When representatives of a produce supplier walk the aisles of a major grocery chain, the routine is familiar. They check how their products look on the shelf, perhaps exchange a few words with the produce manager about movement, and glance at the competition’s display. The focus, quite naturally, is on presentation and relationships.
Yet, while their attention lingers on what is visible, a larger drama is unfolding in the background. Many shoppers sorting through the tomato display have already been tracked, analyzed, and categorized long before reaching that section. The store knows that Sarah arrives on Tuesday mornings and always opts for organic, while Mike hunts for bargains on stone fruit but indulges in berries for his children. It often knows which shoppers notice a carefully arranged display and which of them actually buy.
The irony is that all of this information exists — but suppliers themselves are often kept in the dark.
What the Balance of Power Looks Like
Many retailers historically kept pressure on brands with the prospect of competing store-brand products. Today, they wield something far more powerful: access to customers’ shopping data. Grocery stores have morphed into data companies that also sell food. Every loyalty card swipe, every digital coupon clip, every app download creates a treasure trove of behavioral intel that retailers guard like state secrets. Drew Dabbelt, vice president of Retail Media for NielsenIQ North America, puts it bluntly: “Retailers own this data, and they protect it fiercely.”
The numbers tell the story of a massive power grab. Research and Markets projects loyalty programs will explode at 15.7% annually and hit $27.26 billion this year. Grocery Doppio reports that digital grocery sales now capture 13.6% of total revenue, while customers shopping across multiple channels spend 1.5 times more and deliver 25.6% profit margins for grocers. AlphaSense sees retail media spending racing toward $100 billion globally.
And that only scratches the surface. Geoff Parker, professor of Engineering Innovation at Dartmouth University, studies these power dynamics and sees the reality clearly: “Access to the data layer is incredibly valuable and important. So you do pretty much see a flow of power to whoever controls that data layer — more to the retailer side.”
Each retailer has built their own data fortress, complete with entry fees and strict boundaries. Tobianne Paul, chief of marketing at NatureSweet Tomatoes, describes the new reality. She says that with some major retailers, suppliers are expected to invest in their data platforms, which in turn provides fairly good reporting and greater visibility. Brands seeking to understand customer behavior across chains are left stitching together data from Kroger, Walmart, Amazon, or Instacart with whatever tools their budgets allow.
Parker doesn’t sugarcoat who wins: “I posit that the retailers win on that because they have direct control over the data. I don’t see [shoppers] winning. When you can do finer-grained targeting, then you’re likely to extract more of the surplus.”
The platforms sitting between brands and customers add another chokepoint. Parker explains how delivery apps control the game: “If you go straight to Uber Eats or DoorDash, then they control the relationship.” These intermediaries “give brands advantages but they lose visibility,” since “the eater interacts with [the platform]” instead of directly with the brand. In other words, the balance has flipped completely. Retailers control the infrastructure, the customer data, and the platforms that determine success. Brands pay for the privilege of meaningful shelf presence while trading away direct customer relationships for personalization capabilities they can’t get anywhere else. Decades of category knowledge and buyer relationships still matter, but they now compete against algorithms and expanding data moats.
What Data Suppliers Get (And What Stays Opaque)
The uncomfortable truth is that in some ways customers have become more valuable as data points than as actual buyers. Someone is making serious money from understanding their behavior. The only question left is whether suppliers will find a way to capture some of that value or just watch retailers monetize relationships that suppliers spent years building.
Most produce marketers know this frustration: requests for customer insights often yield reports that appear designed to reveal as little as possible. At most, they might see their SKU-level sales, some pricing information, and maybe inventory movement through distributors.
Paul describes the typical shopper signals brands receive: “Basket size, new to brand, share of voice, share of shelf.” Occasionally, companies can negotiate deeper data pulls, but retailers control the tap and decide what counts as helpful.
The measurement game gets even more frustrating when companies are trying to prove their marketing works. Paul explains the challenge every produce marketer faces, saying that achieving true incrementality or a strong return on ad spend requires access to lift data, which is not always available.
