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ISSUE NO.
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MEANINGFUL CONNECTIONS: THE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
80% 79%The number of Latin American consumers who believe that technology has made their lives simpler
The number of Asia-Pacific consumers who believe that technology has made their lives simpler
SOURCE
GlobalData’s TrendSights
Overview: Smart & Connected,
Engaging with consumers in a
hyper-connected, technology-
enabled society, October 2018
The number of both American and European consumers who believe that technology has made their lives simpler
The number of Middle East and Africa consumers who believe that technology has made their lives simpler
72% 44%
DOES TECHNOLOGY MAKE LIFE MORE SIMPLE?
THE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK FUTURES | JUST-FOOD & JUST-DRINKS
ISSUE NO.5 | FEBRUARY 2019 2
Not long ago the concept of
smart machines being routinely
involved in our everyday places and
spaces was the stuff of science
fiction. Concepts such as the
Internet of Things (IoT), Artificial
Intelligence (AI), machine learning
and blockchain were the stuff
of university high-tech research
programmes, military research
labs and technology company
‘moonshot’ initiatives. But the future
has become the present: in our
smartphones and cars, increasingly
in our homes and at the grocery
store - both the physical and virtual
versions - within food and drink
companies, and on the farm.
Smart technology has been
working for some time behind the
scenes in all areas. Looking ahead
five years, connected technology
has the ability to save beverage
companies money, including in
labour costs, as the ‘intelligence’ of
these machines is rapidly evolving.
Using AI, refrigerated display cases
that automatically order product is
already on the horizon.
Smart tech is now also coming out
of the closet, and could soon play a
key role at home and in the physical
places and virtual spaces where
we get the food we eat and the
beverages we drink.
This report explores the future of
smart technology both in front and
behind the scenes: What trends
are driving smart tech? What
will the market look like in 2023
and beyond? What hurdles will
businesses have to overcome? And,
what should you be doing, right
now, to prepare?
THE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK FUTURES | JUST-FOOD & JUST-DRINKS
Smart technology has long been behind
the scenes at food and beverage
companies. As consumers become more
tech-savvy, the rise of smart technology
in the home, the shop and the production
facility will continue to change the way
we manufacture, order, cook and
store food and drink.
INTR
ODUC
TION
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INCREASED URBANISATION
According to the UN’s Department
of Economic & Social Affairs, two-
thirds of the world’s population is
expected to live in urban areas by
2050.
CASH-RICH, TIME-POOR MIDDLE CLASSES
Stats from the Brookings Institute
suggest that at the end of 2016,
there were 3.2bn middle class
people in the world, with 160m
people per year expected to join the
cohort every year for the next five
years.
CONSUMERS EXPECT EVERYTHING TO BE DELIVERABLE
Tech disruptors such as Lyft, Uber,
Instacart, iGrab.it and Drizly mean
people can order what they want,
when they want it.
DIGITAL REVOLUTION
Technology continues to become
more sophisticated - and its use
knows no boundaries. For example,
according to PwC, by 2020 there
will be “close to seven times the
number of connected devices as
people on the planet”.
SMART LIVING
According to GlobalData’s
‘TrendSights Overview: Smart &
Connected’ report, consumers
are becoming more reliant on
the “efficiency and effectiveness
of digital solutions in managing
their lifestyles and dealing with
household chores and shopping
experiences”. The key audience, the
report says, is Millennials.
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
MEGATRENDS
From the desire to make everyday
tasks more simple and less time
consuming to the rise and affordability
of smart devices, there are several
trends driving us towards connectivity
when it comes to food and drink.
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BLOCKS
ROAD
A general distrust of technology still lingers for some consumers, while others shy away from new brands.
VULNERABILITY TO ATTACK
“Connecting devices makes
them accessible to cyberattack,”
says PwC. “If something can
be connected, it also becomes
hackable. Digital security, and the
trust it supports, becomes even
more critical. This applies equally
across consumer and industrial
applications.”
PRIVACY
Inviting smart tech into homes
comes with questions around
privacy, data gathering and data
sharing. Consumers will want to
know how their information is used
and stored.
KNOWLEDGE GAP
According to PwC, 72% of UK
consumers say they are unlikely
to introduce smart tech into
their homes in the next 2-5
years. The firm said that a lack of
understanding is the issue, but
this is likely to change as the use
of items such as smartphones
continues to advance.
