Today, there is almost an infinite selection of product, and content at the click of a button. This created a new problem for brands. As more content fights for our attention, product discovery has become an increasingly valuable business. Retailers and brands are partnering to connect with customers in new ways.
Amazon has declared war on brands. It will use algorithm to find a product that matches your preferences for a lower price. It will figure out the best deal and most likely trade you into the highest-margin product for them which will be Amazon toothpaste. But, it is not just about Amazon. Let’s say the fridge could use its connectivity to talk to your phone and let you know that you need eggs, creating an ecosystem. By extending our ecosystem we can have the fridge order the eggs from the grocery store. Amazingly, this is already starting to happen today. Connected kitchen appliances can identify ingredients, cook meals, and recommend personalized nutrition for the family.
Food retail of the future will be delivered through tight collaboration between smart merchants and supply chain teams, enabled by a digital platform strategy that allows you to capture data, experiment, build machine intelligence and create deep and lasting partnerships.
We see five main structural trends starting to transform food over the longer term:
- Vertical agriculture: Today we are beginning to see signs of viability from indoor agriculture, where sensors, algorithms, data fusion, machine perception, and robotics come together to remove many of the labor and yield constraints of existing outdoor farming methods;
- Intelligent food grids: Smaller, automated warehouses, operating closer to city centers, with goods fulfilled through small autonomous electric vehicles able to deliver fresh food to smaller merchants;
- Advanced food manufacturing: Advances in biosciences and material science couples with changes in customer preferences will impact how and where our food is produced;
- Borderless retailing: The retail store is going borderless, it will appear in many forms, satisfying a diverse set of needs. Backed by a globally efficient supply chain and predictive inventory management;
- Augmented humanity: The biggest differentiators moving forward will involve making strategic bets with either human capital in developing your technology capability, or financial capital in bringing an efficient food experience to each of the communities you serve.
The food industry is evolving at such a rapid rate, and retailers, distributors, and producers need to rethink their business models and focus on innovation to succeed in this evolving market. We are passionate about partnering with ambitious leaders who are up for the challenge. Is that you? We’d love to hear from you.