In the food space, we work with both traditional multinational conglomerates and also fast-growing startups. Both business scenarios require shrewd, tough-minded executives who can innovate and keep an eye on maximizing profit. But one trend that we’ve noticed recently is that a number of executives in the largest, most recognized brands in the world are eager to leave a great compensation package and seniority to try their hand in a fast-growing startup.
We see this switch time and time again. So we wondered: what is happening in the food space that is causing so much disruption in the traditional order? And how can more established companies use that knowledge to retain their best talent?
Startup-style growth trajectories
Once upon a time, energy bars were reserved for niche audiences of dieters and rock climbers and were not a part of American life in a meaningful sense. KIND Bars changed all that with a natural-ingredient rich concoction that can now be seen practically everywhere you go. Founded in 2004, the bars capitalized on the “whole foods” trend early on (the bars have minimal ingredients and consumers can see individual fruits and nuts through the transparent wrapper) to become an unstoppable snack-food juggernaut. Sales of the bar have really exploded, going from $10 million in 2012 to $781 million in 2017. What’s the reason for this impressive growth? An aggressive distribution strategy and the marketing muscle to get consumers sampling the snack where they live, work and play.
Increasingly sophisticated data
AI and machine learning are now being used to revolutionize every part of the food industry from safety to supply chain to, of course, maximizing all possible profit opportunity. Deliveroo is one of the largest restaurant food delivery companies in the U.K., and recently unveiled a product called “Editions” which calls on customer data to curate restaurant “hubs” in areas which have an unmet demand for certain chains or types of food. It’s an innovative model that should help cut costs for startups or more established businesses to expand into new areas and is a foray into the “cloud kitchen” space.
A company called Analytical Flavor Systems is using an AI-informed “Gastrograph” to deliver fine-grained information to package food companies on what flavor profiles are likely to trend in certain markets or niches, and can stand out from the pack in a crowded marketplace.
Segments in the food industry are also being transformed by new lab techniques that are incredibly promising. As consumers become more eco- and health-conscious, we also see them consuming less meat, and nowadays a whole crop of companies is standing by to supply that consumer with a juicy burger made completely of plants. Spearheaded by scientific innovation from companies like Just Food, Impossible Foods and Beyond Burger, these burgers, chicken strips, mayonnaise and faux eggs are craveable and hearty, a far cry from the bean-centric health-food fare of yore. Next up: put down your oat-milk latte, PerfectDay engineering yeast to make cow-free milk that’s genetically identical to the real thing.
We are increasingly seeing a whole crop of “functional foods” that align nicely with a aspirational, affluent lifestyle touted by high profile publications like Gywneth Paltrow’s Goop. Why ruin your workout with a pint of ice cream when you can have the tasty and protein-rich Halo Top? Looking for something sophisticated and grown-up to drink at a party when you are eschewing alcohol? A new crop of tasty adult beverages that are alcohol free (Elixir), imbued with superfood properties (Mudwtr) or CBD-infused (Recess) are hitting the market daily competing for your attention. What all of these companies show is a willingness to understand consumers’ lifestyles and build products to suit.
What this means for you
Recent technological changes including the growth of AI, data-driven decision making, laboratory science have set the food industry on a path toward transformation. Add to that the changing demographics within the American market and renewed interest in health and wellness and you have a perfect recipe for a space for radical change, and, from our point of view, a more fluid job market. It pays for the most established companies, therefore, to understand what attracts candidates to these fast moving startups so perhaps they can emulate some of that innovation even in a more traditional setting.