Many grocers have little to no visibility on their fresh inventory (e.g. meat, seafood, produce, & prepared foods). Today, there is a large demand from grocers for insights on quality, waste, inventory levels, tracking, and daily production for fresh and prepared foods. This becomes more and more prevalent as the market sees consumer demand for healthier, prepared foods continuously trend upward. For example, by 2025 the global organic food and beverage market is expected to reach $320.5 billion, tripling its market-value from 2016.
I recently had the opportunity to visit with a grocery retailer in North America with over 200 stores and $3 billion in revenue. A large part of our conversation centered on the retailer’s need to put a solution in place that would provide associates and management real-time visibility into their fresh inventory. Some of the challenges this retailer is facing are typical for many others and we see them on a daily basis. I’ve outlined several below.
Three major problematic areas grocery retailers face in fresh item management, ultra-fresh produce and food-to-go prepared in store:
The Bakery Department
- When do you start the production process for ready-made frozen items which have a thawing process prior to baking?
- How do you schedule production volume and timing for items that are produced multiple times each day?
- How do you take into consideration supplies needed for the production process and reduce regularly occurring out-of-stocks (e.g. the sleeve for baguettes)?
The Deli Department
- How do you solve for production constraints caused by equipment and preparation processes that vary by location?
- How do you ensure fresh deli items are put out in time and eliminate frequent out-of-stocks?
- How do you manage transformation of leftover rotisserie chicken and reduce large quantities of waste?
The Meat Department
- How do you effectively track and manage inventory of primals and the meat cuts?
- How do you forecast the impact of holidays that affect meat in different ways depending on the meat product and the holiday?
Based on these challenges, grocery retailers have a tremendous need to achieve real-time visibility for fresh. In addition, like most retailers, the grocer I was speaking with is driven by goals that focus on increasing sales and reducing out-of-stocks.
To achieve these goals, the optimal solution for them consisted of three key components:
- Forecasting for daily and intra-daily production, including suggesting the optimal quantity to be produced and consideration of various critical components during production, such as production lead time(s), quantity constraints, on-hand counts, and substitution (due to shortages or branding differentiation across locations).
- Inventory management throughout the production process by automatically tracking movements through consumption, production, and sales for ingredients and prepared foods thus providing visibility to the availability items needed for production.
- Rich data management enabling analysis of ingredients, supplies, and nested recipes to accurately forecast the demand for the prepared food and opportunity for transformation – eliminating waste.
Symphony RetailAI’s solutions address the major pain points grocery retailers are experiencing today in fresh by ensuring management of all fresh critical elements and providing end-to-end visibility.