Food for thought as the world changes

Deliveroo has revolutionised food delivery, providing a highly efficient option of hot fresh food at low cost, but it is now facing competition from Amazon. Picture: Contributed
Deliveroo has revolutionised food delivery, providing a highly efficient option of hot fresh food at low cost, but it is now facing competition from Amazon. Picture: Contributed
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New ways of delivering our dinner are prompting the Government to look anew at the supply chain, says Martin Whiteford

Almost every major industry has now been disrupted by digital and mobile technology and innovative start-ups. Uber’s impact on taxis and AirBnB’s on hotels are now deeply entrenched changes to otherwise highly mature sectors. Given the sector value, food and drink is the obvious next target. Incumbents at all stages of the chain, from production to supply are under pressure.

This week alone saw Amazon launch itself as a challenger to Deliveroo in London. In addition, on Friday in Edinburgh the winners of the Climate Launchpad competition for sustainably focussed start-ups showcased their ideas. Two of the three placed winners were looking specifically at food and drink.

CreChar are turning disposable coffee cups into plant growth enhancer, while Green Grow Mushroom produces environmentally friendly gourmet mushrooms grown on coffee grounds using waste heat/water from whisky distilleries. Disruption is coming from the biggest multi-nationals and the newest start-ups.

What trends can we identify and what does this mean for the future of food and drink in Scotland?

The food industry continues to fragment. Year on year, the largest companies lose market share. Food and drink has always innovated but the scale and breadth of what is now hitting the sector is far beyond the soft launch of a new flavour of crisps.

Transparency is critical. People want absolute clarity on what they are eating and the provenance of their food. That is far easier to achieve if you are a fisherman on the West Coast of Scotland providing an overnight courier service of fresh fish direct to customers than if you are buying from the supermarkets. Technology now enables a fisherman in that position to sell direct. E-commerce and social media bypasses traditional retailers.

People will spend money on higher-quality products. Health products continue to gain ground and people are prepared to pay a premium where they perceive a health benefit.

Convenience is a key trend. If you already have an Amazon account will you switch to Deliveroo? Deliveroo has already revolutionised food delivery, providing a highly efficient option of hot fresh food at low cost, but will they be swept away by Amazon? Some would say this is gourmetconvenience, high-quality hot food for the time-poor and cash-rich.

Many trends identified are targeted at affluent consumers. Home-delivered meal kits is a good example. Coconut water may be ubiquitous in Pret a Manger but it doesn’t yet mean it’s mainstream. The way everyday consumers buy and eat, particularly baby boomers and older people, remain deep-rooted.

What prevents early stage growth in food and drink? There is a challenge in scaling some of these innovations. What is the tipping point where local becomes industrial? At what point does your product start to look “processed”? When does a successful craft beer stop being a craft beer? The local versus industrial rhetoric is important here and a balance must be struck.

Sustainable growth is important. The whisky industry is actively investing in sources of renewable energy including anaerobic digestion, using the distillery waste to produce heat and power. The interaction between energy and food and drink in Scotland is an important one. Food waste is already being diverted to energy projects and that must increase. Packaging is another obvious route to improved efficiencies.

Business models and funding sources are changing. Social Enterprises like Social Bite, a sandwich shop and caterer where 100 per cent of profits go to good causes and one in four employees is formerly homeless, are rapidly gaining market share. Consumers are prepared to shop ethically.

Crowdfunding allows innovators to fully fund their plans without third party funding.

Is this wave of disruption impacting yet on the core parts of the system –agriculture, manufacturing, processing and transport? To a limited extent, yes, but there are major inroads still to be made.

On 6 September, the Scottish Government announced their intention to commence a consultation in 2017 on a Good Food Nation Bill to join up the Government’s approach on food and improve the effectiveness of the food and drink supply chain. A concerted approach from Government is obviously to be welcomed but it remains true that innovation will primarily come from businesses with a culture of innovation and the brightest new start-up founders.

This isn’t futuristic. 3D-printed food and personalised nutrition are still some way off but the threat and opportunities from disruptive technology and practices are very real and are already changing the landscape of food and drink in the UK.

• Martin Whiteford is a partner in Anderson Strathern’s Corporate Team and leads the Creative & Future Industries Sector Group. Anderson Strathern is a sponsor of The Scotsman’s food and drink conference, 20 September More for information click here

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