alternative business models in food and nutrition · hello fresh: purchase and retention delivered...

ALTERNATIVE BUSINESS MODELS IN FOOD AND NUTRITION

Pinar Hosafci

Head of Packaged Food Research

April 2018

THE BACKGROUND: WHY THE FOCUS ON ABM?

4 KEY MODELS IN FOOD

THE MODEL OF THE FUTURE

© Euromonitor International

3

Packaged food is in the midst of a massive shift

1%

~ 0%

2%

http://www.euromonitor.com/


4

What is Big Food doing against this backdrop?

Growth of modern grocery

retailers and private label

Retailers delisting SKUs

Prioritise power brands

Boom in health and wellness and free-from

products

Movement away from “Big Food” towards healthier food

Invest / acquire

“healthier” brands

Low staple consumption

growth

Strong growth in snack and dairy

Grow snack and

dairy portfolio

Strategy C: Prioritise power brands

Strategy A: Invest in health and wellness brands

Strategy B: Maintain portfolio momentum through a focus in fast growth categories



5

E-commerce: the last remaining hotspot



6

..Or not?

Regardless of how convenient online shopping is, consumers still like to visualise, feel and sometimes even taste food before purchasing it. It takes time to build trust in online shopping, many shoppers are slow to change, and new processes are complex.



7

Take a step back



8

Euromonitor has identified a total of 20 megatrends

We considered all aspects of

consumer lifestyles and made

use of our full network of

1,000 industry experts.

The outcome was an

authoritative list of 20

megatrends.

Megatrends represent a

fundamental shift in behaviour

and have the power to

transform and disrupt entire

categories not just today but for

years to come.



9

Further research led us to eight “focus” megatrends

We then wanted to ascertain which of

these important trends to focus on for

impact analysis and thought

leadership:

• We did this by running a second

round of research across our expert

analysts.

• Results were compiled and the

process enabled us to narrow down

to eight focus megatrends that will

have the furthest-reaching impact

on industries and consumers in the

years to come.



10

Shopping Reinvented spans all phases of the shopper journey

OmnichannelEngagement

Shopping Reinvented

Pre-purchase

Experiential Shopping

Instant Gratification

Personalisation

Purchase

Blended Store Formats

Value for Money

Seamless Checkout

Post-purchase Last Mile Reimagined



11

Shopping Reinvented in food and nutrition: four key pillars

Subscription

Services

Just-in-time Delivery

Blended Stores

Personalisation



13

Graze: The pioneers of snack subscription

Desk snackersStay home

moms

Savoury snacks in the

UK

>40% sales growth 10%

rise in subscription

> 4000 outlets in the UK

US launch and range

expansion

Partnership with Royal

Mail

Flexible Product Offering

Consumer Data



14

Meal kits have tremendous growth potential for food companies

0% 10% 20% 30% 40%

Alcohol

Arts/Crafts

Pet Products

Meal Kits

Food/Drinks

Home Décor

Home Care

Toys/Games

Personal Care

Accessories

Books

Beauty

Apparel

% of Respondents

“For which types of products do you use a subscription service?”

Global Consumer Trends Survey 2017 n:10,763



15

They are also increasingly being tailored to different need states

Yum in Box – meal plans for Kids

My Six Pack – meal kits for fitness enthusiasts

“physic management services”

Meal kit for vegans


Hello Fresh: Purchase and retention delivered to doorstep

Originally from Germany, Hello Fresh, subscription box is now available across 9 countries.

Flexible ordering. free delivery, healthy ingredients, and affordable prices have been key to HelloFreshsuccess. In 2017, Hello Fresh has teamed up with Bosch Hausgeräte to harness digital networking in the kitchen by integrating the Home Connect technology with the HelloFresh app. The integration gives users access to hundreds of recipes and valuable nutritional information. It enables users to save time, while creating a bond between devices in the kitchen and the emotional aspects of food. Add Mykie into the equation with voice commands and recipe speech services like “Drop”, and this becomes a value multiplier.Longer term, it will be interesting to see how the connected smart home benefits specialist healthy food delivery retailers, and how the larger grocery chains try to react and compete


17

What do we mean by just-in-time delivery?

Scheduled delivery

Click & Collect

S -commerce

Enhanced Placement

Direct Selling

Non-digital



18

Mobile commerce is on a boom; retail is getting its fare share

In China, South Korea, Japan and Poland retail’s share in mobile digital purchases has reached or surpassed 50%.



19

WeChat: The successful marriage of s- and e-commerce

WeChat

Blogging platform

Virtual wallet

In-app live chat

Geolocalstore locator

Flash sales

Brand loyalty

programs

Gifting

Free bees

In March 2018, WeChat hit 1 billion monthly users

In 2015, the app has expanded into food delivery through its partnership with e-commerce start-up foodpanda, now owned by Ola. Users can browse nearby restaurants, receive exclusive promotional offers and order food through the app in not just China but several South (East) Asian markets.

Through WeChat, food brands can open online stores creating and nurturing a brand at a much faster pace than in real time. The online payment function facilitates sales and enables free products who spread the word on the brand, to win free products.



20

Cyberstar cookies make a boon in China

AKOKO is an artisanal cookie made by local producers that was marketed and sold exclusively through micro blogging platforms including Weibo and WeChat.

Featuring high-quality ingredients, exquisite packaging and, AKOKO gained popularity rapidly as a brand and sales now reach 5,000 boxes a day.

It is one of the many examples of cyberstarproducts – artisanal unbranded products that spread through word of mouth marketing. AKOKO was so successful that it rolled out to retail after reaching a sizeable consumer base. Earlier this year, it also filed for an IPO.

