10 Oct 2018 Changes and challenges in SA’s F&B sector
A welcome new B2B F&B event that’s bound to grow in stature is the FoodNext.Africa symposium, a two-day meeting focusing on food disruption from farm-to-fork. The 2018 event was held recently at Cape Town’s CTICC – and here are some interesting views from some of the speakers on the state of play in SA’s F&B sector.
Judy Sendzul of InvenfinFoods
Invenfin is a strategic venture partner with a proven track record, owned and backed by the Remgro Group. It invests off their own balance sheet and does not manage third party funds – therefore not constrained by a limited time horizon and stringent exit objectives.
What do you believe has been the key change in the F&B sector over the past five years?
Consumer led change – being more informed about food, the consumer has demanded “more” from brands, products and manufacturers.
In turn, more “small food” innovators have been successful in gaining traction with consumers looking for clean, real food with a transparent origin. This has put pressure on big food companies to innovate and adapt.
Where do you see the three key challenges driving innovation in the industry over the next five years?
- Supply chain and route to market keeping pace with the changing landscape and adapting to be able to bring innovation in smaller brands to a wide reaching consumer base cost effectively.
- Retailers focusing heavily on white label or private label products put a damper on smaller, more innovative brands to have the space to establish themselves in competitive categories.
- The rapid rise of on line shopping in certain categories forces innovators to position their products to be more accessible to a “dark store” environment and to make sure that their social media conversations are effective. The skills to do this effectively are not always part of the initial plan and are a difficult “retrofit”
The F&B sector is undergoing huge change. What are the three tips you would give for success in the coming five years.
- Be passionate about your product and your brand. Make sure that you have the best quality with full traceability so that you can tell an authentic story around your brand.
- Be authentic and disruptive in a busy category and you will succeed.
- Find your tribe = consumers that are your target audience who fall in love with your product and share their experience on social
Simon Mantell of Mantelli’s
Mantelli’s produces premium biscuits specialising in smaller runs of niche biscuits and cookies which have a significant handmade component – differentiating them from biscuits produced in mainstream factories.
What do you believe has been the key change in the F&B sector over the past five years?
- Tough economic conditions – less business travel.
- Margin pressure for F&B channel as a result of increased overheads and declining sales in real terms.
- In many cases, a lowering of quality standards to meet the new price points.
- Extraneous factors like the weak rand, low confidence and drought.
Where do you see the three key challenges driving innovation in the industry over the next five years?
- Relatively small and disparate market.
- Cost of bringing innovation to market when volumes are small in relative terms.
- Customers, owing to pressures explained above, are reticent to pay for innovation.
The F&B sector is undergoing huge change. What are the three tips you would give for success in the coming five years.
- Differentiate one’s business from the competitors.
- Continue to improve efficiency.
- Remember that in chaos there is opportunity – look for and then develop these opportunities.
Laura Johnston, CEO and Founder of Daily Dietitian
Laura launched Daily Dietitian in 2014 when she saw a gap in the market for healthy, fresh and personalised meal delivery. It is the easiest way to have fresh, nutrient-dense, delicious meals, delivered to your door. Daily Dietitian takes away the stress of planning, shopping and cooking, making it easy for you to stick to your diet and achieve your personal goals.
Their chefs create lunch, dinner, and snacks using fresh, seasonal ingredients and then, mid-morning they deliver directly to you. All their meal plans are dietitian formulated and tailored to your unique needs.
What do you believe has been the key change in the F&B sector over the past five years?
Consumers are more demanding than ever before. It is no longer about “food” but about the overall “experience” and the “connection” with a brand, its values and ethics.
People are spoilt for choice and their expectations are high so companies have had to find innovative ways to set themselves apart.
Where do you see the three key challenges driving innovation in the industry over the next five years?
- Individuality. Food and beverages will need to be personalised to allow consumers to follow unique diets more targeted than gluten-free, paleo, and vegan, each chosen for a consumer’s one-of-a-kind physiology. Where gut health is a current trend with probiotic foods, soon we’ll be eating to stave off depression, help us sleep, and enhance overall mood.
Nutrigenomics will come into play here (the study of how our diets influence our genes). A growing body of evidence and scientific interest in the field have put us on the brink of revolutionary advances in personalised nutrition. Companies that show innovation in this space will be rewarded. - The environment. Whether it’s lack of land, water, pollution, or severe weather that’s preventing the ideal growing conditions, innovation in “fast”, “fresh” farming is key.
Vertical growing, aqua or hydroponics ecologically sound commercial farms of the future will be able to be located wherever they’re needed. - Being healthy. Fat is back, protein must be high quality and sugar is out. Consumers want to eat healthily but their definition of what this means continues to change. F&B companies need to keep up and quickly.
Trends are moving away from supplementation and towards whole foods and intrinsic nutrition (nutrients that are inherent in the ingredients).
The F&B sector is undergoing huge change. What are the three tips you would give for success in the coming five years?
- Through social media, everyone now has the ability to become a food critic. It’s no longer just about fashion, what you eat (or where you ate) has become an important form of self-expression and people collect like to collect and share their experiences.
