Grocery shopping today is in the midst of an evolution.
Retailers are adopting a number of technology solutions to
face the challenges of tomorrow and ensure a brighter future.
In the modern grocery enterprise, adoption of technology and
digital transformation involves embracing advanced digital
tools that optimize decision-making, learns as it goes,
recommends next-best actions, and moves at a faster speed
than ever before.
Unlike the prior years, when technology was viewed as a
necessary evil, grocers are embracing tech investment today
as a hedge against fast moving competitors and a catalyst
for growing revenue and earning the loyalty of omni-channel
shoppers.
A big reason for the embrace of technology today is the
growing maturity of off-the-shelf solutions, especially in such
areas as merchandise management, the supply chain and
labor management. Another reason is that cloud options offer
grocers a new delivery model that can be less expensive and
less burdensome to deploy for the IT department.
The embrace of digital transformation by grocers is a major
theme playing out today and it spawns a large multi-phase, multiyear
process. Although much work is being done to make grocery
stores digitally ready and reliant, much more work lies ahead
as grocers seek to grow their businesses in a highly competitive
environment and meet the rising expectations of their customers

Food & Grocery Retail is poised for a bright future. According to industry veteran Sanjiv Goenka, Chairman, Spencer’s Retail, the Indian online grocery market could exceed sales of US $3 Billion (about Rs 22,500 crore) in 2020, a substantial 76 per cent jump over the previous year.

But while the pandemic has opened the floodgates of opportunity, it has also altered consumer behavior radically. The focus on health and hygiene has intensified and consumers are turning to e-commerce for their grocery and essentials needs. Moreover, like in other retail segments, a growing preference towards Omnichannel shopping experiences has also been noted among modern consumers, ushering in a new normal for food retail that may become permanent.

In this issue of Progressive Grocer, we outline how Spencer’s is about to change the Indian grocery retail landscape as an early adopter of the Omnichannel model. The feature also reveals the strategies that the retail icon is banking on as well as insights on how it is working towards initiating innovative, out-of-store efforts to ensure customer experience.

According to a Deloitte study, grocery and food retailers are responding to an unprecedented demand that has strained the entire ecosystem in COVID times. Customers from all demographics, especially those over 50, have shifted to digital and delivery, ushering in a new normal for food retail that may become permanent.

While it is true that the food and grocery industry was spared the horrors that non-essential retailers were faced with during the crisis, this industry too has been deeply influenced by the pandemic and the subsequent lockdown. This has triggered a major shift in consumer attitude as well as their consumption preferences.
As hygiene and safety take precedence, awareness about the importance of buying packaged products, especially foods items, has increased manifold. Subsequently, the food and grocery industry in India, just like elsewhere in the world, has registered a fresh spurt of demand for packaged foods. As per the IRI CPG Demand Index, the overall demand for CPG has increased by 15 – 20 percent in the last few months of the lockdown in contrast to the same period in 2019. While it promises immense opportunities to the segment it also has compelled businesses to concentrate on adapting supply chains, manufacturing and marketing to meet the evolving demand.

In many places around the world, grocers are among the few businesses that remain open during the Covid-19 shutdown, providing truly essential services, which has resulted in booming sales. Demand for online grocery is going through the roof as evidenced from the rising number of online grocery orders reported by retailers and also thanks to the steep bump in delivery app downloads.

The surge in online grocery penetration isn’t just a Á uke due to the pandemic. Sales were already trending more toward online ordering, with various studies and estimates already projecting a healthy growth in online grocery sales.

COVID-19 will spark a long-term shift toward online grocery, which will prove to be a sticky sales channel. As more consumers get a À rsthand taste of the convenienceof this service, as well as the cost-effectiveness compared with getting restaurant takeout or delivery, they’ll want to continue ordering groceries online even after the pandemic ends.

