FoodLogistics.com |

Joseph Andraski

As president and CEO of VICS, you're in touch with literally hundreds of retailers. What are some of the latest trends that are shaping the industry?

ANDRASKI: What we're hearing from the retail industry is a clarion cry about the need to increase speed to market. Companies are no longer willing to accept the long lead times that it takes from product concept to delivery at the store. Everything is focused on the store—and ultimately the consumer—because retail is a consumer-driven business.

Consumers can choose from a multitude of outlets to buy the same product, including the Internet, so in order for retailers to be competitive they have to make sure the product is in-stock. They also have to continually bring to market new and interesting products that will drive consumers to their stores or Web sites.

There are companies that have found the magic, especially in the apparel industry. At one time, fashion was a four season business, but now there can be as many as 12 to 15 seasonal type changes. To make that happen, it takes technology which gives trading partners the ability to move information rapidly.

What about in the food industry?

The same challenges exist in the food industry—maybe more so. Talk about alternative outlets. You can buy many food items in drug chains, convenience stores, wholesale clubs, mass merchandisers and...Tesco is entering the United States with another format that will serve the consumer. There's a host of outlets out there and now we're seeing that buying product online is getting a stronger play. Total online retail sales are increasing 2 percent to 4 percent a year, so e-commerce is growing.

Companies have to get prepared for rapid changes in the market because if they don't, they're going to be left behind. Look at what's going on with Whole Foods Markets. They identified the natural and organics arena and changed the landscape. Healthy eating has gotten a lot of buzz from the government and other agencies with all the issues surrounding obesity. Now other retailers are playing catch up.

What other trends are do you see?

Supply chain visibility is becoming key. Outsourcing is a trend that continues to grow and China is going through a revolution right now that most people are unaware of. China is developing industrial parks that are unlike those here in the U.S. They're building ports and an infrastructure on hundreds and hundreds of acres in Beijing and other locations that will be comprised of clusters of manufacturers and raw material suppliers for those manufacturers.

The percentage of products that are being outsourced today can do nothing but grow. This isn't only happening in the U.S.—it's happening in Europe and other parts of the world as well.