Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
Issue link: https://www.e-digitaleditions.com/i/769179
THE FUTURE OF RETAIL Q&A WITH MIKE LEE, FOUNDER OF THE FUTURE MARKET Compared to a decade ago, today's retail market offers consumers an abundance of choice: specialty food products can be found at mainstream retailers, vibrant specialty food shops, and in upgraded supermarkets. In just the last two years there's been a significant jump—to 16 percent from 10 percent in 2014—in people buying premium food online, through gro- cery delivery services, ubiquitous in urban areas, and meal kit services such as Blue Apron. Still, retailers, particularly supermarkets, have maintained their role as the primary source of specialty foods; today retail channels account for 78 percent of sales, up from a 69.1 percent share in 2007, according to the State of the Specialty Food Industry report. To maintain their connection to consumers, retail outlets need to get in the feelings game, says Mike Lee, founder and CEO of Studio Industries, an agency applying design think- ing to food products and experiences, and founder of the Future Market, a conceptual grocery store illustrating the future of food and retail experiences. "Customers want to feel that they are part of an experience, part of a story, which carries a lot more weight. That is the cost of doing business going forward. You can't just be a generic product or outlet that stands for nothing, or doesn't give you an experience anymore," says Lee, who previously played a key role working on innovation and product development for Chobani. The last decade has seen a shrinking of the grocery store cen- ter aisles, leading some to predict their imminent extinction, as there are more and more places and ways to buy shelf-stable specialty foods. You disagree. Why? Fresh has become more the centerpiece, but the center aisles are going to bounce back. We are in this in-between period in which Big Food is figuring itself out. There's a whole gen- eration that still consumes these legacy brands, which were established in a time when well- ness wasn't as big of an issue and big brands were the food heroes. The smart companies are investing in better-for-you products to replace the legacy ones. Among my friends, many have kids who have only ever eaten organic food. That's kind of crazy. You just multiply that at the generational level and see what's driving innovation in the center aisles. In every category where there is a "bad product" there's an entrepreneur right now chipping away at how to make that product better, more sustainable, better for people, more transparent, all of that stuff. The products at the Fancy Food Shows, that's the future of the center aisle. In the past 10 years, retailers have invested heavily in fresh, both produce and freshly pre- pared foods. What do you see the next decade bringing? Fresh will continue to proliferate. You're going to see more produce grown on site, a sort of a transformation of what it means to be a grocery store. A grocery store can now be a farm; we're THREE PREDICTIONS FROM MIKE LEE 1. Center aisles will rebound. They will feature increasing innovation as food manufacturers create new versions of the legacy brands that are better for you and more efficiently and sustainably produced. 2. Stores will take on greater roles as producers. More retailers will feature produce grown through roof-top, aquaponics, and aeroponic farming. Shoppers will also see more mainstream retailers playing a proactive role in curating what's on their shelves. 3. Shopping will be more inter- active. Brick-and-mortar stores need to become places where customers can be educated and inspired. We will see more tele- presence technology, like live video chats with producers, as an interaction layer inside a grocery store. Look out for stores taking on greater roles as producers, featuring produce grown through roof- top, aquaponic, and aeroponic far ing. PHOTO: MIKE LEE 38 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com