Fresh Tech

If you're a fresh food executive you might have had the opinion that subjects dealing with fresh products, and recipes, baking, food preparation and catering were hot and exciting, while technology was a subject that left you feeling cold and probably a little bored.

At best, technology was a necessary tool that barely impacted the fresh food departments. Actually, it was best left to the front of the store or to the mercy of grocery buyers and merchandisers. We deal with pots and pans, ovens and scales - heat and cold. We're skilled artisans, chefs, bakers, meat cutters, produce and seafood experts; all creative food purveyors.

The truth is that fresh food executive are all of these, but they are also managers, merchandisers, production supervisors and buyers. In a bottomline world the skills needed to excel at these more mundane activities have made the world of technology far more interesting and attractive to even the most creative artisans along the perimeter of the store. More and more fresh food executives are crying out for the kind of technological support for their activities that is available to their grocery and nonfoods counterparts.

The need for technological tools in the fresh section is greater than ever. There are two basic reasons for this. It is well documented that the random weight fresh food sections are lagging far behind the rest of the store in implementing anything that even remotely looks like category management. This is because of a lack of standardized data and a lack of programs that can handle and manipulate the data in a way that makes it usable to the fresh food executives for handling sales promotions or inventory.

The second problem is that as supermarkets get more into HMR or prepared foods, they are straying even further from their normal operations. This means that whatever management systems they do have in place will be come less and less capable of handling these more complicated product. In making the transition from grocer to food manufacturer, retailers need the ability to deal with a totally new group of informational needs. Existing supermarket systems are not adequate for costing recipes, handling ingredients or custom catering orders, nor are they able to handle the costs of adding value to the products in the produce, meat and seafood departments.

Fresh food executives have, by this time, had ample experience in going outside many of the traditional supermarket channels in search of sources of specialty products or foodservice products and supplies, or all manner of ingredients and services. So naturally, they have begun to look at what technology is available to other types of retailers and food purveyors. For instance, deli and foodservice managers have begun to look at what software is available to restaurant and institutional management as a way of getting the technological help they need. Produce buyers are looking at what kinds of tools they can get from the agricultural community, while instore bakers are looking at their independent bakery cousins for help with formulas and costing software.

Because many supermarket managers have begun to use these tools, or made inquiries about them, developers of these programs, sensing a lucrative new market, have begun to develop version of their products specifically for the needs of the supermarkets. These alternate versions are necessary because the supermarket must still deal with a set of variables that is unique to a supermarket operation. For instance, a prepared foods program in a supermarket is not exactly the same as managing a restaurant kitchen, some aspects would be the same, but many are still unique to each application.

Among the most aggressive department executives to go in search of technology outside the supermarkets have been the foodservice and deli directors. This is because the products and production that they are utilizing are the perhaps the most foreign to the traditional supermarket. Plus, there is a ready source of software products that are available to the foodservice industry from private developers and through the National restaurant Association (Washington, DC). The trick is making these software packages work in a supermarket.

One such system that has been operating successfully with the restaurant industry for several years and that now has developed an application specifically for supermarkets is Food Trak. The program, developed by System Concepts, Inc. (Scottsdale, Ariz.), consists of a number of modules all designed to enhance a supermarket foodservice departments control of its inventory. The system monitors the amount of inventory sold and compares it to the actual inventory used, revealing any problems. The program also monitors costing and pricing, as well as production. According to Dan Williams, vice president of channel development:



"It's designed to give ideal food costs, it's designed to provide information to management on purchase history. It's designed to export purchase orders into accounts payable to increase efficiency of data processing. It's also designed to interface directly into their point of sale, so perpetual on-line inventories can be achieved. These are the structural foundations for management.

"The key report would be the management summary. In essence, that would be your variance reporting, it tells you where your problems lie. If you're going to identify those problems and you're doing a recipe with a lot of shrimp in it, but the amount of shrimp you're buying versus the amount of shrimp that you are selling creates way too much variance, by zeroing in on that variance and reducing it from 30 percent to 2 percent, for example, you can put that difference right into your pocket. Shrink is a big issue, portion control is a very big issue."

Probably the most pressing problem that retailers want a program, such as Food Trak, for is to enable them to accurately cost out their recipes and be able to plan out their menus. These are functions that are basic to the restaurant business but have vexed retailers since the first sandwich was passed across a deli counter. Williams says that the program will relieve operators of any burdens in accomplishing these tasks:

"They will have the ability to cost a recipe, they'll have the ability to model a recipe, the ability to change the modeling based on any number of factors, such as retail, portioning or margin. The forecasting feature will take purchase history, take into account period use, such as holidays, and give them a prediction of what will be needed."

In addition to its numerous restaurant and foodservice users, Food Trak is currently being used by approximately 30 retailers, each using various modules and on different stages of implementation. These retailers include Food Lion, Lucky's and Whole Foods Markets. One supermarket operator that has recently begun to use Food Trak is Andronico's Market (Albany, Calf.).

