Disrupting the food chain
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The Business of Supply (episode 2): It's rare that we look down at our plates and consider where our food comes from – that is until it’s gone
Between recent geopolitical conflict, and devastating disruptions to supply lines, what is the current state of food today?
- Pablo Quintero, AGSM MBA graduate and Principal Product Manager at biotechnology start-up, Vow
- Shan Pan, AGSM Scholar, Scientia Professor and Deputy Head of School (Research), School of Information Systems and Technology Management, UNSW Business School
- Michele Roberts, Associate Professor, AGSM Academic Director and Associate Dean Post-Experience at UNSW Business School
Find out more about Scientia Professor Shan Pan’s research and UNSW research below:
- Read now: How Singapore is improving food innovation, sustainability and productivity
- Read now: Digital sustainability: technology solutions to climate change
- Discover now: Digital Sustainability Knowledge Hub
Narration: We can do without a lot of things – but not food.
In wealthy countries, we tend to take it for granted and rarely consider where our food actually comes from – that is, until the price of a head of lettuce nudges twenty dollars. Then, we might remember that political, environmental, social, and technological forces and disruptions to global supply chains all impact its supply.
Today on AGSM’s Business of Leadership podcast, we’re discussing food. How does it get from farm or factory to our forks? Why do we continue to waste so much of it? And how can emerging technologies, in areas like blockchain, biotech and digital sustainability, make food supply fairer, less environmentally damaging and more robust?
Pablo Quintero, AGSM MBA and Principal Product Manager at Vow, an Australian protein alternative company, joins podcast host Associate Professor Michele Roberts to discuss. A cultivated meat biotechnology company, Vow grows meat from animal cells, and was recently tipped by LinkedIn as one of the top 10 LinkedIn Top Startups in Australia for 2022.
Pablo shared with us how the start-up industry is seeking to disrupt the food industry, shift consumer behaviour, and meet demand for more ethical (and still tasty) products.
We are also joined by Scientia Professor Shan Pan, Deputy Head of School (Research) at the School of Information Systems and Technology Management at UNSW Business School, an expert on digital sustainability and sustainable food practices.
Michelle Roberts: Hi, everyone. My name’s Dr. Michelle Roberts, I’m the associate professor and AGSM academic director, and associate dean post experience programs at UNSW Business School.
Michelle Roberts: Today’s episode is focused on the business of food supply, and we’re joined by a couple of experts from the UNSW community on food. So firstly, we have Pablo Quintero an AGSM alum from our full-time MBA class of 2016.
Pablo is principal product manager at Vow, a biotech startup that is looking at one of the most challenging problems in the world, trying to grow real meat in a lab using animal cells instead of animals.
We’re also joined by UNSW Scientia Professor Shan Pan. Shan is an AGSM scholar, deputy head of school for research at the School of Information Systems and Technology Management at UNSW. Shan’s an expert on sustainable and secure food supply practices and is also the founder of the UNSW Digital Sustainability Hub. So, welcome Pablo and Shan.
Pablo Quintero: Hi, thanks a lot. Very, very happy to be here.
Michelle Roberts: Wonderful. Now, I might start by asking both of you to tell us a little bit about your work in food supply, any cool stuff that you’re working on and why you’re so passionate about this space. So Pablo, we might begin with you.
Pablo Quintero: Sure. I’ve been engaged with food for my last three positions. The first one was with AgriDigital, it’s a B2B software company that provides trust and secure software for the grain industry. Then, I moved to build my own company in Spain where we would build farm-to-door services providing organic produce directly from farmers to consumers. And then, after two and a half years with that business, I just arrived a couple of months ago to Australia to join Vow as a principal product manager. And here, we’re just creating or inventing a new industry, and the industry is extremely in its early days. So, everything is very new and we’re constructing it together with other companies.
Michelle Roberts: Wonderful and Shan?
