Executives give advice to suppliers, consider market drivers for retail demand

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Be bold with innovation and always level with buyers.

Those were words of advice to suppliers that three executives from diverse grocery retailers shared during a June 21 virtual United Fresh Produce Association Reimagine Conversations event.
Moderated by Rich Gonzales, vice president of global produce sourcing for Walmart, the event also included John Savidan, senior director of produce and floral for Encino, Calif.-based Gelson’s Markets, and Jeff Vocatura, produce sales manager of Big Y Foods, Springfield, Mass.

New product introduction and innovation

The retailers discussed the shifting variables that go into the decision of whether to bring a new product to market.

Vocatura of Big Y said the chain is constantly looking at trends. In addition, he said Big Y gets immediate feedback from its produce managers when a supplier approaches the chain about a new item.

“If a supplier comes to me with an item, I will send a group text out to (produce managers) with a picture of it and (ask them) ‘What do you think, what do your customers think?’ I get really great feedback. We might try it in the store too. And I believe we have some great intelligence to really see if something is going to succeed, and I pass that along to our suppliers weekly.”

After describing the appeal of the new product in stores with different demographics, Vocatura said he challenges suppliers to see if they can improve the item. 

“I think (that process) works and it’s very beneficial to our company.”

When a new product is introduced, Vocatura said the chain promotes it heavily on social media, providing digital coupons with either a percentage savings or dollar amount off. Any new item typically gets six months to prove itself, Vocatura said.

“We will put it in a print ad,” he said. “We have a variety item of the week that we feature in our ad every week, so any new item might go on that to get it going,” he said. “We really lean on our social team to kind of get something moving and launched, and then we evaluate after that and make a decision.”

At Gelson’s Market in Southern California, Savidan said any new item must first deliver top-notch quality.

“It’s really got to be a great eating experience for the customers; that brings on the repeat customer.”

Savidan also says that Gelson’s gives a lot of social media support to new items. Unfortunately, he said, store support doesn’t include sampling.

“Pre-pandemic, sampling was fabulous to get (consumers) to taste all the great stuff that we had out there,” he said, but that hasn’t returned yet. 

At Big Y, Vocatura also said that sampling has not returned. 

Gleson's“We don’t see it (returning) any time in the near future,” though he said it may come back in some revised form. 

The produce manager with a paring knife now can’t even offer a customer a slice of a new apple variety, he said.

“So much of the basic (strategies) we were not able to do over the past year or so.”

Gonzales said retailers depend on suppliers for innovation.

“The one message I would say that we all probably are going to say to (suppliers) on the call is bring it to us, don’t be afraid, be bold, throw it out there, we want to see new products,” he said. 

“We want to create more excitement, whether it’s a new variety or a new size of pack, you name it — we do want to see that innovation. And oftentimes, we rely on you, the growers, to bring it to us.”

Insight from online sales data also helps with decisions, Gonzales said.

“More access to information has allowed us to become more precise in (how we) bring the product to the stores,” he said. Savidan of Gelson’s said the chain is focused on innovation in fresh produce.

“We want that new apple, we want that new mango, we want that new variety of lettuce or whatever,” he said.  If the product has good traction, the chain also will consider using it as a private-label item.

Vocatura of Big Y Foods said that any new products that can save labor get noticed.

“Anything that can help (reduce) labor in the stores, whether it’s something that’s precut or something that’s easy; easy and simple is what wins in stores now,” he said. “We want to really help our stores out by having something that’s the next generation of product, where it’s easier at store level.”

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Choosing a supplier

Gonzales asked the retail panelists about how they choose their suppliers.

Communication and service are one and two in terms of importance, Vocatura of Big Y said.

Big Y“Price is never number one, it’s always (about) service and quality.”

Gonzales said Walmart wants both good news and bad news as fast as possible from suppliers.
“My message to all of you is to, if you’re dealing with us at Walmart, just give us the news — we just want the straight story,” he said. “Then from there, we start building trust, and that’s how you grow with our business.”
Savidan of Gelson’s agreed.
“We don’t want the empty promises, just tell us the truth of what’s going on, if the trucks are going to be late or short or whatever,” he said. 
That will build trust and enable a long-term relationship, he said.
Gonzales also asked the panelists about the importance of sustainability and social responsibility programs from their suppliers.
The pandemic took away some of the momentum for reducing plastic in packaging, Savidan said. However, he said that focus will return in the months ahead.
Vocatura said there are huge opportunities for more sustainable packaging throughout the industry.

Online trends

Online is an important part of the grocery business, though Gonzales said that 50% of consumers have still not tried online grocery shopping.  50%


“There is still a huge (unreached) market out there,” he said.

Savidan said online grocery is the “wave of the future,” but he said that he doesn’t believe brick and mortar stores will disappear.

“There’s too many foodies out there that want to pick (their) own stuff out,” he said.

Like Gelson’s, Vocatura said Big Y partnered with Instacart and saw strong orders through the pandemic.

“It seems like this younger shopper (is) more geared to (online shopping,),” he said. “Where does that leave us in 10 to 15 years, as the older generation goes on?” 

That remains to be seen, but Vocatura said Big Y is heavily invested in growing online sales.

“We’re trying different things — maybe do an ad in print, and maybe do one on digital and see where that balances,” he said. 

Gonzales said Walmart’s pick-up grocery business has penetrated more households than delivery, noting that one of the main reasons that consumers use pick-up instead of delivery is because of the higher cost of delivery.

While delivery is expensive and not a very profitable endeavor for retailers, Gonzales said Walmart is seeking to create loyalty by serving its customers.

In Europe, where online grocery has been around for a longer period, Gonzales said fresh produce still has low double-digit penetration among consumers.

“We expect that we will continue to grow (online sales) , but we don’t see the stores going away either,” he said.

During the pandemic, much of the online grocery growth came from the older population, Gonzales said, while the younger generations are generally more active online.

“For us, we think about it in terms of an ecosystem and how do you get people into the ecosystem, meaning they’re doing financials, they’re buying or ordering, they’re doing medical things, and they’re doing the grocery,” he said. “For us, it’s really about an ecosystem play, in terms of how we think about online.”

Labor woes

The panel was asked how they deal with the challenging labor market.

Read related: Labor crisis could open the door for Congress to act on immigration reform

From education incentives to promotion opportunities, Gonzales said there is lot of engagement Walmart attempts to retain employees. Still, he said turnover is a challenge.
Vocatura of Big Y said making things easier for employees in terms of store design and production areas is important. With many employers handing out $2,000 to $3,000 bonuses to sign on, that makes competing for workers tough.

“These kids are seeing that; how do you get them into a grocery store entry level? It’s tricky,” he said.

Panelists were asked what advice they would give people entering the business.

“Look around, be a sponge and soak up as much as you can,” Vocatura said. “Put yourself out there and try to attend every event, every conference; soak up everyone’s knowledge and then follow your heart and where you want to go after that.”
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Gonzales encouraged those new to the industry to “take the challenges.”

“Always be curious. I think curiosity helps cure a lot what ails in terms of your career. Depending on where you are in your career, focus on the job you have today, to really do a great job on that job, and then the rest of the opportunities will open up beyond that.”

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