What, How and Where Will We Be Eating in 10 Years?

19th Food & Beverage Industry Meeting looks into the future

28/05/2015 Barcelona

IESE Business School
(From left to right) Raimon Ripoll, Deloitte; Jorge Lang, Intel; Miguel Ángel Fernández, LG Electronics Spain; and Ianko Ignatiev, Edamam / Photo: Jordi Estruch

What will the food industry be like 10 years from now?

Will we be eating the same produce? How will products be distributed? And what about consumers? Who will they be and how will they shop?

These were a few of the questions raised at the 19th Food and Beverage Industry Meeting this month at IESE’s Barcelona campus. Hosted by IESE and Deloitte, the meeting attracted sector leaders, experts, scholars and stakeholders who also received a copy of the IESE-Deloitte Vademecum on Food and Beverage Markets 2015.

Under the banner, "The Road to 2025 and Beyond," the meeting sought to identify a number of scenarios that are likely to define the industry over the course of the next decade.

The Shape of Food to Come: 10 Key Trends

Daphne Kasriel-Alexander, a Consumption Trends consultant at Euromonitor, identified the ten global consumption trends that will set the tone for the next few years:

1. Convenience shopping. Formats and products that deliver convenience, flexibility, and saving in time and energy savings will predominate: omnichannel solutions for people with little free time, same-day delivery, 24/7 culture... In the case of food, the "top-up" shopping trend has been consolidated. The traditional weekly or monthly shop is increasingly complemented by purchases in convenience shops or neighbourhood corner shops.

2. Consumption habits and their effect on sustainable development. The choices that consumers make are increasingly being seen and used as a tool to influence company policies – and support the drive to more sustainable development.

3. Influencers like you and me. Opinion leaders are no longer the famous or experts. Increasingly ordinary people – people like us – exert the biggest influence on our habits and choices, through blogs and social media.

4. Millennials. Digital natives are setting the pace and defining new forms of consumption. Understanding this new generation of consumers is key to future success.

5. Community-style shopping centers. Online retail is drastically changing the way we shop. This trend is not, however, set to replace physical outlets – where people try out goods. In the future, shopping centers are projected to be focal points and testing grounds for new experiences.

6. Collaborative economy. Sharing instead of owning is a growing trend that will also make its way to the food industry, with the arrival of formulas similar to those already applied by Uber and AirBnB for transportation and accommodation services. We’re already seeing, for example, home-cooked meals for home delivery to people who are too busy or don’t feel like cooking.

7. Privacy. In a hyperconnected world, information privacy is becoming a serious issue for consumers, and a critical factor for businesses and brands.

8. Shopping around the world. Brands are global and they can sell in any country thanks to online shopping webpages. We are seeing a proliferation of market places where consumers can find the products they want, the manufacturers they want all over the world. A new phenomenon is emerging: shopping tourism.

9. From virtual to real, and back again. Today’s consumer can transition naturally from one channel to another – physically shopping and a few minutes later, or even simultaneously, connected to the virtual world. The future will be definitely omnichannel.

10. Connected and healthy. The "healthy" movement, driven by the proliferation of wearable connected devices and applications designed ad-hoc to monitor and process information about our habits and routines (exercise, weight, calorie consumption, sleep quality, etc.) will shape the industry in years to come.

Millennials: The New Consumers

IESE Professor of Marketing, Íñigo Gallo, working with a group of five MBA students, has identified some key difference in the way young people (millennials) consume, compared to their parents:

  • They are less loyal to shops and brands
  • They buy fewer items but more frequently
  • They do more research to find what they’re looking for
  • They put less planning into their shopping
  • They eat out more

According to Gallo, millennials share three characteristic traits, which he sums up as the three "Cs": They’re more conscious; they’re more connected among themselves and with the world; and, despite everything, they’re still quite common (in the sense that they are "normal".)

Challenges Facing the Food Industry

It’s hard to know what the opportunities for the industry will be in the next decade. It is likely however that we will need new technologies to improve efficiency along the food value chain, and the shopping and consumption experience. We will also need to develop new industrial solutions to address future challenges.

Food science and technology expert Béatrice Conde-Petit, from the Swiss multinational Bühler, says that alternative animal protein sources will also have to be found to "guarantee the nutritional intake of the entire global population." In the future we will need to consume more vegetables, algae and even insects, she believes.

We will also need to develop protein structuring technology that helps optimize the nutritional value of the food we eat, or even developing new, more efficient varieties of raw feedstock (along the lines of tritordeum, a hybrid cereal derived from the cross between durum wheat and wild barley developed in Spain).

A New Pathway to the Consumer

The biggest challenge for distribution will be to "rethink the pathway towards the consumer," says Sandra Sieber, professor of information systems at IESE.

The propagation of connectivity, digital interactions, information and ultimately, the ensuing increase in so-called digital density, are already leading to new distribution models with alternative value propositions.

We are seeing models such as the "direct to consumer" model, (whether online, via market places like Amazon or Alibaba; or offline, as some brands are already implementing with their own concept stores in key locations); and others which are revolutionising the "last mile" in distribution – offering solutions that go one step further than those we see now. These include Click & Car or Click & Collect, and focusing on same-day delivery by drivers with free time (like Deliv or Instacart).

So what are distribution leaders doing today to get ready for the future?

For Víctor del Pozo, consumer products manager for El Corte Inglés, the strategy involves replicating, as accurately as possible, the shopping experience provided in the department stores in the online channel. This means delivering the same freshness, the same variety and quality in the range – and the same level of service.

The challenge, he says, is to offer a unique, integrated omnichannel shopping experience. The "the point of contact with the consumer has greatly increased" thanks to the connectivity and interaction provided by Smartphones, tablets, social media.

"Big data is providing very useful information, because among other things, it lets us know what our customers aren’t buying from us, and where they are shopping. I can tell that a customer isn’t buying his milk from us because he’s buying it from a competitor. And now I also know who that competitor is."