By Janette Barnard - Prime Future
See the original article here
To frame up 4 trends that will drive change upstream (production, processing) in animal agriculture, we start with 4 recent downstream (retail, foodservice) announcements.
Walmart’s response to Amazon Prime: "Walmart Inc. is trying again to build a membership program that can rival Amazon Prime, the Amazon.com Inc. service with more than 150 million members. On Sept. 15, the retail giant will launch Walmart+, a $98-a-year membership that includes free grocery delivery, a discount on gas from Walmart parking lots and the ability to check out via a mobile phone in stores.”
The moves above illustrate 4 trends that will inevitably impact upstream beef, pork, poultry, and dairy:
- Grocery is at the center of what seems like the Mega Retail War to End All Retail Wars. Whole Foods sells premium meat and poultry with multiple specialty claims while Walmart sells case ready meat & poultry, but is launching its own beef supply chain. Grocery is at the center of a slugfest between Amazon, a $1.7 Trillion company, and Walmart, a $416 Billion company. Meat is at the epicenter of grocery. This matters.
- Buying behavior massively shifting to online. How does the meat industry take advantage of consumers moving much of their retail purchasing online, either for delivery or curbside pickup? You know I think this is the tip of the iceberg of what D2C will mean to packers. But what does it mean for how packers serve their retail customers?
- Increasing alignment among supply chains. The proverbial distance between animal health companies and retailers, or between cow-calf producers and foodservice companies, is shrinking.
- Increased fluidity. An animal health company as a data provider to retail? Packers as retail, e.g. Perdue Farms D2C? Retailers as packers, feeders, cow-calf producers, e.g. Walmart’s Prime Pursuits initiative with 44 Farms? The traditional lines are blurring. Everyone is in everyone else’s lane. We’ll unpack this more another time, but this is one of the highest impact trends that’s just beginning to play out.