FOOD RETAIL

The tech transforming food retail

Winning the war for basketsThe food retail landscape is rapidly evolving. Today’s shoppers

have more options than ever for where they can buy fresh food.

They demand high quality, seamless convenience, exceptional

selection and engagement. Forward-thinking retailers are

turning to technology to give it to them.

Proprietary research on disruptive technologies conducted

by Hussmann parent company Panasonic shows that some

companies are already using next gen-solutions to disrupt

barriers like inefficiency in food retail, and to improve the

customer experience. Among the innovations being explored

and employed are blockchain, AI, robotics and autonomous

vehicle tech – 4 of the 10 leading disruptions expected to

generate trillions in economic value in the decade ahead.

Retail game changers:• IoT, automation, and robotics technologies that enhance

operational efficiencies

• AI, blockchain and data analytics that allows stores to

personalize the customer experience

• Clicks-meets-bricks eCommerce integration for the

“on-demand” economy

• Renewable energy technologies that lower electricity costs

while sustaining the environment

E-grocery and changing consumer expectations bring new

opportunities to brick and mortar. We believe that connecting

disruptive technology into integrated solutions is essential to

staying on top of the trends and ahead of the competition.

Better food faster.We have the technology.

Count on Hussmann to be your trusted partner every step of the way to help you evolve and win the war for baskets.

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Collect perishables on demandThe Food Marketing Institute estimates that 70% of U.S.

consumers will be grocery shopping online by 2024.

And a leading grocery disruptor reports that 10% of all

shopping is expected to move to Click & Collect or delivery in

the next five years.

Hussmann is helping brick and mortar take advantage of this

eCommerce shift with innovations like our connected locker

solution. Stores can place these refrigerated pickup lockers

out by their curb or on strategic sites right in shoppers’

neighborhoods, overcoming “last mile” costs and logistics

hurdles while better managing quality control.

With this end-to-end cold chain solution, the quality of medium

temperature and frozen perishable products can be preserved

until shoppers pick them up, just like at their local grocery

store. Shoppers get convenience without compromising food

safety, backed by a secure system that keeps their data safe.

SECTION 1 (IoT): The internet of groceries

Much of the tech driving retail’s dramatic transformation

utilizes the Internet of Things. Aka IoT, the term encompasses

physical “things” such as devices and sensors that are smart,

connected, and able to collect and share data. By 2025, there

could be as many as 75 billion devices worldwide hooked up to

the IoT, Statista reports.

Connected solutions offer tremendous opportunities for the

food retail industry to streamline services and interactions.

Experts expect IoT to have an impact on all stages of the supply

chain, from more efficient product sourcing and less food

waste to automated checkout technology and more convenient

ways to get groceries into customers’ homes.

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The power to optimize produceDisruptive technologies aren’t just impacting food sales:

they’re affecting the very source of our food. High-tech farmers

are taking plants out of the soil and into water or air, combining

hydroponics or aeroponics with sensors, rigorous data

collection and algorithms to determine optimal conditions for

superior growth. The desired result is vegetables and lettuces

that are taller and tastier. This internet of produce also enables

growers to remotely monitor their crop health in the cloud, and

to alter light and nutrients automatically as needed.

At Hussmann, we’re enabling farm to market freshness with

solutions that bring our food supply closer to the point of

consumption. Our innovative Living Merchandisers let stores

grow live plants right in the produce aisle with technology

that keeps herbs, micro greens and veggies properly watered

so they stay healthy and fresh. These eye-catching displays

extend the shelf life of high margin, high shrink produce items,

and retailers report increased category sales of 200% by

always having vibrant, high-quality produce available.

Maintain freshness in the cloudAs omnichannel grows and more retailers enter the food

service market, food-related risks are escalating. Food recalls

cost the industry an estimated $55.5 billion a year, according

to the FDA. And contaminated foods cause 1 in 6 Americans

to fall ill every year. IoT powered technologies like those

employed by our StoreConnect solution bring new capabilities

to food retail, enabling enhanced quality and safety while

reducing waste and giving shoppers the freshness they crave.

StoreConnect remotely monitors a store’s refrigeration

equipment to ensure consistent performance, making it easier

for retailers to maintain optimal temperature controls – a key

factor in preventing food contamination. This intelligent, cloud-

based solution is poised to advance the retail service business

by leveraging technology that allows Hussmann to improve

first time fix rates, lower energy consumption, predict failures

before they happen and perform maintenance in response to

actual site conditions. Proper refrigeration keeps food on the

shelves and customers in your store.

Sources: Panasonic Corp. of North America, Hussmann Corp., McKinsey & Co., Nielsen & the Food Marketing Institute(The Digitally Engaged Food Shopper) and WSL Strategic Retail (The Shoppers Guide to Restructure Retail Report).

Communicate with customers in real timeSmartphones have significantly changed the way people

navigate the path to purchase. Look down the supermarket

aisle and you’re bound to see shoppers checking their phones

or texting as they push their carts. They can get real time

information on everything from price comparisons and recipes

to ingredient analysis and environmental impact.

