Yum China turned its business around through its mobile app that drove traffic to stores.
Albertson’s just partnered with a prominent venture capital firm to start a “grocery tech” venture fund.
Go look at Cargill’s job postings and you’ll see almost as many job openings for data science & technologists as feedmill operators.
It seems every other day there’s a new announcement about a food retailer acquiring or partnering with a food delivery business, meal kit service, robotics, facial recognition tech, etc.
But that’s at the retail level - that doesn’t impact primary or further processors where consumer tech & preferences don’t matter.
Of course it does. If your customers are feeling the ground beneath them shifting, they will look for partners and suppliers who will shift with them. And as your customers increase their IQ about tech (TQ?), they’ll demand you do the same if you want to continue to do business together.
But in the meantime before the customer demands go into effect, there is a window.
A window of opportunity while your customers are navigating this new world but don’t have it figured out, and while your competitors are sitting back.
There’s a window for the forward thinking packer, processor, or distributor to get out front and lead with innovation and technology that creates demonstrable value for customers further down the value chain….and reap the financial - and strategic - rewards.
Imagine being the packer that enables retailers to increase margin per pound by making a market based decision on what cut to run in an ad, instead of the “it’s the 1st week of August and we always run x, even though everyone else does also”.
Imagine being the distributor that stays relevant by helping independent retailers merchandise their meat counter in a way that increases store traffic.
The fluidity of business models and pivots in where/how value is created is one of the most fundamental dynamics across the food complex, and there are 4 predominant ways to incorporate technology as it becomes increasingly relevant:
- Ignore it. (at your own peril)
- Build it. Hire programmers and data scientists and take on the risk, cost, and managerial burdens to build everything in house. (Good luck to ya.)
- Acquire it. Pay a premium to hire the talent, capability, and/or product you want. (How many meat businesses are sufficiently capitalized to make this type of play?)
- Proactively partner. Find strategic partners that have the capability and expertise to solve your problems with (presumably) cloud based solutions you can scale up or down.
What a great time to be in the meat business, right? But it won’t be for the people who see themselves as “just a meathead” or the companies who see themselves as “just a packer/processor/distributor”. Those folks may find a bumpy road up ahead.
Savvy execs acknowledge that to be in business - yes, even meat and poultry - is to be in the technology business. And while it may be a bit intimidating and uncomfortable, the acknowledgement of where the world is moving is the first step.
This article was originally published on Meatingplace.