Tariffs and the Rising Cost of ‘Fresh’: Tactics for the Tomato Wars

tomato tariffs battle

THE HUMBLE TOMATO has become a high-profile emblem of the tariffs controversy, and grocers are faced with delivering dual bad news to shoppers: Prices are likely to rise; quality and availability could suffer.

With the announced imposition by the White House of a 17 percent tariff on Mexican tomato imports beginning July 14, the food industry was thrust further into pricing and operational uncertainty. Tomatoes have been the stars of recent media attention, but the broader issue of tariffs on food imports presents a complex set of challenges for retailers, growers, distributors and packaged food manufacturers.

Politics aside, sweeping food import levies would create a cascade of market effects. Price increases may be expected to depress demand. Transportation from southern border ports of entry would decrease proportionately. Domestically-farmed substitutes, such as those in Florida and California, may travel greater distances to the points of consumption and remain in cold storage for longer periods. The demand for seasonal farm workers could rise. Dependent manufacturing sectors, like the $7 billion U.S. frozen pizza industry, may need to absorb or pass along increased ingredient costs.

That’s just tomatoes. Thanks to its favorable soil, climate and proximity, Mexico has also become an important supplier of avocados, bell peppers, eggplant, spring table grapes and citrus fruits to American consumers, a circumstance initially made possible by the favorable rules of the 1994 NAFTA agreement, later superseded by the 2018 United States-Mexico-Canada Agreement (USMCA).

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In-Store Marketing Experts Demystify the Shift to Digital

in-store marketing banner

THE SHIFT TO DIGITAL over the past 12 months raises questions about the ongoing relevance of stores and in-store marketing. Not to worry – even as more shoppers buy more of their goods online, stores remain the primary selling channel – for most categories.

Retail has never evolved faster. The ripple effects will continue to impact this industry for many years, even after the chaos of the COVID-19 pandemic fade in memory.

For this expert roundup, our good friends at Tokinomo gathered some of the most influential voices in the industry to share what they expect is next for in-store marketing. I was privileged to participate and offer some detailed comments.

How will in-store marketers respond? My esteemed colleagues and I offer a range of observations and opinions, encompassing: “The Year Ahead”; “In-Store Promotions Tools”: “Hybrid Shopping”; “COVID-19 Impact” and more.

The discussion was a golden opportunity to share some of my best licks with some of the brightest minds in our industry. A few highlights to whet your appetites:

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Retail Tech Innovation or Consumer Change: Which Came First?

retail tech innovation or shopper behavior

THE EXPANSION of omnichannel retailing presents our industry with a chicken-and-egg problem: Does consumer behavior drive changes in retail tech innovation or does retail tech drive changes in consumer behavior?

This is much more than a philosophical musing. It’s a question that matters greatly to retailers. Retailing becomes more intricate over time at a pace that exceeds growth in consumption.

This means the next incremental dollar you add to your top line will be a little bit harder to obtain than the last one. Omnichannel requires retailers to maintain, optimize and adjust to keep pace with shopper expectations and behaviors. Those expectations change fast. They are elevated by shopper experiences and shaped by forces outside the retailer’s control.

I call this the Law of Equivalent Experience: The best service standard experienced anywhere is instantly expected everywhere.

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Millennials: The Next ‘Pig in the Python’

FOR GRAYING BABY BOOMERS like me, the awesome power of demographics has in many ways defined our lives. There are a lot of us. We clogged our kindergartens, our universities, our workplaces, our media, our politics and our communities with sheer numerical might; and the retail marketing universe seemed to revolve around our needs and our sense of entitlement.

In his 1980 book, Great Expectations, author Landon Y. Jones called this phenomenon “a pig in a python” – a rather visceral visualization of how the boomers’ demographic bulge has traveled through America’s culture, distorting as it goes.

Along the way we also had a lot of kids. So many, in fact that we engendered an echo boom that is numerically larger than our own. In case you haven’t noticed, those 75 million “millennials,” as the demographers like to call them, now largely dominate cultural, political and marketing discourse. Not to mention our consumer economy – the 18-34 cohort wields $2 trillion in purchasing power.

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