FOOD LOGISTICS AND TRENDS IN FULFILLMENT by AMAZON

As consumer tastes continue to become more refined, retailers must target their private label offerings to a very savvier shopper. We continue to see fierce competition in the grocery space with new entrants. The aggressive expansion by German retailers promoting private label will need to be watched closely by US grocers. If you are a US grocer & do not have a steady supply of premium label products, you will struggle in the marketplace. Up-scaling can be done in a variety of ways for retailers. Categories here that are changing include areas with life style changes with tastes & activities. Look at dairy, milk now being replaced by yogurts, flavored milks, and alternative milks. Ready to eat single service offerings flying off the shelves. In speaking with Buyers, Store owners, Customers from Sysco, I see in the Southeast stores; here that frozen foods, deli programs, grocery food service, natural, organic, free-from, health oriented, and upscale foods are trending. We will see some exciting time in the next few years with more competitors fighting for market share will be a great benefit for consumers pocket book $$$ !!!

Amazon.com is looking to fill more than 50-60K jobs in a hiring spree at 11+ warehouses. The Seattle company said on 8-16-2017 it's planning to make thousands of offers on the spot at the locations. they are looking to continue expansion in food logistics with recent acquisitions such as Whole Foods. WF offers free delivery of products & my guess would be to be used as a pickup site too for Amazon products for consumers. Food produce logistics growing in many areas in USA. New entrants too from Germany. German grocery chain Aldi said it would invest $3.4 billion to expand its U.S. store base to 2500 by 2022, raising the stakes for rivals. This is making folks at Publix, Kroger, (Lidl- not nervous but growing in the Southeast), Target, Buy-Lo & many others nervous.

WHY THIS FOOD GROWTH?

The U.S. vegetable and pulse sector comprises hundreds of independent markets within the food marketing system. During the first 8 years of the 2000s, U.S. farm cash receipts from the sale of vegetables and pulses (including potatoes) averaged $17.4 billion--14 percent of U.S. crop cash receipts. This quantity was generated on less than 2 percent of all U.S. harvested acreage. Annual per capita use of vegetables and pulses in the same period was 2 percent higher than a decade earlier. In Chicago, Discount grocer Aldi will spend $1.6 billion+ to remodel and expand more in the Midwest where customers hunt for fresh produce, meat and prepared foods, to eat in the store or take home. ALDI ramps up United States expansion. Goal: 2500 stores by end 2022. ALDI produce section is one of the grocery chain's strategic growth area.

According to the 2007 Census of Agriculture, U.S. vegetable farms are largely individually owned and relatively small, with three-fourths of the 69,172 farms that produce vegetables harvesting fewer than 15 acres. However, relatively few farms account for most commercial sales of vegetables. About 9 percent of operations classified as vegetable farms had sales over $500,000, yet these farms accounted for 90 percent of the value of vegetables sold by growers. Vegetable and pulse production (including potatoes, sweet potatoes, and mushrooms) occurs throughout the United States, with the largest acreage in California, North Dakota (primarily potatoes and pulse crops), Idaho, Michigan, Minnesota, Washington, and Wisconsin. More than half of all vegetable production occurs on irrigated acreage. The Upper Midwest (Wisconsin, Minnesota, and Michigan) and the Pacific States (California, Washington, and Oregon) report the largest vegetable acreage for processing, while California, Florida, Arizona, Georgia, and New York harvest the largest acreage for the fresh market.

Lets chat a little more about Amazon & eFulfillment. 

The Amazon warehouses locations include:

1-Baltimore

2-Chattanooga, Tennessee

3-Etna, Ohio

4-Fall River, Massachusetts

5-Hebron, Kentucky

6-Kenosha, Wisconsin

7-Kent, Washington

8-Robbinsville, New Jersey

9-Romeoville, Illinois

10-Whitestown, Indiana

11-Jacksonville, Georgia- Folks on the ground have said not all jobs have been filled & there is a struggle on finding quality candidates in Jacksonville.

