Randy Riley will be a panelist on The Retailer Roundtable at the Organic Produce Summits next month in Monterey, CA. OPN sat down with Randy to learn more about Kroger’s innovative growth in organics, upcoming trends and how their new partnership with Ocado will help fuel growth.
Randy Riley, Director of Produce, Kroger
OPN Connect: According to the latest data, fruits and vegetables continued to be the largest organic food category, recording $16.5 billion in sales in 2017 on 5.3 percent growth. How important is organic produce to Kroger’s overall growth strategy?
RR: “Kroger wants to be where the customer wants us to be, and on those topline numbers alone you can see how important clean and healthy options are to so many shoppers. Organic produce has been a staple of our growth for more than a decade. It will continue to be a focus. Recently we shared our share of the organic market publicly, in part, to make sure our shareholders and customers understand just how important this growth in is to both produce and the total store.
We could not get to a 40 percent market share in the markets where we operate without making a major commitment to our customers, and they’ve rewarded us all for it. Currently we do not have plans to slow down.”
OPN Connect: What are some new innovative products and trends you see driving growth in your organic produce department?
RR: “Clearly convenience, value and inspiration continue to drive the customer’s purchase trends. I think you’ll continue to see us experiment with the delicate balance between the mix in bulk between conventional and organic product, packaged offerings that make great meals simpler for our consumer and emerging organic commodities that can meet the demand our customers bring. I also think you’ll see us work with Our Brands (Kroger’s corporate brand teams) to help deliver products that customers recognize and trust.”
OPN Connect: Kroger recently announced its partnership with Ocado, a British firm that uses robotic distribution centers to fulfil online grocery orders. How do you anticipate this partnership will continue to fuel your growth in the organic category?
RR: “You’ve heard our CEO, and all levels of our organization’s leadership, share what we feel will be the key to our growth pretty openly. We see our greatest responsibility and opportunity to deliver anything our customer wants, any way, time or where they might want it. Ocado is a proven leader in delivering beyond their customer’s expectations, and they bring a remarkable perspective on how the grocery space is changing. They’ve done it without physical stores; that’s no small feat.
We’re truly excited to work together and to share our learnings to create something new. Without any doubt this will help us drive growth by accelerating how deeply we can connect with customers through convenience. Technology and data will continue to be at the forefront of Kroger’s future growth strategies.
OPN Connect: As a leading organic retailer, what do you see as the industry’s most pressing risks and brightest opportunities?
RR: “The last year has been a challenging year for all of us. We’re all facing material changes in the marketplace. Labor availability is increasingly scarce, and it’s impacting our ability to serve customers and grower’s ability to supply products. In turn, wage pressure is creating real impacts to the costs of doing business - both in retail and to our growers’ business dynamics. Paired with rising costs in the other facets of our industry, it’s more important than ever to be as efficient as possible.
Ultimately, the consumer continues to reinforce that value drives their purchase behavior. It’s become imperative that we strategically partner to grow our business with suppliers. That’s also the most inspiring or brightest opportunity we’ve seen over the last year. The willingness of our partners to work together in joint business planning activities that allow us to gain efficiencies in a way that drive both businesses bottom line results. We’re confident that this greater collaboration and tighter partnership will ensure we all continue to succeed.”
Organic fresh produce display in Kroger.
OPN Connect: You’re a keynote panelist on the Retailer Roundtable at the Organic Produce Summit. What messages will you be conveying to participants?
RR: “We continue to say it every chance we get, it’s a new day (at Kroger), and we’ve completely reimagined our go-to-market approach. As part of our multi-year strategy, we’ve worked to identify strategic growth partners that, with us, continue drive on behalf of the customer. This kind of partnership will only accelerate going forward. Our mission is simple; we aspire to create the best consumer experience, meeting their needs, and we’ll do it by offering the highest quality products – all while being the preferred partner to our suppliers.
A big part of our approach over the last year has been to become more transparent about our business goals, to align our goals to our partners, and to increase the amount our they participate in our strategic planning. These suppliers have had meaningful influence in the direction of our company, and bring great new ways we can better serve consumers. We’re all doing incredibly important work – and we want every supplier to know that, while challenging, it’s connecting with our consumer. We couldn’t be more grateful and appreciative for the support we continue to receive, the inspiration shared and the dedication shown toward moving us all forward.”
Kroger's organic brand - Simple Truth.
OPN Connect: Why is the Organic Produce Summit an important venue for Kroger and your producers to attend?
RR: “We are grateful for the opportunity the Summit provides each year for us to connect with some of our most critical suppliers. This year, like most, we want to make sure the industry understands how grateful we are for our combined success, and how committed we are to growing our business through theirs. We have great partnerships with many different organic suppliers across the country. We have big ones and smaller suppliers and they are all relevant.
We differentiate ourselves from our competitors because of our commitment to the organic industry over the course of the last ten years.