Throughout the course of its more than 130-year history, Del Monte Foods has become an expert in growing, packing and marketing everything from canned corn and green beans to its plastic fruit cups stuffed full with peaches and mandarin oranges.
But now the fruit and vegetable giant is dealing with a new set of challenges that have proven much harder to overcome: navigating the dizzying array of requirements put in place by retailers for CPGs that want to sell their products online.
The process of making sure Del Monte had complied with these rules, which covers everything from how a product is described to the images used, has become so time consuming that last year it hired a full-time employee to handle the responsibility. The new position follows a move by Del Monte Foods to establish an e-commerce team in sales to lead these efforts with retailers.
"There were just so many requests coming in from all our different retailers — I mean it really has become a full-time job," said Jen Reiner, senior director of omnichannel marketing and e-commerce at Del Monte Foods.
The rapid rise in online grocery shopping fueled by the pandemic has deepened fault lines running between retailers and suppliers that have diverging priorities and incentives for their digital businesses. This is particularly apparent with online product listings, which present both sides with a steep workload to develop and post. But while retailers say they need to keep strict control over the approval process and inflow of consumer data, suppliers say they’re struggling with inefficient standards and that grocers aren’t keeping listings up to date.
CPGs, which in many cases oversee a portfolio that encompasses thousands of different SKUs, face a myriad of requirements to sell items online — rules that are further complicated by the fact that what is needed at one retailer may be vastly different at another.
Images often have to be displayed using a certain format. How the product is described to drive traffic can be subject to different requirements and word counts. A retailer like Kroger might define certain terms like vegan or organic differently than Whole Foods does. Then how that display is ultimately posted — whether it is uploaded directly or filled in on a different platform to ensure continuity — varies.
CPGs must keep tabs on their listings over time to make sure they’re fresh and up to date. But any changes they want to make often need to be approved by retailers — a process that can take weeks or even months.
Sam Slover, co-founder and CEO of Pinto, which helps companies manage their products in the e-commerce channel, said he is surprised at "how obtuse and confusing the processes are" to list a product online.
Those processes are often complicated by incomplete or inaccurate information, like ingredient changes or updated packaging, that are no longer current or accurate online.
At the same time, while retailers have little trouble collecting information like the product name, an image showing the front of the offering, or the dimensions of the product — data that is already used in traditional physical retail formats — Slover said it can be harder for them to collect so-called "customer-facing data" needed for modern e-commerce or digital retail.
Such information includes things like nutrition, allergens, which diets or lifestyles a product fits, its flavor and which search terms it qualifies for. These attributes play a crucial role in helping a consumer search for and find something specific like keto snacks that are kosher, or low-sugar vanilla yogurts in the store inventory. Increasingly, third-party companies are being hired to help collect and organize this information.
"We'll eventually get there, but I do think it's just part and parcel of the shift from being a more in-person, physical way of selling a type of product to that system moving online," Slover said of e-commerce in the food space.
Coming up with solutions
The rules grocers impose on suppliers who want to be on their e-commerce channels reflect an effort to control the online experience those retailers present to their shoppers.
"We filter out a lot of the excess products that are out there and have a very diligent process in order to onboard an item, [so] the chances are if you find anything at Westside, it's a proven item," said George Zoitas, CEO of Westside Market, a chain of seven grocery stores in Manhattan. "Manufacturers [need to] to help the retailers that get behind their product because at the end of the day, we are the point of sale."
Zoitas said, however, that the wholesalers he works with have been developing streamlined systems that make it easier for the chain to obtain what it needs to add products to its e-commerce platforms, such as digital pictures, or better descriptions and characteristics for filters to enhance the customer experience.
"It's getting there a lot quicker now. Things are kind of settled and people are integrating a lot better," he said.
Zoitas added that as much as 20% of the products his stores carry don't end up on the company's e-commerce sites, primarily because manufacturers have not provided details Westside requires like a high-quality image, clear description or expected shelf life.
"Manufacturers [need to] to help the retailers that get behind their product because at the end of the day, we are the point of sale."
CEO, Westside Market
Smaller grocers face often significant challenges in managing what they carry on their websites and store shelves because many CPGs use third parties to handle their relationships with retailers, said John Ross, CEO of the Independent Grocers Alliance (IGA), a network of food retailers that has about 1,200 members in the United States.
