Industry Value Chain Analysis

DECODING
FOODTECH

Shivansh Mehendiratta
CONTENTS 1

Introduction ...............................................2
Funding .......................................................3
Value Chain Analysis ……………………………….4
FoodTech Trends Matrix………………………….6
 2
Introduction

“All the big players in the industry
face the challenge of how to thrive in a
landscape where consumers are
hungrier and more impatient than
ever. Either give the consumers the
perfect experience or forget them
forever, this is the severity of the
‘impatience’ of consumers, especially
when it comes to food.”
” where consumers are hungrier and more
Evolution of food is happening and it is
happening at an unprecedented rate. This has
been possible because of the fusion of food
with technology giving birth to a new industry
all together, the food-tech.
With major chunk of disposable income of an
individual being spent on food and
conglomerates trying to capture that chunk,
startups lay their eyes on food-tech to make
the experience better than ever before despite
the competitive landscape.
So far technology has been the solution all the
human problems, yet again we lie our eyes on
technology to come in place.
With such enormous consumer desires, food-
tech needs massive technological disruption,
because the current value chain does not seem
to satiate the human desires.
All the big players in the industry face the
challenge of how to thrive in a landscape
impatient than ever. Either give the consumers
the perfect experience or forget them forever,
this is the severity of the ‘impatience’ of
consumers, especially when it comes to food.
Businesses will need to have the right
capturing strategy, with the operating model
and technical architecture to realize it.

The consumers need food that is highly

nutritious, prepared in the cleanest kitchens,
served to them in no time, does not harm the
environment (and animals), economical and
excites their taste buds equally well.
So far technology has been the solution all the
human problems, yet again we lie our eyes on
technology to come in place.
 3
Funding

Funding

Investors have been bullish about the food

industry in general.

Startups operating in the Meat, Fish, Seafood

& Alternative Proteins, Beverages sectors
alone account for 59.6 percent of total
investments.

Alcoholic Beverages
Bottling & Distribution
Candy & snackfoods
Canned and frozen foods
Dairy products
Food safety & preservation
Foodservice
Fresh foods
Health & Wellness (non-internet/mobile)
Ingredients, flavoring & condiments
Meat, Fish, Seafood & Alternative Proteins
Non-alcoholic beverages
Wholesale food distributors

Value Chain Analysis
1. Preparation of Raw Material: With
the increase in population, the demand
for food has exponentially increased.
According to the Malthus theory,
there’ll come a point wherein food
production won’t be able to satiate its
consumption/demand. Thus, the
industry has faced challenges to
increase the yield drastically to meet
the demand. Agri-tech plays crucial
role here.
Innovations like Genetically Modified
Super Crops, Artificial protein, Lab
prepared meat, Vertical farming,
Functional Beverage are some of the
accomplishments technology has made
possible.
Artificial protein that is cheaper than
ever before seems to be effective in
solving consumer’s desire for
nutritious, high-protein food.
Lab prepared meat, this has long way
to go since this is a very recent
accomplishment. As demand for meat
is expected to rise by 70 percent by the
year 2025, the mass production of lab
prepared meet can help meet the
requirements. According to a research,
lab prepared meat can reduce
greenhouse emissions by up to 96
percent and free up land used for
feeding and slaughtering those animals
by 99 percent.
4
Vertical farming is expected to be
equally disruptive by making it
possible to grow crops under large
warehouse and artificial sunlight and
promise up to 400 percent higher yield.
2. Delivering the raw material: This
is a much unorganized sector, since
there exists a lot of exploitation of
farmers, especially in developing
countries like India.
The governments of such countries
have taken initiatives to build a
transparent marketplace, so that the
farmers receive standardized incentives
for their products.
Grocery delivering startups such as
Instacart, Rappi, Bigbasket, Groffers
are some of the startups solving this
problem. Some of them have their own
warehouses, while others just handle
the delivery part.
3. Food Preparation: Traditionally, the
restaurants were the point of food
preparation and food consumption, both.
With increasing popularity of food
delivery platforms like Zomato and
UberEats, they have become mere point of
food preparation.
Eventually this gave rise to the concept of
ghost kitchens (or cloud kitchens).

These can potentially replace Quick
Service Restaurants (QSRs) and fast
food joints. Not just replace them but
become the only umbrella for food
preparation.
The challenge however is to maintain
higher standards and make the process
transparent using cloud-based
spectroscopy.
Since the consumer does not want to
compromise on quality when it comes
to something as fundamental as food.
3D food printing is another tech-
promise that can change things
drastically but again, comes along with
a lot of uncertainty.
4. Food Packaging: This did not get
much attention earlier but today, this is
as important as the food itself.
Ideally, the packaging should be
biodegradable, cheap and in relevance
to the kind of underlying food. For
food delivery to reach moon,
packaging should be robust, keep the
food in the same condition as it was
packed for long durations.
5. Food Delivery: This is where the real
logistics comes in to action.
Consumers demand for ultra-fast food
deliveries. This can be attained with an
amazing fleet management.
5
The challenge is to adequately
incentivize those who make the
delivery, not charge the consumers too
much and earn profits at the same time.
The potential solution for this is drone
delivery. Drone delivery, although
seems very promising, is still a grey
area. We’re not sure how they’re going
to be regulated and how far or soon
this is going to become a mainstream
reality.
Food Marketing: This is an important
aspect of the food value chain.
Influencers, educators influence food
habits amongst consumers. Word of
mouth marketing is very prevalent in
this sector. Startups like Zomato which
started as a restaurant menu discovery
service now influence consumer
buying decisions.
Food Waste Management: With 1.3
billion tonnes of food being wasted
every year, this has risen to become a
major concern. Startups like Too Good
To Go, Karma have played their roles
to minimize food wastage but still
struggling to achieve volumes.
 6
Food-tech Trends Matrix