TORONTO — Changing consumer habits in light of economic pressure was a key theme of a retailer panel at the Canadian Produce Marketing Association’s Annual Conference and Trade Show in Toronto. The panel, which 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 units are up.
The Value Gap: Why Shoppers are Trading Down
“The consumer out there is definitely challenged, nervous, afraid and budget constrained,” he says. “Units are up in produce, but they are trading down, looking for value.”
He says that while produce is still an important part of shoppers’ diets, consumers are increasingly looking for value in their produce purchases.
Loucks says Whole Food shoppers are a mix of both shoppers looking for value, but also willing to trade up for quality.
“We’re seeing our segment share growing in people looking for value as well as people who are willing to pay for premium products,” she says.
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. But, Hong Kong residents 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 that shifting consumer behavior, Dray says Walmart assesses data to better understand where the consumer is heading to plan accordingly. Dray 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 to help fuel 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, too, she relies on the supplier and grower relationships as well as travel, restaurants and farmers’ markets, too, for inspiration for 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.”
Chu says as a distributor, Top Weal helps use Instagram marketing to create trends and inform the consumer on the benefits of products.
What Major Retailers Want: Innovation and Local Quality
Chu says as a distributor, Top Weal helps use Instagram marketing to create trends and inform the consumer on the benefits of 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 Louck and Dray would like to carry more of, Louck 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 looking for 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 says. “Just innovation.”
And Loucks says she gets really excited about sustainable packaging options, especially in the grab-and-go space.
“I really get excited about uh sustainable packaging for produce,” she says.
And for suppliers hoping to catch Walmart’s or Whole Food’s 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 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, too, says it’s important not to lose sight of the role produce plays 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 a 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.”
And 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 uh 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 Partnerships
Chu, too, says 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 a key skill for produce industry businesses is 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.”
