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to American consumers, a circumstance initially made possible by the favorable rules of the 1994 NAFTA agreement, later superseded by the 2018 United States-Mexico-Canada Agreement (USMCA).

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Retail Media Network Gaps Hold Peril for Brands

Retail Media Networks Mind the Gaps

JUST WHEN YOU THOUGHT the retail media conversation couldn’t get any hotter, we hear high-profile executives from the largest Retail Media Networks (RMNs) and their technology suppliers on podiums and podcasts talking up a glorious future for brand advertisers.

RMNs were a recurring theme at last September’s Groceryshop event in Las Vegas and this month’s NRF ’24 Big Show in New York promises no fewer than 24 sessions on “Retail Media” topics. No wonder – the take from retail media sales this year is projected to reach $52 billion in the U.S. market alone, according to Coresight Research.

RMNs are retailer-owned digital and in-store channels which convey messages and offers to shoppers from CPGs and other third-party businesses. They have exploded in popularity over the past few years, due to the added revenue they can attract for retailers and the personalized audiences they can deliver to advertisers.

Right now, big RMNs wield heavy clout when it comes to scooping up those alternative revenues. The most prominent – Kroger Precision Media, Walmart Connect, Albertsons Media Collective, Target Roundel, Dollar General, Instacart – can deliver audiences in the tens of millions or more. These certainly boast wide geographic coverage that is important for brands.

It’s easy to be dazzled by the scale of those audiences and the purported advertising efficiencies and targeting capabilities of their networks. Savvy advertisers must also recognize that sheer, provable reach is only the first piece of the puzzle.

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Third Party Grocery Delivery? Omnichannel Grocers Wrestle With Choices

grocery delivery

THIS MORNING on RetailWire.com I jumped on my high horse again with this little screed about grocery delivery strategies for supermarkets. As usual, I didn’t shade my opinion about 3rd party solutions, and I know some will take exception. That’s OK. The debate is important.

For perspective, when I founded the VStoreNews e-letter in 1998 I posited a world where grocery stores delivered everything – their own products plus those of other local retailers. Hasn’t happened yet.

The Grocery Delivery Debate

My comments today on RetailWire.com:

I’m squarely in the camp that advocates for own control of all customer-facing services by the retailer. High delivery costs remain a challenge, but this factor must be accounted for in a comprehensive manner. What do you really risk when you put digital moments of truth in the hands of an outside solution provider?

Third-party services intermediate the retailer’s service experience and divert essential data about shopper behavior. I could never agree to hand over control of my brand relationships to gig-workers directed by a company that is angling to become my competitor.

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NGA Dispatch: Cyber Security Imposes Vexing Challenges

Leon Panetta at NGA
Leon Panetta at NGA (VSN photo)

“THERE IS PROBABLY NO ISSUE more important today than cyber security,” said Peter Larkin, President and CEO of the National Grocers Association, in his remarks at the opening session of the annual NGA Show in Las Vegas, this week.

True to his word, the event’s educational program included three breakout sessions and one general session devoted to various facets of cyber security – from safeguarding POS and mobile payments; to protecting proprietary customer data; to defending the enterprise against malicious attacks; to whether insurance can offer useful protection.

Keynote speaker Leon Panetta, the former Secretary of Defense and Director of the CIA, said in response to an audience question that he could foresee the possibility of a “cyber Pearl Harbor” assault on American institutions and infrastructure. The siege is already well under way: The CIA was turning back some 100,000 cyber-attacks per day during his tenure from 2009-2011, he said. The pace has certainly accelerated since that time.

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