BURDEN OF CHOICE
Being faced with a plethora of
choices can result in consumers
plumping for trusted brands, rather
than experimenting with new
products, according to GlobalData’s
Smart & Connected report.
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
ISSUE NO.5 | FEBRUARY 2019
USEFUL LINKS
TrendSights Overview: Smart
& Connected - Engaging
with consumers in a hyper-
connected, technology-enabled
society
5
GORDONDON
HOW CAN SMART TECHNOLOGY WORK FOR FOOD AND DRINKS COMPANIES?Don Gordon, global marketing
director for enterprise software
company SAP, offers some insight
into an interesting and highly
successful example of smart
technology behind the scenes. He
says it involves beverage industry
client-companies that own large
networks of branded refrigerated
display cases placed in retail stores.
Working with SAP, large drinks
companies are using IoT connected
devices to “monitor thousands of
refrigerated units from a single
computer to ensure the refrigerated
cases are kept fully-stocked with
the right products at the right
temperature.”
This is proving to be an invaluable
innovation because it significantly
helps reduce out-of-stocks and is
resulting in more happy customers,
Gordon says.
“Not only that,” he adds, “but this
type of control monitoring enables
the client-companies to dispatch
maintenance crews proactively,
before the refrigerated display units
break down. This alone is saving
big beverage companies pretty
impressive amounts of money.”
THIS TYPE OF CONTROL MONITORING ENABLES THE CLIENT-COMPANIES TO DISPATCH MAINTENANCE CREWS PROACTIVELY, BEFORE THE REFRIGERATED DISPLAY UNITS BREAK DOWN.
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KEY AREAS FOR
TECHSMART
There are four prime areas where smart technology is
beginning to make its mark in the food and beverage
industry - and these areas span right from farm to fork.
The four touch points for smart tech within food and
drinks are: at home, in the (physical and virtual) grocery
store, in production and on the farm.
THE CONNECTED HOME KITCHEN
One of the biggest high-stakes
debates in the food and beverage
industry is whether the future of
food and eating will take place in or
out of the home - and whether it
will involve cooking, online ordering
of ingredients or prepared foods,
pick-up or home delivery.
The premise of the general debate
is a bit of a false dichotomy: some
people will continue to cook, while
others will opt not to. Most of us
will continue to do some of each.
The important question embedded
in this debate is which one will win
the greater share of consumer
dollars?
The stakes are obviously very high
for grocery retailers, food and drink
makers and restaurants, along
with the myriad venture capital
firm-funded food delivery start-
ups, whose mission is to disrupt all
three established industries – along
with disrupting how we eat and
how and where we buy our food
and beverages.
The dominant narrative – the
disruption thesis – over the last few
years has been that food-away-
from-home would be the likely
winner because fewer people are
cooking at home, and Millennials
and Generation Z simply don’t cook.
WE’LL BLEND MEALS WE MAKE AT HOME WITH READY-TO-EAT ITEMS WE BUY FROM OUTSIDE THE HOME
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But new data from more than one
source tends not to back up that
assertion.
For example, recent figures
from food technology research
and communications platform
The Spoon suggest that 47% of
Millennials in the US cook at home
at least five or more times per
week.
Additionally, research firm NPD
Group says that four out of five
meals in the US are prepared
at home, and “although the
relationship of in-home prepared
meals versus those sourced away-
from-home has been stable for a
few years, we still prepare more
meals at home than we did a
decade ago,” researchers wrote in a
June 2018 report.
David Portalatin, vice president,
industry advisor at NPD Group,
predicts we’re headed towards a
mixed approach.
We’ll “blend meals we make at
home with ready-to-eat items we
buy from outside the home,” he
says. Blended meals is where the
connected smart kitchen can come
into play.
Smart ovens such as the June
Oven, which can automatically
recognise and cook hundreds of
foods, will make cooking easier and
faster. Meanwhile, models such as
the Tovala come with a meal kit
service, delivered to your door.
Every major appliance maker
has a smart refrigerator on the
market - and they are investing
big money to create successively
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
47%
The percentage of millennials in the US who cook at home at least five or
more times per week.
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smarter and more useful versions.
The ultimate objective is the
connected refrigerator, which can
automatically order its food and
drink contents.
Tied-in with smart cooking
appliances and devices,
connected smart refrigerators -
manufacturers hope - might make
home food preparation so easy, less
time-consuming, and perhaps even
fun, that more consumers embrace
cooking at home.