Shan Pan: Yes, hi. My work in the global food supply chain started some three years ago, when I was helping a client in doing consultancy work, in helping them to map out their maturity model in terms of food innovation readiness. This got me interested in this area. And more recently, I’ve been looking at the carbon emissions of supply chains in linking, which is one of our projects at the Digital Sustainability Hub here at UNSW . Really looking at it from a carbon emissions point of view, what are some of the supply chain-related activities that stood out? And what are companies out there working on reducing? And then, hopefully reaching carbon zero.
Michelle Roberts: And I guess your passion in food, tell us something about how you became interested in food supply chains?
Shan Pan: So, food is essential isn’t it? I mean, we can do away with a lot of other things, but not food. So, food has always been, in my own research has been underestimated by myself. I have always taken for granted that the food will always be there, the prices will be stable and the impact on environment, or the environment impact on food will be stable over time. And just the way we’ve grown up. And as I do more research in this area, I come to a realisation that it’s actually quite dynamic. And hence, I thought it would be good to put in a bit of effort into doing some research in this area.
Michelle Roberts: And Pablo, what got you passionate, interested in supply chain with food?
Pablo Quintero: Well, I would say two major things, the first one is the impact of food in our lives is huge. So, at a social level we always gather around food or beverages. And the second point is on the environmental side. So, how food has become one of the sectors that has a higher environmental impact in our lives. So, those two are my major drivers for being passionate in this industry, in this space.
Michelle Roberts: And Pablo, we might just get you to explain Vow to us for a moment just before we carry on, because it takes a little bit of getting your head around. So, it is protein, but grown at the cellular level.
Pablo Quintero: We wouldn’t say it’s protein, but its animal cells, so it could be whatever type of cells that you wish. That we are able to grow in a lab and take it from that lab level all the way up to a finalist product that resembles, or it could be very similar to meat as we know it today. But also, it opens a possibility for creating a complete new category of food given that we are starting from first principles, which is the actual cell itself.
Michelle Roberts: So, presumably it’s cruelty-free, low carbon, nature positive?
Pablo Quintero: Absolutely. So, this means that there’s not any slaughter in place of any animal. What we do is we take a biopsy from an animal, that animal keeps living, and from there we are able to select those cells that are more appropriate to grow in the way that we do things internally. And because you are not in a hostage, in an animal, it’s hormone free. There’s no need to inject hormones in any part of the process. And also, any meds or drugs that you have to give to the animal, that doesn’t happen in this process. So, it’s also called cell cultured meat, it’s also called green meat or clean meat. Because, you get rid of all those unnecessary chemicals.
Michelle Roberts: And so, to give us some context to this discussion, can you explain for us why is global food supply so complex and so challenging? And I’ll get you to talk about some of the shocks that we’ve been experiencing in a minute, but what makes it so vulnerable to shocks?
Shan Pan: And in terms of complexity, it has to do with this chronic issue of food accessibility. So how do we get food to those who need? And how do we ensure that the food is affordable? I think that’s a very basic issue, but it has been a problem all around the world. I think we will all agree that there’s enough food to feed the 12 billion people we have on earth, and yet we still have some 800 million people going hungry. In fact, in some parts of the world, for every minute that goes by there is a person dying of hunger. So, this is a chronic problem.
And I think when we talk about global food system or global food sustainability-related issues, I think we must not forget that this is really the problem that has been around for decades. And I think we’re now really looking at it. And in addition to the shocks that have been introduced in the last few years, I think we’re going to continue to struggle, but I hope we can all work towards that. And there are two structural problems that have more or less cost. The problem that we’re describing, the accessibility issue, that is one, the lack of policy incentives for more equitable and sustainable production. I think that this is a global problem and different countries, different governments, different parts of the world, different ecosystems are facing different types of challenges.
They may or may not have the same policy incentives to want to solve problems that are currently happening elsewhere. So that’s a real problem that we need to tackle. And the other one is this extraordinary, concentration of power and money in the global food trade. So that’s another structural flaw that I think we need to recognise. And they are the ABCD Group, the famous ABCD Group of four giant transnationals that actually dominate the raw materials of the global food system. Just among the four of them, they’re accountable for between 75 to 90 per cent of our global food trade. So, you can just imagine, this being a structural flaw, which is not easy to overcome. So, I would say these are important issues to take into consideration as we talk about global food system today.
