sources and transparency about food origins, health values, and prices, and even devices such as Amazon’s Echo (which puts Alexa in the middle of household conversations).

In addition, ecommerce now offers consumers a wide variety of online grocery options that make it possible to skip the trip down the aisles entirely for some or all of a household’s grocery purchases -- 40% of grocery shoppers have tried it according to Brick Meets Click research, and 21% use it regularly for at least some grocery purchases.

Online shopping options seem almost endless, and more keep appearing each day. Shoppers have:

Plenty of sources to choose from – Amazon, supermarkets, organics, farmers market-style, specialty retailers, mass marketers, etc.
Many choices about how the offer is structured – from subscription services to one-off’s like meal kits or big trip stock-up orders.
An array of fulfillment possibilities to fit the needs of the moment – from slow and economic, to click and collect, to on-demand delivery.

Lasting impacts on shopping habits

It’s not clear which of today’s dueling innovations will finish “in the money” in the race to reinvent grocery shopping, but their presence is already changing the future in some significant ways by:

Expanding the choices people have of where to shop and which information they will use to make purchasing decisions.
Shortening the time between recognition of a need and when the purchase is made.
Changing the way consumers organize and execute their grocery shopping. (Think of the impact of Basket Bandits.)

Don’t underestimate the growth potential

Complicating the picture is the fact that although most grocery purchases still happen in store, digital is where the growth is. Overall growth in the grocery market is flat (maybe one percent per year), in contrast, digital is growing 15% per year.

To put it another way, consider that the business from the 80% of consumers who aren’t open to changing their grocery shopping habits is growing very, very slowly if at all – but business is growing very quickly among the 20% who are open to change, and digital is where it’s happening.

Tools for handicapping the race

A. Create your own adoption curves

Whether you’re a grocer or a CPG brand with traditional roots that’s looking for guidance on how to navigate these waves of innovation, the advice is the same.

The first thing you should do is find out where your customers are on the adoption curve for online grocery and digital tool options. Tracking their progress relative to interest level, readiness and use will give you the best guidance for how and when to invest.

Traditional grocery retailers will want to understand how their customers are changing where and how they shop for groceries.

Which digital platforms are your customers using?
Where are they on the adoption curve?
What are they looking for and not finding in terms of greater convenience, product information, assortment, and ease of shopping (such as ordering, fulfillment, payment, etc.)?

CPG brands and other suppliers will want to learn how consumers are prioritizing channel choice when buying their products (in-store, online, or blended).

TWO TYPES OF ADOPTION CURVES: The blue bell shaped curve identifies the different adopter segments, describes their size, and shows the sequence of adoption. The gold S-curve shows how the innovation accumulates total market share over time. (Image source: http://www.ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/)

2. Follow the adoption drivers

So what propels that adoption curve? Studies across different fields have shown that the adoption of specific innovations is typically influenced by the following set of drivers.

The relative advantage of the innovation – how big is the improvement vs. the traditional practice?
Compatibility – the ease of integrating the new innovation into daily life.
Complexity – how challenging is it to actually use the innovation?
Tryability – how difficult or risky is it to try?
Observability – how easy is it for others to see that a household has begun to use it?

These drivers apply to grocery shoppers trying new digital tools, too, and they can provide insights into why some digital innovations have more success and lasting impact than others.

3. Location matters, more than ever

Lastly, it’s important to recognize the importance of location. Your local market will differ from national averages – specific use may be higher or lower, but either way, it is important to measure/find out.

The range of involvement in digital influences and use of online options is highly influenced by how many are present and their attributes (per the list above) in a given market. As the number of digital options increases in a market, so does consumer awareness for the services due to advertising and promotions, and greater awareness drives adoption rates up.

How prepared are you?

Going forward, retailers and suppliers need to understand exactly what’s happening in the race to reinvent grocery shopping if they want to compete for business. The data is out there, and adoption curves – like a good set of binoculars at the racetrack – make it possible to bring the contest into focus before it gets to the homestretch.

Engaged Consumers, Alternative Channels Fuel Surging Specialty Food Segment

Posted by Kristen Cloud

Date: October 27, 2016

in: Home Page Latest News, National, Specialty

Sunday, October 30, 2016

Boxed Wine Finds the Respect It Deserves!