Platforms like Instacart might run experimentation and provide more insights, but tests are conducted on their timeline and their terms. They cannot be run when needed most.
Dabbelt further breaks down why measurement seems so fragmented: closed-loop data inside platforms is “critical” for real-time optimization, while those expensive marketing mix models validate ROI but run infrequently. Some retailers now offer “all-store” measurement that tracks campaign impact “inside but also outside” their stores. Still, these premium services come with premium price tags.
Meanwhile, retailers are hoarding the data that would actually help suppliers compete. Think about all that rich consumer behavior data they’re collecting through loyalty programs and digital tools while it stays firmly locked behind their walls — shopping patterns, preferences, price sensitivity. Marketers might learn how a promotion performed, but rarely how it compared with a competitor’s campaign during the same week.
The imbalance becomes clearer when looking at the investment numbers. 70% of grocers are pouring money into data analytics platforms, with more than half expanding into e-commerce and AI-driven personalization, according to RDSolutions. Only producers with serious negotiation leverage get detailed, real-time data access.
Cross-platform measurement creates another pain point. Dabbelt points out that retailers hold the keys to customer identity data and have no incentive to share it, which prevents limiting ad repetition (frequency capping) across different retail media networks (RMNs). Multi-retailer consortia are “necessary” because brands can’t “invest in 45 retail media networks,” but retailers prefer keeping their data kingdoms separate.
Collaboration rates between retailers and producers have improved since 2018, but transparency stays confined to whatever supports mutual commercial interests. Brands receive only the data that helps retailers sell more product — not the insights needed to understand the competitive picture or build direct customer relationships. The power gap keeps widening.
Budget Mix: Pay-to-Play vs. Organic Momentum on the Digital Shelf
The digital shelf has become a bidding war, with visibility determined largely by marketing budgets. IBISWorld, a market research firm, states that over 70% of grocery retailers now treat omnichannel as their core strategy and pour budgets into whoever controls the digital infrastructure.
Paul says that content quality and ratings are basic requirements, adding that companies should not invest in ads if their product detail pages are not optimized. Companies can’t advertise their way out of bad product pages. Once they nail the fundamentals, ads build relevancy so eventually they can spend less on ads and still get the revenue, but that doesn’t happen overnight.
Here’s where most brands end up throwing their money: Dabbelt notes it’s “common to see 70% of a brand’s RMN investment” flowing straight into search ads — sponsored products and sponsored brands.
The problem is that costs keep climbing while returns shrink. “Search becomes very expensive when there’s an endless supply of third-party sellers,” and the brands with deeper pockets win by competing “before and after the search” with better creative and more substantial presence.
Paul says she does not view retail media spending as a tax, noting that an ongoing commitment to omnichannel earns goodwill with retailers. But she’s also realistic about the dynamics: it’s “more nuanced” than straight pay-to-play. Retailers notice when suppliers invest in their platforms, and that goodwill can unlock opportunities beyond just ad placements.
Parker compares the practice to creating a barrier that discourages participation, warning that “people will eventually leave.”
The organic side offers some hope. Intelligent AI-driven personalization and real-time inventory promotions can drive sales without constant ad spend. Grocers building strong first-party data capabilities can help brands reduce their dependency on paid channels. Some retailers save up to 50 hours of labor per week with better shelf management technology, creating efficiencies that benefit everyone.
However, the math continues to get harder for smaller players. The biggest retail chains capture outsized shares of e-grocery sales because they’ve essentially become advertising companies that happen to sell groceries. They are able to monetize data, shelf space, and shopper attention at a double-digit growth rate, while smaller regional grocers and independent brands often struggle to match those resources.
Produce Realities
Produce marketing faces challenges that would discourage even packaged goods marketers: perishable products, fragmented tracking systems, and consumers who may forget purchases in their refrigerator drawers.
Nearly 40% of food produced globally gets wasted, with fruits and vegetables taking the biggest hit, as Forbes reports. Meanwhile, 88% of Americans say reducing food waste matters to them, but they keep buying more than they can eat.