Michelle Roberts: And I just want to follow up on your point there about governments, what are some of the policy instruments that we could see globally, that we might hopefully see that could build more robust and equitable global food supply chains? And is there anything indeed that the Australian Government might introduce that could make a more robust, and equitable global food supply chain?
Shan Pan: I think just like how the world is coming together to try to tackle climate related problems, I think more effort should be made to come together to talk about the food accessibility issue. We have countries who are not self-sufficient and they’re very much dependent on procurement, and buying food from other countries. And in what happened in the last two, three years, you would suspect that they are the ones that could afford to pay a higher amount of amount prices in terms of buying food. So, I think we must come together and governments must come together, those well to do as well as those who are still struggling, to really come to the table and to look at this very seriously. I think what has happened in the last two years has, once again, reminded us how vulnerable and how broken perhaps our global food system is.
Michelle Roberts: And Shan, give us an example of something you’ve eaten today that would have some of the inequities, and the challenges and problems, and perhaps high emissions.
Shan Pan: So, I had a sandwich for lunch. I think Australia, it’s a very fortunate country. I think a lot of raw materials actually are produced and locally sought, and manufactured, and prepared and so on. I think to us it’s less of a problem, and perhaps this is one reason why we might have taken for granted how complicated the global food system might be. Yes, I think it’s safe to say that the majority of everything that I’ve eaten today might have been locally sourced. But this may not be the case when you go look at a small country like Singapore, where I came from. Only 10 per cent of their food come from locally produced. So, you can imagine the other 90 per cent are vulnerable to shocks, and vulnerable to price instabilities and so on and so forth. And if you think in terms of carbon emissions, the shipments, the freights and transportation, both land and air or sea, all this would have added in terms of the carbon pollutions to the world.
Michelle Roberts: Pablo, I know you were at AgriDigital, and have probably quite a lot of expertise on the grain industry in Australia. What would be the complexities with the sandwich in Australia?
Pablo Quintero: Well, first, a couple of reactions to Shan’s point. I think a main fact that is really shocking is that 75 per cent of our food worldwide comes from five animal species and 12 plants. So that, means that majority of these species and plants are nowadays almost commoditised. And for that reason, it’s very easy to create a really broad and multilayer system that is really difficult to bring down. And if you have a drought in Australia, you don’t have wheat for some months, it’s really easy to bring it from Brazil, for example. But you need a really complex system right in place, starting with the land, but then the silos, the trains, the boats.
And that is definitely all of the supply chain in place for all those of these commodity foods that is really, really hard to bring down as an incomer in any of these food industries or as a startup. It would be really hard to do it in a different way. Maybe the things that comes to mind if you go local is where you can have a bigger impact. But as long as you go interstate or overseas, that gets really, really complicated.
Michelle Roberts: Can you both just summarise for us what are some of the shocks that you’ve been aware of in global supply chains? And maybe how you’ve experienced some ... Pablo have some of the shocks we’ve seen impacted Vow, and the work that you are trying to do?
Pablo Quintero: Well, even though we are creating a very, very complex and new industry, our base also comes from commodity ingredients. So, we’re talking about, well, no cell line, but once we have that sorted, whatever we need for those cell lines to proliferate and grow, it’s just media. And that comes from just very basic amino acids, and sugars, and water. So, in that sense the impact is very minimal. On the other side, maybe on the downside, it could be that we are also creating the whole process today. So, it’s not that we have a very robust process in place. So, as an example, we have to build bioreactors, and that comes from steel and very heavy engineering. And there’s only one industry, the pharma industry that have worked with these bioreactors before. So, we have to practically invent them from the start. And maybe there is an impact there, that we don’t have enough suppliers, we have to try to figure out maybe doing it ourselves. But apart from that, if we think about the actual product, the impact as per now is minimal.