"We have just purchased it and are in the process of implementing it. We've just received the training and will be going live with building the data base as soon as we can," indicated Mike Miller, the retailer's director of information systems.

"We bought this first just to do recipe sizing and recipe costing as it pertains to our production and also our catering. Then for our future facility, which is our central kitchen," adds John Honeycutt, deli administrator.

"I think that part of the appeal of this program was that they have a clearly defined direction with their windows product," (which will be released in a few months), says Miller. "We are also going in a windows direction with our instore applications. The exciting thing that we see is how data is going to be generated and used by multiple applications within the store. So, now we're using the DOS version as somewhat of a set-up of our ultimate program, but taking advantage of the recipe and food costing capabilities."

Honeycutt adds that, "I think ultimately it will give us complete inventory control. It will give us true food costs to see shrink in a whole other way. This goes along with yielding our recipes more accurately and running nutritional analyses which are important to our consumers."

Retailers are searching for software products that will not be limited to one function or department. Even though the problems they face may be specific to a particular department, many are looking for a one shot solution for all the fresh food sections. For instance, Food Trak can be used to keep inventories across all the fresh food departments, all being kept separately within the department and/or fed to a central location. Also, any value-added or prepared product within the meat, seafood or produce section can be costed through Food Trak, as well as many costing and pricing functions within the bakery. The program also helps in production scheduling.

"What we're finding is that retailers are still so focused on getting their menus planned and on other things that they haven't gotten to use many of these functions," states Williams. "Food Trak did do something to dramatically change the amount of effort that the manager is putting into the process. Whoever they are buying from in the way of purveyors, they can load their catalogues directly into Food Trak, automatically so there's no data input involved They can also supplement these catalogues with a standard database of thousands of food items that we've compiled over years of study with multiple food suppliers.



"For retailers we've added supplemental things that makes it different, such as kitchen production, commissary management and a high volume boxed lunch program that many retailers are finding so profitable. We've programmed aspects of Food Trak specifically to meet those needs. So, when Xerox calls A&P, for instance, on Monday and says I need 250 of your $8.50 box lunch specials on Wednesday, Food Trak takes that and says, we're going to go into production on Wednesday at 6 AM. It displays the recipe, production units and purchase units. It will tell the people doing the work, 'you need to do your pre-prep now and it has to be cooked at this time, these are your yield factors, you need 15 loaves of bread, and 65 pounds of meat.' It tells purchasing how much of each ingredient they have to buy, based on their current inventory."

Restaurants, especially those with more than one unit have developed a "kitchen bible," which has standardized recipes, ingredients lists and usually a picture of the product that the staff can use as a preparation guide. Supermarkets have not generally been aggressive in developing these types of kitchen or merchandising guides. Software, such as Food Trak, has made it easier to develop them. Food Trak has the ability to incorporate pictures, sound and full-motion video directly into the recipe file. This is extremely helpful because you can give your employees a picture of what the dish should look like, and also instruction either orally or on video on its preparation.

These features are also great for use for catering brochures or idea books that are used to show consumers your capabilities. The company also says that Food Trak can be linked to a kiosk that can be used by staff members in the kitchen or by consumers to see what the selections look like and get price and portion information, as well as place orders.

In a large multi-unit chain, software communications is extremely important. The software needs to have the ability to communicate across many units, back and forth to the corporate office and directly to vendors. Food Trak has this ability to communicate. Store department managers can make decisions and use the program locally, and it will also send and receive data and updates from corporate managers. The software also has EDI capabilities to send purchase orders and receive invoices to any supplier that is EDI equipped. There are built in interfaces established with Sysco, Alliant Foods, Kraft and many other large foodservice suppliers.

"We have just drafted a letter that we're sending to our vendors notifying them of our intentions to use EDI," says Andronico's Honeycutt. "When you have a paperless invoice, it will make everyone's life a little easier, both the supplier and Andronico's."

Andronico's opted for a system that originated in the foodservice industry because it was more compatible that grocery systems for the type of business that they were running.

"The difference with this software compared to other supermarket style receiving and inventory programs is that we have a manufacturing facility within our store that we call our deli, and later we'll have our central kitchen," says Miller. "Traditional supermarket style inventory software can't handle the control and costing and inventory of ingredients and sub-recipes. That's really a traditional hospitality or foodservice type of formula or process.



"We are really bringing restaurant software into the supermarket. Part of our challenge is to make it compatible with the rest of the systems that we have within the store pertaining to the POS and scale systems. This will be less difficult once we get into the windows version. We have an objective of entering data once and using it many times. Ultimately, our game plan when we're at the windows version, is to have data entered for the Food Trak system and to share the common elements with the POS and scale systems.

