Disruptors: Alternative Business Models in Food

Strategy Briefing

About This Report

Jan 2018

Like much of consumer goods, the food industry is in the midst of a massive shift. The fickle consumer is testing the age-old brick-and-mortar business model by more rapidly changing product preferences and purchase channels. This briefing adopts the framework developed by Euromonitor’s Shopping Reinvented MegaTrend and applies it to Food and Nutrition. It highlights and discusses four distinct business models that go beyond retail and digital, providing case studies from across the globe.

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Disruptors: Alternative Business Models in Food

Packaged food is in the midst of a massive shift

Like much of consumer goods, the packaged food industry is in the midst of a massive shift. The fickle consumer is testing the age-old brick-and-mortar business model by more rapidly changing product preferences and purchase channels paving the wave for a multitude of alternative business models leveraging technology and e-commerce.

Alternative business models applies shopping reinvented framework to food and nutrition

This report takes the framework of the Shopping Reinvented Megatrend Euromonitor identified and applies it to food and nutrition. The new journey of food manifests itself in four distinct pillars: 1) subscription services; 2) blended formats; 3) personalisation; and 4) just-in-time delivery.

The four models should not be analysed in isolation but in tandem with each other

While each element of the alternative business models framework can be assessed in isolation, there is much overlap between individual models meaning that manufacturers should borrow and combine elements from several models in order to further consumer engagement.

Access economy requires an attitude change an increased flexibility

Alternative business models is heavily informed and influenced by the access economy. As a result, it requires increased flexibility and efficiency. Brands and should go beyond pure functionality to provide a more creative and entertaining experience to consumers, leveraging technology to full effect as they aim to elevate the overarching purchase experience.

Digital technology is an enabler but not a must-have

The recent developments in technology as exemplified by a plethora of delivery and nutrition apps, connected home appliances and use of AI and MI are certainly helping facilitate new models of business but there are more disruptive go-to market strategies that go beyond digital or mobile, such as out-of-home, vending, and direct selling.

Introduction

Scope
Key findings

Introducing the Framework

Packaged food is in the midst of a massive shift
The focus is shifting to e-commerce
How has shopping changed?
Shopping Reinvented spans all phases of the shopper journey
Shopping Reinvented in food and nutrition: four key pillars

Subscription Model

What do we mean by subscription model?
Graze: from online personalisation to brick-and-mortar retail
What differentiates Graze?
Milk delivery back on the scene: China welcomes “internet milk”
HelloFresh: purchase and retention delivered to doorstep
What HelloFresh brings, when combined with Home Connect
E-commerce meal kits have real potential for staple brands
Our take: subscription services

Just-in-time Delivery

What do we mean by just-in-time delivery?
WeChat: the brand actively advertises the concept of “food”
Meet AKOKO: a cyberstar cookie sold through s-commerce
Unilever forays into the direct-to-consumer space
Trident and Icebreakers join Amazon Dash to reignite sales
Connected appliances provide a digital route to instant delivery
ICA Infridge offers unattended home delivery right into your fridge
Mobile commerce is booming; retail is attracting its fair share
Adoption of mobile retail apps key in driving click-and-collect sales
Platejoy leverages Instacart for instant delivery of customized meals
Just-in-time delivery is not only about digital
Our take: just-in-time delivery

Blended Formats

What do we mean by blended formats?
Retail meets foodservice
Eating out; drinking in: coffee goes to retail; yoghurt goes out of home
Branded stores can be used as launch pads for retail innovation
UAE’s London Dairy perfectly blends café with retail
Food is notoriously slow to react to e-commerce
Amazon: from internet bookshop to organic food specialist
Wal-mart moves to online as its US store sales suffer
JD.com: Wal-mart’s Chinese partner helps improve its store offers
Alibaba’s He Ma combines blended formats and instant delivery
Our take: blended formats

Personalisation

What do we mean by personalisation?
Nutrigenomics in real time: Campbell's personalised meal kit
3D printing: personalisation or another cost-cutting measure?
PepsiCo taps into smart cap technology for personalised nutrition
Weight Watchers personalises meal kits in partnership with Chef’D
Whole Foods trials a virtual produce ordering system
Jamie Oliver leverages artificial intelligence for meal suggestions
Vita Mojo: ultra-personalised restaurants
Brazil’s Apptite combines personalisation with instant delivery
Our take: personalisation

Predicting the Future

The future will be a custom model
Pablo & Rusty’s Pty Ltd: A model that ticks all the boxes