At a time when the Covid-19 scourge continues its rampage
unabated, consumers have certain expectations from the
food industry: Access to an abundance of safe, affordable,
healthy food, neatly merchandised in clean stores, is an
expectation we all have, much like running water, electricity
and reliable internet. So when something happens to upset
the rhythm of our lives, we want a quick return to the normal
and the way things were.
But deÀ ning normal is extremely challenging because
COVID-19 is still upon us, among us. Shopper expectations
are still being reset in potentially dramatic ways. For
example, COVID-19 brought a new era of SKU rationalization
and reduced hours? And what role will prepared foods and
self-serve departments play in food retailing’s future?
At this point, we just don’t know what’s on the other
side of the COVID-19 nightmare. But there are a couple of
things we can be certain about, though: There will be no
return to normal for retailers. Retail is in a constant state of
change and advancement and readjustment to customers’
expectations. Sometimes those expectations are set by a
forward-looking competitor that sees what others don’t and
gets there À rst to serve customers in new ways. Other times,
as in the current situation, an external force resets shopper
expectations.

As coronavirus cases continue to rise across the world including
in India, shoppers are advised to exercise caution in their
daily interactions with others to stem the spread of the illness.
Grocers and supermarkets can do their bit to allay public fears
with regard to COVID-19 by choosing to address the concerns of
customers directly.
To begin with, they can diligently focus on the stores’ hygiene
and cleanliness standards even more so until the coronavirus
passes. Stores should spend more time cleaning commonly
used areas more often, such as checkout lanes, credit card
terminals, conveyor belts and cleaning shelves when restocking.
In addition, retailers should encourage sick employees to
stay home with paid sick leave via the company’s Paid Time Off
(PTO) policy, whereby associates amass PTO banks that can be
used to cover time away from work.
Additionally, they should ask customers to purchase only
necessary items and not to hoard products, so that “all people
can À nd the products they need to support their health and the
health of their families.”

What can you expect at a gathering that attracts the most eclectic bunch of cognoscenti from the Food Retail industry? As is customary at the annual India Food Forum (organised by IMAGES Group and publisher of Progressive Grocer), the conclave this year rippled with energy and its usual share of heat and light that the conferences, workshops, exhibitions, live shows and networking sessions radiated. Industry mavens who spoke on different themes and topics at the numerous panel discussions threw up interesting insights on the F&G industry. Discussions also led to information on trends, emerging product categories, understanding consumer behaviour, and on marketing and in-store promotion strategies – all of which, as everyone agreed, require joint efforts of both manufacturers and retailers.

Talent — the leadership that’s going to take our industry forward — continues to be a top concern of grocery executives,so making the industry an attractive and fulfilling place to work must be a top priority. And it’s no secret that what constitutes “attractive and fulfilling” for the next generation of leaders differs in many ways from their predecessors.

Salary, they tell us, isn’t necessarily the deciding factor for Millennials and Gen Zs. Research indicates that 70% of emerging leaders say they’re more likely to stay with a company that’s serious about sustainability. And 10% would accept less in annual salary to work for a company with a better sustainability record.

Gen Zs also are upwardly mobile, with opportunities for personal growth a top concern when entering the workforce. In fact, 76% expect a promotion within two years of starting a job. Talent among emerging leaders is certainly not in short supply in this industry.

In grocery retail, one trend that remains ever strong is that food retailers are embracing own brands more than ever, with some developing comprehensive strategies in this area. With the rising consumer acceptance of such items, a superior private label offering has emerged as key to differentiation among food retailers. To ensure that their private label strategy is successful, the new offerings must tick all of the emerging trend boxes that their national brand counterparts do. It is heartening to see retailers embrace the best practices regarding the entire private-brand experience when developing new private label items. They are incorporating such emerging trends as simple ingredients, local sourcing and an emphasis on fresh perimeter products, while balancing quality and cost considerations. They understand that promoting and merchandising private label products for maximum appeal to shoppers includes performing extensive research, marketing to customers by traditional and digital means, and providing pertinent information about the product.

The festival of Diwali – the most anticipated and eagerly looked
forward to occasion by the retail industry, when Indians pull
out all the stops to binge on shopping and buying gifts – is just
round the corner. While big festivals come in a regular rotation
and every day is a holiday on some level – from birthdays to
promotions to farewell parties, to name just a few – putting the
“special” on special occasions generally means elevating the
foods and beverages experience for celebrating such milestones.
Retailing and business opportunities are signi􀃀 cant on these
big occasions. Retailers can attract shoppers by providing and
promoting gourmet offerings, including both packaged products
and store-made or private label choices. Consumers purchase
specialty foods for a special occasion like a dinner party,
birthday or holiday.
Many parts of the store can be a draw for occasion-minded,
gourmet-seeking shoppers, meaning that basket lift can occur
in several spots. In the perimeter, for instance, the in-store
bakery, deli, prepared food area and produce section offer a
variety of products for parties or gatherings of different scales
and sizes. Meanwhile, in center store, specialty foods can be
merchandised for everyday consumption or for days that mean
something more to a shopper.
Carrying specialty foods and beverages is a signal to
shoppers that a store provides items for both “regular” eating
occasions and occasions that mean something more.

