This article was written by Scott Bouvier and Melissa Monks.
We recently participated in the annual Food and Grocery Australia
Conference where insights into the trends that will drive and shape the
future of food and grocery retailing and consumption were analysed and
discussed. We heard from international thought leaders, leading market,
consumer, brand and social analysts and senior executives from both
retailers and suppliers.
This article provides our views on the common themes with some legal takeaways.
Trust and authenticity
Our connected, diverse and better educated consumers want sustainable
healthy fresh products tailored just for them, with better transparency and
traceability and prices they can trust. Consumers will be increasingly
digital, global, social, mobile, visual and powerful. Products will need to
innovate more than ever in an authentic transparent way.
Trust takes a long
time to build but if lost it is very expensive to retrieve. The drive to
authenticity in Australia should be supported by our “world’s highest
standards” misleading and deceptive conduct laws. Those laws are likely to
be used by competitors, consumers and the ACCC to support those suppliers
that truly invest in authenticity and attack those that take short cuts.
While suppliers pursue the current ubiquitous “cost out and innovate more”
strategy, they will need to ensure that systems and capability remain in
place to support their product claims. We predict that the future will be
busy for consumer products lawyers as they test and support authenticity.
Experience, convenience and innovation
Consumers want an experience, connection and discovery, so we will see
more experimental stores with increased integration with eating in and
social environments (not food courts, more like marketplaces). Retailers
will have restaurants with takeaway versions of the meal ready to go in the
With our insatiable need for more convenience, there will be an
increasing trend to “retailer assemble and consumers prepare” models (eg
meal kits and box services) and better tasting ready to cook meals.
Significant innovation is needed to improve the taste and freshness of
ready to cook meals and suppliers will need to jealously protect their
intellectual property in recipes, production processes and packaging
The future of online and the voice assistants
Australia has a comparatively low uptake of online food and grocery
shopping at about 3% of the total market. This is expected to grow
substantially with increased promotion of click n collect, the advert of online focussed new entrants and the growing use of the Internet of Things within the home
automating our purchasing decisions. In the home environment, brands will
increasingly be at the mercy of the algorithms used by voice assistants.
Brands will need to ensure that they clearly
connect with the consumer (or otherwise pay for voice positioning?!).
Brands will need to shift from owning the aisle to owning the consumer.
Trademark lawyers will increasingly need to focus on the aural aspects of
brands and there will be interesting legal challenges involved in
differentiating between requested products and promotions.
Technology and the supply chain
There is a deluge of technology opportunities for the sector but there will be challenges as
they interface with unwieldy legacy IT systems. Block chain will become
commonplace to optimise the supply chain and support authenticity claims
and reduce waste. There will be increasing trends to localised ranging to
meet our culturally diverse consumers, with more SKUs across different
regions, so the supply chain will get more complex.
opportunities will not be with the average products but with variable
products and premiumisation, provided they can be produced and supplied
economically. There will need to be a massive investment in flexible
systems and technology skills to stay competitive. For the lawyers there
are likely to be IT disputes if consultants and suppliers don’t establish
clear expectations in business transformation contracts and continuing
challenges of retro-fitting law to new technology modes.
Data data data
Data will continue to be collected, monitored and matched in all
dimensions and offers increasingly tailored for diverse consumers. IT and
compliance systems will need to keep up and the data used responsibly and
with transparency. Regulatory reforms like the new European General Data
Protection Regulations (GDPR) will drive more transparency and there will
need to be significant legal and compliance training to manage the risks of
loss of consumer trust.
Tough retail environment
The momentum of price deflation has slowed and the reset to everyday
prices has almost bottomed out. More price stabilisation may be good news
for suppliers but the retailer environment is still tough. New entrants will challenge the incumbents but
the challenges presented by the Australian market will not be easy.
Even with increased competition, it won’t be any easier for
suppliers. The current review of the Grocery Code has confirmed significant
improvement in retailer and supplier relationships but it will recommend
changes to good faith obligations, wider retailer coverage, dispute
resolution, delisting practices and price transparency demands.