Scaling the Food Supply Chain for Upcoming Holiday Season

Amid multi-billion-dollar shift in consumer food spend and 300% jump in online grocery sales, food retailers need supply chain agility and scale for a holiday season marked by increased demand and shorter timelines.

Adobe Stock 271097710

Grocery retailers are facing unprecedented demand and consumer change during one of the busiest food shopping seasons of the year. With an analysis of USDA data projecting a $250 billion annual shift to food at home spend, and an FMI report showing a 300% jump in online grocery sales, food retailers are contending with new challenges during an already busy holiday season.

This will be one of the most challenging and unpredictable shopping seasons our generation has seen, which means food retailers need supply chain agility to help them react in real-time to changes in demand. To meet shoppers’ expectations, inventory now needs to be replenishable in a matter of hours—not days or weeks—which is why there’s been an uptick in retailers seeking out insights and solutions that provide greater flexibility and visibility, from product origination to store shelf or digital cart.

A single, global, multimodal platform is at the core of many planning strategies to help grocery retailers accommodate demand surges, tight transportation markets and ongoing uncertainty since the outbreak of the pandemic. Retailers need connectivity to inventory management services enabling quick order adjustments, access to industry leading retail consolidation services and integration with multimodal transportation solutions with direct-to-store delivery. Infrastructure that should be plugged-in to this connectivity should include a mix of hundreds of temperature-controlled and ambient warehouses, as well as temperature-controlled and dry truckload and less-than-truckload transportation options. A combination of localized warehousing at scale connected to multimodal transportation options allows for a streamlined process down to the SKU level and gives retailers unmatched flexibility to meet consumers’ ever-changing demands. Additionally, if store shelves do sell out, retailers need a supplier that can ensure fresh product is replenished as needed to ensure that consumers can have that perfect pumpkin pie for their holiday.

This next-level agility is not a short-term need. According to Robinson Fresh’s customer research study on changing grocery shopper habits, some of the biggest change-drivers in retail are here to stay, including that 70% of shoppers plan to continue these changed habits of online shopping beyond the pandemic. The survey also found that online shoppers are thinking more about health, and care where their food comes from, with more than half citing organic, non-GMO, fair trade, sustainability, environmentally friendly, local, nutrition or country of origin as extremely or very important. And, shoppers are looking for meal inspiration, making digital shopping enhancements key to online loyalty with people wanting recipes, nutrition guidelines and storage tips. Additionally, it showed 48% of shoppers prefer online shopping with delivery above curbside or in-store pickup, presenting a greater need to further integrate online and brick-and-mortar supply chains.

The perishable foods sector of food retail has seen the largest shift to online purchasing, with the study revealing 54% of consumers are buying fresh produce online for the first time since the start of the pandemic. This is a major shift. In the past, Robinson Fresh’s consumer research has shown that people want to touch and feel their produce. They want it ripened to their preference, which has meant consumers going to the store and picking out produce for themselves. The industry sees this jump in online produce buying as sign that people are willing to trust others to pick out their produce, and this trend will continue even after the Coronavirus disease (COVID-19). In fact, research revealed that seven out of 10 of consumers say they will continue to shop online after the pandemic is no longer a concern.

Heading into the holidays, the sudden increase in online orders is further complicated by the CDC’s recommendation for smaller Thanksgiving gatherings, which will make inventory needs even harder to predict. This is on top of historically tight transportation and warehouse capacity, making available space for goods hard to come by, especially on short notice. A perfect recipe for uncertainty during a season when food is such a central part of family traditions.

Speed to shelf, retail acceptance rate and having inventory in the right locations are all heightened challenges this year, especially as capacity is tight even several weeks ahead of the holidays. And, perishable products like pumpkins, cranberries and proteins such as poultry and other meat are always more difficult because you are working against the clock to ensure the product gets to the consumer while it’s still fresh. Finding solutions for retailers that increases efficiency and reliability while also maximizing supply chain agility is more important than ever.