With the festive season coming on, brands and retailers
are focusing increasingly on the Millennials and Generation
Z respectively. Marketers and advertisers have found that
consumer spending and shopper power has steadily been
shifting towards the younger generations and away from older
folks, like Gen Xers.
Consumer trends consultants acknowledge the young
generations’ desire for greater convenience in eating, due to
busy schedules for work and school, with smaller meals and
snacks replacing traditional sit-down eating occasions.
But while the young generations have embraced online
shopping, the youths still express an appreciation for the
in-store experience. To some grocery shopping is “relaxing,”
while others say that it’s “easier to try new things in person.”
Other revelations: In choosing brands or products, with
prices being comparable, the young generations select items
from companies known for being socially or environmentally
responsible; packaging is also a purchase in􀃁 uencer. As
consumers, these young generations are looking for products
and services that mesh with their personal values and
identities, including health, communication, consistency,
independence and self-improvement.
Going into the festival season, the concerns of the young
generations – the most important customer demographic today
– should be duly noted and acted upon by brands and retailers.

PROGRESSIVE GROCER has been the voice of the food retail industry for over 80 years in the USA. Serving a wide audience in the Indian market, Progressive Grocer India's readers are top management at headquarters and top decision makers at store level. By anticipating, reporting and interpreting important data and trends, PROGRESSIVE GROCER fulfils its mission of identifying and highlighting insights and opportunity for leading grocery retailers, thereby accelerating brands and sales success for leading manufacturers

How can grocery retailers develop comprehensive, consumer-driven approaches to health and wellness? Consumers want to meet all of their health-and-wellness needs in a single destination. That means convenience, coupled with a sufficient variety of core, niche and cutting-edge products. Savvy retailers anticipate health-conscious shoppers’ needs and offer solutions-based in-store merchandising, adjacencies and complementary online shopping experiences.
Retailers need to be transparent and help provide answers to key consumer concerns, including where food comes from, the nature of ingredients, and how food is produced. As a point of differentiation, retailers should look beyond the path to purchase and focus instead on the path to healthy consumption by providing meal solutions that fit a healthy lifestyle.
They can showcase an authentic commitment to wellness via weekly circulars, store displays, healthy recipe ideas and prepared food offerings, better-for-you own-brand products and in-store samplings, and overarching messaging. This can be done by tapping into shopper data and tech engagement to target the right shopper with the right product at the right time. By becoming leading wellness destinations, retailers can ensure that they are able to better connect with the growing base of wellness-minded shoppers

PROGRESSIVE GROCER has been the voice of the food retail industry for over 80 years in the USA. Serving a wide audience in the Indian market, Progressive Grocer India's readers are top management at headquarters and top decision makers at store level. By anticipating, reporting and interpreting important data and trends, PROGRESSIVE GROCER fulfils its mission of identifying and highlighting insights and opportunity for leading grocery retailers, thereby accelerating brands and sales success for leading manufacturers


Grocers can improve sales and the customer experience by
honing their digital offerings. Cameras on digital signage can
evaluate demographics or even mood, Today’s technology can
generate digital signage content or mobile offers based on
factors like weather. If the temperature in your area goes above
40 degrees Celsius, a shopper might be informed about cool
beverages and drinks. If you’re in a deep freeze, it may trigger
a promotion for coffee or hot chocolate. Smart technologies
supported by a robust network marry the in-store experience
seamlessly to the digital realm.
Examples include beacon technology that connects a person’s
mobile device with a brand’s loyalty program; custom templates
that can be changed based on customer 􀃁 ow, seasonality, and
time of day; and the use of cameras to help analyze age, sex, and
mood of shoppers to likewise present these shoppers with offers
speci􀃀 c to their interests. Through the use of videos, stunning
imagery, as well as accompanying product information, customers
have a richer encounter with offerings.
Today’s curious shopper craves information to make
purchasing decisions: digital signage can offer recipes, customer
reviews/ favorites, sourcing information, QR codes for capturing
that link to even more content either in store or at home. As grocers
and markets are increasingly becoming an experiential food
destination, digital signage, including menu boards, encourages
shoppers to embrace the store as a casual dining destination