Michelle Roberts: So, that’s the great news about Vow, that it’s actually a simple and a green supply chain.
Pablo Quintero: It is, yeah. And also, considering our values, one of the main one is that we really want to create foods that displace meat. And therefore, whatever we create has to have a greener impact than those foods that we displace.
Michelle Roberts: And Shan, any impacts that you’ve been experiencing and observing in the communities that you are doing research with?
Shan Pan: Putting the COVID shock aside, I think there are two other important shocks that are not going to go away easily, quickly. The first one is the geopolitical conflict tensions, the Russian/Ukraine conflict. And then, you have some international relation tensions closer to where we are. And these are not going to quickly go away and say for example, Russia and Ukraine, and what’s the impact of that conflict on food? And so, I think they are a couple of interesting facts, and they are very serious. And so, for example, between Russia and Ukraine, the two countries, they produce around 30 per cent of the world’s traded wheat and barley.
So, just the two countries, they are accountable for 30 per cent. And we know what happened in the last nine months or so, with conflicts and so on. So, what then happened to the 30 per cent? So, who’s replacing the 30 per cent? So, are people paying for more? Because, they don’t get the 100 per cent anymore, they get 70 per cent instead and so on and so forth. That’s one fact that I came across. The other one is that 60 per cent of the world’s sunflower oil actually came from those two countries. So that’s 60 per cent, so you can just imagine the impact, both the current impact and the near future impact it would have on a lot of countries. The other fact that I came across was Somalia, Somalia purchased, imported 90 per cent of the wheat from those two countries. So again, you can imagine the immediate impact it would on the stability of the food sources in this case it’s wheat. And also, the prices that countries like Somalia and others will have to pay in this context of geopolitical conflict.
The other one that’s been around and will continue to be around I’m afraid, is this impact of climate change on food supply, right? I mean, we are getting a lot more extreme weather events. We used to say this is a record summer, this is a record winter, but it seems like every year we’re breaking records. And just about every other quarter having we’re floods, we’re going to continue to be fighting the droughts. And there will be an increase of temperature from an environmental point of view, and there will be a lot more unpredictable rainfall patterns. And so, I think from a global food system point of view, those are the shocks that I think will become the norm as we move ahead.
Michelle Roberts: And I’d like to stick with climate, because we know it’s the one shock that’s going to get a lot worse before it gets any better, if it gets better. So, we’re seeing lots of initiatives starting to come through, such as the carbon labelling of food, where we’ve seen some work in some countries where there’s a traffic light system. And consumers will get to see if they’re choosing a higher emissive food, like red meat or a lower emissive food like vegetarian, plant-based or to some extent chicken. We’re starting to see some potential policy instruments coming through that would price the cost of the carbon into the food. What do you think of these initiatives that you’re seeing? And what do you think the options are there to green our supply chain to make it more regenerative, more nature positive?
Pablo Quintero: In my experience with AgriDigital, I was able to be on the front line on how to create a blockchain layer for the supply chain of grains. And that was a very interesting firsthand experience on how information is nowadays, almost across every single step of the way open. That is really, really powerful for consumers to get into that information. And I think companies will have to follow and to be transparent, because the end consumer is more and more going to demand that information. And today we are in a place where it’s easier and easier to track at every single step. What comes in? What comes out? What is the impact of that?
So, we’re seeing startups coming out for establishing these blockchain companies. From AgriDigital there’s a spinoff called Geora, that now is specialised in this blockchain solution for the industry. And also you have OpenSC that is also Australian, and you are able to see from the packaging in the supermarket of, for example, fish, a trout, where that has been fished with what specific boat. So, you have a QR and you have very, very specific information about the food that you’re getting, and also the impact that it’s having. So, I think it’s really, really good news having technology to provide us with more information and so, consumers have better choices to make.
Michelle Roberts: And are we at the point where blockchain is being used to track the carbon of food or the authenticity of certain foods, Pablo?
