By Philippe Peron, Chief Delivery Officer, Evolve
The food technology (or FoodTech) industry is going through a period of significant acceleration as a result of COVID-19 outbreak. In the United Kingdom, revenues in online food delivery segment have increased by almost 12% so far in 2020 versus the comparable period in 2019 and are estimated at £4,215m (€4,528m) to date. Users of online food delivery services have increased by 10% compared to the same period last year.
Despite a general decline in investment activity that’s being felt across almost all sectors globally, some FoodTech startups thrive and attract investments amid the pandemic. Allset, a dining and takeout startup of the Ukrainian origin, has just raised $8,5 million in series B funding from several investors including Andreessen Horowitz and Greycroft, amongst others. Allset pioneers on-demand dine-in technology and offers a platform that connects local restaurants to its busy diners.
What’s driving innovation within the FoodTech space?
For one, as global populations explode, we have to find ways to feed people. Secondly, consumers are also more environmentally conscious and seeking sustainable options. They only want to engage with brands that share the same values (forcing established businesses to adapt).
While the FoodTech space is vast with lab-grown meat, 3D food printing, and more, this piece will focus on the most topical innovation.
1. Smart farming – blockchain, big data, IoT, and drones
The future of food is smart farming. According to the United Nations, the planet’s population is expected to reach 9.7 billion by 2050.
To feed them, global agricultural production needs to rise by an astounding 69% between 2020 and 2050. To achieve it, governments and companies alike have to turn to technologies like the Internet of Things (IoT) for big data and analytics.
In 2020, we’ll see more activity in the IoT and software development space to improve efficiencies by collecting and visualising data. The data collected by smart sensors is written on to the blockchain, then analysed to identify mineral content, PH levels, and quantify the landscape.
“Farmers have to get more productive to be profitable. The data from an IoT system can aid them in finding those areas where they can reduce cost and reduce risk.” Deanna Kovar, Director, Operator Station at John Deere
This information then allows farmers to act. With the help of automated machinery integrated with prediction software, we can do much more than ever before.
When you leverage precision technology comprised of connected sensors and algorithms designed to optimise operations, you can cut costs by about 15% and increase crop yield by 13%.
Drones also enable farmers to ascertain how their crops are fairing in their respective growth periods. They are also used to spray ailing crops with substances to bring them back to life. According to DroneFly, drones can spray fertilizer 40 to 60 times faster than doing so by hand.
IoT in AgriTech (which is part of FoodTech) is not all about crops and soil. It can also be used to track cattle movement, behaviour, fertility, and their current location.
“I do believe that any tech solution that helps ‘digitizing’ the food supply chain (e.g yield mapping and forecasting) will be more broadly adopted in the aftermath of the COVID-19 pandemic. In addition, I envision that companies operating in both the vertical farming and the plant-based protein sector will significantly accelerate their time-to-market as more consumers might have the chance to try their products while on lockdown and might now looking to purchase more of them,” Alessio D’Antino, CEO at Forward Fooding.
2. Supply Chain Automation with the Help of AR and VR
IoT has already transformed supply chain automation and management. Now Augmented Reality (AR) and Virtual Reality (VR) are taking it to the next level.
Supply chain operations can be overly complicated. With the introduction of VR, businesses can leverage experience-based learning, improve supply chain planning, enhance collaboration between employees, and engage in data and processes visualisation.
The introduction of AR can help supermarket staff use smart glasses to pick up products and place them exactly where they have to go. Smart lenses can also share the pickup list and the best route to take while navigating through large warehouses.
3. New warehousing models (micro-fulfilment)
As competition between online grocery companies intensifies (mainly due to the COVID-19 outbreak), micro-fulfilment is now the go-to solution to improve grocer capabilities.
This approach takes up minimal square footage and allows companies to fill orders faster than the traditional store-pick models. So you can expect more micro-fulfilment centres to pop up around the country and the continent at large.
4. Drone food delivery
Yes, you read that correctly. Drone food delivery is coming much faster than most of us imagined. In fact, Dublin is set to become the first European city to receive fast food deliveries via drones.
