Thanks to all of you for your interest in our new Weekly Food Business Insights but, particularly, for those who have registered!
If you haven’t had the time to peek at “the product”, we’ve posted a previous week’s Insights to give you a more precise idea of what to expect.
Please, see here Issue Number 02, that we published in July 2020. All the news nuggets are on the same page but, when you are on the platform proper, the information is the same but each nugget has its own page. We hope you find it interesting and worth signing up for the one month trial and then stay with us!.
We hope the Insights will give you a wider view of the world of food outside your area of business. Please visit us on https://agribusiness.academy/drfood
Commuting to City Centres is Passé. Stay Home, Stay Smart & Safe!?
- Covid-19 has turned the home into the hub both for working and socialising. Lower stress working from home (relaxing in pyjamas until the business Zoom call!)? Not so – many parents have had to balance home working with home schooling for their kids. Working from home may be the new normal for many people as employers see the cost savings associated with having remote employees.This could be worrisome for property owners as city centre offices are shrunk and workers head for the suburbs or even rural areas. It’s threatening, too, for restaurants and Food-2-Go outlets located next to city centre office and apartment towers. Some notable trends with food industry implications include:
- local shops, services, restaurants, coffee shops and bars offering local products are preferred. Consumers have more trust and feel more connected to local businesses. Brands should highlight their provenance credentials and links with the local community to encourage this goodwill. ;
- Starbucks envisaged its cafés as “The Third Place”, somewhere in the middle between home and the office. Increasingly, the workplace may be distanced with local coffee shops being the office during the day, a social focal point in the evening, flipping the beverages (energisers during the working day and alcohol/CBD for relaxation in the evening) and food offers to suit customers.
BIG IMPLICATIONS: Local is in and the cachet of the global brand is diminished. The Post-Covid period may require city food and drink businesses to be particularly agile in responding to a new world of work and after-work socialising. But for local firms with local attributes and links to the local community, make sure you shout loud!
Covid-19 Accelerates the Introduction of Automation and AI Throughout the Agricultural and Food Industry
- Starship Technologies has been running a robot delivery service for groceries in Milton Keynes (a small city north of London) for over two years, working with Tesco and The Coop. Previous customers were Just Eat and Deliveroo delivering takeaway meals. Happy households can track the robots progress and have loved the “no human contact” element during the coronavirus crisis. Walmart has robotic floor cleaners silently sweeping huge hypermarkets in the USA. Kroger’s Giant Eagle stores have robots to check stock availability. The distribution centres of Ocado, the pure online grocery player, are notable for their lack of human staff and abundance of robotic product pickers & packers..
- In China, the world’s first robotic restaurant was opened by Country Garden (in June) and 20 in-house robots cook and serve food. Caliburger in the USA has Flippy robots to work at the grill. Dr. Food ordered a beer and snack when staying at the Mandarin Oriental in Boston and it was brought to his room by a robot in a tuxedo!
- The use of robots, particularly in the horticultural and dairy sectors, is exploding worldwide – apples in New Zealand were picked in some orchards this season mitigating the extreme shortage of harvest labour worldwide in agriculture.
BIG IMPLICATIONS: In all parts of the agricultural and food chain, AI and robotics will transform productivity and cost control for food businesses. Also, “Germaphobic” consumers love the idea of products being “untouched by human hands”. But, aspects of the “sharing society” may be stalled as some are concerned about “Who used this last?”.
Retail 2020/21: 10 Trends in Global Retail – Post-Crisis Update
How will the retail sector worldwide adapt to the new “mask economy” post-Covid? A recent report provides some good ideas for food businesses:
- Reduce physical interaction but maximise the ways to engage with customers.
- Most customers want to shop quickly and efficiently most of the time and, particularly when they are shopping for day-to-day “Fuel Food”. Don’t confuse them in-store or online. Reduce checkout processes with self-scan apps, etc., make online shopping and click & collect even easier;
- Develop “Experimental E-Commerce” activities particularly when shoppers are willing to invest their time to buy, cook and present “Story Food” (rather than weekday “Fuel Food”) – like live-streaming product demonstrations, focussing on what is in-season, how/where and by whom the product is grown, lessons on how to cook, video consultations and one-to-one sessions.
- Use social media to support in-store and online shopping;
- Shopping festivals and holidays will gain in importance (we’re learning from Asia where they celebrate on a different and higher level than Westerners!);.
- Develop more resilient supply chains which, often, means shorter chains with longer lasting commercial relationships. Understand better your risks associated with sourcing, and engage with suppliers that can help you to be stronger in front of unknown adversities (Covid-19 has taught us this the hard way!). Local suppliers will be more important, and digitalisation will help to manage an increasing number of suppliers and, using technologies like blockchain, enhance transparency and traceability in the chain.
