Technology, sustainability, asset protection and implementation of the Food Safety Modernization Act’s traceability rule are among areas of concern for the grocery industry, according to Doug Baker, VP of industry relations at FMI – The Food Industry Association.
Baker talked with The Griffin Report’s Maggie Kaeppel during the recent FMI Midwinter Executive Conference.
Baker said artificial intelligence is “on the tip of every tongue.”
“The members are spending a fair amount of time trying to establish a roadmap with current and potential clients as to how they’re utilizing AI, and then what do the retailers, wholesalers and product manufacturers have to do with their foundational data in order to be able to execute against those new opportunities that are being facilitated by AI.”
The industry also is readying for the implementation of the food traceability rule, as part of the Food Safety Modernization Act.
“That is a very cross-functional activity inside of retail communities,” Baker said. “You have to have technology, supply chain operations, food safety – everybody’s got to be involved. This is an extremely complex, although important rule.
“It’s going to take every department, and it’s going to really change a lot of business processes that the industry has been doing in order to be able to record every hand that has touched certain products on the food traceability list, from field to store.”
Sustainability is a focus for the industry, as it also crosses communities. Baker said this includes reducing emissions and waste, adding that the issue of waste could be placed into the asset protection community.
“Waste merchandise loss is now sort of being looked at holistically. It’s not just about theft, but it’s also about forecasting, merchandising, temp control and the asset protection folks are getting more and more involved in that.”
From an asset protection standpoint, Baker said organized retail crime and theft are significant. While the true impact to the industry is difficult to measure, both are on the increase, he said.
“We have a tendency to measure that anecdotally around apprehensions. But that’s even somewhat of a challenge because of some of the hurdles that retailers face when they’re trying to bring these individuals to justice.”
Baker said retailers are looking at technology to help mitigate theft at the store level. However, this technology should be “customer centric.”
Shoppers are frustrated with some of the tools and resources being used to reduce theft.
“Now it’s looking at what are those customer-centric things that we could be doing that doesn’t just totally throw their shopping experience out the window, but it allows the retailer to continue to protect their people, profit and assets.”
The greater use of self-checkout may be attributing to in-store theft, but the reasons vary. Baker said a customer may have planned their actions beforehand, or they may become frustrated with the self-checkout, take the item and walk off. Employee theft also occurs.
He said there is computer vision technology that is helping grocery associates who run the bullpen in self-checkout lanes. There also has been an increase in associate training.
According to Baker, there is a discussion over the definition of theft and organized retail crime. Many times, store level personnel don’t realize it’s ORC until it gets into the investigative period, he said.
Ultimately, Baker said self-checkouts are never going away. They give customers a choice.
“It’s about giving that customer as many options to engage in that store and get their food and move on that makes them feel comfortable,” he said, noting that self-checkouts continue to be a benefit to retailers as workforce remains a challenge.
Baker said there is real value in self-checkouts, but there are some inherent limitations. Those are theft related, education and awareness.
Self-checkouts will continue to be popular with some shoppers, especially as they become more comfortable using the technology.
“I know any retailer would invite a shopper that doesn’t feel comfortable with self-checkout to go ahead and stand in line and say hello to their favorite cashier. They’re still hugely important assets to the store.”
As for sustainability in packaging, Baker said some of his biggest discussions with the private brands community center around the availability of food-grade, recycled material. He said all agree there is not enough supply available to meet the commitments being made by brands and retailers.
“We’re in an attempt, trying to deconstruct that to understand how much supply is available and what kind of impact can we make on that whole subject around packaging in order to be able to meet the customers’ demands.”
Looking at recycled packaging, Baker said it’s all about the circular supply chain – “locations to return it, facilities to process it.”
He said there is an industry created to accomplish those steps, but it is small at the moment. Baker noted that consumers are not doing as much as they could be to support those businesses and create that loop.
The industry also is looking at safety in a new light. With more frequent extreme weather events across the country, employers are having to consider how to protect their associates.
Some companies have designated people to monitor extreme temperatures – hot and cold – to protect and support associates in stores and manufacturing and distribution facilities.
“There’s a lot of work being done in the safety community around those types of activities,” Baker said.
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