# 12-potentially more soon.

As reported by Geekwire: In a “first-of-its-kind” partnership, Amazon is working with Arizona State University to create a voice technology engineering program, which includes an option for students to get customized Alexa-powered Echo Dots in their dorm rooms. Amazon donated to ASU 1,600 Echo Dots, which retail at $50 a piece, enough for every freshmen moving into the new high-tech, engineering-focused Tooker House dorm. Amazon also worked with the university to develop a custom ASU skill to get information about the school, academic schedules and the campus as a whole.

As noted by ASU Now, the new program will also include three undergraduate engineering courses with voice development lessons, with a fourth course planned for the spring. Students will be encouraged to build skills for Amazon’s digital brain Alexa, using third party tools that are available to all Alexa developers as well as code examples. Voice technology has become an important point of emphasis, not just for Amazon, but many of the world’s biggest tech companies. Everyone these days has a voice-powered digital assistant and is looking for ways to get a leg up on the competition.

Amazon has turned over the keys to Alexa to the developer community. In working with universities to supply students with devices, tools and classes, Amazon is creating a wider talent pool of engineers to draw on later, and in the meantime, a larger community of third-party developers building Alexa skills. Amazon hive potential concept for drones, they have a patent filed on this too.  Amazon.com is a unique company, but what makes it stand out can best be seen through a comparison with its fellow tech titans. Of the five tech companies that have come to dominate the stock market, all have done so by excelling in one line of business -- Apple in gadgets like smartphones; Alphabet in search; Microsoft in office software; and Facebook in social networks. All of those companies make investments in order to strengthen their positions in the markets they dominate.   Amazon, however, operates differently. While the company no doubt has a dominant position in e-commerce, it's also a leader in cloud computing, the #2 video streamer, and a leader in e-books and voice-activated technology like Alexa, and it's growing in a number of other categories it competes in. The company resists conventional definitions, which is part of what has made it so attractive to investors.

But the best metaphor to understand Amazon may be to look at it as a growth investor or a venture capital firm inside a giant company. Amazon approaches emerging markets and technologies as a growth investor does, looking for blockbuster returns that will offset the flops that inevitably result from other investments. Many of Amazon founder and CEO Jeff Bezos's mantras revolve around this philosophy. He willingly embraces failure, having said, "I've made billions of dollars of failures. Companies that don't embrace failure and continue to experiment eventually get in the desperate position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence." At the time, Bezos was referring to the Fire phone, a flop that led to a $170 million

At the time, Bezos was referring to the Fire phone, a flop that led to a $170 million write-down. The Amazon Founder also likes to say that the company is always at Day One, meaning it is always innovating like a startup, rather than becoming a complacent stalwart. Amazon continues its growth just like beBee.com, founders Javier & Juan are on a roll.

Amazon continues to grow like a weed, or if you live in the South, like Kudzu. Looking at the last 90 days of earnings calls and other corporate events such as investor days, a trend emerges. Amazon comes up a lot. It was mentioned a staggering 635 times over that time frame, while President Trump came up just 162 times and wages were discussed 111, the earnings call data show. It’s become even more pronounced over the past 30 days, with Amazon garnering 165 mentions compared with 32 for Trump and 22 for wages. More fresh produce coming your way from domestics & international suppliers from locations such as South Africa, Mexico, Chile & Peru.

If you have questions or need packing space in the USA please contact Bill Stankiewicz @ 1.404.750.3200 or email bstankiewicz@portfreshlogistics.com . We will continue to see more growth in Cold Chain logistics within the Southeast, Northeast & Midwest areas of the USA.

Thanks for reading,

Bill Stankiewicz , Cold Chain Logistics Executive , APICS Chapter Board Member

Office: 1.404.750.3200 , email: bstankiewicz@portfreshlogistics.com

www.savannahsupplychain.com

www.twitter.com/billstankiewicz

www.beBee.com USA BRAND EXECUTIVE

C: Information here shared from Motley Fool news clippings, & GeekWire, Amazon News Service