Huddle Notes from July 20th, 2020

Huddle Notes from July 20th, 2020

The huddles this week focused on food hub hurdles, pivots and successes; transformative supply chain technologies; and sustainable packaging innovation. Watch the recording here.

Talking Points

  • Food hubs built around farm-to-school programs
    • With uncertainty around kids coming back to school, many hubs struggling; somecould be out of business in 6 to 8 weeks if things don’t change
    • Farm-to-school already a difficult business model, now extremely tough
    • Hubs that have pivoted to nonprofit, food security work, CSAs, direct-to- consumer, etc., have better runway out of COVID
    • More philanthropy dollars supporting hubs’ nonprofit endeavors
    • Exposure of issues food assistance industrial complex also helps upstart programs gain awareness and funding
  • 87% of COVID-positive Tyson and JBS workers are minorities
  • Product line rationalization hitting food service too
    • Taco Bell cutting SKUs; KFC cutting SKUs, launching veggie chicken nugget; both cite supply chain issues
  • Commodity surpluses
    • Nuts
      • Keto and paleo crazes drove up demand, so more trees planted
      • Now too many almonds and walnuts, driving prices down
      • Excess peanuts because no fans at Major League Baseball
      • Low nut prices great for food brands, bad for growers
    • Coffee
      • Climate change threatening growing regions
      • COVID caused office shutdowns, so less coffee consumed
      • Price declining significantly
        Trends
  • Technology transforming supply chain
    • Innovation already impacting food manufacturing, distribution, etc., but COVID accelerating adoption
    • Big expense upfront but pays off long-term with max efficiency and less labor
    • Applicable for businesses at any scale
    • Deloitte’s Technologies for Supply Chain Innovation
      • 3D scanning
        • Big food companies using for design and development
        • Improves cellphone scanning accuracy
      • Virtual reality
        • Software helps visualize how product looks on shelf, with a library of competing products
        • May transform meetings with retail buyers
      • Smart glasses
        • Enable hands-free work
        • Wearable interface with computer
        • Manipulate glasses to retrieve data
        • Warehouses experimenting with them
      • Smart sensors
        • Microprocessors, diagnostics, storage connectivity
        • Cost dropping as tech improves
        • Real-time inventory tracking and total traceability
      • Autonomous robots
        • More accurate and efficient than humans
        • Already used widely for big industrial food distribution and warehousing
        • COVID prompting more food facilities to intersperse robots with humans for safety
      • Smart software
        • Becoming more and more necessary for traceability, food safety compliance, etc.
        • Check out Quigistics ERP system, affordable for small brands
        • One area where tech can make big impact for small companies
      • Renewable energy
        • Big global food companies (Nestlé, Danone) not U.S. based; home markets in Europe and elsewhere stricter on sustainability, with consumers pushing companies harder to be greener
  • Innovation in sustainable packaging
    • McKinsey report
    • Danone (French) has prioritized sustainability for years, focusing on packaging and circular economy; goal to have 100% of packaging reusable, recyclable or compostable by 2025
    • Circular Economy Accelerator aiming to develop private-public partnerships to encourage sustainable packaging and municipal composting, especially in the U.S.
    • Consumers wary of plastic packaging, despite COVID-caused uptick; food companies should take heed
  • COVID comorbidities and nutrition connected
    • Comorbidities higher among minorities, on a continuum with food access, nutrition, diet, etc.
      Tips & Next Steps
  • Pivot success: ShiftMeals in Vermont
    • Quasi-farm-to-institution model leveraging restaurants to feed essential workers
    • Partnered with nonprofit, growing rapidly, more funds coming in
  • Specialty Food Association – Working with Buyers webinar series | Free! | More Information
  • Pricing for Profit Workshop covers w-commerce, wholesale, Amazon, etc.