In a set of articles, we will discuss the key ideas on FoodTech: what the major strategic choices are, which trends are the most prominent at the moment, what strategies companies in various segments are employing. Here I would like to concentrate on the key strategic choices that FoodTech is about.
FoodTech as a Part of Agricultural and Food Business Context
FoodTech (or food technology companies in a broad understanding) is connected to the technological advancements in agricultural and food production business. At the same time, FoodTech is just one segment in the general taxonomy of agribusiness. It can be evaluated as a part of the product line in agriculture, or it can be analyzed as a segment in the technology dimension of food and agricultural production. In either case, the topic of agriculture as an industry and its possible strategic options is a large one (information about the strategic context for agriculture as a whole is available here), so in this article, we will be concentrating on FoodTech as just one aspect of agriculture.
It is also worth mentioning that, while I will be focusing on FoodTech, I will be referring to and using extensively the ideas about strategic choices or strategic dimensions. These are the decisions that companies or their CEOs make along the way of development and moving these companies forward. A more extensive and thorough walk-through on these key strategic choices is available in a different article here.
The Key Paths for Strategic Choices in FoodTech
All the industries and all the types of business can be analyzed across the standard strategic alternatives. These typically include deciding on the stage in the industry value chain, defining geographical distribution, choosing customer segments, focusing on several products, researching into technology, and finding monetization types. Nevertheless, here I would like to talk about the more specific choices that the CEOs or shareholders of the majority of FoodTech companies make. These mostly go along the technological advances that can be classified as parts of the general FoodTech value chain path as well as FoodTech-specific client segments.
Techs in the Value Chain
For the value chain approach there are three most discussed and most important stages in the current strategic context for FoodTech:
- products and ingredients;
- supply chain and logistics;
- retail and marketing.
There are several key strategic choices that companies make while concentrating on manufacturing products and ingredients. In the majority of cases, the most promising areas here are:
- plant or lab protein production;
- low gluten or sugar foods;
- meal kits assembling;
- private label kits;
- personalized foods;
- beauty and wellness.
Along the second stage focused on supply chain and logistics there are several points as well:
- blockchain-based supply;
- improved packaging;
- micro supply centers;
- safety and traceability;
- precision and advanced farming.
The third set of value chain options lies in the sphere of retail marketing. Here the key questions that shareholders and company heads should answer to themselves about the areas of strategic focus are:
- using voice and face recognition;
- store and supply center robots;
- alternative points-of-sale development;
- wellness and eco-product branding.
FoodTech Customer Segments
The specific client segments that are important particularly for the food tech segment of the agricultural industry are:
- millennials and Generation Z;
- vegetarians and vegans;
- wellness-oriented customers;
- eco-friendly customers;
- seniors or older people.
To sum it all up, FoodTech is quite a new part of the agricultural and food production industry, which is very popular at the moment. Moreover, it is very promising in earning profits for the shareholders and making the lives of people around the world better through feeding the growing global population. The key variants of the FoodTech classification are listed above, and it can be extremely helpful for any discussion on strategic choices in FoodTech.