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1
Morning Business Session
Panel Presentation: “Disruption — Business as Unusual”
Presentation to the members of theAmerican Bakers Association
Cyrille Filott –Global Strategist Consumer Foods
Business as Unusual
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Rabobank: The world’s leading F&A bank
Note 1: Ranking as per Global Finance 2015
EUR 426bnoutstanding capital with
EUR 98bncommitted to the F&A sector
Active in all segmentsin the Netherlands with a
F&A focus worldwide
Located in
43countries
ranked amongst the
Top 25safest banks globally
(1)
Access to finance, knowledge and networks
Rabobank Banking‐for‐Food
3
Disruption!Introduction
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• Sales on this day through TMall
• 2009: < USD 100 mln
• 2016: USD 17.8 bln
• Number of parcels: 657 million
• Best selling food brand: Three Squirrels
Singles day in China
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7
• The consumer
• Channels• Competitive forces• Including disruptive innovations
• Political changes
• The economy
• Supply chain/commodity prices
Industry issues Macro factors
Disruption – outside factors influencing a business
Disruption!The Consumer
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Experience
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Sustainability
Convenience
Health
Transparency
Millennials are changing eating culture
• Convenient, seen as healthy
• Experience through interesting flavours
• Market growth of 50% in past 5 years
Examples
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• Now 5% of the US food market (from 0% 20 years ago)
• Double digit growth rates
• Seen as healthy and more sustainable
Organic food Popcorn
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• In 70% of food categories big brands are losing share to small brands in food retail
• Distrust of (big) brands
• Big food companies slow to turn the ship
‐6.0%
‐4.0%
‐2.0%
0.0%
2.0%
4.0%
6.0%
BakedGoods
FrozenBakedGoods
Bread Pastries DessertMixes
Market share changes 2011‐2015 in food retail
Big Brand Private Label Small Brand
Different appetite for brands
Where do consumers learn and talk about food?
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Disruption!Channels
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0%
10%
20%
30%
40%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Hypers Superstores/ Supermarkets Hard & Soft discount, limited Convenience stores Other Online
Europe: where are people to buy food?
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Food delivery – disrupting how food is bought
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Online grocery
• Impact on assortments, marketing and supply chains
Meal kits
• Simple DIY
• Fast growing market – opportunities for bakers?
Ready‐to‐Heat
• Catering to a particular audience?
Ready‐to‐Eat
• Without an (aggregator) app restaurants will find it tough to survive
Food retail type Food service type
With a huge impact on suppliers
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Marketing• Demographics
• Impulse
• Basket size
• Over‐index/under‐index
• Filters
• ‘Share of screen’
• Category captain
• Profiling
• Price blurring
• Digital coupons
• Listing fees
• Support new entrants
• Consumer tracking
• Profiling
• Benchmark
• Big data vs. privacy
Assortment• On‐screen visibility
• Formulations
• Brand /logo recognition
• Substitution
• Ranking
• Reviews
• More SKUs/’long tail’
• NPD
• Auto‐fill
• Freshness
• Packaging size
• Pricing strategy
• Private Label/Store Brands
• Regional products
• Cross‐selling
• Loss leaders
• Shopping lists
Supply Chain• Complexity
• IT investments
• Working capital
• Forecast data
• Logistic costs
• Production costs
• Production runs
• Delivery times
• Shrinkage
• Listing fees
• Packaging standards
• Recalls
• Direct to consumer
• Market places
• Alternative channels/platforms
• Fulfillment
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Disruption!Innovation
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This time it is personal
Personalised marketingPersonalised food
10
19
The connected world will lead to disruption
Money Technology People
Start ups everywhere
20
No bakery –yet?!
High barriers to entry
Not necessarily “on trend”
11
21
Panel discussionConsumer, Channels, Competitive forces
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This document has been prepared exclusively for your benefit and does not carry any right of publication or disclosure other than to Coöperatieve Rabobank U.A. (“Rabobank”), registered in Amsterdam. Neither this document nor any of its contents may be distributed, reproduced or used for any other purpose without the prior written consent of Rabobank. The information in this document reflects prevailing market conditions and our judgement as of this date, all of which may be subject to change. This document is based on public information. The information and opinions contained in this document have been compiled or derived from sources believed to be reliable, without independent verification. The information and opinions contained in this document are indicative and for discussion purposes only. No rights may be derived from any potential offers, transactions, commercial ideas et cetera contained in this document. This document does not constitute an offer or invitation. This document shall not form the basis of or cannot be relied upon in connection with any contract or commitment whatsoever. The information in this document is not intended and may not be understood as an advice (including without limitation an advice within the meaning of article 1:1 and article 4:23 of the Dutch Financial Supervision Act). This document is governed by Dutch law. The competent court in Amsterdam, The Netherlands has exclusive jurisdiction to settle any dispute which may arise out of or in connection with this document and/or any discussions or negotiations based on it. This report has been published in line with Rabobank’s long‐term commitment to international food and agribusiness. It is one of a series of publications undertaken by the global department of RaboResearch Food & Agribusiness. ©2017 ‐ All Rights Reserved.
