Unprecedented disruption is afoot — a fact that the retailers and manufacturers at the Food Marketing Institute’s Midwinter Executive Conference last weekend understand all too well. From new formats to emerging technologies, shifting consumer habits to the online retailer whose presence was acutely felt throughout the event, companies are confronting an industry that has changed considerably over the last year, and is evolving at an accelerating pace.

The conference was the retail trade association’s effort to help executives understand and manage change. Through seminars, keynote speeches and one-on-one interviews, attendees learned where they’re succeeding, where they’re coming up short, and how to develop a winning game plan in a new digital age. Here are Food Dive’s top observations from the conference.

1. The “new food battleground” is here

Although Amazon can comfortably claim the title of top industry disrupter, it is far from the only force shaping the industry. As FMI Midwinter attendees were often reminded, discounters, pure-play online grocers and non-food retailers have all come to play in their space. Moreover, consumers’ digital migration, including the ever- expanding adoption of mobile, has broadened the reach of their research and transactions, making it harder for brick and mortar grocers to stand out.

“Retailers can no longer rely on their location primacy,” said Steve Pinder, managing director of retail strategy with consulting firm Kurt Salmon, in an interview with Food Dive.

And what about Amazon, anyway? Attendees learned about all sorts of new and emerging technologies that can help them compete with the e-tailer, from artificial intelligence to improved data management systems. Still, one couldn’t help but feel as though company leaders were getting a crash course in the systems Amazon has already mastered.

“This is the new food battleground,” said Mark Baum, chief collaboration officer and senior vice president of industry relations with Food Marketing Institute during a presentation Monday.

2. Technology has a massive role to play

The grocery industry isn’t known for being very tech-savvy, but consultants and company leaders are trying to change that as consumers increasingly turn to digital channels, and as fierce competition demands systems that drive accuracy and efficiency. Retailers admit they don’t have the expertise to implement these systems. That’s why experts and service providers stressed the importance of forging key partnerships.

One technology that came up quite a bit was artificial intelligence, which carries the promise of predicting consumer demand as well as inventory. With machine learning capabilities evolving, AI systems can improve accuracy and efficiency, and continue improving.

However, experts cautioned against imagining a future where machines run the business. The best application, according to experts, is narrowly focused rather than broadly focused — predicting the best items to feature in a company circular, for instance.

AI implementation also isn’t a seamless process, as Whole Foods’ recent issues with out-of-stocks illustrate. According to reports, the retailer’s new order-to-shelf technology, which relies on AI, lies at the heart of the debacle.

“You have to be willing to test and fail and lose to ultimately succeed,” said Jason Lobel, CEO and co-founder of SwiftIQ, a retail analytics company, during a presentation. “You’re going to fall on your face.”

3. Companies are not ready for e-commerce

Amazon’s acquisition of Whole Foods set in motion a flurry of industry acquisitions and partnerships aimed at expanding grocers’ e-commerce reach. As online shopping has become more widely available in recent months, consumer adoption has accelerated — which is why FMI and Nielsen moved up their highly cited prediction for e-commerce penetration, saying it will now be a $100 billion industry within as little as five years.

Despite this accelerating migration online, research released at the conference shows that retailers are woefully unprepared to capitalize. According to interviews with industry leaders conducted by Nielsen and The Dialogic Group, just 7% of grocers and 18% of manufacturers say they have the skill and culture needed to succeed in omnichannel retailing.

Nielsen and Dialogic’s research also found that retailers also suffer from overlapping organizational structures, poor forecasting, poor data management, and weak marketing and merchandising initiatives.

Retailers have a lot of catching up to do, which is difficult in such a low margin industry. But as experts pointed out, they have no choice. According to Thom Blischok, president and CEO of The Dialogic Group, retailers can start by committing to investment and efficiency.

“For this industry to survive, you must have an operating model that’s about 35% less than it is today, with an investment of 15% in digital, which makes the industry competitive in the omnichannel world,” he said during a presentation Saturday.

4. Transparency is more important than ever for consumers

According to FMI’s 2017 Grocery Shopper Trends report, 59% of consumers are looking for food with minimal processing claims like preservative-free and GMO-free. Sixty-five percent of shoppers, meanwhile, say they’re trying to avoid “negative” ingredients like sodium, sugar and added hormones, while 25% are looking for ethical claims like cage-free and grass-fed.

Consumers’ growing interest in health and wellness has inspired them to peel back the curtain to see what goes into the foods and beverages they consume. And they don’t always like what they see.

This desire for transparency has led suppliers and retailers to disclose more information about the ingredients and processes behind their products. According to numerous sources who spoke at FMI Midwinter, that desire will only grow, meaning companies need to continue honing their marketing and reforming their supply practices.

Investing in cage-free eggs and removing artificial ingredients from a private label line isn’t cheap. But these steps allow opportunities for companies to differentiate themselves. As Leslie Sarasin, FMI’s president noted in her keynote, there are ample opportunities to market the procurement and selling practices that companies already have in place.

“You’re no longer just the purveyors of food products,” she said during her keynote presentation Monday. “You’re the conveyor of values.”

5. There’s hope for CPG brands

It’s a narrative everyone in the food industry knows by now: As consumers turn to the smaller brands they feel meet their needs for taste, health and other criteria, large CPG companies that dominated the industry for years have seen their sales plummet.

To get back to growth, CPGs have focused on new products, reformulations and acquiring promising brands. In some cases, this has improved results, but success has remained elusive for many players. Still, there are enough exceptions to the rule these days to offer a general roadmap for companies to follow.

In a presentation centered on just that topic, experts with IRI and The Boston Consulting Group examined top CPGs like Constellation Brands and WhiteWave and forwarded a few criteria for success. This included a focus on driving volume, on making targeted acquisitions in promising categories, and on developing focused brands that share from the same broad categories CPGs used to dominate. Companies should also, they said, zero in on consumer demands for simple ingredients, plant-based ingredients, mindful indulgence and more.

Companies should also be constantly evolving. As an example of this, they pointed to Idahoan Foods, a company that has developed a range of quick, innovative and on-the-go offerings centered around the humble potato.

“No matter the size of the company, you have to be entrepreneurial,” said Drew Facer, CEO of Idahoan Foods, during a presentation.

6. True retailer-manufacturer collaboration may finally be at hand

The relationship between retailers and their suppliers is often contentious, with each refusing to share information or to work together on promotions and other marketing initiatives. Collaboration has long been preached by organizations like FMI, but that can be easier said than done when pricing, shelf space and other hot-button issues come into play.

Collaboration was again preached during this most recent FMI Midwinter meeting, but this time there was a common opponent invoked: Amazon.

For retailers, the e-tailer presents and existential threat, with the power to alter the way food is sold. For manufacturers, Amazon is a trading partner, but one with a reputation for undercutting on price, and for threatening their shelf sales as well as direct-to-consumer efforts.

So what might true collaboration look like? Presenters discussed increasing promotional support, alignment on forecasting and better sharing of data. Suppliers have their consumer insights, while retailers have theirs. The combined intelligence could be powerful, and enhance companies’ efforts to tailor offerings to their shoppers.

“It’s really about both sides saying what they want, and both sides hearing that,” said Doug Baker, vice president of industry relations, private brands and technology with FMI, in an interview with Food Dive.