Upon reading the "Fate of Food" article in the Imagine 2030 report from Deutsche Bank Research, I starting reconsidering my opinions on the food industry current problems and potential solutions.
I tend to feel bad when I indulge myself ordering a meal and I have always refused to make use of a meal-kit service such as HelloFresh.
Indeed,besides food quality and costs considerations, isn't it non sense from an ecology, energy or sustainability point of view?
More packaging, more transport costs, more energy consumption?
But what if I was wrong?
From supply-driven to demand-driven
Today the food chain is supply driven: the upstream producers push whatever they harvest down to the downstream customers.
- Farmers harvest crops
- Wholesalers buy from farmers
- Retailers buy from wholesalers
- You and me or restaurants buy from retailers
The problem is that especially wholesalers, but also retailers and end customers buy in the hope it will be eaten, ordered, or cooked in the coming week.
Otherwise the food is wasted.
All the apples or tomatoes you see on the shelves in your supermarket will actually be waste unless someone buys it or the supermaket donates their food surplus.
In a demand driven chain, the downstream customers pull only what they need from the upstream producers.
It could obviously reduce waste because only what is necessary would be bought or ordered. It requires much better planning though.
How can wholesalers or retailers reliably forecast the volume of food they need per month all over the year, taking into considerations seasons, customers trends...
This is where meal-kit services come into play. Because they collect tonnes of data on the order habits of its customers, they can define these necessary forecast demand models. Machine learning and artificial intelligence can optimize them even further.
- Customers order periodically meal-kits
- Meal-kit services can forecast the food supply they need and order accordingly accurate amounts from the retailers
- Retailers can forecast the food supply they need and order accordindly accurate amounts from the wholesalers
- Wholesalers can distribute better what they bought from farmers between wholesalers
- Farmers keep harvesting as much
HelloFresh claims its model cuts food wastage by up to 4/5 compared with a traditional retailer.
Incentivize customers to order meal kits?
The previous reasoning of a demand driven food chain fails if the customers don't order periodically meal-kits. The more frequent the meal-kit orders, the more reliable the forecast models.
It is actually a strong assumption because it involves an important customer's behaviour change. Am I ready to commit today to my future meals for the complete next week? I am forced to plan ahead. No more spontaneity.
How to incentivize customers: raising awareness on the positive impact it could have on food waste, price...?