24 Oct 2018 --- Innovation is key to providing affordable, nutritious foods to lower-income consumers, a currently underserved segment in need of industry attention. This growing industry spotlight will not only provide millions of consumers around the globe with the much-needed means to fight malnutrition, but also present the industry with an array of business opportunities. This is according to Kamel Chida, Deputy Director of Private Sector Partnerships at the Bill & Melinda Gates Foundation, speaking at Future Food-Tech in London last week. The summit brought together start-ups, academics and food and beverage industry leaders to discuss the role of disruptive technologies in facing the key bottlenecks and opportunities in the world of food and beverages.
Chida’s remarks follow the release of a report last week by the Institute for the Future and the Bill & Melinda Gates Foundation, entitled Good Food is Good Business, which encapsulates strategies for food companies to combine emerging technologies, such as artificial intelligence and synthetic biology, with established production strategies and traditional food wisdom to produce affordable, nutritious food.
“We have all heard how many children suffer from problematic nutrition. Almost a quarter of those children are stunted, and poor nutrition is the underlying cause of nearly half of children’s deaths in the world. It stunts their physical development and robs them of their future. It prevents them from reaching their full potential, limiting bright futures,” Chida says.
Despite spending most of their income on food, lower-income consumers often lack access to sufficient nutritious and safe foods as these tend to be unaffordable.
“Industry, in general, has not looked at the lower income consumer as a potential business. However, if you look at this from an economic standpoint, these people spend in food and beverage – on a social, economic level – more than 1 trillion US dollars a year. That is a business opportunity,” he notes. However, they are spending those 1 trillion US dollars on lower quality food products.
“From a private sector standpoint, we need to look at how we can create affordable and safe foods that these populations can access and consume to improve their diets and nutrition.”
“From an innovation standpoint, to crack this problem, we need differentiated thinking. If it was easy to get to the trillion dollar business opportunity, we would all know of businesses there. But its full potential has not been realized,” he says.
The crux for facilitating affordability and business opportunities lies in innovation – more specifically, innovation geared towards this market segment.
“If you look at innovation focus, the food and beverage industry focuses on the consumers that can buy those products. The start-ups that are happening are really dedicated and focused on those consumers. But there is little innovation targeted at the lower income consumer. I call it a constrained model for innovation because it really should have affordability at the center of it – how do you innovate with a constrained mindset?”
“Too often, expertise in reaching lower-income consumers, in food innovation, and in ancillary technologies, sits in siloed sectors. A systems approach, bringing together ideas across the landscape of innovators, is what we need to transform nutrition for lower-income consumers,” says Chida.
To tackle this problem, the Institute for the Future and the Bill & Melinda Gates Foundation convened a summit in Singapore in March for a small group of thought leaders and experts, including representatives from global companies such as Danone, Pepsico and Innova Market Insights, to discuss innovations that could help provide nutritious, affordable food to lower-income consumers.
“It was a big challenge but listening to the ideas and discussions over the two days, we could see that although it is a huge challenge, it is possible,” says Lu Ann Williams, Director of Innovation at Innova Market Insights, and attendee at the summit in Singapore. “It will require commitment and willingness to try new things. Every company supports a social cause today but the potential scale of this one is unlike anything we have seen. I hope that the industry joins in this effort.”
Participants in the report have come up with five zones of technological innovation that could spark an affordable nutrition revolution within 10 years. The report identifies products, services, business models and approaches to get the right food to the right people at the right price.
The five innovation zones as presented in the report include culturally specific strategies, harnessing conventional wisdom, as well as growing scientific areas regarding the microbiome and more technological options such as AI.
AI and data analysis have been put forward as new tools to help multinational and local companies deepen their understanding of consumers’ needs and aspirations. Algorithmic persuasion can also lead consumers in lower-income (and all) markets toward healthier and more economical consumption habits.
“AI can be used to help generate consumer information and the way we can cheat or manage costs,” Chida notes on this topic. “Many customers told us that they have no information on the low-income consumer – they don’t know who they are and it’s expensive to learn about your consumers. If you are able to use data you can gain access to these consumers.”
Click to EnlargeTraditional wisdom
Human intuition about the roles and benefits of ingredients and preparation techniques can be amplified and reintegrated into new food products. This traditional knowledge will be open, accessible and actionable by any consumer or producer anywhere in the world.
Key to this will be traditional ecological knowledge, acquired by local communities over generations. Further areas of interest include local knowledge on food and health such as traditional Chinese and Ayurvedic medicine, which are in fact gaining traction, evidenced by growing industry and consumer demand for ingredients such as turmeric and energy regulating ingredients such as adaptogens or botanicals.
On the point of traditional wisdom there is ample opportunity for crossover between the five innovation zones, with the report pointing out that access to advanced genetic and microbial analysis tools will allow R&D teams to “understand the science behind long usage of food as medicine or to achieve delicious flavors,” and address urgent challenges in malnutrition and obesity as well as other noncommunicable diseases by identifying low-cost ingredients that are also “culturally familiar, highly nutritious and less resource intensive to grow.”
The expanding notion of human health, which takes into account the interconnected relationship between our diet, well-being and microbiome, is vital to uncovering opportunities to design food that tastes better, resists spoilage and targets the nourishment of bodies and microbes.
Food companies should, according to the report, look to address nutritional challenges of lower-income populations through the development of next-generation processed foods that are friendly to the microbiome.
“As the causal relationship between our diet and our microbiome is better understood, companies will design food not only to be tasty, cheap and convenient but also to ensure a happy and healthy microbiome,” the report states, providing high-fiber and plant-based products, as well as the incorporation of bioactive peptides and oligosaccharides into functional foods as routes for microbiome boosting product ideas.
Advances in synthetic biology can be applied to food production, enabling the creation of agricultural products through cell cultures that may cheaply and sustainably scale nutritious foods in growing market categories.
One strategy recently explored on NutritionInsight is that of biofortification, or the use of conventionally breeding food crops that are rich in micronutrients, such as vitamin A, zinc and iron. Unlike the more conventional form of food fortification, another way of providing foods with higher nutritional value by adding micronutrients directly to food products, the goal of biofortification is to ensure that the crops used to create the food products contain higher levels of micronutrients.
Food companies can leverage crypto-coupons, smart contracts, and utility tokens managed on blockchains to inexpensively track food as it moves from farms to tables. The same systems will enhance food safety at lower costs, and incentivize the consumption of nutritious food.
A recent industry move which may build toward the solutions put forward in the report is IBM Food Trust blockchain network, which adopts the technology to improve traceability of certain food products.
A number of retailers, such as Carrefour, logistics firms and growers are working with IBM-developed blockchain technology which provides the means to quickly help trace food back to its source within seconds, unlike traditional transactions. The blockchain-based cloud network offers businesses and food industry providers with data from across the food ecosystem to enable greater traceability, transparency and efficiency.
Over the past months, industry has seen a number of examples, start-ups and business moves capitalizing on technologies and innovative food ingredients in fighting malnutrition and providing a solid basis for affordable, traceable and sustainable food sources. However, industry is yet to fully pick up on the opportunities catering to the lower-income has to offer.
As Chida concluded at Future Food-Tech 2018, “when business fights malnutrition, everybody profits.”
By Lucy Gunn
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