retail news in context, analysis with attitude

TechCrunch has a fascinating piece about how a lot of technology money is being invested in the food business, with the goal being to successfully challenge traditional ways of building businesses that feed people for a living, and gain an increasing share of stomach that could disrupt every corner of the food business.

Here’s how TechCrunch frames the subject:

“If investors at some of the biggest technology companies are right, the next big restaurant chain could have no kitchens of its own.

“These venture capitalists think the same forces that have transformed transportation, media, retail and logistics will also work their way through prepared food businesses … Investors are pouring millions into the creation of a network of shared kitchens, storage facilities, and pickup counters that established chains and new food entrepreneurs can access to cut down on overhead and quickly spin up new concepts in fast food and casual dining.

“Powering all of this is a food delivery market that could grow from $35 billion to a $365 billion industry by 2030, according to a report from UBS’s research group, the ‘Evidence Lab’.”

You can read the entire story here.
KC's View:
Just in case you are skeptical, here’s another passage from the story that I found to be persuasive:

Uber, the world’s largest taxi company owns no vehicles, Facebook the world’s most popular media owner creates no content, Alibaba, the most valuable retailer has no inventory and Airbnb the world’s largest accommodation provider owns no real estate. Something interesting is happening.

No kidding.

One of the things that I find so interesting about this story is how it portrays not just tech entrepreneurs as being focused on this sector, but also people from various corners of the food business. Whether it is investment portfolios created by CPG companies to fund startups that could diversify their businesses, or executives from the fast food and fast casual restaurants worlds who sense that something interesting is happening and want to be part of it (or just sense that career sustainability is dependent on investing in future models, not past constructs), it strikes me that there is so much brain power, creative elbow juice and money being put into the sector that something is going to change.

My sense is that at some point a dam is going to break, and companies that define the world differently through original insights into consumer needs and desires (not always the same thing) are going to flood the culture with exciting options.

It also seems to me that food retailers that are not in the game run the risk of being caught flat-footed, which could be a problem. (Could be?) And when I talk about being in the game, I’m not talking about outsourcing delivery to a third party and persuading oneself that an e-commerce strategy has been achieved. Far from it. I’m talking about finding a way to partner with, invest in, and learn from the smart start-up companies that are going to rock the food world.