SAN FRANCISCO, CA - Economic questions, inflation, supply chain issues, and labor shortages have driven much of industry news in recent years, making it clear that buy- and supply-side margins are carving miracles out of madness. Where does control exist, and how can you apply it? According to the Afresh team, the answer lies in the tools managing fresh departments.
An artificial intelligence platform designed specifically to help retailers optimize fresh food management through intelligent recommendations and streamlined ordering and inventory workflows, Afresh offers a technology platform that is purpose-built for fresh rather than adapted to it like some legacy systems. And the AI-powered solutions provider has seen enough success to expand the reach of the control it offers the buy-side.
“We believe tools like Afresh can make a difference for grocers of all sizes. A system that’s purpose-built for fresh food is paradigmatically different from a center-store approach. As a result, we have seen a 20–25 percent increased value on average to our partners—when you think about what that means to a bottom line with typical 1–3 percent net margins, it’s transformative,” Nathan Fenner, President and Co-Founder of Afresh, told me.
In fact, on average, grocers using Afresh have reported shrink reduction by 20–25 percent and sales growth by 3–5 percent, CUB stores have shown 92 percent acceptance of Afresh’s order recommendations, leading to 8.8 percent more efficient teams. This type of impact is why Afresh has now deployed its AI-powered predictive ordering and inventory management solution across 3,000 stores and counting, spanning across the U.S. Now, after six years of solidifying its fresh produce offering, the company is taking its solution to other fresh departments, including meat, seafood, foodservice, and of course, the deli case.
“With tech in grocery, particularly fresh, there are lots of big marketing claims, with even bigger caveats in tiny font. And the results have always failed to live up to the hype. With Afresh, on the other hand, we are demonstrating a consistent, longitudinal, and chainwide decrease in shrink while increasing sales and overall profit. We are now taking the same ethos that has driven that success in the produce department to deli, meat, seafood and more,” Nathan explained.
As an expanding tool, Afresh, sees this evolution in the company’s portfolio as further improving how it serves produce clients and retailers in addition to the new deli-related branches.
“In building our solution for Produce, we needed to handle a variety of different item archetypes—ingredient items and items transformed in the store; random weight items; longer shelf-life, UPC items, etc. As we move into new departments like Meat and Deli, it’s the same fundamental item archetypes—different departments just have different compositions of these item types,” Nathan added. “In Produce, high-velocity, random weight items are key. In Meat and Deli, there is more emphasis on ingredient/in-store transformation and UPC items. Given that, we’ve worked to evolve and improve our approach to these latter two types of items. What’s great is that those improvements will also benefit our existing produce solution.”
The company has realized such success built on a foundational belief: Fresh is a unique business that requires a unique solution. So, while the shift to built-for-fresh or AI-powered technology solutions may sound like a cost to grocers, Nathan assures me that it is an investment that is quick on return.
“Fresh departments are the most strategic for grocers. You can get cereal anywhere; how and what you offer in fresh is a key differentiator. Inventory management software typically built for center store—which is adapted to grocery from industries like auto parts and clothing—unsurprisingly, doesn't fit fresh, whether that is produce or deli,” he punctuates. “A purpose-built solution crafted from the ground up for fresh is so much better than an all-in-one solution. I think we have proven that beyond a shadow of a doubt in our expansive success. Deli is the natural next step to that success.”
With CUB, Fresh Thyme Market, and Heinen's signed on for this latest expansion, with other banners coming soon, AndNowUKnow will soon report the benefits returning to produce departments in turn.