Akoko is an artisanal cookie crafted by local producers in China and marketed and sold exclusively through micro blogging platforms.



21

To counter the stale growth characterising several food categories, including gum, manufacturers are resorting to digital solutions to raise purchase frequency.

Amazon’s Dash Button is perhaps the most well-known example. The small Wi-Fi connected hardware device boasted accelerated growth in 2016, with brands expanding over four times faster than in 2015. Dash Button orders now occur over twice a minute.

Last year, over 50 new brands, including Campbell’s Soup, Cascade, Clif Bar, FoodSaver, Pepperidge Farm Goldfish Crackers, Mentos, Trident, Nutiva Organic and V8 Vegetable Juice were added to the programme.

Can digital influence bottom line?



22

Fan Milk ,one of SS Africa’s most successful dairy brands, developed a unique system in Nigeria whereby frozen dairy and juices are distributed to the consumer in refrigerated vehicles. This unique way of distribution also circumvents traffic congestion which is massive problem in Lagos and other big cities in Nigeria. Impressed by Fan Milk’s distribution model, Danone has decided to invest in the

company through Abraaj Capital. Unilever has a similar model in South Africa, although sales are mainly limited to events and festivals.

Going beyond digital: Fan Milk uses bikes to distribute its ice cream



23

MoMa targets the commuting consumer

2005: Handed out Oatie Shake

to passing commuters at

Waterloo to taste the waters

2009: First supermarket

listing w/ Waitrose and

airline listing w/ Virgin Atlantic

2011: All supermarkets across the UK and airlines +

offices

2016: Number 1 Bircher muesli

brand in the UK

2018: To launch DIY Muesli Mix



24

Online Offline

What do we mean by the blended formats?

Retail Food

service



25

Retail meets foodservice

Itsu Chocolate Rice Cakes

RETAIL

FO

OD

SE

RV

IC

E

EatalyNutella Café

in Canada

Magnum Pleasure Store in the UKKochhaus

Loacker Moccaria & BrandStore in Italy

Knorr’s shop-in-shop

solution in the Netherlands

Dunkin Donuts RTD coffee

debuts in select supermarkets



26

Timbre+ : A food hall from Singapore which acts as an incubator

This food hall is an incubator for up and coming chefs and musicians, combining dining with live music and events, and even engages consumers digitally with an app, delivery and mobile ordering.



27

Branded stores can be used as launch pads for retail innovation

London Dairy is one of the UAE’s most successful ice cream parlours. Having started the business through its own-named cafes, they also moved into supermarket.

London Dairy uses their ice cream cafes as launch pads for innovation in retail. Typically they launch the new flavor in the shop first and roll it out to their retail shop in the form of an in-store promotion to attract traffic.



28

Alibaba’s He Ma: Combines blended formats and instant delivery

In late 2016, Alibaba Group introduced Hema, a food-based concept store that has both virtual and physical presence. Customer transactions are managed via a branded app which helps make product enquiries, place orders, and make payments via Alipay.

The store offers home delivery within 30 minutes up to a distance of 3km from the store. Alternatively, shoppers can dine in or have the produce cooked by Hema chefs and brought to their home ready to eat. The key aim of the outlet is to direct potential consumers to Alibaba’s online business.

Alibaba wants a slice of China’s rapidly growing online grocery market, which is one of the biggest and fastest growing markets globally.



29

What do we mean by Personalisation?

Note: Surveyed Markets include Australia, Brazil, China, Colombia, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Middle East (includes Egypt, Qatar, Saudi Arabia, United Arab Emirates), Poland, Russia, South Africa, South Korea, Thailand, Turkey, United Kingdom, and the USA.

On average, 50% of respondents have used a health app at least once a

monthEuromonitor International’s Global

Consumer Trends Survey 2016, N = 26090

Personalised product

Personalised servicePersonalised nutrition



30

Personalised labels Personalised products and stores

Consumers Want to “Have Their Say”


https://www.mymms.co.uk/

https://www.mymms.co.uk/


31

3D printing technology also offers great promise for product personalisation. It allows consumers to not only to design and shape their products but also decide what goes into them in terms of ingredients paving the wave for creation of food to meet different dietary needs. Katjes Magic Candy Factory is the world’s first producer of 3D printed gummy candy. It has over 100 printers in 35 locations around the world and also offers online services.

Katjes Magic Candy Factory: Driving customer engagement via 3D printing



32

Habit is a personalised nutrition plan utilisingan at-home kit to extract blood and DNA samples, which help design a biologically-compatible roster of food. Once a nutritional strategy has been established, users can work one-on-one with a nutrition coach.

Habit: Grocery list built on nutrigenomics

In 2016, The Campbell Soup Co became the exclusive investor in Habit, an American personalisednutrition meal delivery start-up.

A team of chefs prepares the custom meals, which are then delivered to the customer’s door. This system could paves the way for local subscription services across other industries

22%% of North American

population with an

allergy or

hypersensitivity



34

Barilla: A brand which ticks all the boxes

Subscription:

Partership with

Peapod

Taskspotter:

Pasta for

soups

Blended Stores

Barilla

Restaurants

in the US,

UAE, China

Just-in-Time Delivery

US restaurants

offer online

delivery

Cucina Barilla kit

collaboration by

Whilrpool and

RFID

Personalisation

3-D Printing

Collaboration

with MIT for

development

of flatpack

pasta


THANK YOU FOR LISTENING

Pinar HosafciHead of Packaged Food [email protected]

@pinarhosafci

mailto:[email protected]

https://twitter.com/ewa_hudson

https://twitter.com/MascaraqueMaria

../../H&W launch 2016, HW Proposa, Test Site Changes/Taxonomy file/Recording HW Taxonomy 2017.mp4

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