Bioprinting of food is also another
emerging technology that many
believe will grow the home food
preparation ranks even further.
Simple. No fuss. No cooking skills
required.
Theoretically it’s the perfect
solution. Practically, the jury
remains out, although home food
printers like the Foodini are being
bought by early adopters.
USEFUL LINKS
NPD Group: U.S. Consumers
Are Increasingly Eating and
Preparing Their Meals At
Home Often With The Help Of
Foodservice
Bioprinting is the three-
dimensional printing of biological
tissue and organs through the
layering of living cells. They also
dispense a dissolvable hydrogel
to support and protect cells
as tissues are constructed
vertically, to act as fillers to fill
empty spaces within the tissues.
US-based startup Memphis
Meats is producing beef, chicken,
and duck from animal cells using
bioprinting technology. The
company says it soon plans to
launch its first product.
Bioprinting is the hallmark in
many ways of the smart food
and drink phenomenon. It’s the
literal engineering of a product
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
that looks like and the company
promises will taste like meat but
doesn’t come from an animal.
If such technology becomes
affordable and bioprinted
products catch on, it could
revolutionise the food industry.
Instead of exclusively having
animal feedlots and meat
processing plants, we might also
have scientists competing for
a share of the consumer meat
dollar.
Bioprinting also can be used in
creating “lab-grown” seafood,
which many of its supporters
hope will help alleviate the
problem of overfishing.
HOLD ON, WHAT IS BIOPRINTING?
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THE CONNECTED GROCERY STORE
For grocery retailers, widespread
adoption of smart appliances has
great promise. The connected
kitchen-to-grocery store offers
food retailers - both physical and
virtual - the ability to keep their
share of the food and drink dollar
in the battle with away-from-home.
Either way grocers win.
Brick-and-mortar grocery shopping
remains the norm globally. And
by the time the smart kitchen
becomes widespread, if it does,
nearly every grocer on the planet
will have an online grocery service.
THE CONNECTED CPG COMPANY
Food and beverage companies
wanting to play seriously in the
direct-to-consumer sales channel
have an opportunity to be big
winners if the smart kitchen takes
off.
THERE ARE SO MANY DIFFERENT DIRECTIONS COMPANIES CAN GO IN
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
Smart refrigerators and smart
pantries - Amazon’s Dash buttons
are an early example of the latter
- offer consumers the potential to
more easily order products direct
from manufacturers, bypassing
the traditional retail channel and
possibly saving money as a result.
Connectivity offers CPG companies
a whole host of other opportunities
and advantages. SAP recently
conducted a study on the IoT-
connected CPG company.
“One thing we discovered from
our IoT study is that many CPG
companies are looking to employ
IoT technology in ways that aren’t
immediately visible to consumers
– to do things like improve supply
chain efficiency or monitoring of
everything from warehouses, to
fleets of trucks, and beyond,” says
the firm’s Don Gordon.
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“By collecting sensor data from all
these different points, companies
can make better decisions about
how much to produce (reducing
food waste), where to route
vehicles (reducing fuel waste), or
even what new varieties of a given
food item are likely to take off.
FUTURES | JUST-FOOD & JUST-DRINKSTHE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK
“There are so many different
directions companies can go in. One
of the most immediate challenges
is figuring out where there’s highest
value – both to the bottom line
of the CPG company and, most
importantly, to the consumer,”
Gordon says.
THE CONNECTED FARM
IoT and other forms of smart
technology are rapidly advancing on
farms throughout the world. Among
the most talked about is the use of
blockchain to promote traceability
of ingredients.
It’s very possible that we will
soon be able to connect farmers
to retailers and CPG companies,
and all three to consumers via the
smart kitchen.
This will likely lead to disruption of
the current status quo. For example,
just as CPG companies could more-
easily sell directly to the new
connected consumer via a smart
kitchen, so too could farmers.
A farm might produce its own
line of frozen vegetables, for
example, which consumers could
buy directly, via their smart fridge,
rather than buying them from the
grocer or the CPG company that
sells branded frozen vegetables.
On the other hand, this technology
might create so many options
and buying opportunities that the
aggregator, the grocery retailer,
wins out.
After all, that’s been the key to
success for grocery stores for
over a century - being a one-stop
marketplace where consumers can
get most if what they want and
need.
