Changes in demand open new markets. People will increasingly pay for premium and queue for the right brunch venue or to buy the right doughnut. Provenance is important. Faced with uniform supermarket products, many people want a more authentic connection with what they eat and drink.
We have a growing demand for premium Scottish products and a large increase in small-scale producers but where is the focus so far in attempts to disrupt the food and drink industry beyond this?
Venture capitalists are currently pouring money into meal kit providers that deliver pre-measured ingredients and full recipe instructions. They are taking a gamble that people still want to cook. The logistics of this are not straightforward but there are clearly opportunities for growth.
Deliveroo is an incredibly well funded food delivery service but it been bruised over the summer in protests around the working status of their employees and the limitations of the “gig economy” in providing a wage that people can live on. The economics of making a delivery service work are far from easy. The market leader can change at any point and Uber and Amazon have very deep pockets to force that change.
Is this all for the cash-rich, time-poor office worker? Yes much of it is. The trends reflect a certain type of consumer.
Disrupters often emerge with innovations that transform a sector by serving those consumers on the fringes of the existing market. Food disruption so far has operated in the opposite manner – creating new markets for affluent consumers. Are the margins on food and drink so small that this wider mainstream market may simply not be there?
Scotland’s reputation for world-class produce is based on heritage and tradition but we need to ensure this doesn’t hold back smart product innovation that taps into changing market trends
So where next? Is this wave of disruption impacting yet on the core parts of the system- agriculture, manufacturing, processing and transport? Only on the periphery. There are major inroads still to be made.
Martin Whiteford is a partner with Anderson Strathern.