Friday, October 28th, 2016

Boxx Cellars is taking boxed wine to greater heights of quality, simplicity and fashion

Sacramento, CA (RestaurantNews.com) Wine in a box has been on low store shelves and hidden in restaurant kitchens for decades, never taken seriously for its appearance or quality — until now. Gregg Lamer, who has had a long career in the wine industry as a sommelier, wine buyer, educator and marketer, is about to change the bad rap by bringing class to the category under the auspices of his new company, Boxx Cellars.

By taking control of every phase of boxed or BIB (bag-in-box) wines, from sourcing, distribution, packaging, and dispensing to direct-to-consumer sales, Lamer is hands-on to assure a superior product at all levels.

Wine Sourcing

According to David Williams, wine writer for the UK’s The Guardian, “What’s stood in the way of the bag-in-box . . . is the quality of the stuff inside.” He explains that boxes have “become associated with cheap and cheerless wines.” Aided by his longtime connections, Lamer is sourcing limited-production premium wines from boutique producers spanning global wine regions. He’s building a portfolio of premium boxed wine selections, including whites, rosés and reds from California, Washington State, Italy, France, Spain, Chile and Argentina. In line with Boxx Cellars’ environmentally responsible philosophy, many of his wine sources practice sustainable, organic and biodynamic farming.

Boxing (Bottling)

Another aspect of Boxx Cellars’ quality control and servicing is helping boutique wineries dip their toes into the BIB world by bringing the boxing process to the winery whenever possible. Producing a small run of boxes can help a winery test the market before launching tens of thousands of boxes the way Goliath wine producers do.

The Right Thing to Do

As wine consumers reach for alternative packaging, including cans and kegs, demand for boxed wines will increase. A 3-liter box of wine is the equivalent of four 750ml bottles. Boxed wine uses 91 percent less packaging material and is 41 percent lighter than the equivalent amount of wine in glass bottle packaging. Less weight means lower shipping fuel costs, and the savings are passed along in lower costs to the end user. Boxed wine can save a typical restaurant up to 20 percent on its pouring cost by reducing waste. “Cans Crack Wine’s Glass Ceiling,” an article in the November 15, 2016, issue of Wine Spectator,reports that according to the Container Recycling Institute, glass bottles are recycled only 27.8 percent of the time, less than alternative types of packaging. The figures show that cutting down on material waste is a valuable aspect of boxed wine. However, because boxed wine’s plastic bladder is an oxygen-free container, the wine inside will last a year unopened. Once opened, it will stay fresh from four to six weeks. With normal consumption, that translates to zero spoilage of wine. The entire box package is recyclable.

“Tap”ing

When ordering wine by the glass, the cork-pulling ritual isn’t a factor. But the appearance of wine in a box still presents a problem at an upscale bar. So Boxx Cellars offers an array of wine dispensers like the Boxxle. This spring-loaded device is handsome and sleek and conveniently fits on a bar shelf for ready access. Wine towers for kegs can accommodate boxes, with a device attached to the tap or added to a beer cooler without compromising keg space. Boxes can fit on top of kegs.

Boxx Cellars is prepared to make boxed wines available and stylish beyond the restaurant trade, with handsome carrying cases, carafes, recyclable glassware and wine lifestyle items available online at www.boxxcellars.com. Creative packaging offered by Boxx Cellars makes it possible to take wine where glass bottles have heretofore been forbidden.

The Market

Lamer is finding the wine trade and the public eager for more dispensing options for top-quality wines. Nowadays, the ecologically responsible aspect is a must for most restaurateurs. Lamer says, “Not surprising is the fact that trade, from five-star-rated restaurants to pizza chains, has interest in better boxed wines.” He adds, “I’ve addressed the reasons why the category hasn’t grown in restaurants, and with my one-stop method of procuring a better product, I aim to grow the boxed wine category.”

Direct-to-market boxed wines are available at www.boxxcellars.com, and consumer-direct is an option through a club for Lamer’s specially selected assortments, also available on the website.

Gregg Lamer is a 25-year wine and food industry veteran, crossing all channels of wine and food, from hospitality to restaurants, retail, luxury marketing and systems development. He is a certified sommelier with the Court of Master Sommeliers, a member of the Society of Wine Educators and a former board member of the American Institute of Food and Wine. When he was sommelier at the Phoenician Resort in Scottsdale, Arizona, managing 14 food and beverage outlets, his fine-dining restaurant earned the esteemed Best of Awards of Excellence from Wine Spectator five years in a row. His wine and food pursuits continued, starting with his La Tache wine bar and bistro in Scottsdale and stints with the Robert Mondavi and Stag’s Leap wine cellars and with Domaine Carneros in education and hospitality. He earned Wine Enthusiast’s Award of Distinction for his Amador Vintage Market, a Sierra Foothills wine bar and gourmet market, in mid-2000s. He continues to use his entrepreneurial spirit to tap numerous channels in bringing fine wines to wine enthusiasts.