- While foodservice has been hit particularly hard by Covid, many food retailers have benefitted as a result of lockdowns. A combination of downward pressure on household incomes as we face a global recession and more practice and a greater willingness to cook at home may serve food retailers very well;
- In many countries, as we faced a fearful health challenge, citizens have been more community friendly and inclusive. We’ve looked to help our neighbours and work together to “defeat” coronavirus. Increasingly, consumers expect their brands to be fair to society, the planet and all living things within it!; Pre-Covid, there was growing consumer interest in sustainability and this continues now (notwithstanding that most consumers have only a vague understanding of what sustainability actually is). However, they look to the companies that they buy goods and services from and expect them to be better corporate citizens than in the past. Don’t disappoint them!
BIG IMPLICATIONS: Covid-19 has broken our food shopping and meal preparation mould! Is this fragmentation for ever or will the accelerated introduction of an effective vaccine allow us to slip back into our former ways? Covid-19 has accelerated trends such as online shopping and this will not reverse. But make food shopping easier and even enjoyable! It’s slowed down the anti-plastic movement as plastic is seen as being safer than other packaging forms. But recyclable and compostable packaging will regain its prominence as Covid fears recede (see next item).
Source Coresight (free with registration to the site)
Five Sustainable Packaging Launches During the Pandemic
- While the key concern of households has been the health of their families, consumers are still concerned about the health of the planet. Pre-Covid, big and small food companies were presenting a “greener” face to their consumers and, in anticipation of “green’ concerns returning to the very top of consumers’ agenda, smart companies are trying to keep ahead of the curve on sustainability. Here’s some examples of packaging initiatives:
- “Big Food” such as Danone, Campbell’s and Nestlé are changing their processes and their designs to reduce the environmental impact. Nestlé is using paper rather than plastic to wrap its iconic Smarties. Campbell’s Kettle Chips is sourcing from recycled materials and changing the design of the pack to use less plastic. Danone has launched in France a bottle of Evian mineral water without an added label as the information is engraved on the recycled plastic bottle.
- L’Oreal and Colgate are following a similar approach. The latter has launched a new toothpaste called “Smile for Good”, with a first ever easily recyclable toothpaste tube. Businesses want to be “A Force for Good”, because their shoppers ask them to be so.
- Unilever, in particular, has shown leadership in embracing the need for businesses to have a social purpose first and foremost. Profitability is important but secondary. Indeed, Unilever CEO Alan Jope holds the view that if a brand doesn’t have a social purpose, it doesn’t belong in their portfolio and should be sold!
BIG IMPLICATIONS: As we emerge from the Covid crisis, consumer concerns about the health of our planet and our society will be one of the dominant themes for the remainder of this decade. Companies that engage earlier, substantially and openly with regard to sustainability issues will be rewarded with greater loyalty from their customers.
Source: The Grocer.
Fit for a Better World: The Importance of National Strategy & Branding.
- New Zealand’s Ministry for Primary Industries has released a new agrifood strategy through to 2030. It’s starting point is that “if the natural world is healthy, so too are the people”. New Zealand has a world class reputation as a food producer and its “clean and green” claim is an important element in the national branding of its food exports. Its management of the Covid-19 crisis has only served to enhance this positive image (NZ has had only 1,500 coronavirus cases and 22 deaths and the nation has returned to “normal”).
- Here’s three paragraphs from the document that are refreshingly self-critical but nonetheless inspiring as they recommend a future pathway for their agricultural and food industry:
- “For a start, we need to be very clear that we are not a volume producer – and we should stop acting like one. Selling commodities in undiversified markets is a race to the bottom. Yet we have let that be our default position.
- Instead, we must select the market niches where we can excel in providing and capturing value – and keep a razor-sharp focus on those.
- And, let us set our sights on the real prize – which is owning market categories. One outstanding example of this is Zespri’s development of the gold kiwifruit category. This New Zealand company worked with researchers to develop a new variety that would excite consumers”.
- Mind you, if you promise much about your environmental credentials, then, you better live up to them! Activists in New Zealand are critical of the impact of NZ’s dairy industry on the environment and the animal welfare track record of the livestock sector. It’s great to have green aspirations but smart to under promise and over deliver to maintain a pristine “Clean & Green” image!
BIG IMPLICATIONS: For a nation, ensure food industry members agree on what are their values and collective vision and how these can be communicated to the outside world. Then, work out where your food industry can have the biggest and most profitable impact in export markets. In a fast-changing world, it is vital to be agile and tuned in to the global scene with a clear understanding of market forces.
Source: Ministry for Primary Industries, New Zealand.