The tracking nightmare makes everything harder. Paul explains how attribution gets messy: tomatoes straddle both Price Look-Up (PLU) and Universal Product Code (UPC) systems, but for NatureSweet, “it’s pretty much just the UPC stuff” with little PLU involvement. PLU codes work for bulk items sold by weight, giving retailers pricing flexibility but creating data gaps.
UPCs handle packaged products with fixed weights, enabling much tighter inventory tracking from warehouse to register. Marketers often end up managing two different measurement systems for what may essentially be the same product.
Paul describes the reality of planning around promotions: for campaigns running “in-store and online,” NatureSweet forecasts that lift within their “normal replenishment supply chain.” Produce companies must coordinate harvest timing with campaign schedules — something that sounds simple but requires coordination that most other categories never face.
Digital marketing offers advantages that physical shelf space can’t match. Paul points to what converts: co-branding, use cases, recipes, inspiration, ratings and reviews. Online gives certifications like “Fair Trade” or “B Corp” real estate that a physical package can’t provide. “Selling the dream” with lifestyle imagery can drive conversion beyond what a box on a shelf can achieve.
Paul says staying “always on” in digital is key to relevance, especially when aligned with in-store execution to create the strongest halo effect. But she’s realistic about the limits, saying that RMN buys rarely drive the store execution themselves.
Suppliers are still dependent on physical merchandising, supply chain coordination, and the hope that customers will reach for their product before it goes bad.
Closing the Measurement & Collaboration Gaps
Everyone knows the current system has flaws. Brands can’t prove what’s working, retailers protect their data advantages, and nobody wants to share competitive secrets.
Paul notes that so-called “match market” tests can be difficult to interpret. Companies are trying to isolate their digital spend impact while weather, seasonality, and competitor moves all mess with their results.
Data access also creates a two-tier system. Top grocers offer “all-you-can-eat” data pipes through clean rooms and Application Programming Interfaces (APIs), but smaller brands struggle with the technical resources to use them. Technical skills, such as Structured Query Language (SQL), are often required just to make sense of the data being purchased.
Moreover, fragmentation across platforms risks over-exposure and waste. Off-site retail media spend is “expected to grow 2 to 3 times faster than on-site” in the next couple of years, according to Dabbelt, making cross-channel attribution even messier.
Parker nails the core problem: “If the data owner is also a competitor, they may have an incentive to hide information. That’s the danger.”
His solution? Data holders should have “an obligation to share some of that data” with smaller brands to level the playing field.
Attribution battles will continue because incentives don’t align. “The brand might say the national ad moved demand; the retailer might say targeted ads or in-store drove it,” explains Parker. “You can run experiments to tease out attribution, but it has to be in both parties’ interests.”
What brands should push for: robust incrementality reads beyond platform reporting, standardization across measurement approaches, and transparency around ranking algorithms. “Retailers don’t share” algorithm details, but brands deserve incrementality data as ad costs rise and competition intensifies.
Parker closes with cautious optimism: “It’s really cool that the retail side has gotten more organized, taking back some of the power by getting more aggregated data.”
The pendulum may be swinging too far toward retailers right now, but market forces could eventually find balance when participants stop seeing value.
What Happens Next
The produce industry woke up to find retailers holding all the customer data cards. Paul notes that a crucial skill now is “being skilled and committed to omnichannel,” ensuring that data extends into the in-store environment so campaigns reinforce one another. Paying for visibility alone no longer guarantees success; brands must build organic momentum to make paid spending worthwhile.
Smart brands will negotiate for real measurement data, balance their ad spend across formats instead of dumping everything into search, and treat content quality as the price of entry.
Most importantly, they’ll train their teams to work with clean rooms and APIs because that’s where the competitive advantage lives now.
Retailers have already won the first round of this data war. Produce brands must now adapt to the retailer-controlled system or risk watching others monetize the customer relationships they cultivated.