Food Stamp Craze: U.S. Spends $3.6 Billion to Give $70 Billion in Benefits

OCTOBER 28, 2016

Not only does the government spend a breathtaking $70 billion a year to give a record number of people food stamps, it wastes billions more to administer the bloated welfare program. Some states spend a lot more than others to distribute the free food vouchers and the discrepancies are downright outrageous. The government dedicates $3.6 billion annually just to administer food stamps (renamed Supplemental Nutrition Assistance Program—SNAP to eliminate stigma), according to a federal audit that includes mind-boggling figures.

For instance, California, the state with by far the largest food-stamp roll, spends a lot more than the national average to execute the federal nutrition program. The Golden State doles out an average of $34.06 a month for each of its 2 million food stamp cases while other states, like Ohio, spend only $9.55. Some California counties are off the charts with administration costs. For instance, San Francisco County spends a whopping $73 a month administering each food stamp case. To put this in perspective, New York City spends $23 per case. The huge gap suggests “possible waste and operational inefficiencies,” according to the audit conducted by the inspector general of the U.S. Department of Agriculture (USDA), the agency that dispenses food stamps. That seems to be putting it mildly.

SNAP is a federal program but states are responsible for distributing the benefit and they get big bucks from Uncle Sam to get the job done. Though federal regulations establish uniform requirements for managing administrative funds, once local governments get the money there’s no follow up from the feds, leaving the system open to fraud and corruption. The USDA watchdog reveals the problem has persisted for years and that despite the “large variances” in SNAP administrative costs the agency doesn’t bother monitoring or coordinating with states to “assist in containing costs, minimizing variances, and sharing best practices.” The audit attributes the problem to a lack of effective oversight. In other words, yet another swollen and derelict government agency failing miserably to carry out its basic duties.

A record 46.5 million people get food stamps from the government, but the probe only includes the ten states with the highest rolls so the waste is probably much larger. The figures are broken down in the report by state and county and they’re enough to outrage any sensible, taxpaying citizen. California leads in both charts, spending $825,316,195 a year to give 2,019,272 residents food stamps. San Francisco County spends a startling $27,947,139 a year to give just 32,074 residents food stamps and Los Angeles County $187,426,575 annually to distribute the benefit to 573,282. Other big spenders are New Jersey ($138,400,032 for 439,695 food-stamp cases) and North Dakota ($7,521,986 for 25,011). Hamilton County in Ohio did the most efficient job, spending only $5.70 to administer each of its 61,772 cases every month.

The nation’s food-stamp program has long been plagued with fraud and corruption that’s been well documented in a multitude of government audits in the last few years. Nevertheless, it hasn’t stopped the president from expanding the program to record levels in the name of eradicating what he calls an epidemic of “food insecurity.” Judicial Watch has reported extensively on this, dating back to 2012 when a federal investigation uncovered evidence that food-stamp recipients were using their welfare benefit to buy drugs, weapons and other contraband from unscrupulous vendors. A year later Judicial Watch broke a story about the U.S. government knowingly giving illegal immigrants food stamps for decades. That was followed by another disturbing scheme in which SNAP benefits were being sold online using social media such as Facebook, Twitter and ecommerce websites like Craigslist and eBay.

Earlier this year federal authorities in south Florida busted the largest food-stamp fraud operation in U.S. history. Twenty-two defendants in the largely black and Hispanic areas of Miami-Dade County known as Opa-Locka and Hialeah swindled the government out of $13 million by fraudulently trading food stamps for cash. The crooked vendors operated food and produce stands at a local flea market as part of First Lady Michelle Obama’s initiative to eradicate “food deserts,” common in poor, minority communities where fresh, healthy food is tough to find or often unavailable. The feds say the business owners and their employees let food-stamp recipients use their welfare benefit to get cash in exchange for a cut of the money. They swiped the recipient’s SNAP card for an inflated amount, doled out cash and kept a percentage. In most instances the recipient didn’t actually get food, according to federal authorities.