Pablo Quintero: Absolutely, and that is the work that AgriDigital and Geora have been working on. So, they are able to put digital assets in every step. And to put you an example, imagine that we have a farmer that goes with trucks into a silo and that grain goes into a big silo. So, that gets automated, that information goes into the system and the blockchain is able to create a digital asset of that, saying who is the owner, what are the chemical parameters that grain has. And that information in blockchain is immutable, and you know the ownership. And if you continue in that system then that grain changes hands, and then goes from that silo in Australia to Indonesia for example. And that transaction happens in that same network, then you are able to track or to change the digital ownership of that. So, you are able to track all along the way that asset, and give it a digital immutable information along the way.
Michelle Roberts: Shan, circling back to what are you seeing from these new carbon initiatives, like the carbon labelling of meat or any other opportunities you’re seeing to make our supply chains greener and more nature positive?
Shan Pan: Yeah, I think consumers are expecting to be better informed of what the product is really about. There’s a saying of, “We want to eat the food that we trust and we want to trust the food that we eat.” I think with blockchain, with all the transparency and traceability of product information available, that’s put on the blockchain. The blockchain is really giving the product a life, a story. And so, you can imagine with the availability of technologies like blockchain, we can now give voice to the farmers. Imagine the person who produced a bottle of wine, he or she’s never known to the actual consumer.
And the consumer might have paid a lot of money for it. Wouldn’t it be a great opportunity to give some voices to the farmers, to talk about their passions, their stories of the food they have created. So, with technologies like blockchain, consumers will continue to expect to hear more, to see more, in addition to just the trusted information side of things. So, potentially this could also increase the branding effect of the product, where you actually have one scan of your app, you could almost visit the farm where the product was actually created. So, those are what consumers will be expected, and I think technologies that blockchain is really giving the possibility.
Pablo Quintero: And to add that Shan, there’s a very beautiful case where you can tip the farmer that has collected your coffee beans while you are having a coffee in London. So, that already happens today.
Michelle Roberts: What are the other technologies or innovations that you’re aware of that might come to market, that can help build more robust, perhaps more equitable supply chains in food?
Shan Pan: There was one application, which happens a lot. When I was doing some research earlier this year, I was surprised by the numbers. It has to do with food fraud. There’s been a lot of food fraud cases going around, and what do we mean by food fraud here? It’s mislabeling of a food product, misrepresentation of its quality, origins, freshness and contents. For example, we could potentially be buying fake wine. Just having a nice label outside does not guarantee what’s inside the bottle. So, according to WHO and when I saw the number, it was pretty shocking to me, that every year some 400,000 people die from eating contaminated food. And 600 million people got sick every year.
In terms of the impact on the economy, this whole issue of food fraud is a fairly serious one. And we are hoping that there’ll be more technologies that can be introduced into addressing this issue. There’s a lot of fake food going around, fake hake, fake rice, fake wine, and lots of those fake stuff. And they are unfortunately typically sold to less developed countries, where information and knowledge may or may not be available to them. So, this is one application that I thought technology could certainly play a bigger role in.
Michelle Roberts: And that’s related to greenwashing as well. I mean, we’re seeing a lot of foods come through, a lot of quite, vague terms that the consumer doesn’t really know what to make of it. Pablo, what are your thoughts on this?
Pablo Quintero: For me, and based on my experience, I definitely see that digitalising part of the supply chain has a significant impact, it increases efficiency and reduces time, and therefore it reduces waste of food. A couple of examples of this is when I worked in AgriDigital you could see how very big companies that would transact grain, and have big silos would manage their silos in whiteboards. And that was really, really impressive to see when you would visit them to try to switch to your software. And then, when they did, you could see how their productivity would go up and also, the trust of what comes in, what comes out. And as I’ve said, you can give the time back to people to put it where really it’s needed, and that also has a very big impact on the actual food and reduces food waste. Another thing that digital can bring is new business models.
