When Amazon ate Whole Foods: big changes for Big Food
Kate Phillips-Connolly, Lecturer, Trinity College, University of Dublin, College Green, Dublin 2, Ireland; Director, Abhaile Consulting, 271 Beach Road N, Wilmington, NC 28403, USA. Aidan J. Connolly, Chief Innovation Officer and Vice President, Corporate Accounts, Alltech, 3031 Catnip Hill Road, Nicholasville, KY 40356, USA; Associate Professor of Marketing, University College, Dublin, Ireland; Adjunct Agribusiness Professor, China Agricultural University, Beijing, China P.R
Abstract
The grocery store is ground zero in the tsunami of change facing Big Food. Consumers are changing how they relate to grocery stores, increasingly circling the perimeter, focusing on produce and preferentially choosing fresh, local, and new, even unknown, brands while spending less time in the processed food aisles
in the center. The next generation, the millenials, are increasingly shunning traditional outlets when buying food. Traditional leading brands of processed food, backed by traditional marketing strategies (heavy advertising on traditional media, coupons, brand extensions, etc.) are failing to hold on to their customers. The challenges can be found throughout the food value chain, from new competitors for grocery providers to new delivery mechanisms, from changes in generational food preferences with social media platforms to express their preferences to farmers who increasingly can and want to communicate directly with the end-users who actually eat the food that they produce. This access to more information opens more options (and opportunities) to buyers and suppliers all along the food value chain. Barely 100 years old, the grocery store model is becoming obsolete, and with it the organization of the food value chain must be re-written. So what does that mean for Big Food and the food supply chain? What directions can the industry take to adjust to the new competitive realities? This paper offers direction and guidance for Big Food and other producers in the food supply chain
