FROM APPLES TO THE APP STORE NEW ZEALAND’S FOOD & BEVERAGE JOURNEY New Zealand’s food and beverage sector is going through a transition 38 MARCH 2017 from relying on commodities to more value-added products…’adding value to volume’ has been targeted for the industry as a whole, whether through innovation in existing businesses or entirely new businesses commercialising higher value products. No small measure of progress has been made in this regard – and not just in high profile successes like Garage Project, Panhead and the broader craft brewing community. Much of the progress has occurred substantially under the radar, as overall R&D spend as a percentage of revenue in the sector remains low (as it is on a global basis versus other industries), and the largest industry participants and their revenues dwarf the aggregate of SMEs and start-ups where much of the value-add and impactful innovation is emerging. However, while we can point to successes, the global landscape of food and beverage innovation is thinking bigger and positioning for the future. Sustainability is moving from a once-a-year report for public relations purposes, to being integrated into new product selection and formulation. Consumers are demanding transparency of ingredients and their sources, and formulation that sounds like food and not chemistry. The potential power of data and analytics is now being realised across the value chain in how ingredients are produced (precision agriculture), how food is processed (industrial Internet of Things), logistics (smart transportation), quality and transparency (cold chain management, blockchain-enabled food tracking) and marketing and sales (nudge marketing, food recommendation engines, convenience services). But the key convergence area is in human health and wellbeing – not just the role that food and beverage plays, but also the future revenue streams that can result. It is a key pillar in the strategies of the largest food and beverage companies in the world, given the new high-value revenue it offers. It can be seen in food companies’ engagement, such as Campbell Soups’ investment in Habit, a start-up delivering services for DNA analysis, vital signs monitoring and health goals, with the goal of shipping meals directly to doorsteps. From the opposite side, it can be seen in health sector engagement, such as the Mayo Clinic’s investment in DayTwo, a start-up delivering microbiome-based personalised diet recommendations via an app. Our food and beverage producers also need to establish capability and partnerships across components. Consumers are becoming increasingly more quantified and will increasingly make consumption decisions based on this information. Personal genetic testing is becoming more accessible. Dozens of start-ups are developing platforms and products for gut microbiome analysis. Dozens of wearable devices are on the market allowing for physiological state to be measured in real time. Dozens more are developing tools for nutrition analysis from plate to gut. The ability to deliver recommendations to consumers on food and beverage choices based on this range of information is a matter of when, not if. This degree of analysis is already available in high performance sport, where such measurement and action is already common place, but the general population will eventually be as measured and responsive in terms of health and wellbeing as our highest performing athletes are today. Again, the leading food and beverage companies in the world are designing their innovation programmes to this future. We need to be doing the same. This will require access to a critical mass of high-quality research in pharma, medtech, nutrition science, microbiome analytics and behavioural sciences, a high-performance sports ecosystem as a testbed, access to educated venture capital which understands the sector, a digital sector to drive analytics and consumer convenience platforms, and a regulatory environment in both healthcare, food and beverage combining safety, transparency and agility. New Zealand may not be the best in the world in terms of any single component listed above, but taken in the totality that the future of health and wellbeing will demand, New Zealand arguably offers the best overall combination of these, and is competitive with any other country in the world. For its part, Callaghan Innovation has recently completed work on an operating model to better serve New Zealand industry. Food and beverage is one of six target sectors where a critical mass of capability will be focused on enabling and driving innovation broadly across the sector, where it converges with others, and drawing on capabilities from biotech to data science. With an industry open to innovation and focused on market demand - and targeted, integrated support from the researchers, investors and regulators - New Zealand is ideally placed to continue to the place ideas and’ ideators’ come home to. New Zealand’s food and beverage sector delivers novel products, but has the opportunity and imperative to do much more, says Callaghan Innovation chief technology officer Chris Hartshorn Dozens of start-ups are developing platforms and products for gut microbiome analysis. Dozens of wearable devices are on the market allowing for physiological state to be measured in real time. Dozens more are developing tools for nutrition analysis from plate to gut. THE LASTWORD
FT-Mar17-eMag
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