The April 22 Produce Marketing Association's weekly virtual townhall webinar, Industry Responds to COVID-19, featured four leaders in the fresh produce e-commerce sector. The event aimed to explore the pressures on the industry created by the COVID-19 crisis, and how consumer demands and needs are shifting for produce growers and others.
The expert panel included Jacob Krempel, Senior Director of Procurement, HelloFresh; Eric Li, Vice President, Shanghai Yiguo E-Commerce Co., Ltd.; Tony Stallone, Vice President of Merchandising, Peapod; and Mathijs Lak, Senior Buyer and Partnerships, Picnic Technologies. PMA CEO Cathy Burns served as facilitator for the webinar.
In terms of changes to Picnic Technologies due to the coronavirus pandemic, Lak said that the Dutch online grocery-delivery firm, has seen a huge increase in online food ordering. Picnic is "the new milkman," he says, "a supermarket on your iPhone."
The company, in fact, has dubbed their grocery-delivery service "Milkman 2.0"; its business model includes using electric delivery vehicles, and focusing on less food waste and miles traveled. "Fresh produce supply is still stable," Lak said, "with basics such as cucumbers and broccoli in demand." The global coronavirus pandemic, he said, "has caused our customer waiting list to jump from 60,000 to 200,000."
China-based online fruit and vegetable retailer Shanghai Yiguo E-Commerce Co., Ltd.'s company vice president Li said that his company is dealing with "huge disruptions in the Chinese supply chain" as Yiguo fulfills a growing number of online orders. "Our penetration rate is higher [since the COVID-19 outbreak]. Our customers used to be younger, but now we have many new customers who are my parents age."
Many customers are buying ready-to-cook and ready-to-eat products from the website rather than individual ingredients, Li said. He added that with the surge in orders, deliveries can run as much as two days behind. But partnerships that have allowed for streaming videos of popular Chinese celebrities on the company's website have kept sales up, he added.
In terms of what is needed by supply-chain companies during the COVID-19 crisis, Peapod merchandising vice-president Stallone said that the company looks at several variables when forming partnerships with produce suppliers. He said the firm asks, "Do you have a digital strategy?" "Do you have a digital image on the web?" "Do you have automatic picking" "What is your packaging for curbside pickup?" In addition, Stallone said, quality and promotions are other factors the company looks for in a produce partner.
HelloFresh Senior Director of Procurement Krempel said that his company chooses produce suppliers based on potential partner's flexibility, consistency of supply and the ability to customize orders. "We're looking for [suppliers] who do things differently, who can grow with us," he said.
Overall, the consensus among the speakers seemed to be that greenhouse suppliers and produce growers need to do what companies are doing nationwide — adapt to changing business landscape by creating virtual spaces and virtual commerce opportunities while guaranteeing a consistent supply of quality products.
PMA's weekly series Industry Responds to COVID-19 launched in March, when the coronavirus crisis was beginning to hit the U.S. produce industry. The series airs on Wednesdays at 12 p.m. EST; visit PMA's website for more information.