@Cyrille_Filott
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12
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Source: Deloitt US, 2016
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15
Thank you
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Click to Add Title
Click to add text
American Bakers Association
Ashleigh MichaelsCorporate Executive R&D ChefFood Programs and OffersMarch 27, 2017
About Me…
– Food Manufacturing • Schwans, Dawn Foods, De Beukelaer Cookie Company, AllergyFree Foods
– QSR, CPG/Licensed products • Focus Brands, Auntie Anne's International, Cinnabon Domestic & International, Starbucks)
– Convenience Store Food Programs
and Offers• Racetrac Petroleum Inc.
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Who We Are•
•Headquartered in Cobb County, Georgia since 1976• Third‐generation, family‐owned business
• Serving guests since 1934• Second‐largest privately owned company in Georgia
• More than 7,000 team members •2 Operating Retail Divisions Made up of…
•More than 700 stores in 12 states •RaceTrac Numbers:
•18,000 guests per store per week•Offers more than 3,000 retail and grocery items to address out guests’ needs, including premium food offerings•4 Million gallons of fuel each day
• Made To Order Offer
• High quality foods – Top pillar
• Made To Order Menu and Process Evaluation
• Consistency among 4 regions
• Limited Time Offers
• Waste Control
• Speed of Service
Nutritional Regulatory laws
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Understanding Equipment and Operation Capabilities
Leveraging Licensed products
SKU rationalization
SKU Cross utilization
Thaw and Serve testing
Insights into Offers……the WHY?
Jean-Manuel LEVEQUE
CEO DELIFRANCE French company Owned by VIVESCIA cooperative Top player of the frozen bakery industry Present in 20 countries, exporting to 80
Chairman AIBIEuropean Association of Plant Bakers
Established: 1956 – Offices at Brussels Mission: Advocating the common interests of plant bakeries at the level of the Europeanand international institutions 15 Members: Austria, Belgium, Bulgaria, Denmark, Finland,France, Germany, Italy, Netherlands, Portugal, Russia, Slovenia, Spain, Ukraine, United Kingdom
19
Who is behind this bakery in Europe?
An artisanal bakery? A retailer?
A hard discounter ?Foodservice ?
Digital?
4000 Drives in France (both click&drive and click&collect)
N°1 bakery supplier in Europe
Decreasing number of artisan bakers
- 350 bakers / year (FR)
4000 ISBSchwarz is N°4 retail
player worldwideBoom of fast casual
(+15% visits)
Leading to a channel blurring in bakery
Food to go menus & seated lunch
Seated lunch
Presentation shelves
Presentation shelves
Product presentation
Product presentation
Distribution channels are inspiring each other, blurring segmentation
Retailers Artisan Bakers
Foodservice
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The answer from the Bakery industry: freezing…
Source: based on Gira 2015
+7 points since 2009+4 points in 5 years
RETHINKING FOOD
PRODUCT INNOVATION
AMERICAN BAKERS ASSOCIATION
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@dhgisme | @foodtechconnect
We are the site of record & world’s largest food innovation community.Since 2010, we’ve cultivated a community of 30k+ leaders.
E V E N T S J O B B O A R DN E W S & A N A L Y S I S
WHO WE ARE + WHAT WE DO
@dhgisme | @foodtechconnect
THE NEW FOOD ECONOMY
Big Food is Struggling: the top 25 US food companies lost $18B in market share since 2011.
Small and mid-sized companies accounted for 46.4% of CPG sales last year.
Food Startups are Growing: $10 Billion was invested into new Food and Food & Ag Tech ventures across the globe in 2015.
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@dhgisme | @foodtechconnect
NEW TECH & BUSINESS MODELS ARE DISRUPTING FOOD
@dhgisme | @foodtechconnect
CONSUMERS BUSINESS & TECH
PEER-TO-PEER
ON-DEMANDDELIVERY
SOCIAL MEDIA
ECOMMERCE
ACCELERATORS+
INVESTMENT
CROWDFUNDING
TARGETED ADS
BIG DATA
DRIVERS OF INNOVATION
VALUES
TECHADOPTION
CONVENIENCE
MILLENNIALS
HEALTH & WELLNESS
PERSONA-IZATION
TRANSPARENCY
PERSONALIZED
SOCIAL
DISCOVERY
23
@dhgisme | @foodtechconnect
Companies that are better for PEOPLE, PLANET & PROFIT are transforming the food industry.
@dhgisme | @foodtechconnect
KEY INNOVATION AREAS
1. Sales Channels
2. Authenticity
3. Personalization
4. Ingredient Innovation
5. Decentralized Production
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@dhgisme | @foodtechconnect
NEW SALES CHANNELS
ONLINE GROCERY MEAL KITS D2C BRANDS
@dhgisme | @foodtechconnect
AUTHENTICITY
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@dhgisme | @foodtechconnect
INGREDIENT INNOVATION
@dhgisme | @foodtechconnect
FOOD WASTE INNOVATION
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@dhgisme | @foodtechconnect
PERSONALIZED NUTRITION
@dhgisme | @foodtechconnect
DECENTRALIZED PRODUCTION
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@dhgisme | @foodtechconnect
Companies that are better for PEOPLE, PLANET & PROFIT are transforming the food industry.
Danielle Gould