It’s a fascinating and uncertain
future proposition.
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3KEY BENEFITSTO FARM-TO-CONSUMERCONNECTED TECH
THE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK FUTURES | JUST-FOOD & JUST-DRINKS
Michelle Weisberg, who was most
recently SVP at Texas-based
global trading company McLane
Global, and a senior executive at
the Los Angeles-based Smart &
Final supermarket chain, is now a
Chicago-based food and grocery
industry consultant, researching the
future of food and drink. She offers
three key benefits of smart food and
drink associated with the farm-to-
consumer connected scenario.
1. FOOD SAFETY
Using blockchain, retailers and
manufacturers will be able to identify
recalled products quickly. Consumers
could be contacted by app if they
have already purchased the product
or if the consumer tries to prepare
the recalled product, they could
be alerted by a smart appliance. In
addition, if a product’s shelf life is out
of code, the smart appliances would
have the ability to communicate this
information to the consumer.
2. MARKETING TRACEABILITY
Customers could learn more about
a product - from what farm it was
grown on, to the temperature it was
transported at, simply by scanning
the packaging. Proper cooking
directions and storage information
could be utilised to talk to smart
ovens, refrigerators and pantries.
3. CONVENIENCE
In addition to everyday convenience,
holiday stress could also be eased
by having seasonal purchases
automatically ordered annually (with
an opt-out option). Customers would
be able to have all the ingredients
shipped to them along with their
favourite recipes without worrying
about anything, except for who will
have to sit next to Aunt Martha at
dinner.
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BECOME DIGITAL
The smart food and drink revolution
is digital, not analog. This is job
#1 for food and drink companies.
All aspects of the operation, from
supply chain to marketing, need
to be digitalised to compete in the
present and future of smart food
and drink.
FORM STRATEGIC ALLIANCES
Food and drink companies need to
form strategic alliances with smart
kitchen/appliance companies and
grocers. The synergies between
packaged goods, smart homes and
online grocery retailing in its many
formats are going to increase every
year for the next 10 years. As a
result it’s essential food and drink
companies start forming these
alliances today.
BECOME OMNICHANNEL
No single distribution channel is
going to rule. Instead, we have
entered into an omnichannel world.
Brick and mortar retail, online
grocery retail, direct-to-consumer
are all must-do strategies of
distribution for food and drink
companies in the new age of smart
food and drink. Food and drink
companies currently without an
omnichannel strategy are already at
a disadvantage.
THE FUTURE OF SMART TECHNOLOGY IN FOOD AND DRINK FUTURES | JUST-FOOD & JUST-DRINKS
WHAT DO
FIRMS NEED TO DOFOOD & DRINKS
NOWFrom ensuring a business is completely digital
to forming strategic alliances in the tech
world, there is plenty that food and drinks
companies can start to do now.
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UNDERSTAND THE CONSUMER LIKE NEVER BEFORE
Consumers are increasingly in the
driving seat in the age of smart
food and drink. As a result, food
and drink companies need to
better understand what drives and
motivates shoppers, be it online
or in stores. This requires greater
effort in research and analysis.
Those who fail do so so will be left
behind.
THE
WRAPSmart technology has the ability to change the food
and drinks at home equation. It is also changing
how we obtain food and drinks out of the home,
most-specifically in the form of online ordering with
food delivery. Looking five or so years out, we’ll see
connectivity in the homes of early adopters who can
afford smart appliances, the cost of which will keep
coming down as more people purchase them.
TAKE PERSONALISATION SERIOUSLY
Consumers increasingly want to
be addressed personally as well
as a demographic or lifestyle
group. Food and drink companies
therefore need to start putting
personalisation into their product
development and marketing mix.
The age of smart food and drink
means smarter consumers who
want to be addressed as a group of
one. Personalisation therefore is no
longer a luxury, it’s a must.
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LUCY BRITNEREditor, FUTURES
+44 (0) 1527 573 721
This report was written by Victor Martino. Martino is a California-based strategic marketing and business development
consultant, analyst, entrepreneur and writer, specialising in the food and grocery industry. Additional material by Lucy Britner.
© 2019 All content copyright aroq limited. All rights reserved.
FUTURES TEAM
DEAN BESTManaging editor, just-food
+44 (0) 1527 573 726
OLLY WEHRINGManaging editor, just-drinks
+44 (0) 1527 573 720
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