Is Your Business Ready For Disruption in the Food Industry?

By Jo-Ann McArthur

In John Huston’s cult classic Wise Blood, the main character preaches, “Where you come from is gone, where you thought you were going to was never there.” This quote perfectly describes the state of today’s food business.

Thanks in large part to Millennial consumers, the food and beverage industry is unrecognizable compared to what it was only a few years ago. Any plans you had about where your business was heading may be right out the window.

Industries used to evolve, with change occurring at a gradual or even glacial pace. Today, new ideas and technologies seemingly drop out of the sky unannounced, and game-changing paradigm shifts are the norm. This isn’t evolution; it’s disruption.

This disruption is primarily driven by Millennials. They are tech-savvy, globally aware, often values driven; and there are a lot of them.

Here are some ways disruption is affecting the food business.

Sourcing & Purchasing

Kids who grew up with digital technology are now young adults, and often parents, fully comfortable ordering anything and everything online, including groceries, and pre-made meal kits. Amazon’s purchase of Whole Foods and entry into the meal kit market are by design, not coincidence.

How will retailers fight back? – By offering new experiences and facilities. Start getting used to the word ‘grocerant’ and take note of the expanding grocery section in neighbourhood drug store to serve inner city condo households with smaller kitchens.

Food Preparation

Today’s consumer has access to food-related content 24/7, be that on Buzzfeed, YouTube or Facebook, and is more in touch with world cuisine than at any point in history. And yet, home-cooking is on the decline. Busy people are going out to eat, and homemade meals need to be ready in 30 minutes or less.

While there is a collective understanding of the value of eating well, these consumers crave convenience, too. They don’t want ingredients; they want meal solutions.

Radical Transparency

Millennials are mindful consumers and they want to know where their food is coming from. This ties in with being digital natives, and the resulting ease of access to information. They love origin stories, and the words “craft” and “artisan” are label darlings.

Trust in food and beverage packaging claims is low, and manufacturers are scrambling to prove and promote their integrity. Watch for more labels like, “Certified Humane” and keep your eyes on blockchain technology as the industry seeks to shore up eroding consumer confidence.

Plant-based Products

Millennials are adopting flexitarian, vegetarian and vegan lifestyles in far greater numbers than previous generations. Big food business needs to react accordingly – this isn’t a niche market anymore.

Not so many years ago, the idea of Maple Leaf Foods entering the plant-based protein market would have been unthinkable; and a blended meat and veggie patty at Sonic Burger? Scandalous! But it’s all happening as meatless and less-meat goes mainstream.

Intersection of Tech & Food

A few paragraphs up I mentioned Amazon’s foray into the grocery business. Their intelligent assistant for the home, Alexa, is a big part of that plan. Alexa and Google Home are taking their places on the counter alongside traditional kitchen gadgets.

It’s like something from The Jetsons: speak a voice command into the air to find a recipe, add the items to a grocery list, or even place a grocery order. That’s assuming, of course, your smart fridge hasn’t already ordered for you! Manufacturers will need to find new ways to stay top-of-mind if the target consumer isn’t browsing the shelves in the grocery store.

From Nose to Tail

The phrase “waste not, want not” is still true today. Throwing away food is throwing away money, whether you’re a consumer, or a producer. At the start of the decade, the word “upcycling” hardly appeared on the radar. Today, it’s all the rage, as waste streams now feed rivers of profit. What was once trash finds new life as “ugly produce” and veggie leftovers find their way into restaurant soup stocks, and livestock farmers’ troughs.

Health and Wellness

It’s a bitter irony that today’s working consumer can’t find time to cook at home, but recognizes the value of food for promoting health and general well-being. Food purchase decisions are increasingly based on what’s on the label, and what those ingredients can do for the buyer.

Consumers are looking to food to make them feel good inside; mind, body, and spirit.

When & How We Eat

Those ‘Leave it to Beaver’ scenes – or ‘The Brady Bunch’ – and images of the nuclear family sitting down to two or three meals together every day look so quaint, don’t they? Few families have that luxury any longer.

The three traditional meals of the day no longer comprise even one-third of our eating occasions. Call it daypart agnosticism. What makes up the balance of our diets? Snacking between meals, exactly what your mother told you never to do. Watch for increasing and diversifying ‘snackification’ of meals to suit busy and highly mobile lifestyles.

These are exciting times in the food industry, no matter if you’re a producer, a seller, a marketer, or a consumer. As the influence of the once almighty Boomers continues to fade, the void will be filled by Millennials bent on disruption.

Collectively, this generation wants what they want when they want it, and the way they want it. Any business that wants to come along for the ride will need to figure out how to disrupt their own processes and find innovative ways to deliver. The past truly is gone, and the future may not be what you expected.

Jo-Ann McArthur is a Founding Partner and President of Nourish Food Marketing in Toronto, where powerful brands for food and beverage products are built. Email Jo-Ann at j@nourish.marketing for an in-person presentation of the Nourish Trends Report for your company. Visit www.nourish.marketing to learn more about food trends and marketing.

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