As digitally dependent as we’ve become, 94% of total retail

spending still happens in stores, and in-store conversion rates

are four times higher than online-only conversion rates, a

recent study reports. Data shows that most shoppers make

the ever-important purchase decision in front of the shelf.

Savvy retailers are tapping disruptive tech to take advantage

of this prime time – and using analytics to influence those

decisions in personalized ways.

One such boon is beacon technology, which automatically

senses when mobile users are close and suggest offers to the

user via mobile messaging. Recently, a large-scale retailer

began incorporating beacons into their stores, showing

shoppers limited-time deals on nearby products based on their

purchase history and dietary preferences.

The rise in eCommerce has also given rise to streams of

data rich with information. The insights gleaned from digital

shopping are helping businesses get a clearer understanding

of the needs and behaviors of their customers so they can

personalize the experience.

Data collection and analytics allow retailers to better manage

their product mix and price, shopper engagement and in-store

marketing, all while catering to the changing habits of different

demographics. Harnessing the power of accurate, shared

data throughout the food industry supply chain is also enabling

transformative gains in labor efficiency, food safety, and

sustainability.

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SECTION 2 (DATA & ANALYTICS): Insights to streamline the food chain

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Intelligent pricingArtificial intelligence is reshaping retail, with grocers adopting

the tech in record numbers. Robotic assistants and cloud-based

convenience have become table stakes, while emerging

solutions such as AI-driven price optimization tools are upping

the competitive ante. This promising technology enables

supermarkets to automatically test prices and promotions

across their geographic network, and to receive ongoing

insights they can immediately act on. The experimentation-

based software can read what’s happening in stores with

real shoppers at the shelf, providing brick and mortar with

the same capabilities as eCommerce to optimize prices

using analytics.

DATA BRINGS PERSONALIZATION

intend to invest in or adopt

The goal? To use the data gleaned from digitalshopping to better understand the needs andbehavior of their customers.

SHOPPERS WANT CONVENIENCE

Consumers crave convenience and will pay moreto shop how and when they want

of shoppers who orderonline and pick up instore are satisfied withthe experience

Transparency at the scan of a tagAs shoppers realize they can find out almost anything about

a product at the tap of a mobile app, they now want that same

information about their food. Is it fresh and safe? Where did it

come from? Was it ethically farmed?

Food suppliers are testing data-driven block chain and IoT

sensor technology that can tell shoppers all that and more

just by scanning the label, and grocers are excited about the

potential of such solutions to drive customer engagement.

Electronic Shelf Labels (ESLs) from Hussmann company

Aperient use special NFC tags or QR codes to deliver custom

data at the scan of a phone, driven by the desires of tech

savvy Millennials and Gen Z to eat healthy and support

environmentally-friendly food sources.

Other benefits of this supply chain transparency are safer food,

less waste and better control of foodborne disease outbreaks.

Shared food data lets distributors and grocers be proactive if

a crop is contaminated, quickly pinpointing the source of the

outbreak without trashing unaffected inventory.

Sources: Panasonic Corp. of North America, Hussmann Corp., McKinsey & Co., Nielsen & the Food Marketing Institute(The Digitally Engaged Food Shopper) and WSL Strategic Retail (The Shoppers Guide to Restructure Retail Report).

Hussmann is doing its part to design, engineer and deliver a

propane R290 system – microDS – to refrigerate perishable

foods such as meat, produce, dairy products and beverages

for its food retail customers throughout the United States.

Propane R290 is proven to be safe for the environment: in the

event of any leakage, it has a tiny global warming potential of

3 compared to commonly-used hydrofluorocarbon refrigerants,

which have global warming potential ratings greater than 1,300.

The EPA lists propane R290 as an acceptable refrigerant

substitute under its Significant New Alternatives Policy, and this

fuel has an ozone depletion potential of zero. Because microDS

is non-toxic and environmentally safe, it is future-proof against

ever-changing state and federal refrigerant regulations.

Indoor & vertical farmingAnother way retailers are looking to meet the rising demand

for fresh, sustainable, locally grown food is by exploring indoor

farming and other alternative growing methods. Inside a

4,000-square-foot warehouse in Singapore, Panasonic grows

approximately 80 tons of green leafy lettuce; mini red radish;

mustard wasabi; a range of microgreens and other veggies a

year, utilizing LED lights and climate controls to overcome the

island’s shortage of arable land. Here in the U.S., urban farms

are sprouting in abandoned factories, on high-rise rooftops,

and within shipping containers, adopting the “farm-anywhere”

approach to bring local produce to a space-starved contingent

of city-dwellers.

In the last few years, companies have shown increased

interest in innovations that reduce their carbon footprint and

protect our environment. Top decision makers are considering

renewable energy, with Panasonic research reporting that 4 in

5 companies are ready to flip the switch. Sustainable products

and solutions offer food retailers lower energy costs, more

efficient operations, less food waste and more responsible

business practices.

