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Retail super session explores changing consumer and harmonization of audits

by Tim Linden | May 04, 2009
LAS VEGAS -- Today's consumers are living in a fast-paced, changing world, and they are changing just as quickly. To capture these customers, supermarket retailers are going to have to reach out and find new ways to do business.

That was the general message delivered by Kevin Coupe, a former reporter who monitors the retail sector and who spoke at the Retail-Foodservice Super Session April 23 during the United Fresh Produce Association convention, here.

Mr. Coupe, who publishes a daily on-line retail blog, used the encyclopedia to illustrate how fast the world is changing. It was more than 500 years ago, he said, when the first encyclopedia was published. For most of those 500 years, that encyclopedia and others like it followed the same framework to pass that information to consumers. It wasn't until 1994 that Microsoft launched an on-line version called Encarta, which basically made the written encyclopedia obsolete and ruled the Internet for most of the next 15 years.

However Microsoft has announced that Encarta will be abandoned later this year, as it has apparently been made obsolete by the advent of Wikipedia, the free encyclopedia that uses submissions from consumers at large. Mr. Coupe said that there is no doubt that in a much quicker time frame, Wikipedia will be made obsolete by the newest innovation that has not yet surfaced.

He likened the supermarket business to that original encyclopedia and warned that shopping at the market is a linear experience that tomorrow's shoppers are not apt to do.

Talking about current trends, Mr. Coupe said that consumers are looking for "taste, transparency and traceability." He defined transparency as "consumers wanting to know where their food comes from." He said consumers want access to this information, and suppliers run the risk of alienating them if they do not provide that information - and in a quick and concise manner.

"Do you know what the three-second rule is," he asked, challenging the audience. "No, it's not how long your food can be on the ground and still be eaten. It is how long young people give a web site to load."

He said that consumers are changing the face of other retail sectors, and they will do the same to the supermarkets. Today's shoppers tend to get what they want, when they want, how they want -- and they pay what they want.

Mr. Coupe pointed to Amazon Fresh as a potential major shift in how food is delivered. That one-time on-line bookseller has expanded into many other items and is currently looking at food as its next conquest.

He concluded that we are living in a "VUCA world" -- volatile, uncertain, complex and ambiguous.

Also on the agenda at the session was Sean Picquelle, produce manager for Taco Bell. Mr. Picquelle is deeply involved in the harmonization of audits and briefly explored the work in this arena. The industry is well aware of the multiple audits that are currently required of most growers, packers and distributors as there is currently no harmonization. Buyers are working with different third-party audit organizations, and suppliers with more than one buyer are often paying for a handful or more audits on the same farms and facilities.

Mr. Picquelle said that there are two industrywide task forces -- the Standards Harmonization Working Group and the Audit Benchmark Working Group -- trying to develop standards and processes to harmonize the audits, which would result in fewer audits. He said that there has been success in the tomato industry, which has developed harmonized standards that each third party can audit against. Presumably this will mean that any audit will suffice.

But even as Mr. Picquelle was arguing for harmonization, he revealed the difficulty in the task by discussing Taco Bell's procedures. Taco Bell does not certify audit organizations but auditors themselves. So being audited by a particular company is not enough if you are a supplier of Taco Bell. Your audit must be performed by a specific person within that company.

With regard to the harmonization effort, the Taco Bell executive said that recommendations would soon be made by the working groups, which will be shared with the industry to determine how to move forward.