The City Food Lecture 2021 proved to be yet another highly informative and enjoyable occasion for the audience of over 850 people, despite having to be in a virtual format this year.
This year’s guest speaker was Mel Smith, the CEO of Ocado Retail, and her subject: ‘The role of new technology in the future of UK food retailing’ was particularly topical at a time when Ocado has become the world’s largest online-only grocery retailer.
Accelerated changes
Mel has much experience of the retail grocery sector having specialised on retail businesses when working with McKinsey and being a strategy director at Marks and Spencer before taking up her post at Ocado.
Mel Smith emphasised the accelerated changes that had taken place over the past year with online grocery sales accounting for 13% of the total market – an enormous change from the previous year’s figure of 7%. In global terms, the UK has one of the highest online penetrations and the current figure is expected to double again in the next few years. McKinsey research indicates that consumers take as little as two months to make a permanent change in shopping habits and the British shopper has had the COVID-related situation for more than nine months.
For Ocado, 2020 had been a really challenging year with the ‘massive’ increase in demand starting from March; all-told they increased capacity from existing sites by 40% and delivered a total of 17.7million orders.
Turning to the future, Ocado are constantly looking at automated solutions to improve supply chain efficiency. The company introduced robotic picking into their Erith warehouse in 2019 and now have three robotic arms operating there; it means that they have doubled the rate of pick for ambient products and the success of this means they will be rolling out this technology in other warehouses.
Many households are not able to plan their grocery purchases in advance and in order to satisfy this demand for immediacy, Ocado launched Ocado Zoom in 2019, which can deliver ambient products in under an hour or for an agreed slot later in the day. They were able to serve 270,000 orders across West London in 2020 and plan to expand the Zoom service in 2021 as it enables them to meet the needs of a different consumer profile from their usual customer base.
Further developments in the future ranged from the use of technology to develop closer partnerships with customers, better support for meal planning and reducing food waste; and ‘5G and the growing number of smart appliances’ opening up opportunities, including linking your basket with ‘your smart fridge’.
Q&A with the panel
The panel session following the lecture was chaired by Charlotte Smith, presenter on BBC 1’s Countryfile and Radio 4’s Farming Today, with Mel Smith being joined by Laura Winningham, CEO City Harvest; Charlie Bigham, the food entrepreneur; and James Walton, Chief Economist at IGD.
In answer to concerns that the increased use of new technology would reduce employment levels in the food sector, it was pointed out that greater automation was shown to result in the creation of more interesting and better paid jobs; moreover, robotics were able to fulfil some roles where recruitment was difficult.
Food waste was also raised as a topic and all panellists agreed that the amount of food waste was excessive; in an audience poll, 87% of those present were also either ‘concerned’ or ‘very concerned’ about this subject. It was an encouraging trend that increasing volumes of surplus food were being diverted to food banks and charities but still too much was being disposed of.
In concluding comments, with over 900 Liverymen and guests which included 80 students present in the online audience, the panellists emphasised the importance of exciting careers in the food industry.
In her closing comments, HRH the Princess Royal complimented the organisers and thanked all the participants in the virtual event - but expressed the hope that it would be possible to return to being together in the Guildhall next year.
Assistant Bob Bansback, OBE