Safer refrigerantsAs more consumers enjoy modern grocery shopping globally,

up to a quarter of greenhouse gases could come from

refrigeration technology. For food retailer leaders, lasting

change means more than meeting sustainability goals, it

means leaving this planet better than we found it. Energy-

efficient equipment and safer, non-toxic refrigerants are

an imperative as we strive to feed an exploding worldwide

population projected to reach 9.8 billion people by 2050.

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SECTION 3 (SUSTAINABILITY):

Tech for a better world

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One promising idea is food waste reduction software, which

helps businesses track food inventory and assess how much

is thrown away as a result of inaccurate management and

ordering processes. This technology is being used by food

service companies and in commercial kitchens, enabling

them to measure and analyze food waste to reduce inventory

costs by discarding less food. Several of these waste tracker

applications even have capabilities that allow businesses to

safely donate their excess food to those in need.

New technologies such as food reprocessing are giving expired

food new life, reducing environmental impact and turning

waste into profit. One socially conscious bread manufacturer

has developed a concept to reprocess breads that are

considered unsuitable for sale. Typically, this bread gets

thrown out or ends up as cattle feed, and the downgrading of

food takes a big toll on the planet. But now the rejected bread

is being reprocessed into sourdough, becoming an ingredient

in the company’s production line.

3D food printing is another trend that’s gaining momentum,

and early adopters are using this tech to engineer new breeds

of healthier, sustainable foods. The food printers of tomorrow

have the potential to allow users to customize their meals,

specifying the ratio of calcium, protein, carbs and other

nutrients for optimal nutrition.

Waste prevention, recycled & engineered foodsRoughly 50% of all produce in the U.S. is thrown away, to the

tune of $160 billion worth annually. Wasted food is also the

single biggest occupant in American landfills, according to

the Environmental Protection Agency. Disruptive tech is being

used to curb food waste and extend shelf life and at every step

of the supply chain.

From sensors that monitor and reduce oxygen in shipping

containers to allow fresher fish and meat to travel farther, to

processes that absorb ethylene gas in refrigerators to store

fresh produce three times longer, to price-adjusting apps

that use algorithms to reduce food waste and increase sales

based on realtime demand, emerging solutions are helping

businesses and consumers save money while being more

responsible with the world’s resources and food supply.

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What’s on the horizon?Here are a few promising developments.

AUTONOMOUSGROCERY STORESSupermarkets-on-wheels bringmilk, eggs and perishablesright to your door on-demand,even after hours.

AIRBORNE WAREHOUSES& DRONE DELIVERYAirships becomesupermarkets-in- the skystocked with high demanditems for faster delivery

supermarkets-in- the skystocked with high demanditems for faster delivery

3D FOOD PRINTINGUsing powdered or liquid food material in

a process know as additive manufacturing,new breeds of healthier, sustainable foods

and nutritionally complete meals can becreated at the push of a button.

FOOD REPROCESSINGNew technologies and processes

give expired food new life,reducing environmental impact

and turning waste into profit.

AUTOMATEDFULFILLMENT

CENTERSRobots sort and pack

groceries around the clockin smart, autonomous

stockrooms.

REFRIGERATEDCOMMUNITYPICKUP LOCKERSNeighborhood-basedclick and collect towerssolve the logistics hurdlesof last-mile grocery delivery.

A few decades ago, the idea of robot workers sounded

far-fetched. Not so any more, as automation and robotics

technologies gain traction in food retail, with companies

exploring solutions to help with every facet of the industry,

from farming, packing and picking to stocking, checkout and

autonomous delivery.

Automation from harvest tohome deliveryOne farm in Japan is overcoming the industry’s labor shortage

with the help of Harvesting Robots. Leveraging AI and a camera

equipped with image recognition, these farm bots are able to

determine which tomatoes are ripe enough to be harvested by

scanning their color, then use a primary robotic limb to pick the

good ones off the vine.

As AI and machine learning become more sophisticated, so too will

the capabilities for robotic labor. Experts agree in the next 10 years

the food retail industry will increasingly benefit from this tech.

Already, Amazon’s warehouses have over 30,000 robots working

alongside humans in the fulfillment process, and other large

retailers are expected to follow their lead. Work is underway in

the United States for Ocado’s first automated robot warehouse with

Kroger, and the U.K. company is also licensing its technology to

retailers in France, Sweden and Canada, according to Forbes.

SECTION 4 (AUTOMATION):

The future of food retail

Sources: Panasonic Corp. of North America, Hussmann Corp., McKinsey & Co., Nielsen & the Food Marketing Institute (The Digitally Engaged Food Shopper) and WSL Strategic Retail (The Shoppers Guide to Restructure Retail Report).

Inspired ideas that anticipate shoppers’ desiresAt Hussmann, we are armed with expertise in all areas of food retailing,

from our merchandising and refrigeration foundation to leadership in energy

efficiency, sustainability, store design and online grocery innovation. As

we continuously explore, test and understand new, state-of-the-art digital

solutions, we are poised to help retailers make sense of the changing

landscape and to implement the transformational changes that will deliver

solutions excellence in our dynamic world.

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Learn how Hussmann can help move your food retail needs forward.

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