"I've been a bit surprised that other supermarkets are not using the inventory function that Food Trak has as completely as restaurants do. We have full intention of using as much inventory function as possible because we have a foodservice mentality in our business. We're very dedicated to HMR and the deli, and we're going to use the full inventory capabilities as the our implementation."

Many of the technologies that are imported into the supermarket from other disciplines are much more specialized and narrower in scope. Many times they provide one specific type of information. A good example of this can be found in the bakery.

Measuring costs in the bakery has long been a problem for the instore departments. It is easier for them assign a margin to finished or frozen products brought in from suppliers than it is to figure out the true costs of producing it themselves. This has severely hampered the development of category management in this department, or the retailer's ability to always know whether it is more cost effective to bring in a frozen product or make it himself.

The major stumbling block to accurate product costing in the bakery has always been factoring in the labor needed to produce a given product. To help retailers with this problem, the Retail Bakery Association (Laurel, Md.) has developed a standardized labor costing program, which provides the bakery director with a "normal" cost factor for the production of many of the most popular bakery items. While it is not as accurate as the individual bakery measuring their ownlabor costs, it is one costing factor that they can use to get a handle on their costs.

Other technologies aid the retailer by making it easier to access information and make it more convenient to use. One program that was adapted from software that was being used in agriculture makes it easier for produce buyers to handle pricing and availability information.

The recently introduced Pricing Plus from DTN Produce (Omaha, Neb.) is an enhancement package on the company's agricultural data service, Price Link. The service provides buyers and producers with news, weather and marketing information on produce. Pricing Plus allows produce buyers to manipulate the information in any manner that better fits their needs.

"We reached out to the produce marketer to make it easier for them to receive their transportation information, their FOB pricing information, weather and produce related news," says Kevin Engelhardt, operations manager. "We compile information and transmit it via both the internet and the satellite system. Someone will come to us and subscribe to the DTN Produce news service, we'll lease them a satellite dish, monitor and the required receiver, it's a stand alone system. They can also call it up on their internet site."

The big draw of the system for supermarket buyers is not the news or the weather reports, but the ease in which they can get essential product and pricing information. This is where the Pricing Plus software comes into play, because it allows the buyer to structure the reports that he gets in the manner that makes the most sense for him. DTN's national sales manager, Robert Reynolds, explains:



"What it provides buyers with is that it allows them to receive all their prices right in front of them on one monitor. What it enables them to do is sort and search it. In other words, if they want to get the best price on apples, they hit 'apples' and all the apples will come up. They can then search it by size, variety or grade. All the suppliers can feed into one place via the Price Link. They all get merged together, then they can move them into a spread sheet.

"It makes buying so much easier and cost efficient, it's fast. It just cuts out all those faxes and phone calls, it's just more efficient this way The cost savings is the other big benefit. You're talking time savings and management savings. It generally could take one extra person on staff to physically enter all the prices that come through the fax and phone, here they have it simultaneously. It also expands their bases of where they buy from, because they have the best possible prices from every supplier right in front of them."

The reports, or screen displays can be customized by the buyer. If he just wanted to get prices from his preferred supplier instead of every supplier, the buyer could easily limit the report to his top 20 vendors, for example. The system also allows the buyer the flexibility to split the screen into as many as four separate tiles, each displaying a separate report or weather map.

According to Englehardt, Price Link is currently being used by about 2,400 subscribers. He estimates that about 1,500 of these are buyers, with the rest being suppliers. Among the supermarket operators who use the service are WalMart, Giant Foods, HEB and SuperValu. Pricing Plus is brand new and so far only seven companies have signed on.

The next objective for Pricing Plus is to make it interactive, which would allow buyers and seller to directly communicate with each other. According to Reynolds:

"That's our next step, we're going to be working through EDI. We're working to have purchase orders, confirmations, pass throughs - the whole gamut going through EDI. We're looking to have that ready by the PMA (Produce Marketing Association) show (in October). There is a way through the E-mail component of the system that buyers and sellers can talk to each other right now."

Another twist on the borrowing of software from other resources outside the supermarket is software programs that are really directories. Instead of the programs that really manage the department or provide vital missing information or "live" information and data, these program are on-line directories of products or training materials or another number of other helpful subject areas.

Many of these products, and there are probably hundred that cover information pertaining to the fresh food sections, are produced by trade associations or various media groups. For instance, the North American association of Food Equipment Manufacturers (Chicago, Ill.) recently published an industry-wide specified identification system, which is the first directory to use a standard numbering system. This is designed to make the fulfillment of food equipment orders easier.

In a similar vain, the Marketing & Technology Group, Inc. (Chicago, Ill.) introduced the Digital Directory, which digitally lets retailers find meat and poultry equipment. They can compare different pieces of equipment electronically by scanning the files on the directory's disk.

Over the years, retailers have been increasing reaching out to sources within allied or often competing industries. First for products, or sources of distribution, then for staff, training materials, production technologies and now for management technologies. These technologies will help them bring the latest management paradigms into the various section of the supermarket.