Friday, October 28, 2016

Why a supermarket might be building the world's most exciting robot

SECONDHANDS

The autonomous collaborative robot could be assisting engineers on the factory floor by the year 2020

Ocado

By JAMES TEMPERTON

Wednesday 10 June 2015

An ambitious robotics project that combines artificial intelligence, machine learning and advanced sensors to understand and assist humans in real time could be truly "revolutionary", according to the team working on it. The SecondHands humanoid, being developed for online supermarket Ocado, could soon be helping factory engineers fix mechanical faults and even learn on the job.

The robot will be completely autonomous and should be able to help with everything from fetching tools to holding objects and even assisting with cleaning and engineering tasks. The project is a collaboration between the technology arm of the online supermarket and four universities across the European Union. The robotics team at Ocado Technology believe it could become "the most advanced assistive robot in the world".

SecondHands will use 3D vision to see both depth and colour, with artificial intelligence allowing it to learn by example and respond to its surroundings. Once trained in a series of basic tasks the robot should be able to increase its own intelligence and act independently. SecondHands will also be able to understand natural speech, allowing it to respond to voice commands.

We want our technicians to be able to rely on these robots

Graham Deacon, robotics research team leader, Ocado Technology

By MATT BURGESS

In order to operate in a factory designed for humans SecondHands will be based heavily on human morphology. Early versions might operate on wheels, but in the future the robot could move on tank tracks or even legs. It could also have extra abilities such as telescopic arms to make it more useful as an assistant. The robot will be flexible enough to work easily alongside humans, with torque-controlled arms, anthropomorphic hands and a bendable torso.

The robot will eventually be put to work alongside engineers at Ocado's vast logistics factories in the UK, which handle more than 167,000 orders per week. When something goes wrong with a mechanical component SecondHands will help engineers carry out repairs quickly and safely. It could also operate in areas too dangerous for humans, examining high-speed conveyors at close quarters and handling toxic materials.

The EU is funding the project to the tune of €7m (£5.1m) as part of its Horizon2020 initiative to encourage researchers to work more closely with industry partners. As well as coordinating and contributing to the research Ocado will also be the end user, with the robots designed specifically for its factories. If the project is successful the team at Ocado are hopeful it will find uses elsewhere.

By LIAT CLARK

The first SecondHands prototype will be operational at an Ocado testing facility in 18 months time and it is hoped the final version will be assisting engineers in factories in 2020. Unlike current collaborative and assistive robots, such as those competing in the recent Darpa challenge, Ocado says SecondHands will work just as quickly as a human.

The robot will use artificial intelligence, machine learning and advanced sensors to assist engineers autonomously

Ocado

"The big challenge is to get the robot to proactively do stuff, understanding where it is in the task and then doing something useful," Graham Deacon, leader of Ocado Technology's robotics research team tells WIRED.co.uk. Deacon describes Darpa as "a bit like watching paint dry" as the robots slowly perform simple tasks. "We want our technicians to be able to rely on these robots. These robots have got to work in real time and respond in the right timeframes and be something that the technicians feel comfortable relying on."

SecondHands' potential for high-level reasoning, Deacon explains, is a work of artificial intelligence. Software will help the robot construct a vast knowledgebase around the tasks it carries out and then understand how they can be applied to other problems. In this sense, the robot will learn on the job.

The structure of SecondHands will be based on the next-generation ARMAR robot, developed at the Karlsruhe Institute of Technology in Germany. Ocado will work on the software side, with a speciality of vision-based grasping and manipulation. Additional research into artificial intelligence and contextual understanding is being undertaken at University College London, La Sapienza University of Rome and Ecole Polytechnique Federale de Lausanne.

As it keeps learning it will become more useful

Alex Harvey, head of project management, Ocado Technology

The aim of the project is to create a robotic assistant that doesn't require any human input but that understands what it needs to do based on its own understanding and intelligence. "We would expect the robots to be able to track what the engineer is doing, understand the task that the engineer is trying to perform and then synthetically understand its own capabilities as a robot to proactively offer assistance," says Alex Harvey, head of project management at Ocado Technology.

In one example the robot would be able to understand that an engineer is climbing a ladder would need help holding a safety guard once it had been removed. Having seen and understood how this task is performed, SecondHands would then be able to apply its knowledge to other tasks without being told how. "For it to be truly useful it has have a base capability and it has to be able to learn on the job and it has to be able to get better. As it keeps learning it will become more useful," Harvey says. "If SecondHands existed today it would not be stretching the truth to say it would be the most advanced assistive robot in the world," Deacon says. "In five years time somebody else might be doing something similar, but if it were to exist today it would be the most advanced robot of its time."