That is something that, for example, I did with my previous company with Kulto in Spain, we were digitalizing how small organic farmers would work. And you could see how before joining us, they would work the land, they would crop, they would put things in their van and they would go door-to-door to sell their goods. And that would take for them more than 60 per cent of their time, it would be the commercialisation part of it. But they are farmers, so what we gave them was, after joining us they would have 80 per cent of their time exclusively for the land, and for the products. And we would take care of everything from the commercialisation side. So finding customers and also, doing the deliveries for them. So, that was thanks to digitalization, and I do feel that by experience that is by far one of the best things that technology can bring to the industry, to the supply chain sector.
Michelle Roberts: So, we’ve talked about digital transformation. Pablo, what are you seeing as best practise advice for leaders in food service organisations?
Pablo Quintero: So, what I’ve seen and it’s always from the other side, from the side that brings the technology and the transformation, and that digitalisation. But what I’ve seen from the clients that want to implement this, is that it has to come from the top in order to be successful. And there’s always going to be resistance, because change is contradictive to human behaviour. So, change is always going to have its resistance, but I would say that from the top, it’s very clear that this has to happen. Then, little by little the mentality of the whole company shifts towards change. And so, you have to be resilient and you have to manage, to navigate the bad times or the initial times that are not the best. But then, you always see quick results, and that’s where you start having the buy-ins from all the layers of the organisation. And definitely it is something that you need persistence to make it work.
Michelle Roberts: And Shan, what have you seen emerged from the research on best practise for leaders in food service organisations with digital transformation in supply chains?
Shan Pan: The food industry is a very unique one. Unlike the banks, unlike any other industry, when you think of the food industry you almost immediately think of global systems. So, you need to buy from somewhere out there, one of the countries who are 1000s of miles away. And you need to think about pricing, and you think about prediction, you need to think about hedging. I mean, a lot of this prices are decided and determined a couple of quarters before you actually need them. So, we don’t know enough about food industry, because they’re typically ... I mean, a lot of the big food companies are family owned. They don’t disclose a lot of what they do, and they do so well from a profit point of view. That like Pablo said, some of them are actually using whiteboards to brainstorm and make important decisions. So, one of the things based on my own research, is that we don’t see enough actions that some of the big food companies are taking.
Perhaps this is something a business school can contribute by collaborating with some of the bigger food players, in understanding their automation needs. Maybe we’re just talking about automation, maybe we’re not yet talking about the use of AI, use of big data. I mean, here we’re just talking about automation of their supply chain processes, and perhaps that’s something that Business School research can really come in handy. The project that I was helping a client to do a couple of years back, really helped them understand in terms of digital innovation maturity model. So, where are they on one to five, are they two? Are they four? And what does it take to get to the better side of the equation? And that’s something that I think we can do a lot more, and we can collaborate with the food industry players in better understanding their needs.
Michelle Roberts: And I want to circle back to something that Pablo just raised, which is this issue of food waste. It’s one of the biggest issues in food supply chains, indeed in global warming. What is the role here? And our role as consumers. So, in terms of food waste, what are you seeing as solutions to food waste? To what extent is this an issue for the food sector? To what extent can we as consumers move the needle on food waste in our homes?
Pablo Quintero: Seeing it from a disruption or startup point of view, I think there are business models that have come up in the past years that tackle this issue. One that comes to mind is a startup called Good To Go, right now I don’t know if it’s in Australia. But I do know that it works in Spain, and it works really, really well. And their business model is about offering whatever leftovers you have from the supermarket that they have to just throw out, throw away. And they would offer that as a really, really low price in a bag. And you with their app, you can see what supermarket is close by. And let’s say for three or five euros you are able to get a bag full of fruit, or vegetables, or even packaged products that are very close to expiry date. And that way both sides gain, right? So, the supermarket gains a little bit more money, they don’t waste food and the consumer also buys it at a cheaper level. So, I think they’re always opportunities to bring up new solutions, and this is one of them.
Michelle Roberts: Shan, any reflections on the role of consumer versus the role of the food industry in food waste?
