The future of food production is just around the corner
During the AFTP conference in July 2018 we took the opportunity to chat with members of the AFTP community and gain their opinion on what lies ahead for food and agriculture businesses in the near future.
In our first piece, Chris Wells Managing Director of AFTP affiliate partner Leatherhead Food Research explains how the industry should harness Millennials’ nimble approach to business and demand for personalisation. Chris sees this as the best way to prepare for changing consumer demand.
“The food industry, with its very large food production facilities around the world, is perceived as slow to change – and some businesses are. But more and more we are seeing big business adopt the tactics of start-ups to respond to these global challenges,” he says. “There are some very bright futurology teams working on new food products and production methods.
“Research is vital. Organisations such as the AFTP provide a vital resource to help the agriculture and food industries to build capability within their teams.”
Distrust of ‘Big Business’
Millennials - defined as individuals born between 1981 and 1996 - are famously distrustful of ‘Big Business’ and they consider global food production companies to be part of that group.
The food industry is based on scale. It is capable of impressive efficiencies because of the volume of throughput. This results in relatively inexpensive, standardised food.
Previous generations, the Baby Boomers and Generation Xers, grew up to trust mass-produced food because they see it as highly regulated and safe to eat.
But Chris believes this is no longer what millennial consumers want. “They don’t want a sea of perfection, where everything is the same size and shape. They like the ‘perfect imperfect’. They see imperfectly shaped or sized food products as ‘more authentic’, rather than having just come off a conveyor belt.
“They also prefer local produce and ‘personalised’ products. This is something the food and beverage industry needs to take very seriously as millennials are now the generation that is starting to drive the economy.”
Customisation vs personalisation
Companies such as Coca Cola and Nike have taken the first steps towards personalisation, with individually-named drinks bottles and design-your-own footwear. But customisation only goes so far.
“Customisation allows consumers to choose pre-defined options from a set of parameters, and to feel that they are expressing some personality,” says Chris. “But personalisation is what today’s consumers really want.
“In the very near future the food and beverage industry will be able to develop a kind of ‘mass personalisation’, using feedback loops generated through the IoT (Internet of Things).
“In a smart, interconnected world, your coffee cup would give feedback to the coffee machine on the temperature you like your coffee before you start drinking it. The next time you get a coffee, it will be served at the temperature you prefer.
“In the near future, inanimate objects like coffee cups may be capable of responding to your behaviour.”
Immediacy is key
If consumers increasingly want products to be personalised, they also want them straight away.
“Immediacy is key,” says Chris. “Social media communicates experiences immediately and businesses need to be able to respond to that immediacy.
“They also need to be able to respond quickly when things go wrong – or don’t meet a customer’s expectations. Any negative impact is multiplied by social media and made personal.”
Keeping up with the start-ups
Greater localisation and more and more individualisation presents a challenge for the food industry. Large corporations are tackling the problem head-on in a spirit of, ‘if you can’t beat them, join them.’
“Little start-ups can respond to consumers they way they want them to,” says Chris, “And some big corporations are deciding that the solution lies in buying start-ups and harnessing that responsiveness.
“A good example would be Tyson investing in Beyond Meat, but there are many others.
A nimble food industry
While clear challenges face the food industry, not least issues of sustainability in a world of global warming and population growth, there are also huge opportunities.
“The food and beverage industry can be nimble and can do clever things quickly,” says Chris. “Large food companies need to learn not to be afraid of the new business model.
“Small start-ups are generating massive shareholder returns. They find a niche and they exploit it. And these very successful companies are often run by Millennials, whereas global food businesses tend not to be – yet.”
The right product at the right price
But what will happen to those enormous food production facilities around the world?
“The industry is changing,” says Chris. “But large food production plants will still be needed for a while yet.
“The global population is expected to reach 8.5 billion by 2030, which is a lot of people to feed. And it is really only consumers in the developed world who can afford to pay for such high levels of personalisation when it comes to food.
“Consumers will continue to want safe, good quality food at a good price – and in many parts of the world the best way of delivering this will still be mass manufacturing for some time yet.
“However, smaller, more agile and probably more local, food and beverage production facilities are on their way.
“We are fortunate to have the AgriFood Training Partnership to provide the link between academic research and those employed in the food industry to help UK businesses deal with these kinds of issues.”
Accessing industry expertise for our participants
Leatherhead Food Research provides expertise and support to the global food and beverage sector.
The company provides practical solutions that cover all stages of a product’s life cycle from consumer insight, ingredient innovation and sensory testing to food safety consultancy and global regulatory advice.
AFTP courses are designed with industry input to ensure we include topical issues and bridge related knowledge gaps. Courses are designed to provide maximum benefit to industry with participants often undertaking work-based assignments as part of their assessment; using their knowledge gained on courses to address real-world challenges.