Food firms have rather more information obtainable now than they used to, says Gil Horsky, senior director of ventures for SnackFutures at Mondelez. The problem now’s combing via the insights to seek out the actionable objects. He shares that different shifts, like in sustainability, personalization, and demand for regionally grown food, make the industry a great spot for innovation. Even massive firms like Mondelez must be reinventing themselves, Horsky explains, and that’s a part of his job. SnackFutures invests in early stage startups in addition to incubating new companies, performing like entrepreneurs inside a giant company. While new manufacturers have a better time breaking into the market at the moment, Horsky explains that it nonetheless takes persistence to construct and scale a model with bodily merchandise. He says he finds nice pleasure in fulfilling customers’ wants, particularly when the merchandise have the emotional connection that food can.
What is the way forward for food? How can we even method a sophisticated query like that?
The manner we’re consuming at the moment and what we’re consuming at the moment is very totally different than what we ate a few years in the past. We all grew up consuming three meals a day. Today, we’re consuming, on common, seven mini meals per day. We’re all on the go. We have totally different wants all through the day.
The final hundred years have moved the food industry to turn out to be rather more industrialized and it’s rather more scale. Mondelez is the largest snacking firm in the world. Now, truly, you are seeing a lot of tendencies of customers going again to the pre-industrialization section. People are immediately wanting for regionally grown food. The second factor you are seeing is the want of personalization. Each of us has totally different wants. One of the largest adjustments is round sustainability and the round economic system. Is the food grown in a sustainable manner? Is the packaging sustainable and recyclable?
All of this stuff are literally a very fertile ground for innovation. Lots of new startups, a lot of huge firms which can be needing to reinvent themselves, which makes the food industry so thrilling at the moment.
I consider that the cabinets in the grocery store are vastly totally different than even 10 years in the past, and the charge of adjustments and the capacity for small manufacturers to pop up and and for giant firms to reinvent themselves. What is new to 2022 that enables us to do that fast invention and innovation?
If you look till 10 years in the past, there was just one path to market. You may promote at shops. Suddenly, the retail atmosphere began altering. When you are a small model, you truly can succeed as a lot as the massive model in the on-line area. Lots of retailers have been wanting for smaller manufacturers to present this expertise for customers with new distinctive manufacturers.
Asking what’s up in 2022, there are a few issues. Plant-based is massive, so customers need to eat much less meat, milk, and seafood. The second factor, which I’m very excited for, is a area of “food is medication.” Instead of taking pills, can your snacks or food have a functional benefit that can be as effective as some of those?
You also asked how the industry is changing for smaller brands. That’s one of the reasons why we created SnackFutures. We do three things. We manage the company’s corporate venture arms. We make investments in early-stage startups. We invested in Israel in a company called Torr FoodTech that enables you to actually weld together ingredients into snacks without the sugary binder.
The second thing is we actually incubate new businesses. For example, consumers are eating less vegetables, but they’re looking to get a vegetable in a snack form. We would actually, like an entrepreneur, work with an outside R&D team, outside co-packers, outside distributors, and incubator brand. We did one in vegetables called Dirt Kitchen. We test it in one market, several stores. If it does well, we scale it up.
Those are some of the things we’re doing. We’re taking some of the things from the playbook of entrepreneurs and putting them in a big company setting.
Does technology play any role? What can we leverage today in terms of the technology around us, social media, different tracking mechanisms, to even understand whether the product we’re putting in the store works?
Technology plays a huge role in the industry. There’s the McKinsey study that was done a few years ago about some of the largest industries in the world and their level of digitization. And food and ag was one of the lowest ones.
In the space of market research, in the past, we had to wait sometimes weeks and months to get insights from consumers in the physical world. Today, you can actually do things very quickly. We can put different concepts on Facebook, Instagram. We see what concepts interest people. You have the ability to do focus groups online. We talk with consumers in their homes. We are able to get insights on a daily basis, if we need.
If you want to mine trends and look at what is spoken on social media, we can zoom down to the level of seeing what’s happening in New York State or New York City. What are consumers looking for. It gives you a lot of power. I think the bigger challenge is actually distilling your insights from all that. Distilling these for something actionable, that’s probably the harder part today.
What are we seeing in terms of micro brands versus the larger brands? What’s happening with consumer behavior there?
Ten years ago, you would not see emerging brands. Today, there are a lot of them that have a strong founder story. They would usually start creating a tribe around them of followers and believers and slowly scale up. What we do in SnackFutures is we try to either invest in some of those that are in the well-being snacking space or even build our own.
There’s much more openness, both from a retailer and a consumer perspective, to try new things. Obviously, there’s still the fundamentals. You have to be a great tasting product. You still need patience building a brand. That’s the beauty and the challenge in this industry. We’re talking about physical products. It’s very different than some of the tech we know that can just go and scale within a night and become very, very big. Here you manufacture, you distribute, you sell, slowly you scale up.
In the past, our playbook was competing against the other big brands. We all were using very similar strategies. Today, we actually need to compete with a lot of smaller brands that are growing very fast. When you’re in a dynamic market and you have 20 competitors and they have different playbooks, it just makes you better. For the consumer, it’s great because there’s more choice.
If we’re looking years down the line at snacking behavior, is it going to change?
Our strong belief is that snacking as a behavior is just going to get bigger. I think the interesting part is going to be: how are these snacks going to look in the future? You’re even seeing some concepts that are blurring lines. For example, you have a category which is actually meal replacement. It’s basically beverages that give you the same nutrients and filling feeling of a meal. I think we’re going to see an evolution of these product forms and what needs they are fulfilling.
The second one is: how do we actually get these products? Maybe 10 to 15 years down the road, you’re going to have the 3D printer and you’re going to print all the snacks for the next day. It could be. Maybe not.
I think the impact that the food industry has on sustainability, climate, and the ecosystem is just going to become a bigger topic.
What do you get pleasure from most about what you do?
There’s not a bigger joy than fulfilling the needs of consumers. The amazing thing in snacks, especially in chocolate and cookies, is that people are emotionally attached to them. There’s a lot of research that the first chocolate you ate as a kid, you think is the tastiest chocolate. It’s the taste of your childhood. I think it’s a very emotionally engaging industry and role.
Working with startups, entrepreneurs, and new technologies to reinvent this industry and bring it to the next stage that will be healthier, more sustainable, and more fulfilling for consumers is super exciting.
Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, is a Venture Partner at J-Ventures and was an engineer at Hippo Insurance. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.
Contributing editors: Michael Matias, Megan Ryan