Shan Pan: Yeah, I think education can play a big role. I think raising awareness, I don’t think we are educated enough. I think as a consumer we do observe, every time we go to the supermarket there are products that are about to expire, but we don’t actually know what happened to them. Some will get sold with a huge discount, and others we don’t know. So, I think consumers have a role in here, I don’t think we have enough innovation in this space. Pablo talked about a couple of startups that have tried that, but I think from a bottom up point of view, I think we’re all to some degree guilty of food waste.
In terms of the things that we hold, and the things that we don’t finish on a daily basis and we buy things that may or may not be necessary. So, it’s a whole spectrum of waste, not just at the consumer end, but also along the process as well in terms of packaging, in terms of shipping, in terms of distribution. But also, in terms of the primary production. I think the whole issue of waste will have to be looked at closely.
Michelle Roberts: I want to bring Pablo in here, is this issue, the hedonic appeal of food. So, it’s hard enough to get consumers to buy bananas that are slightly bruised in the supermarket rather than them going to waste. But Pablo, you’re in a company that’s going to need to get people to buy meat that’s been grown in a lab. So, what are the insights that in your work at Vow, on getting consumers to do something that is not a usual, traditional behaviour for them?
Pablo Quintero: That’s a great space that we definitely give a lot of importance to here at Vow. And the way that we see it is, its not trying to create a product and trying to force our product into the market. But rather really understand the market, and then create something that market would need or would really want. And here at Vow, we are at a very good position for doing that, because it’s not that we grow something in a tree and whatever that tree gives us, we have to put it outside. It’s more that we can create whatever we want. So in our case, we give a lot of importance to really understanding that customer, to understand if they have pain points in the way that they consume meat today. If they have some unmet needs or we can find some great things about eating meat. And by understanding really, really well that consumer is definitely a way that we see that we can do really, really well. Because then, we will bring those opportunities in-house, and we can create products that could meet those.
Michelle Roberts: So, responding to consumer needs for novelty, and prestige, and experiences that are unique
Pablo Quintero: Absolutely.
Michelle Roberts: I mean, presumably we can’t try a Vow product yet. How long will it be until we can?
Pablo Quintero: So, you can book a flight to Singapore for early next year, which is when we are going to have the legal approval to sell in Singapore. So, that’s going to happen really, really soon. Not only with Vow products, I’m very convinced that changing people’s behaviour is extremely difficult. And more so in something so embedded in our genes, which is food. And it’s particularly meat in Vow’s world. So, for changing behaviour, I think it’s untapping on things that people will need.
And I can give you an example, I forgot the brand now, but there’s a case study of an ice cream brand that they have released ice cream with melatonin, for you to eat it at night and being able to sleep. So, I can see how that group did a customer study understanding what are the issues when eating ice cream. And maybe they tapped into a problem which is, “I don’t like to eat ice cream at night, because all of the sugar makes me awake and I cannot have proper sleep.” So, now we have created a product that can solve that problem. So, I think that is a really smart way for creating new products, and being able to tap into a market. So, it’s really understanding that market, and then creating those products based on that.
Michelle Roberts: I read some research that a trap perhaps, that the healthy food sector falls into, is to describe the functional benefits of the healthy foods. So, if you read any of the packaging for a steak, it’s all about how succulent it is, it’s juicy, it’s mouth-watering, it’s delicious. And if you read Impossible Burgers and v2, if you look at those products, it’s organic, it’s low fat, it’s vegan, and there’s not a lot of hedonic appeal.
Pablo Quintero: Yeah, just to comment on the plant-based products, maybe they cannot go towards those claims, because they’re not there yet. So, they don’t have that taste, they don’t have that texture. It’s really hard. And there are problems that we are facing today at Vow, but we are really convinced that we can overcome them. In our case, we have the vision of creating meat foods in the feature that are cheaper than whatever meats are available today. But also, that are way tastier, that you can choose them over chicken, pork, beef.
And also that gives you a better nutritional value than then actual meat. So, if you have those three things in place, we believe that there’s nothing that would retain some customer to choose our products against what you have today in the market. The way that we market, we will have to see. It will definitely be a lot of trial and error, and see what resonates most with the customer. But we definitely see that with low price, with a really, really tasty products and also better for your health is something that is going to be a win for us.