Retailers are increasingly serving “phytigal” shoppers, who browse
and buy in the physical and virtual worlds as their needs require.
Consumers have shown an eagerness to cherry-pick more formats
more frequently, and the trend of regularly buying groceries online
is bound to pick up with time. Within 10 years, 20 per cent of all
food would be sold online, it is being predicted.
Connecting with shoppers is the key. Experience continues
to emerge as a key point of differentiation for traditional grocers
facing digital upstarts, which have conquered convenience,
selection and price. Grocers no longer just sell food — they barter
in experience and information. Retailers have to become more
comfortable talking science, technology and nutrition... and in
preparing consumers for the next golden era of retail.
To thrive in this new retail world, innovation has to be pervasive
in an organization. Players must experiment, learn and make
changes on the 􀃁 y. Adapting to digital retail is more about mindset
than organizational structure; collaboration models need to shift,
and retailers must hire digital talent.
One industry study has identi􀃀 ed 􀃀 ve key issues facing the
industry: emerging new consumerism, arti􀃀 cial intelligence and
technology, workforce, the new marketplace, and food production.
Over the years, the industry has seen trends come and go, but
never before has lasting change come on so strong. The truth is
that we have not seen before an industry changing as quickly and
violently as food retail is changing today.

Why go to the store? We saw a few jaws drop during a session
at the recently concluded India Food Forum conference, when a
speaker questioned the need for physical stores. I thought the
question was particularly timely, considering our outlook of the
omnichannel world, going ahead. I mean, most surveys seem
to indicate that, while consumers are increasingly embracing
online grocery shopping, they also express a desire and
affection for the experience delivered by a trip to the store.
Online groceries are a rising trend. Near-future predictions
include: Online grocery will grow steadily as consumers get a
lot less anxious about buying produce online. Grocers will try to
move to pure e-commerce models to handle the rapid growth,
but will be stymied by lack of skilled personnel. And grocers will
scale out their private label on any channel they can get their
hands on.
The innovator’s dilemma is currently real for every grocer
on the planet, many of whom don’t understand the nuances of
technology-driven marketing. Not many existing supermarkets
are prepared for the impact, even though they are doing
their best to adopt as much tech as they can. Unfortunately,
we’ve found that margin improvements required to win online
groceries mean that they will probably have to be technology
companies, applying data and code to stitch together a new way
to build for the next hundreds of millions who have really started
to dislike shopping at stores

What can you expect at a gathering that attracts the most
eclectic bunch of cognoscenti from the Food Retail industry?
As is customary at the annual India Food Forum (organised
by IMAGES Group and publisher of Progressive Grocer), the
Conclave this year rippled with energy and its usual share of
heat and light that the conferences, workshops, exhibitions,
live shows and networking sessions radiated. Industry mavens
who spoke on different themes and topics at the numerous
panel discussions threw up interesting insights on the F&G
industry. Discussions also led to information on trends,
emerging product categories, understanding consumer
behaviour, and on marketing and in-store promotion strategies
– all of which, as everyone agreed, require joint efforts of both
manufacturers and retailers.
Pages 22 to 52 of this issue of the magazine offers a
conspectus of the action at the India Food Forum. For those
who were not there, we bring you interesting bytes and loads
of information exchanged at the Forum. Turn to pages 42 to 52
to 􀃀 nd out the achievers who won the Coca-Cola Golden Spoon
Awards powered by Kissan for excellence in grocery retail
across multiple categories. My congratulations to the winners
and my heartfelt thanks to all the participants at the Forum for
making the show a great success.

