With an evolution in consciousness taking place around food production, provenance and supply chains, startups are emerging that are changing the way we think about food
More than a decade ago, the stirrings of revolution were beginning to be felt in the UK food industry. Led by a clutch of celebrity chefs, our culinary landscape started to shift as we transformed into a nation of foodies.
Today, what we eat and how it got to our plate has become increasingly important to each and every one of us. We have a much deeper understanding not only of our food but also the processes behind the scenes in its supply chain. Armed with that knowledge we are able to make much more informed choices – to the point where food is as much an expression of our culture, personality and passions as it is an accompaniment to time with friends or the telly.
In a short space of time, the dominant influence of mass market economics, such as volume and price, has been eroded. And, into the space left behind, new drivers of consumption have flowed, such as sustainability, provenance, craft, flavour and even the story behind the brand.
This shift means that scale is no longer the defining measure of success. In fact, quite the opposite is becoming true; small is now ‘good’, and this has presented incumbent corporate players with a challenge, given that their existing routes to market are predicated on scale, frequently at a national rather than local level.
Understandably, the industry’s leaders are finding themselves under mounting pressure to tap into innovation in the face of growing competition and industry-wide disruption from smaller, agile players. Any reader of this column will be well aware I’m an advocate of corporates partnering with startups as one of the best means by which to innovate and open up new markets. So those same readers may also not be surprised that I recommend this as a solution to the innovation conundrum corporate players have before them in the food sector.
In this spirit, a few startups have caught my eye this year which corporates should watch out for. There are many more but here are a handful whose approach highlights the core areas ripe for innovation:
Beyond the societal and environmental justification in not throwing away perfectly edible food each year, there is also a real cost. An estimated 5% to 25% of apples, 9% to 20% of onions and 3% to 13% of potatoes are rejected on cosmetic grounds – that’s a lot of revenue thrown into the bin each year simply because wonky and misshapen produce fails to meet the aesthetic standards of supermarkets. Yet there’s a hunger for this non-conformist produce, with 73% of consumers polled by Blue Yonder saying they are open to purchasing such food. Oddbox is a good example of a startup providing a tangible solution to the issue of food waste while generating increased revenues for farmers and savings for customers.
Founded by entrepreneur Ben Patten and soon to launch in the UK, Food Clubs is a great example of a community-led, bottom-up initiative. In this case, it allows people to club together to buy groceries direct from wholesalers for 30% to 50% less, meeting a consumer need the business world isn’t addressing. Needless to say, this model disrupts the grocery retail industry by leveraging the power of collective consumption. Corporate retailers are going to need to find compelling ways to circumvent or adapt to this disruption in 2018 otherwise they risk further undercutting of their market share by the likes of this clever startup.
Personalisation has been the word on retailers’ minds for quite some time but few corporate retailers have got their heads around it – yet. Part of the issue is that personalisation is notoriously hard for corporate retailers as their instinct is to start big before thinking about refinement of the product. But it’s also naive not to recognise that consumers increasingly desire – and expect – personalisation, which digital technology has enabled to filter into various aspects of our lives. Neil Grimmer’s startup Habit is taking personalisation to the next level by marrying finger-prick blood test and DNA swabs with tailored meals delivered to customers on a subscription basis. This is using one consumer issue to solve another, killing two birds with one very innovative stone.
Online grocery delivery is one of the ripest areas for innovation as providers hunt feverishly for a way to make it profitable and sustainable as a business. Whoever can find a solution for grocery’s key issue, perishability, will be able to instantly improve the fortunes of online grocery delivery. Growing Underground is a great example of how startups are addressing the challenges of the supply chain through innovation. By using hydroponic technology, Growing Underground is able to grow fresh, pesticide-free salad leaves 33 meters underground in Clapham with a capacity that can reach up to 20 tons per year. With the right support and investment, it’s a model that has the potential to revolutionise local supply chains.
Twiga Foods is changing the way informal markets operate in East Africa through mobile-based and cashless B2B supply-chain solutions. Food vendors can use their phones to order products that are delivered direct from Twiga’s supplier network at a lower cost, bypassing the wholesaler entirely. Though Twiga is only doing fresh food at the moment, could it be to Twiga and a corporate’s benefit to partner to do consumer packaged goods (CPG) too?
While the innovation within these businesses is plain to see, it’s something very difficult for corporates to replicate. Likewise, there is much that corporates can bring to the tables of these various startups, not just in terms of finance and scale but also through access to networks and expertise. What’s really interesting is the possibility for new food revolutions being created in the space in between.