TORONTO — Changing consumer habits in light of economic pressure was a key theme of a retailer panel at the Canadian Produce Marketing Association Convention and Trade Show. The panel featured Maggie Chu, head of trading at Top Weal; Michelle Loucks, senior director of global perishable logistics, supply chain order management and produce purchasing at Whole Foods Market; and Scott Dray, senior director of global produce sourcing at Walmart.
Panelists discussed how shoppers have responded to economic pressures, often trading down instead of buying less. Dray says units are up, but it’s important to understand the context of where and why that is so.
The Value Gap: Why Shoppers are Trading Down
“The consumer out there is definitely challenged, nervous, afraid and budget constrained,” Dray says. “Units are up in produce, but they are trading down, looking for value.”
Loucks says Whole Foods Market is seeing its segment share growing in people looking for value as well as people who are willing to pay for premium products.
Chu, who represents a major Hong Kong-based produce distributor, says that what’s interesting about Hong Kong is that residents spend less on essential items to save money for travel and festivals, though they often travel to China by train or bus for those everyday items.
“In China, the cost is quite low, rather than in Hong Kong, where it is really pricey,” she says. “People would rather go to China for same-day traveling for groceries, shopping or dining and then back to Hong Kong on the same day. They spend less on essential items because there are way more choices in China.”
Social Media and the Hunt for the Next Big Trend
To manage and plan accordingly for the shifting consumer behavior, Dray says Walmart assesses data to better understand where the consumer is heading. He cites the growing popularity of sweetpotatoes as a key example of units being up and adjusting supply to serve that demand.
“As units start to go up on a particular item, we try to dig in and understand why and then make sure we’ve got supply to match that coming demand or that existing demand,” he says.
In terms of social media shaping trends and demands, Dray points to TikTok’s help in fueling this sweetpotato demand — but he says he looks to his children and grandchildren to ground trends to reality.
“They’re the ones that get to consume it,” he says. “They won’t lie. If I bring home something that’s kind of a good value, but they don’t eat it, the value really wasn’t anything.”
Loucks says she also relies on the supplier and grower relationships, as well as travel, restaurants and farmers markets, for inspiration about the next big thing to better inform her teams.
“You’re always looking to be inspired,” she says. “Every time you engage with anybody in this industry, you’re always looking for an opportunity.”
What Major Retailers Want: Innovation and Local Quality
Chu says, as a distributor, Top Weal uses Instagram marketing to create trends and share information about products.
“We provide promotions in-store to educate the customer about the benefits or advantages of the products,” she says. “So, somehow we can create the trend.”
When asked about what Canadian products that Loucks and Dray would like to carry more of, Loucks quickly points out Canadian mushrooms.
“I love it that I was a mushroom buyer when I worked at Loblaws, and I just have a passion for mushrooms,” she says. “I believe our quality in Canada is superior in so many ways, and so I’ve constantly promoted mushrooms since my first day with Whole Foods.”
Dray says he really thinks about the customer first in terms of products, and he’ll source the product from wherever it makes sense.
“There’s lots of great things grown in Canada that make sense for Walmart anywhere, whether it’s the U.S., Mexico, Central America, China, it’s got to be great quality, great flavor,” he says. “That’s really what I care about the most — not necessarily any particular item, but the item that fills that customer need is what I’m looking for.”
In terms of what they’re looking for on the trade show floor, Dray says it’s quite simple: He’s seeking something that meets a need.
“I’m looking for something new, something different, something that will fill a niche, make something better that already exists,” he explains. “Just innovation.”
Loucks says she gets excited about sustainable packaging options, especially in the grab-and-go space.
And for suppliers hoping to catch retailers’ attention, Dray says he wants the conversation to stem from meeting a need and how the supplier can work with Walmart to meet that need.
“I need you to understand what my needs are, how my business operates. What’s a problem that you’re solving that’s customer-facing focused?” he says. “What’s the need of a customer, and how can we work together to fill that need?”
Dray also says it’s important not to lose sight of produce’s role in the global food industry.
“We drive a lot of health in the world, and we should take that responsibility seriously and continuously strive to be better at it,” he says.
Loucks says quality is an important part of the conversation.
“You definitely need to be able to ensure that you’re getting the best that the supplier has to offer,” she says. “I’ve always felt that with Whole Foods, everybody wants to be on the shelf. And for you to be on the shelf with us as a retailer, definitely quality is the key.”
Loucks says it’s also important for suppliers to understand Whole Foods’ values, like its Source for Good program, which includes all certifications and focuses on ethical labor.
“I’ve seen the fruits of that part of the industry when we’re applying those certifications and thinking consciously about how we treat people in this industry,” she says.
Building Resilience Through Sustainable Partnership
Chu also says that when working with suppliers, it’s important to look at the relationship as a partnership, not a quick transaction.
“We keep a long partnership with our suppliers,” she says. “We need that, because we don’t want to keep finding new suppliers and don’t want to spend time to keep sourcing new ones, because we build trust together.”
And Chu says it is key for produce industry businesses to be agile in the face of volatility but also understand that working together is an important way to weather the storm.
“We are facing different difficulties or challenges every day,” she says. “You can work together with others in the industry.”
