Tag: value chain

I have a team member with a propensity for out of left field utterances.  A recent one got me thinking, especially as it matched a theme I’d been exploring for that presentation at Peking University I mentioned in the previous post.  It went something like this:

“We’re still cavemen trying to live in a 21^st century world”

And one of my themes in myPeking speech was about the rate of change in my lifetime, how it is accelerating and methods of learning to cope with the problems this causes.

Whilst I don’t consider myself a caveman, there are times when the rapid rate of change happening everywhere I look does make me wonder if we, homo sapiens, are ready for it from an evolutionary standpoint.  Let’s face it, the human body is not built to withstand travelling above a certain speed.  We are soft flesh over a breakable skeleton.  Yet here we are, able to buy and drive cars that can travel well in excess of that certain speed.

Much of what we do, a caveman would recognise: we live in caves, albeit called houses and with air conditioning; we wear furs, although the clothes we wear come from mammoth stores, as opposed to a woolly mammoth; and we still eat nuts, berries, fruits and vegetables – although what Mrs Cro Magnon’s opinion of supermarkets would be, I dread to think.  So we’re still doing all the same things the cavemen did, we’re just more sophisticated in how we go about it.  We can devise changes in technology far faster than Mother Nature can in humans by evolution, so it’s no wonder the two are increasingly out of step.

How has this rate of change affected our food?
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What comes to your mind when you see a vehicle like this?  Brightly coloured, two front bits and no rear end, a re-engineered middle and a ruddy great banana on the top of the roof?

I don’t know about you, but what comes to my mind is that this very cleverly put together promotional vehicle reflects the state of our produce retail  industry.

The two front bits represent respectively the supermarkets – Foodstuffs (New World, Pak N’ Save) at one end and Progressive (Countdown/Wooolworths/Foodtown)  at the other.  The ‘bit in the middle’ is the rest of the retail industry – the urban green grocers, the fruit shops at the edge of town, the gate sellers, the farmers markets, the opportunitists at the roadside selling produce from their vans, the office fruit bowl stockists and the internet ‘box of stuff’ vendors.

There are several questions that play on my mind in connection with this state of the retail industry:

• How big are the two front bits, i.e., the supermarket produce share, really?
• What is a realistic level for the supermarket share of produce sales before it disturbs the industry value chain equilibrium?
• To what extent is ‘the middle bit’ dependent upon the two ‘engine drivers’ for its well being as opposed to being in control of its own destiny?
• How will the local New Zealand model be impacted by international trends in the next five years?

Let me start with this observation.

Fruit and vegetable ranges stocked in supermarkets are continuing to reduce, driven by item based shrink and profit consideration at both merchandise and buying office level. Buyers and category managers whose performance is judged by the profitability of narrow product categories are not prepared to gamble by stocking niche products.  Store staff with insufficient training are not best placed to sell non-mainstream produce.  So if I am looking for whitloof, fennel and red currants, I know that I will not find those in the supermarkets.

This thread will be continued over the next few weeks and comments are as always welcome.