This is certainly just the beginning. According to PWC, these unmanned aerial vehicles have the potential to add an estimated £42 billion to the UK economy by 2030, creating 628,000 jobs in the process.
5. Waste reduction (FoodTech goes green)
These upcycling models are so popular that even the Italian food giant Barilla is investing in FoodTech startups focused on waste reduction.
Packaging made of biodegradable materials is now mainstream. To meet the demands of the marketplace, Nestlé, for example, announced that it would invest up to €1.9 billion to ‘lead the shift’ from traditional virgin plastics to food-grade recycled plastics.
This is part of the company’s overall effort to develop innovative sustainable packaging to achieve 100% recyclable or reusable packaging by 2025.
All these FoodTech innovations and solutions are made possible by cutting-edge development that leverages both artificial intelligence and big data to differentiate each player in the value chain.
6. The digital transformation of restaurants and cafes (in response to COVID-19)
It’s safe to say that the great pandemic of our generation has changed the world forever. It’s probably the biggest disrupter and initiator of digital transformation in at least a decade.
When the crisis is over, we can expect teleworking to play a significant role in modern business. But what about customer-facing service industry businesses like restaurants?
Thousands of restaurants and pubs across the world were forced to shut down to enforce social distancing. However, restaurants (especially cash-strapped smaller establishments) are now faced with the prospect of closing down for good.
Through rapid digital transformation and partnerships with on-demand delivery apps like Deliveroo, Just Eat, and Uber Eats, the industry can survive the pandemic. Some of these establishments might even decide to become permanent Ghost Kitchens.
FoodTech software development challenges
The FoodTech industry faces the same software development challenges that are rampant across sectors. According to Coding Sans’ State of Software Development 2020, the top three challenges faced by companies are as follows:
- Managing Capacity – 30%
- Sharing knowledge – 20%
- Prioritising development – 17%
Other problems include time management, selecting technology, and labour costs.
Hiring managers across the technology space continue to have trouble managing capacity issues. To resolve this, they can implement in-house mentoring programmes to boost knowledge sharing. While this approach can help, to some degree, the tech talent shortage will continue to impact the industry.
Is Software Team Extension a Response to FoodTech Development Challenges?
As much as 39% of FoodTech startup founders find it hard to hire tech employees locally with the correct skills, mind-set and work ethics for the jobs.
To counter it, food delivery companies and restaurants will have to get creative to access top tech talent.
Software team extension approach ensures rapid response to maintain business relevance in these unprecedented times while optimising costs and accelerating pace of innovation. It can also help these companies stay afloat during times of uncertainty, and after the quarantine implications on economies are realised.
As teleworking will soon become a new normal in business as a result of many lessons learnt during the current crisis and social distancing, virtual telecommuting teams will be the next logical step to shape the post-pandemic expectations. As companies will be looking for ways to identify cost savings while retaining their core staff, a team extension model will come in handy. It allows businesses to ensure business continuity without overblowing IT budgets for infrastructure setup/modernisation, hiring staffing agencies/contractors to assist with talent recruitment and dealing with HR, admin and legal hassle. Companies in FoodTech will be able to keep their in-house teams focussed on core technology development while having an extended telecommuting team develop certain features and functionality.
“Building capabilities in AI, data analytics, IoT, machine learning, and blockchain – or better still working with a specialist partner – will equip businesses with the information they need to make key decisions that can drive more personalised, and transparent relationship with customers that are needed for growth.” E&Y
Partnering with a specialist software development provider can save FoodTech companies time, efforts and money as professional vendors have all tools and systems in place to ensure fast and cost-effective plug-and-play team setup solutions, and efficient extended team integration with the core local team to cover all bases.
Key to successful use of dispersed teams is the client company’s ability to inject its corporate DNA into a remote team and make it feel like they’re 100% part of your in-house team.
If your food company is frustrated and stymied behind as a result of the Coronavirus outbreak and unclarity, Alessio D’Antino of Forward Fooding suggests that you “stay focused and stay positive. It’s a great time to experiment and take the time to think through what really matters to you as human beings as well as business owners“.
Are you looking to digitally transform your food-related company and take it to the next level? Let’s discuss how Evolve can help!