Encourage social media engagement to positively build your brand, monitor your social channels to learn more about your consumer and identify “influencers” to be your spokespeople. - Use big data. Having a better understanding of your customer is going to be of paramount importance in the foodservice industry. Why guess when you have information at your fingertips. Knowledge is power – listen to what your customers want and need.
- Be socially and environmentally responsible. Helping reduce the negative impact of waste in the foodservice industry will connect consumers to your brand.
Marco Monteiro of Firmenich
Firmenich is the largest privately-owned company in the perfume and flavor business. Swiss and family owned, they have created many of the world’s favorite perfumes for over 100 years and produced a number of the most well known flavors we enjoy each day.
What do you believe has been the key change in the F&B sector over the past five years?
Over the past 5 years, the industry has seen the rise of the local dynamos. These dynamos have been stealing share from the big food players in the FMCG landscape through operating on lower OPEX, launching quicker innovation and exhibiting an agile speed to market on new products.
Consumers are driven today by the internet of things and exposure to global trends. They want innovation, together with better taste and nutrition at affordable prices.
Where do you see the three key challenges driving innovation in the industry over the next five years?
- Reduced sugar, salt, msg, fat reduction and clean label, whilst still retaining the great taste. This is where Firmenich have great technologies to be able to do this. We are more than just a flavour supplier. We are an all-in-one solutions provider. Firmenich spends more than R5bn globally per year on R&D on Taste Modulation.
- More consumers will be asking for natural and non GMO products in their food and drink products
- There will be an increased focus on clean label and better nutrition or fortified food stuffs.
The F&B sector is undergoing huge change. What are the three tips you would give for success in the coming five years.
- The innovation pipeline needs to more agile. F&B companies need to launch products aimed at the ever changing consumer quicker. 12-18 months innovation pipelines just don’t cut it anymore. Consumers want it available now! This is the world we live in.
- Consumers and in particular Millenials are the most adventurous, making them a promising target group for flavour innovation. Their hunger for unusual flavours highlights the importance of innovation in order to maintain consumer interest.
- Be proactive on the regulations coming on sugar, salt, fat, MSG reduction and clean label. For example, it was our experience that with the local sugar tax implemented in April this year that manufacturers were racing to the deadline.
Michelle Adelman of Accite Holdings
What do you believe has been the key change in the F&B sector over the past five years?
The swing back to local and fresh food. My parents and grandparents lived off a farm-to-table experience, but in the 70’s we shifted to more industrialised, processed food. I believe the pendulum has been swinging back to local, fresh, “real” food.
Whether you look at the surgency of boutique distillers, gastro-pubs, organic and vegan foods, or processed food safety scares, consumers are being increasingly cognisant of the source and quality (not just cost) of the food they consume.
Where do you see the three key challenges driving innovation in the industry over the next five years?
In Sub-Saharan Africa I believe our three big challenges are:
- fighting malnutrition by delivering nutritious and affordable food to the mass-market;
- finding more environmentally sustainable ways of producing protein;
- transforming the agricultural supply chain to transform small holder farmers into value-added contributors.
Each of these challenges is a mountain unto itself. I’m seeing a lot of innovation in food technology to address (1) and (2) – but (3) is the hardest.
It will require all of us in the industry to have the strategic and moral intent to engage small holder farmers and youth in productive agriculture and food production.
The F&B sector is undergoing huge change. What are the three tips you would give for success in the coming five years.
I think there is one major theme: don’t be insular! My biggest observation from being on the ground in food and agriculture in Africa for the past seven years is that we are very inward looking – both in terms of agriculture techniques, but also consumer behaviour.
We need to look for global trends and best-in-class technology and apply them in our African context if we are going to grow with the world and find creative solutions to our challenges.
Whether it be attracting international high-value tourists with a F&B experience they want (not what we want), looking at urban agriculture technology (and applying it in our African context), or getting on the “boutique” food bandwagon (with a view to export and international markets), we need to look beyond what we know and be willing to explore alternative points of view.
Read what these dynamic SA food entrepreneurs have to say about change and challenges, too:
- Nicola Jenkin of Pinpoint Sustainability
- Kabelo Matlala of Kasi Eats
- Sonia Mountford of Eategrity
- Dino Nathanael of Mybraai
- Timothy Willis of Aerobotics
- Chef Ash Heeger, Chef Patron at Riverine Rabbit
- Amy Weare and Jane Bisset of We Are Food
About FoodNext.Africa: Hosted by dmg events, it is designed as a collaborative meeting place where startups, innovators, investors and thought leaders come together to share visions, projects and experiences.
dmg events is proud to present the years’ most exciting b2b food event where the startups, food innovators, foodtech businesses, investors and partners who are redefining the food industry from farm-to-fork connect.
Built around an agenda of critical debate – it is hosted by key personalities and businesses providing meaningful insights into embracing disruption, scaling up new projects and meeting the rapidly changing needs of consumers.
See more about FoodNext.Africa 2019 here, 23-25 June in Jo’burg: www.foodnextlive.com