Natural Foods Merchandiser

What's next in naturals: December 2010

Industry advancements such as mobile-phone coupon systems, community projects linking farmers to food buyers and a smartphone application that uses GPS data to access soil-survey data and what these advancements mean for retail


Retailers launch mobile-phone coupon systems
To improve convenience and build loyalty, some supermarket chains are using digital coupon systems that customers can access on their mobile phones and sync to their store loyalty-card accounts. Grand Rapids, Mich.-based chain Meijer launched a paperless coupon program in September, following in the footsteps of Cincinnati-based Kroger and Pittsburgh-based Giant Eagle.

What’s next: Thanks to the growth of smartphone users, mobile coupon systems will continue to gain popularity, says Steve Horowitz, chief technology officer of Horowitz notes that by the third quarter of 2011, it’s estimated that most Americans will have smart phones. Still, “the key transition point to making this technology ubiquitous is tying it to the point of sale in a way that doesn’t slow down the checkout line,” he says. That may mean customers access their saved coupons by keying their phone number in the phone program or by using phones with embedded radio-frequency identification chips that allow scanners to pull up coupon lists instantaneously.

What this means for retail: While continues to partner with retailers to develop store-specific coupon programs, Horowitz notes it’s important to realize that “retailers are consumers of coupons, not issuers of coupons.” Instead of spending time and money to develop store-specific cell phone apps, invest in upgrades in point-of-sale scanners and software that work with universal mobile-coupon programs.

Next in distribution

Community projects link farmers and food buyers
To connect small farmers with regional food distributors and larger wholesale buyers, several nonprofits and business groups launched the San Francisco Foodshed Project last summer. Supported by the city and funded by a state grant, the Foodshed Project provides farmers with a centralized distribution hub and coordinated supply and demand.

What’s next: Similar programs are popping up nationwide, such as the nonprofit Local Food Hub in Virginia, and findings from the San Francisco Foodshed Project will be used to start more food hubs across the country. FarmsReach, one of the companies working on the Foodshed Project, recently conducted a regional food-supply meeting with attendees across the country. The event brought to the surface issues within the current system, such as farms not knowing how to effectively plan, pack and price crops according to food buyers’ requirements, says Melanie Cheng, founder of FarmsReach. “We’ve identified the fundamental problems in a vertical supply chain,” she says. “If the farms aren’t doing things the way the buyer wants, they won’t get a sale.” FarmsReach is working with partners to develop tools that will help farmers plant crops depending on local demand, access real-time regional produce prices and check packing and safety standards required by distributors.

What this means for retail: Until food hubs that work with grocery stores begin sprouting up, retailers should take the first step to connect with local farmers, Cheng says. Contact local farmers’ associations as well as farm co-ops to discover which sell wholesale. If you find a local farm that can provide high-quality products for your store, connect that farmer with your distributors. As Cheng puts it, “there is nothing more effective than a buyer telling a distributor who they want to work with.”

Next in agriculture

App allows in-field soil queries
To help farmers learn about soil properties in the field, Toby O’Green, PhD, a soil resource specialist, and Dylan Beaudette, a PhD candidate, both at the University of California-Davis Soil Resource Laboratory, developed SoilWeb, a smartphone application that uses GPS data to access soil-survey data anywhere in the 48 contiguous states.

What’s next: Since the Natural Resources Conservation Service stopped issuing hard-copy versions of its national soil surveys in favor of web-based versions, SoilWeb may be a vital, on-the-go tool for farmers needing to gauge the quality of farmland before planting crops, O’Green says.

What this means for retail: Eventually, farmers could use such site-specific soil data to partner with retailers and develop niche marketing based on their farmland, “like a terroir for organic crops,” O’Green says. “It’s like Hatch green chilies. They have recognition because of the physiology of the landscape they’re grown in. If you create that romantic feeling and connection to the land, some people will grasp it.”

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