Food Tech
Abstract:
At $11 trillion globally and $1.2 trillion in the US, food retailing is a massive market that has historically been conducted almost entirely offline. Whereas e-Commerce accounts for over 8% of total retail sales in the US, online food retailing lags far behind at just 1%-2%. However, this mix is changing rapidly. Grocery stores and restaurants, long the traditional channels, are giving way to new direct-to-consumer concepts. Brick and mortar stores will continue to dominate; howev- er, the logistics of getting the shopper in and out of stores more efficiently and food orders to and from the consumer more conveniently is where technology is finally coming to bear. 2015 was a major turning point in the market for food tech. Millennials took over as the largest demographic age group in the US workforce at 34% of all workers. Entering the workforce means Millennials are busier than ever. Unlike other are- as of expenditure, Millennials are spending on par or higher for food services than prior generations. 2015 was also a milestone year in terms of food preparation and eating habits. For the first time ever, US spending on dining out exceed- ed spending on dining in, at $622 billion and $617 billion, respectively. This trend shows no sign of slowing. Over the last four years, the rate of growth in dining out has exceeded that of dining in by almost two-fold. The food tech market is all encompassing, providing services in the form of meal plans and shopping lists, traditional grocery delivery or pickup, and the ordering and delivery of fully prepared meals. Of these services, grocery delivery is the largest segment on a dollar basis. A mobile app is a basic requirement for this market: it must be sleek and highly user-friendly. Ultimately food tech is about achieving on-demand convenience for the consumer and better traffic for the merchant. The food itself must be appealing for a concept to succeed; however, as the “Big Three” pizza delivery chains have demonstrated, exceptional technology can turn even a mediocre food purveyor into a category killer.
Discussion Topics:
Please introduce yourself, your firm, and take a minute to express an opening view on today’s discussion topic.
What are the most interesting pockets of food tech and why? What category of business do you expect to have the biggest impact to the sector?
What do we expect the size of the food tech market to be in 1 to 2 years? Will technology drive incremental growth in the food industry itself?
What are some of the best ways traditionally brick and mortar establishments can differentiate themselves and main- tain or win back customers with food tech?
What will be the effect of this new market on existing tangential markets, such as mobile payments, table-side tech, agriculture, cyber security, etc.?
What are some of the biggest challenges food tech needs to overcome in order to be successful?
How might other emerging technologies, like drones, VR/AR, etc., impact the food tech market?
Will we see a return to the level of financing activity of 2015? M&A activity in the sector has been somewhat limited, will we see a decent number of sizable exits eventually?
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