Online Produce: Winners Act Early

Online grocery shopping already has profitable entrants in the U.S. and is rapidly gaining traction in Western Europe. Further expansion is expected in both regions over the next decade, according to the recent Food & Agribusiness Research industry report 'AgFocus: Online Produce-Potential Winners Act Early.'

photo of online grocery shopping

It’s a nutritious choice for today’s health conscious consumer and has a perishable nature, making it a frequently-shopped category.

The success of the e-grocery channel largely depends on retailers’ ability to get fresh produce correct, which creates both opportunities and challenges for the supply chain.

Increased collaboration throughout the supply chain will enable proactive produce suppliers to better identify and react to the changing needs of retailers entering the online space.

Rabobank Senior Analyst for Fruit, Vegetables, and Floriculture Roland Fumasi says, “As e-grocery is still in its infancy in the U.S., the suppliers who engage in an ongoing test-and-learn process with retailers can gain a distinct advantage in both knowledge base and strategic loyalty over those suppliers who wait.”

Online Food Channel Starting to Sprout

While e-grocery has trailed behind the overall online retail trend, there are signs that it is gaining momentum. In the U.K., where online grocery has had the greatest penetration, approximately 7 percent of total food purchases are done over the web.

Online grocery sales are expected to more than double in the U.S. over the next three years. According to a 2013 Nielsen report, about 10 percent of the total amount spent on groceries in the U.S. is on fresh fruits and vegetables. However, online grocery shoppers tend to have higher incomes and spend more in the fresh fruit and vegetable categories.

Working Together to Deliver Better Information

As the e-grocery channel increases consumer expectations for information, shippers/marketers will be expected to deliver a more comprehensive digital library, which will also require input from growers and packers.

Today’s consumer is more food savvy and food engaged than ever before. Purchasing decisions now involve how a consumer values things like sustainability and social good.

 “They crave information about who, when, and how their food was produced. Growers, packers, and shippers who can create a positive, digital connection with consumers stand to gain market share,” says Fumasi.

  • Roland Fumasi

    Senior Analyst - Fruit, Vegetables, Floriculture
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