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A Disruptive Retail Environment, Ripe with Opportunity

Updated: Jan 31, 2023

2022 has been a challenging and transformative year for grocery retail. Trends that emerged during the COVID pandemic, from rising costs and supply chain shortages, show no signs of abating. Evolving consumer preferences for value, convenience and healthy foods continue to push retailers to adapt both the products and the shopping experience they offer customers. New entrants and partnerships are accelerating disruption and competition in the ecosystem, forcing retailers to navigate an ever-more complex landscape to stay profitable and keep customers loyal.

Retailers are responding by investing in innovations that both improve the consumer experience and streamline operations throughout the supply chain. McKinsey reports that grocers have increased their capital spending by 2.3X relative to historical levels, and Progressive Grocer’s annual survey reveals that 54% of grocers are increasing their annual tech spend this year. But retailers cannot innovate fast enough on their own, and increasingly look to external partners offering tailored solutions for the industry.

Enter the rising food-tech industry. Based on Pitchbook data, VC firms invested more than $39 billion in food-tech companies in 2021, up 150% from 2020, with more than half of those dollars going into the top two categories of online grocers and apps & marketplaces. Hundreds of startups are also creating new categories of consumer products (e.g. alternative proteins, meal solutions, etc.), adapting disruptive technologies for the retail environment (e.g. vision-based technology, robotics and AI), and transforming the way that food is produced (e.g. controlled environment agriculture), protected (e.g. shelf life extension) and distributed (e.g. freshness monitoring).

Here are a few areas where retailers are launching partnerships to deliver game-changing innovations:


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