How To Navigate Key Challenges In The Future Of Food Retail

By Mark Baum, Chief Collaboration and Commercial Officer and SVP, Industry Relations, FMI — The Food Industry Association

The day-to-day activities of any industry, when viewed in real-time, may seem random and lack a larger framework.

That is why it’s important to take a longer view by periodically identifying overarching issues impacting an industry. In the food industry, this exercise enables leaders to understand how priorities are shifting and prepare for what is ahead.

How FMI’s issues blueprint supports its strategic plan

FMI has developed a current issues blueprint with Oliver Wyman to help the association identify and understand its critical priorities. The blueprint supports FMI’s latest update on its strategic plan, which draws onboard member interviews, senior staff input, and outside research.

The prior strategic plan, in 2023, focused on continuity following the disruptions of the COVID-19 pandemic. The latest plan, set for adoption in early 2026, reflects opportunities for FMI to strengthen its leadership of the food industry and grocery value chain; convene industry leaders to advance shared priorities; and communicate its value proposition of advocacy, collaboration and education, known as ACE.

Members offered input on how to advance our ACE efforts. They view advocacy as a core strength, collaboration as an ongoing priority and education as an area with room for growth.

Furthermore, FMI’s new blueprint outlines urgent issues and evergreen priorities that will shape the agenda for the next three to five years. It reflects an evolving industry and challenges ranging from emerging technology to shifting consumer behavior. While many topics remain familiar, their nature has changed circumstances evolve.

Technology’s expanding role in food retail

Technology has shifted from being primarily an enabler to a major driver of industry change. Its influence spans the entire food system, from production to consumer engagement.

Emerging technology: Artificial intelligence, machine learning, and digital transformation initiatives are reshaping operations enterprise-wide. Automation and robotics are enhancing procurement, merchandising, and supply chain functions. To support these developments, FMI will launch GroceryLab in June, bringing merchants, operators, technologists, and brand leaders together to explore practical applications of new technology.

Cybersecurity: Rising cyber incidents and their financial and operational impacts have elevated cybersecurity as a shared industry concern. FMI adopted a board policy statement last fall defining cybersecurity as a noncompetitive issue, similar to food and product safety. Members want FMI to help coordinate collective action and strengthen defenses across the industry.

The Future of work in grocery retail

The labor priority has evolved from the word “workforce” to the “the future of work,” reflecting changes in the work itself, the workforce and the workplace. Technology is reshaping employee function with tools such as generative AI, augmenting tasks under human oversight. Companies of all sizes are seeking strategies to support employees at every level.

Attracting and retaining workers remains a challenge in a competitive labor market. FMI created a chief people officer community to bring HR leaders together to share insights and address priorities such as improving industry attractiveness.

Regulatory complexity creates operational strain

The regulatory environment remains a top priority, partly because it has become a patchwork of conflicting and often confusing state and federal regulations — especially around the food companies produce and sell.

These blurred lines create an inconsistent and increasingly unsustainable framework that complicates business operations and erodes consumer confidence.

To help address these challenges, FMI joined the Americans for Ingredient Transparency (AFIT), a broad coalition of stakeholders committed to advancing a uniform national standard for ingredient safety and transparency at the federal level.

Shifting consumer behaviors in grocery retail

Understanding changing shopper behavior remains a key industry imperative. Nutrition, health, and meal occasions are among the top areas of focus, along with the consumer’s demand for transparency and a growing embrace of e-commerce shopping.

Economic pressure and marketplace competition

Economic conditions, food inflation, consolidation and shifting competition are shaping the marketplace. Societal polarization is influencing consumer preferences, brand perceptions and community interactions. Retailers are also facing challenges such as theft and on-premise violence. Members want FMI to help them better understand and navigate these dynamics.

Core priorities that remain central to the food industry

There are some topics that do not fall under “imperative” because they are always relevant and considered “core priorities.”

• Food and product safety: Safety is a constant focus and ties into supply chain traceability, transparency, and practitioner education.
• Public policy and regulatory: While regulatory complexity is an imperative issue, the subject of public policy and regulatory is an enduring topic for this industry. Longstanding topics include pharmacy benefit manager reform and credit card swipe fees. Emerging issues include state-level proposals related to SNAP exemptions and extended producer responsibility requirements.
• Value chain collaboration: FMI remains focused on non-competitive issues, including sustainability, efficiency, supply chain resilience, value creation, and joint trading partner business planning.

How FMI will drive progress in the food industry

FMI views these issues as circular, not linear. Based on member feedback, FMI sees more future opportunities to advance advocacy, collaboration and education(ACE). Some examples of these efforts include connecting members into a network of state-specific advocacy, enhancing technology leader engagement and collaboration, and solidifying the integration of technology and AI topics across all FMI education channels.

Members also want support communicating priority issues to stakeholders, including policymakers, NGOs, media, analysts and, when appropriate, consumers.

FMI aims to help create a more connected, resilient and innovative industry aligned around the needs of consumers and communities. The organization plans to support members as the future of consumer-packaged goods and grocery retail industry continues to evolve.