We had a story the other day ab=out how Amazon was developing AI that could evaluate produce quality. One MNB reader wrote:
If Amazon’s new AI for produce quality can help me pick out ripe cantaloupe or ripe honeydew melon, bring it on.
Regarding the configuration of freezer and refrigerated sections, which I argued the other day needs to be disrupted by a technology genius, one MNB reader wrote:
Hey KC, not sure if you've been in a Shaw's lately, but they've started to put glass doors on ALL refrigerated cases, where possible.
Think end caps, dairy department, deli (bacon, hot dog case), even the produce cut fruit, bag salad wall now … However I think their reasoning is to capture all that wasted electricity and refrigeration, not exactly thinking outside the box, but it's a start!
What they have to do, I think, is use the doors for something other than a divider that saves electricity. Maybe, rather than using them to separate people from product, they could be used to draw people in.
MNB reader Rich Heilen wrote:
Been traveling so if you have commented on this and I missed it, oops, sorry…
Been stories the past week or so in our area about restaurant delivery – the delivery companies, the restaurants and consumers.
Two key points. One is some delivery companies are adding restaurants without telling them. So, a driver shows up, sometimes when an out-dated menu, wanting an order. The other is, no one seems to be making money at this.
A story from our area talks about restaurants that while appreciative of delivery services in the beginning times of COVID are tired of rate hikes so are starting their own delivery service. The gist is that the services raised rates because they were losing money. Now restaurants have cancelled so still losing money. Added to this is a break point where consumers feel prices, whether from restaurant or delivery service fees, are getting too high.
The story points out delivery fees of 30 percent when restaurants are operating at less than full capacity (really hurts on bar side where margins are higher) are saying “no.”
A poll shows 60 percent of customers – 71% millennials – are likely to continue with delivery after the pandemic.
So, where does this go? At some point there has to be profit at both the delivery and restaurant levels. So, where does that come from? The consumer most likely. If that’s the case what is the consumer breakpoint where some of that 60 percent (or 71 percent) says delivery isn’t worth it. If people start going back to dining in, do delivery rates drop? Who survives?
Guess my point is whether or not the pandemic has created habits we cannot really afford to sustain and if that’s the case, what’s the answer? One may be that we accept delivery works in dense core urban areas, less so in outlying urban, suburban and rural areas and it becomes a niche service.
And, on another subject, from another MNB reader:
Morning KC…I always enjoy my morning read of the MNB, but especially when there is a "Ted Lasso" trailer!
I may have missed it, so forgive me if you have already covered this, but have you heard much rumble about the real struggles with manufacturers (including CPG) specifically around (lack of) labor issues? I work for a small frozen food manufacturer, and it has been historically difficult to attract, hire, and retain employees for production facility work. Many employees are members of families where multiples of the households work in the same facility, so if one is quarantined….they all are.
Government programs like extended unemployment and stimulus checks allow employees the ability to take additional (unplanned) time off. The impact is far reaching as attainment drops, fill rates decrease, out of stock levels increase, stress/patience levels of retailers is stretched further…not to mention the short staffing that ensues causes smaller and an overall lower number of production runs, which means less efficient operations and higher COGS (and likely pricing increases at retail if the trend continues).
In talking with my many peers in the industry, this is not isolated to us….nearly everyone is struggling to keep up and keep moving forward in a time where demand has been unparalleled (and not slowing down). The extent that many companies are going through in order to hire entry level workers is nothing like I’ve seen in 30+ years in the CPG business.