Does your food business model still fit in the fast-changing environment of the food industry? Or are you keen to try a new dish? Traditional business models are being challenged by a group of ambitious gamechangers.
As you can read in our previous article, sustainability, digitalization, health, and convenience are the key drivers behind the global food transition. Over past year, we have been working with some of your fellow-food innovators and we studied about a hundred breakthrough business models. We found out they all have a couple of common denominators. So fasten your seat belt, because with these 4 design principles you have the key ingredients to accelerate your (future) food business model.
The most successful businesses in food all are making sure that their product is accessible to their customers at the right time, at the right place and for the right price. Sounds logical, right? But hear this, you are not automatically accessible when your product is on shelf or at the menu. Your customer still needs to know about you, your product. But they also need to be able to buy it via their preferred channel. But in general, food value chains are still long and complicated systems. So, there are a lot of hurdles to take before your product actually ends up on the plate of your customer.
Duo Duo Grocery is a successful business by Pinduoduo, China’s largest agricultural platform. Local farmers sell their products directly to consumers nearby. They go and pick-up their fresh fruits, saving tons of money and time on transportation. In Europe we see healthy meal boxes providers that sideline the middlemen and collect their ingredients from the farmer.
So question is, how can you design your business in such a way that you guarantee easy access to your product for your customers at all times?
Our friends at the UN predict that our world population will grow to 10 billion people in 2050. That also means 10 billion mouths to feed. Making sure there is always sufficient food, is therefore a critical design principle. How will your business contribute to this? How can you organize yourself smarter, but also challenge the companies you work with across the value chain to step-up their game. What can you do to use less resources? Or how can you optimize your production using robotics, biotech and AI?
Food can be grown anywhere, even in urban and hostile environments. Square Roots, founded by Kimbal Musk (yes, the brother of) is committed to bringing food whole year round to people in the city. They are transforming sea containers into indoor farms. Their technology has now reached the point where the containers can be used anywhere in the world.
When working on your next innovation we challenge you to think long-term and to think about availability within boundaries of the planet.
This sounds like a no-brainer. Yet, we still see plenty of companies greenwashing their vegetables. Luckily, consumers are becoming more aware of their ecological footprint and are demanding more transparency about where their food is coming from and how it’s impacting our environment.
The more honest and open you can be about your business; the more likely people are willing to buy it from you. We know it is quite the challenge to be sustainable throughout the entire chain of the process. Growing your products biologically is one thing, if you need to ship them to the other side of the globe, you still have a challenge. Solving this challenge requires collaboration and co-innovation throughout the value chain.
In 2020 Yara and IBM started working together. They built a cloud-agnostic digital farming platform. The goal is to offer farmers across the globe digital services and agronomic advice supporting them in their business. Ultimately leading to stop deforestation by increasing food production on existing farmland.
Yara is on a mission to create a sustainable world without hunger. And we are totally on board for that. That’s why we believe that starting or growing a business in food without taking your society and environment into account is not an option anymore.
A lot of the challenges in the food industry can be re-designed using the latest and greatest technology. But bottom line is that people still need to be able to buy your product at the end of the day. The average that low- and middle-class income households are spending on food is decreasing. While the costs for producers and distributors are rising. So how are we going to keep things affordable?
Let’s look at Aerobotics. This South African company has developed a data-driven farming management system that is able to optimize and protect yield, season after season. Price volatility is no longer depending on yields. They are using drones to collect data. Replacing the previous labor-intensive way of measuring acres of land, controlling crop diseases, and managing water usage. Leaving more time to manage the farm. All resulting in more affordable product in the long run. What does affordability look like in your food business model?
As a last example we want to inspire you with Liberian company Kawadah Farms, a project by Tailored Food. They have successfully managed to apply all four design principles in their food business model.
We are curious to see how these principles show up in your business. And if you need help to (re)design your food business model, we are obviously here for you. Just give our colleague Demian a call.