Michelle Roberts: Shan, any closing thoughts on the role of consumers, what we can all do to contribute to more robust, greener and more equitable food supply?
Shan Pan: Yeah, I think when it comes to food in terms of, we were just talking about adoption in especially some of the new foods that are coming along. And I think it’s always useful to look at our foundational drivers when it comes to food adoption. A couple of things that come to mind, taste, price and convenience. And so, these are the three key foundational drivers. I mean, why do we pick this particular type of food? Because it’s tasty, because it’s affordable, because it’s conveniently available to me. So, I think those are the foundational drivers. But what we are seeing more and more now among the consumers, what is called the evolving drivers are now coming along. Evolving drivers such as health, we’re becoming more conscious about the health aspects of the food that we’re taking, and the amount that we’re taking. And it’s an environmental impact that the particular food of our choice could have.
And the third one would be, which we didn’t really talk a lot about, it’s the animal welfare. So, not having gone through animal testing. So, some of that information and practises are now becoming an important part of motivations. Why are certain products are preferred by our younger consumers? And I think it’s going to take a while, but at the end of the day it’s focusing on segmentation. So, you’re going to have to figure out which particular segment would be most likely to be receptive to health, be health conscious, and environmentally friendly, and taking care of animal welfare and so on. And hopefully over time companies that evolve will tell us what the new marketing message should be, a new business model should be. And over time, just like anything new in our history, there will be a process of understanding, resisting and eventually accepting it.
Pablo Quintero: And to add to that, I think a good lesson that we can learn from the plant-based market that is not doing well at all. And you can see Beyond how their stock has gone 85 per cent down in the past 12 months, it’s because taste and texture is not there. And even though they claim that they’re greener or that it’s plant based, there is something from those fixed drivers that you were saying before, which are taste and texture. So, those are non-negotiable. And if you are not there, whatever comes next is not going to be the main driver for consumers. And the second point there is that being environmentally friendly is now something that the new generations it is a must, it is already a given. So, that is something that brands and food companies, it’s not something that they can differentiate by saying that they are environmentally friendly. It’s already something that you must have, and it’s not something that you can leverage on for. Because, all of their competitors are already there, and you definitely have to have other parameters where you have to be strong at.
Michelle Roberts: And that speaks to different customer segments as well, because that plant-based sector perhaps don’t want a burger, which is maybe where Beyond might want to pivot into some different food lines. But certainly, as a vegetarian, it feels like there’s more and more wonderful plant-based foods coming on the market all of the time.
And so, it’s been a wonderful conversation with lots of insights from you. Pablo, I can tell you, Shan and I will be organising a research trip to Singapore, to be the first to see you go to market with Vow =and as Shan says, there’s a huge growth in young people wanting to eat healthily, and remove animal suffering from food supply chains. So that’s, something we’d all like to see you achieve a lot with.
Pablo Quintero: Definitely, that would be amazing. We just launched this week; our website is called morsel.sg as per Singapore. And there is a waiting list there for trying our new product, which is an Umay Quail, it’s a Japanese type of Quail. And as we say, since now we don’t have to kill animals, we can create meats from whatever species that we want. And this is the first of it.
Narration: Thanks for listening to The Business of Leadership: Disrupting the food chain.
If you want to hear more about the work companies like AgriDigital are doing in the food-tech space; we’ve got an episode for that. Check out The Business of Ethical Leadership episode to hear from the AGSM MBA alumna and CEO and Co-Founder of AgriDigital, Emma Weston, to learn more about how the company is seeking to drive trust and transparency in agricultural supply chains.
You could also listen to Tristan Harris, the co-CEO of Harris Farm Markets, speaking about how the food industry is responding to the sustainable food movement, in our episode, The Business of Food.
Want to learn more about our research and work in the area? There’s plenty more information in the show notes on our website. Just search the-business-of-leadership-podcast online or check out the podcast bio on the platform where you get your podcasts.
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