IGA has developed resources to help smaller grocers stay on a product manufacturer's radar, Ross said. IGA taps the collective strength of the retailers it represents to help suppliers or their representatives convince grocers to carry their products online and in-store, and also streamlines the process of collecting product imagery and other details for use online, Ross added.
Representatives of the nation's largest grocery store chains by store count — Kroger, Albertsons and Ahold Delhaize — did not respond to requests for comment about their relationships with product manufacturers.
Elly Truesdell, a former Whole Foods executive who oversaw local brands and product innovations, said the process of listing products on a retailer's website has improved remarkably over the past few years. But Truesdell, who recently left as a partner at Almanac Insights to launch investment fund New Fare, said the biggest obstacle remains keeping the product listing updated to include things like new packaging, more relevant search words, descriptions or other details — a particularly onerous process for a retailer overseeing tens of thousands of SKUs.
The logical solution would be to place the CPG in charge of these responsibilities, but doing so, she said, creates its own challenges, including the possibility that a food maker tries to give itself an unfair advantage over its competitors, or that it struggles to comply with the listing requirements. The retailer also risks giving up at least some power over their online store to the CPGs.
"That is the negotiation that's happening right now. How much do retailers trust, or are they willing to give up that control?" Truesdell said. "More than anything, I think it really is still on the retailer rather than the platform itself because that's where the onboard and the product assortment starts."
With retailers and CPGs trying to figure out the optimal way to set up their digital platforms to attract consumers, the dance over how to sell products online remains fluid, Truesdell added.
One supplier that’s trying to make online listings more seamless and compelling for retailers is Tyson Foods, according to Jennifer Fitting, the company’s director of e-commerce.
In contrast to how they shop for prepared offerings, such as a bag of chicken nuggets, consumers buying meat online want a shopping experience that is similar to a store, where they can pick a product based on how it looks and its perceived freshness. This experience is inherently difficult to replicate online, Fitting said.
Fitting said Tyson incorporates artificial intelligence to determine which pictures do the best job of communicating the information a consumer might need to purchase a product. The beef, pork and chicken processor will often test multiple postings with consumers by tweaking the image, or by adding or removing information like the nutritional content. A heat map helps Tyson determine what resonates most with shoppers, Fitting said.
According to a survey conducted by Midan Marketing cited by Tyson, 30% of consumers say their primary method of purchasing meat is online.
"The retailer will ultimately have the final say. We don't want to push anything to them that they aren't comfortable with, so it's a collaboration," said Fitting. "We can tell them what our best practices are and what we think makes sense."
"That is the negotiation that's happening right now. How much do retailers trust, or are they willing to give up that control?"
Partner, Almanac Insights
Fitting said the relative infancy of the online marketplace naturally means that how CPGs and retailers work together to cultivate an online posting, and the processes they use to make it more enticing to the consumer, is going to evolve.
"There are new technologies, new ways to market that come on board every single day," Fitting said. "Customers are changing. Consumers are changing, so the worst thing that can happen is we stay stagnant. We've always got to be paying attention to what the future looks like and making sure we're staying ahead of it."
Brian Archey, senior director of data science and analytics at Conagra Brands, said the fact that CPGs control access to products people want to buy gives them an advantage in managing their relationships with grocers.
"The retailer wants better products. They want to make sure that what they can stock the shelves with consumers want ... and yet we don't have that direct access to the purchase data and the consumer data that the retailer has because they're the ones in control of that," Archey said. "But the partnership is pretty collaborative in the way that we've been able to just make better products that sell based on what the consumer wants and is actually looking for."
Reiner with Del Monte Foods said retailers are increasingly assessing how well a CPG does in complying with their online guidelines. While food manufacturers are not being penalized or fined so far, how well they do in the online marketplace has become as important as supplying products in a timely manner or the amount of sales, she said.
"You're held to a scorecard, and like any business relationship, you're going to want to get 'A's' on that report, and if your content card isn't an 'A' it's going to be a topic of discussion when you're having a business meeting on other initiatives that you want to drive," Reiner said.