Coming in hot: the biggest business model trends in the food industry 

  • Business Model Innovation

In a world where there are restaurants making shows of avocados, farmers growing their crops vertically and consumers ordering their groceries in one click, we can only imagine what the future of food will look like. But, as you probably know, these breakthrough business models do not come from thin air. We think it is safe to say that our food system is broken. A rapid growth of our population, a massive decrease in biodiversity and unprecedented global affairs force us to rethink our menu. We see major shifts in the entire ecosystem; consumers, distributors and producers are all stepping up their game to overcome the shortcomings in the system. In this article we will give you a taste of the key transitions happening in the food industry and inspire you with companies that already started cooking up their new business model.  

Conscious consumers making better choices  

Let’s start with ourselves. As consumers, we are becoming more and more aware of the gaps in our current system. Not only because we are directly impacted by rising prices of our daily groceries. But also because of new kids on the block like Dutch based start-up Upfront and South-African Know It World. They both make it their business to be transparent about what we eat and where our food is coming from. Too Good To Go, on the other hand, is showing us where our food is going to after we throw it out. Their business model is designed to prevent food waste. As a result, we are making different choices in the way we buy and consume food. There is a growing group of consumers that are deliberately shifting to food that is better for themselves, better for animals and better for the world around us  

Food producers making better use of land  

At the other end of the food chain, we have our producers. Today, they are using about 38 percent of the global land surface to grow and produce our food. About 1/3 of it to grow crops and the remaining 2/3 for grazing livestock. However, with the rapidly growing population and the increasing demand for food, land and oceans for that matter, have become a very limited resource. Creating opportunities for companies that are changing the way we grow and produce food. Let’s take a look at three of the biggest trends we see here.  

First up, advanced biomanufacturing -a technology that uses a biological system to produce biomaterials and biomolecules to produce food. New York based company C16 Biosciences, for example, has developed a platform that uses biomanufacturing to produce a sustainable palm oil alternative without being a major driver of deforestation.  

Second, regenerative farming. Essentially, it is a farming method to improve the resources it uses instead of destroying it. It focuses on ways to use technology to enhance the ecosystem of the farm by regenerating soil, improving biodiversity and paying attention to water management. Diary giant Arla translated regenerative farming into their dairy system with livestock. They use an artificial intelligence tool that allows them to predict the milk intake from their 1.5 million cows. Resulting in an efficient use of milk and a more sustainable value chain (dairy farmers often have a lot of grasslands for growing animal feed and grazing that – if managed well – can increase carbon sequestration to capture CO2 in stable, solid forms in the soil).  

In contrast to the growth plant-based diets in many parts of the world, the up-and-coming middle class in emerging markets is eating more meat than ever.  

The third biggest trend we see is cultured meat and insects. Real animals but grown from cells in a laboratory, so less invasive for the environment and much better for animals. American food tech company Eat Just, Inc. is producing cultivated chicken under their brand Good Meat. Singapore, who is leading the pack for lab grown meat producers, has approved Good Meat’s chicken bites for sale. In the upcoming decades we will need to get even more creative with the way we use our land and oceans to produce our food. Next to these three trends there are many developments happening in this space.Whilst there is little surface left, there is plenty of room for improvement in the way we use our land and ocean to grow our food.   

Distributors making smarter moves from A to B

As consumers we are demanding more information about the origins and journey of our food and the impact it makes on our planet. This forces distributors to move to transparent, smart and sustainable supply chains. Some distributors are shorting their supply chain by connecting farmers directly to end-users, like what Australian organization Open Food Network does with their open-source software platform. At the same time, others are focused on better matching supply and demand by making use of big data. German food distribution platform SPRK uses artificial intelligence and machine learning to connect restaurants and retailers with food oversupply to partners looking for food. A third group is creating credibility, efficiency, and safety in the supply chain by using blockchain technology. It offers the possibility to trace the entire lifecycle of a product from production to consumption. Leading the way here is IBM with their Food Trust™ system. All these new technologies are creating growth potential for companies that are willing to move away from the traditional a-to-b supply chain and  looking for business models that are as green as broccoli.  

A full eco-system trying to keep up with our fast-paced lifestyle.   

Even though we see a clear trend for more sustainable diet choices, we are still looking for unique food options that easily fit into our fast-paced lifestyles. Healthy and convenient seem to be the keywords here. We are all aware of the rapid growth of food delivery services such as Grab, Gorillaz and Indian giant Zomato. But equally impressive is the growth in food subscription services such as Hello Fresh and Marley Spoon. 

However, the real breakthrough business models seem to happen at the edge of food and health and well-being. Indian startupVoll Sante, for example, provides functional foods & beverages and nutraceuticals that help consumers to avoid chronic diseases. Tel Aviv based Nutrino collects physiological data from users and recommends customized diet programs. Companies like Lumen and DNA Fit are tapping into the business model of personalized nutrition, uniquely offering their clients, diets based on their breath and DNA respectively.   

As you can see, the food industry has been rapidly changing. We have seen disruption after disruption, and we do not expect the pace of change to slow down any time soon. From changing consumer behavior to their increased awareness about the environmental and social impact of food production, distribution and consumption. And from the acceleration of technology to global pandemics.  

We can only imagine that these dynamics could make it challenging for you to make the right strategic choices, but we believe within all of these changes lie many opportunities for you to start creating value differently. So, are you hungry for more? 

Are your curious to find out how 3 other businesses are tackling the food revolution? Download our fresh playbook:

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Consulted sources

Food and Agriculture Organization of the United Nations 

Food ingredients first 

Foodvalley 

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