The food and grocery industry is going through a period of major change, and ARTS is organizing a new initiative to support its attempts to provide consumers with fresher, safer and environmentally-friendly products. The catalysts for these changes are:

• Increased competition in food retailing from mass merchants like Target and Walmart — the latter being the largest seller of groceries in the United States

• Health concerns from contaminated food. The mad cow epidemic in the 1990s triggered the destruction of more than 50 percent of the U.K. dairy herd, and the tomato/jalapeno scare this summer devastated farmers in the United States. All told, there were 4,500 reported outbreaks of food-borne illness between 1990 and 2003

• Global warming is now top of mind, as people rethink their duty to be responsible stewards of our world.

Fresh foods — meats, poultry, vegetables, baked goods and the like — constitute 32 percent of total grocery store sales (as well as 59 percent of grocery shrink) but account for 50 percent of profits. Grocery retailers realize their competitive edge and are implementing fresh management strategies to improve margins and customer loyalty.

Fresh strategies include closely monitoring the supply chain to ensure a flow of goods matched to consumer demand — not daily or weekly, but hourly. Store-produced goods like prepared meals and bakery items require applications to monitor not just demand, but the required ingredients and labor to prepare the items.

A Fresh Item Management (FIM) strategy includes a series of integrated applications linked by shared data as shown in the accompanying graphic.
Existing ARTS XML schemas can be used to link these applications into a fresh management strategy that will ensure grocery companies keep their competitive edge by having the right inventory at the right time and price. Speaking of right price: Since consumers carefully inspect fresh products (and buy only the freshest), automated management can promote sales by offering yesterday’s baked goods for less than today’s.

Critical to public health
Stopping the flow of contaminated goods to market and quickly removing those already on the shelf requires traceability. Tracing contaminated inventory to the producing farm quickly and locating and recalling all shipments is critical to public health.

The U.S. government passed Country of Origin Labeling (COOL) legislation in 2002 to try to address this issue, but it is still pending enactment – and this bill only covers beef, pork and lamb. What about produce and poultry? ARTS data standards include provisions for passing along this information, although it will require collaboration among all players in the supply chain and the associated standards organizations.

Several years ago, Tesco began providing nutritional labeling on most products above and beyond what is required by law. The company has attributed part of its exceptional year-over-year growth in sales and profit to this initiative.

Now, once again, Tesco is leading the industry by announcing it will place carbon footprint information on up to 70,000 items – allowing consumers to choose goods based on the impact their production has on the environment. Tesco CEO Sir Terry Leahy has been quoted as saying this will not be simple, but that he hopes it becomes an industry standard.

Collaborative database
To effectively and accurately capture records and manage the carbon footprint of food products will again require a cooperative effort very similar to COOL; a key factor will be a standard database to store the information and make it accessible to all. ARTS is the standard data expert for retail.

ARTS invites all interested parties to learn more about, and assist in the development of, these efforts by attending the ARTS meeting October 13-14 at the offices of Wincor Nixdorf in Berlin, as well as the 6th Annual Retail Technology Summit, October 15-16 at the Steigenberger Hotel Berlin.

For more information about both events, please visit www.nrf-arts.org or contact me at maderr@nrf.com.