Paul Clarke, Ocado's director of technology, has even grander ambitions. "Robots of the future could even use these capabilities to actually build warehouses," he says.

Transforming organics success through technology

Innovative organics companies are modernizing their technological foundations with solutions like an integrated ERP suite

October 25, 2016

By Dave Gustovich

Canadian consumer demand for organic foods has never been higher. As shoppers buy more goods labelled as organic, pesticide-free, non-GMO and other attributes of healthier foods, food distributors and manufacturers face the need to adapt to the complex challenges of the organic products supply chain.

For these companies, farm-to-fork traceability of multiple ingredients is critical. Without preservatives, the limited shelf life of foods necessitates greater speed and collaboration across the entire supply chain, while pricing needs to balance the higher cost and volatile supply of organic raw materials against consumer willingness to pay premium prices for organic products.

Attaining organic certification from an organization such as the Canadian Food Inspection Agency (CFIA), and similar agencies across the world, is a rigorous and complex data-management exercise for farmers, food manufacturers and grocers — with a high risk of brand damage if certification is lost because of a violation.

And while food supply chain stakeholders have invested heavily in complying with food safety regulations, nearly half of the respondents to a recent study by analyst firm Aberdeen Group1 showed compliance as the top challenge they face.

A huge market opportunity

Globally, organic sales have recently been valued at more than US$72 billion per year, and 58 per cent of Canadians say they buy organic products every week, resulting in a CDN$4-billion local market. Expectations for continued growth have made organics a top priority across the highly competitive industry, affecting players both large and small.

Multinational consumer packaged goods (CPG) suppliers like Kellogg, Kraft Heinz, and others continue expanding their organic portfolios, in many cases acquiring smaller organics companies. However, most companies producing and selling organics in Canada are small and mid-market companies, ranging from family produce, dairy and livestock farms, to regional food processors.

Today, many of these same producers and distributors rely on disconnected and inflexible applications for financials, inventory control, demand planning, supplier management, product and ingredient tracking, and logistics. In fact, spreadsheets and paper-based processes are still being used by some, leading to both delays and guesswork in planning and production. For these companies lacking the resources of a multibillion-dollar CPG or supermarket chain, improved visibility, control and agility is needed to capitalize on the organic foods opportunity – and many are turning to new technologies to do so.

Visibility and standards

Innovative companies in the organics industry are benefiting by modernizing their technological foundations with solutions like an integrated enterprise resource planning (ERP) suite. Aberdeen, in its report on food safety, views integrated ERP as a competitive advantage for food processors, particularly in visibility and enforcing standards.

“By implementing an integrated ERP solution, top performing food and beverage manufacturers can proactively manage compliance while keeping costs low and delivering high-quality, consistent products,” Aberdeen says. “The benefit of a technology foundation that supports a single source of truth is that best practice standards, recipes and requirements can be communicated and enforced.”

Canadian manufacturers and distributors need to elevate performance in five key areas to better compete in the organics space:

Traceability: Farm-to-fork traceability of ingredients strengthens compliance with food safety and organic certification requirements, resulting in consumer confidence and positive brand image. Real-time alerts and exception reporting are valuable in detecting and addressing anomalies.

Demand planning: Sound processes to cost-effectively manage supply, minimize waste and adapt to consumer demand that varies seasonally, geographically and demographically is all the more important given volatile supplies of organic raw materials.

Speed to market: Given constraints with shelf life for non-preservative foods and ingredients, companies need to accelerate production and distribution – often to comply with supermarket demands.

Supplier and raw material flexibility: Processors need the flexibility to switch suppliers or substitute ingredients without compromising quality or production schedules, due to erratic supply and often frequent shortages of organic ingredients.

Stakeholder collaboration: Meeting consumer demand for organic goods greatly benefits with digital collaboration between manufacturers, suppliers, logistics providers and markets. Cloud-based technology clears the path to new digital channels that aid all parties.

With demand growing, organic products have proven they’re more than just a passing fad, and strong revenue growth tracked by the Organic Trade Association over the past decade backs that up. With the right technology and innovations, Canadian food manufacturers and distributors are ready to write the recipe for success in the organics sector.

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