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Jan-Willem Grievink (FSIN) on online sales, blurring and chain models
"Strawberry sales by algorithm becoming a reality"
The takeover of retailer Whole Foods Market by the American internet giant Amazon could cause a real revolution in the food sector according to Jan-Willem Grievink of the Foodservice Institute Nederland. "What Amazon is doing is unburdening. People said the same about Zalando: 'This will never catch on' That fact that they don't make money from every aspect of their business isn't relevant. People don't think in old fashioned earning models. It's about what the consumer wants. All of Amazon, including the cloud services, is very profitable."
"Every Amazon subscriber now pays an annual fee of 235 dollars and is therefore completely unburdened and receive their shopping delivered to their home. This goes for consumers, but also the smaller stores and restaurants. People are now experimenting with drones. It costs money, but imagine how many links you are removing from the chain. The entire chain of purchasing, cross docking, storage is taken away," explains Grievink. "This may seem far away, but will be a reality within ten years. Certainly in America, and I expect England, France and Germany to be the first in Europe."
"This particularly offers opportunities to smaller suppliers. It doesn't matter much to Amazon how big their suppliers are. They read algorithms and can make automatic connections for growers who want to sell a few pallets of very special strawberries to strawberry lovers," says Jan-Willem. "they know the spending pattern of a customer, so they can offer customers of a new variety or dessert that suits them. We are quick to say that that kind of information, about a customer and their behaviour, is creepy, but we actually like being unburdened."
Blurring 'Blurring' concepts also means that they're not immediately profitable. Most retailers that added catering have to deal with high costs and an explosion of complexity and turnover a loss in their new service. The same goes for catering companies that retail. They have to learn the other's expertise or hire it. Yet blurring will take flight and take billions of Euros from the safe 'middle' or the current formulas in the food sector. Euros that the supermarket and catering will have to hand over," Grievink expects.
"Food is more and more fashion and part of the lifestyle. For everyone. It's about the experience. People want added value. I see growers who don't have enough added value and pride for their product; the same with supermarkets. Don't be fooled into thinking that the consumer isn't waiting for it. When La Place started serving fresh pressed orange juice for 3.95 Euro there was a market for it. The consumer is farther ahead than we think. The problem is often that a grower with around 60 hectares of tomatoes is working on keeping the costs low and making energy back rather than looking for the tastiest tomato in the world. It's a different job. I often speak to growers who don't even know where their product goes and how it is sold in the supermarket. It's unbelievable!"
"We have an oversupply of a lot of products in the Netherlands and a large amount of supermarkets that don't want to be more expensive than their colleagues. This is why there is so much focus on price and little variety. Surviving in the mainstream jungle means choosing cost-leadership. You can escape this by operating in a closed chain, but this demands a lot from your company, as you have to know you customer's customer and can choose added value. I'm convinced that there is space for small scale. This is why I expect a growing market for specialist businesses in the Netherlands. In short, it demand making choices, but it starts with love for your product."