Innovation that begins with technology instead of beginning with the consumer has a high probability of failure. The future of food is personalization, says expert Jean Van Damme of Startle, a New York-based company that supports food companies in their efforts to innovate.
Technology and design
After experiences at leading Belgian retailer Colruyt Group (as director of R&D and innovation) and Le Pain Quotidien, you moved to New York to found Startle, an innovation studio for the food ecosystem. Tell me about this new endeavor.
"We help large and small food companies execute innovation initiatives. We focus on the cross-pollination of science and technology with marketing, design and storytelling. For example, together with a university and several industrial partners, we are working on a packaging material that changes color when a pathogen is present. This project is a good example of a technological challenge, but it’s also a matter of user experience. As another example, we are optimizing the assortment of food supplements for a supplement producer, because consumers were having so much trouble navigating their current offering."
Why are marketing and design so important?
"In Silicon Valley there is a tendency to apply the principles of technological innovation to food. Which is very difficult. This translates to concepts such as HelloFresh or Blue Apron, which (in their current form) are not aligned with the lifestyles of consumers. It is hard to push technology to consumers in the same way Apple does so successfully. These sorts of concepts are not sustainable, certainly in Europe, where the traditions of cooking and food run deep and strong."
Of course there are a bunch of enthusiastic customers for concepts such as HelloFresh or Blue Apron, but retention is still a challenge?
"I saw figures from Blue Apron, where retention after 18 months was about 10%. The concept is not truly adapted to how consumers eat today. Many consumers want to eat healthy, convenient and tasty food, but these services don’t truly deliver on that for individuals. That's why they are adapting their business model and are offering meals in grocery stores, too. I believe the subscription model will remain a niche business for a limited number of interested consumers."
Yet HelloFresh has been able to raise a significant amount of capital…
“Yes, because investors are betting on technological advances and market share gains. They try to buy market share to create economies of scale, hoping to become profitable that way. While this could theoretically work in a city like New York, most of Europe does not have the necessary population density to reach that point. And we will have to wait quite some time before autonomous vehicles and drones take over..."
Too much attention for technology
A mistake made by many innovators is that they build something for themselves. They develop products for busy, well-paid professionals in major cities.
"But if you want to objectively innovate, you have to turn your own opinion off. In the US, billions of investment dollars go to the development of ventures that only work in the 4 or 5 major metropolitan areas. At the same time, not too far away, there are real ‘food deserts’ where people have limited access to fresh and healthy foods. Could we please use some of these resources for projects that solve that problem?"
“A beautiful example of this is the story of Juicero, a start-up building high-tech juice makers. Consumers had to buy the juice maker itself, along with a subscription to receive special bags of fruit and vegetable pulp at $5 to $7 per bag. The machine was initially priced at $699 and later at $399. The company raised more than $100 million, until a journalist at Bloomberg made a video showing that you could squeeze the bags with your bare hands and get the same result as with the expensive juice maker. This lead to failure of the company. It is a great example of an innovation so focused on technology that it forgot how humans use and interact with that technology and what they really need. A lot of food start-ups lack a human-centered approach to innovation.”
This means that a lot of valuable innovations in food are not necessarily sexy?
"Offering frozen vegetables in a quality, organic and attractive package can be more successful and more helpful than coming up with a new freezing technology. Examples like Halo Top, making good ice cream with more protein, less sugar and less fat, is aligned with a consumer lifestyle focused on health and taste. Or Sir Kensington's, creating condiments with new and improved ingredients, while leaning on strong branding and a line of quality products. They became so successful that Unilever bought them 9 years later."
What are the big innovation areas for today's entrepreneurs in food?
"In my opinion there is one common denominator: personalization. Consumers are so diverse and complex, and their needs are different from moment to moment. On top of that, our bodies and metabolism are unique. Technology allows us to analyze and understand this complexity (through DNA, blood and microbiome analysis, but also through psychographic analysis), driving innovation to improve health, sustainability, convenience, experience... That is a domain to work in. Personalization can happen on different levels. We still have some way to go towards hyper-personalization. Think about a future where a machine makes yoghurt just for you, with adapted probiotics to suit your metabolism and microbiome. We are not there yet."
But brands and retailers can already find ways to adapt their offering to individual needs.
"Yes. There used to be less choice, but today, for example, you can choose between hundreds of coffee brands, origins and roasts. They each have a unique story. The amount of choice you have when ordering a coffee in a typical New York City coffee shop is staggering. Starbucks claims they have 80.000 possible combinations for your order. This is already a first step towards personalization."
Lots of confusion
The big challenge today is to drive consumers to eat ‘better’. There is so much confusion about what is good and healthy, and everyone becomes their own expert.
"This is true, also on an academic level. The quality of some scientific studies is very low. A reason for this is the publication pressure for academics. Even if research of questionable quality is published, media pick it up and turn it into clickbait. The result is that one day you get the advice to drink two glasses of wine a day, and the next day wine is poison."
Additionally, food research is extremely difficult?
"To do it right, you need large sample sizes and a lot of time, because there are so many effects you can't exclude. A huge innovation would be to improve scientific research exploring the effects food has on our bodies. While we work on that, more nuanced communication and reporting about this kind of research is a strong first step. I’m convinced the best advice today is still the advice my grandmother gave me: eat a little bit of everything, but never too much of any one thing."
Jean Van Damme will be speaking at the RetailDetail Food Congress on 3 and 4 October in Brussels. Other sprakers include Ocado, Delhaize, Colruyt Group, Smartmat, Deliveroo, Duval Union, Tiqah… Follow this link for more information and to order tickets.