Healthier food alternatives are changing the market dynamics
and now becoming a mainstream option of consumption. To
a large extent, Millennials are the spearheads of this change.
In today’s age, Millennials are looking for healthier food
alternatives – ready to eat quinoa salad is preferred more than
ready to eat fries. Today, consumers are looking for healthier
options and vegetarians are demanding more protein-based
foods, organic foods, natural, and ‘free from’ ingredients, which
include gluten, wheat, and dairy products.
It’s time that we look at these trends as they will shape the
face of the food and beverage industry in the days to come. Our
lead story Centred on Health (Pages 52-90) looks into today’s
healthier eating trends, along with the demand for better tasting
foods that can be consumed ‘on the go’.
Going ahead, the industry will also have to invest in the
latest food and beverage technologies to be able to handle the
increasing complexities in the supply chain. With consumers
aware than ever before about food additives, preservatives and
production techniques, it’s also time to consider what changes
are needed in processing, packaging, and marketing. As we
peer into the future, there are a lot of changes and shifts to look
out for, and our lead story offers a few insights that the Industry
must take note of.

It’s that time again: the exciting transition of embarking
on the unknowns of a new year while one reflects on the
accomplishments of the past 12 months.
With competition in the grocery space becoming more fierce than
ever before, retailers will be duking it out over how best to deliver
on shopper need states. Stores are going to be reconfigured,
new services created. From home delivery and meal kits to
prepared foods and in-store experiences, grocers will be focused
on innovating the best means to the shopper’s end. Mergers and
alliances will be less about expanding market share and more
about leveraging complementary competencies to better bring
consumers what they want, how they want it.
The largest traditional grocers and the industry’s usual
pacesetter will be looking more concertedly at the expansion
of private labels, meal kits, digital, home delivery, new stores,
price cuts, new sustainability initiatives, and courting of local
suppliers. They will be relying increasingly on investments in
insights to make their customer-first elements faster and more
aggressive.
As a new year looms ahead, grocery retail has a responsibility
to offer potential products and services that aligns with its
customers’ goals. It’s a surefire way to build trust with your
shoppers that will last, regardless of whether the New Year’s
resolutions are achieved.

At the front end of the food business, as most food retailers
in India have learned, there is really no one-size-􀃀 ts-all
formula. Brands today have varied formats – from large-scale
hypermarkets to smaller supermarkets. The crucial part here is
to get the mix right across these varying formats. Retailers will
need to strike the right balance to be truly successful.
Large-scale formats work well in key metropolitan cities where
the trend increasingly is for families to do weekly shopping trips
for household supplies. The challenge on this front often comes
from the inadequate supply of space and land bank to build
large-scale hypermarkets. With the smaller supermarket format,
􀃀 nding the right location is the key. India’s high population
density, and the presence of well-entrenched unorganized retail
often makes this a challenging proposition.
The focus for most retailers will be to capitalise on smaller
formats, which are more cost-effective. Smaller convenience
stores and supermarkets are the way forward for most big retail
chains. This format will continue to grow in the coming years, as
retailers look at sizably growing their presence in the market.
The key future focus across these formats is to improve
footfalls and basket size. Brands need to improve in this area
while ensuring that they continue to provide excellent customer
service, convenience and exceptional value to give customers a
truly remarkable shopping experience

The emergence of Modern Trade and E-commerce has made it
easy to be a single product company and has fostered innovation
and entrepreneurship. Launching a new FMCG product is no
longer the domain of multinationals or big players with 􀃀 nancial
and distribution muscle. Small and medium enterprises that
were previously deterred by the huge capital investments
required for distribution networks while launching new products
can now easily develop and bring their products to the market in
a cost effective manner. This has had a profound effect on the
number of launches of innovative products in the market.
Quinoa puffs, butter spreads, health and energy bars, pasta
kits, packaged ready to cook idli/ dosa batters, raw juices, water
based functional beverages are all excellent examples of new
age products built and marketed by small companies being
widely accepted by the consumer base. Milk and value-added
milk products too are increasing their share and we envision this
trend to become stronger in the times to come.
This shift towards fats and proteins from the traditional intake
of carbohydrates is the biggest food consumption trend, which
cannot be missed. It can also be seen as the re􀃁 ection of the
dietary habits of a younger India. As enablers in the consumer’s
shopping journey, recognizing and translating these trends
into viable business opportunities remains a key concern for
manufacturers and retailers today.

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Progressive Grocer - November 2019

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