On September 15 and 16 of this year, the Organic Produce Summit 2021, which brought together more than 1,200 professionals from the agri-food sector, was held in Monterrey, California. During the fourth educational session of the summit, topics such as the online purchase of natural products and the opportunity for organic fruit and vegetable companies to play an increasingly dominant role in today’s market were addressed.
How has organic e-commerce grown, and how does it shape future food?
The fourth session – moderated by Steve Junqueiro, former president and COO of Save Mart Supermarkets – provided an overview of the growth of online organic sales over the past 18 months and discussed the future landscape of online shopping and the players involved along the supply chain: retailers, distributors, organic exporters, etc.
In this regard, a general growth of online grocery sales in the United States is evident: during 2020, they reached 8 billion dollars for most of the year, while in 2021, revenues are estimated to be close to 7 billion dollars per month.
Different studies in organic products have evidenced this growth trend. For example, according to figures presented at the Sana Restart fair, e-commerce sales of organic products recorded an increase of 143% compared to 2019, somewhat higher than the 125% of food in general.
Turning to the previous point, experts agree that online sales of organic fruits and vegetables increased significantly during the pandemic. And while this has been apparent since 2009, the health crisis has forced consumers to buy their food through digital channels, primarily to avoid the contagion risks associated with face-to-face purchases.
Now, what is the reason for the preference for organic products? According to the survey “Voice of the Consumer Health and Nutrition” – elaborated by Euromonitor International – there are three main reasons:
- First, focus on preventive health, food safety, and sustainability.
- Animal welfare concerns.
- Changes in market maturity and consumer priorities.
This trend has benefited the exportation of fruits and vegetables, proving is a growing reality, as the market and consumers’ buying have changed.
What lies ahead for e-commerce, and how should the Agtech industry act?
David Bishop -partner of Brick Meets Click and one of the panelists at the fourth session of the Organic Producers Summit 2021- pointed out in one of his speeches that, according to his company’s research, only in August 2021, 50% of Americans made at least one online purchase of food.
The above allows us to understand that online sales are no longer the innovation they were years ago: today, they are an essential part of the market and a requirement for those who prefer to buy their food without going to the shops.
Retailers need to adapt their processes to this trend and start implementing digital sales channels based on their needs, audience budgets, and marketing objectives.
In any case, the customer experience should always be at the center of all strategies, which should be reflected in sales channels and payment methods to food packaging. These key aspects comprehensively meet consumer demands and must be the central competitive differential.
If it does not find the added value it seeks, the consumer can always go with the competition. So, for example, if it wants to buy online and pick up at the store, and the seller does not offer that alternative, the customer will go elsewhere.
In response to the above, the Agri-food retailer must combine quality, excellent level of service, and new ways of selling products. And although face-to-face sales have taken a back seat, it is always necessary to have a physical point, especially when it comes to organic products.
In line with the above, Carlotta Mast of New Hope Network -a company dedicated to promoting healthy living from different perspectives- pointed out in a virtual event that:
“Although total natural and organic e-commerce sales will double between 2018 and 2023 … consumers are still expected to primarily buy natural and organic retail products in physical stores over the next few years.”
These are the consumers who prefer the sensory experience when buying their food.
Likewise, it is also possible to go deeper into innovation and think – for example – about boosting “dark stores” (distribution centers focused on online sales), which would help optimize the supply chain and logistics, as well as align with customer requirements.
Of course, it will also be necessary to invest effort and resources in other areas, such as digital marketing, omnichannel, last-mile logistics, food packaging, and business digitization in general.
PolyNatural: strengthening future food
Understanding today’s requirements and challenges, PolyNatural has endeavored to exploit the potential of natural components to safeguard food quality and contribute to environmental sustainability and the growth of the Agtech industry.
This is possible thanks to Shel-Life®, a solution made from natural extracts, lipids, and vegetable polymers that forms a natural coating on the fruit, which extends the shelf life of the products and safeguards their quality, reducing food waste.
Shel-Life® is ideal for organic exporters, producers, and retailers in the sector because, unlike other coatings, it is not made from synthetic waxes derived from petroleum, responding to the demands of consumers who are increasingly concerned about what they consume.
A valuable solution for producers and retailers – especially those focused on export fruits – to increase the shelf life of crops (resulting in a higher return on investment), as well as to provide chemical-free foods
Natural coatings such as Shel-Life® are essential for companies and producers to position themselves among consumers increasingly aware of the elements present in the food they eat, a trend that’s here to stay.