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DecisionNext Blog

Is Tyson the Tesla of Animal Protein

Published by Janette Barnard December 15, 2017

Elon Musk’s Tesla recently unveiled an electric powered semi truck coming to market in 2019. Within a week, Walmart and Loblaw’s placed orders. The trucks will only have a range of 500 miles per charge (roughly half of what a tank of diesel will do).

Buying a product that won’t be available for 18 months seems a bit risky, so what are the advantages of being at the forefront on technology with more potential than results?

  1. The story. People love stories about bold initiatives, from the media, investors, employees, customers, all the way to end consumers. Status quo protectors drive away top talent individuals & companies, innovators attract them.
  2. The cost advantage. Let’s say Walmart’s 10 Tesla trucks save them $.03/mile. While competitors are paying for fuel like they’ve always done, Walmart can pass $.025 to consumers in savings and buy a little more market share. How long does this go on before competitors catch on? Who knows.
  3. The sustained advantage. There’s always a learning curve with new technology - how do I staff around this technology, how do I incorporate into current systems and processes, how do I get the most out of it. But by the time the rest of the pack is starting up the steep learning curve, the early adopters are hitting their stride and expanding their use of the technology - the first users are continually ahead of the pack even as the technology becomes mainstream, creating a sustained competitive advantage.

This little example of Tesla’s electric semi is all well and good and an interesting trend to watch.

But you know what’s really interesting?

That even though Tesla is known for its electric vehicles, Tesla removed the word “motors” from its company name because it no longer sees itself as an electric vehicle manufacturer. Tesla sees itself as an energy company, a solar energy company.

Which changes how it allocates R&D dollars.

Which changes its acquisition strategy.

Which informs product launch decisions and the product roadmap.

But who cares about energy, let’s talk about the meat business.

Here’s the thing - this same dynamic is playing out as companies along the entire food value chain redefine themselves to compete in a fluid business environment where technology is enabling segment lines to blur.

No longer “just a meat processor”, Tyson has positioned itself as a full-fledged food company. And with the establishment of their venture fund, an innovative food company at that.

Companies like Cargill have announced initiatives to add digital products to their portfolio of animal nutrition products as they reposition that business as a solutions provider, not just a seller of feed and feed ingredients.

And companies along the value chain are realizing the power of capturing data and using it to drive decisions. If your newest competitor/customer (Amazon) is one of the largest data companies in the world disguised as a retailer, ya kinda have to follow suit.

The bifurcation is already happening between status quo protecting businesses and those that have the foresight to broaden their view of the world, the capability to reimagine the meat industry’s future, and the discipline to act on what’s possible not historical.

This article was originally published on Meatingplace.

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