‘The food industry is just realising it needs to reinvent itself’: ShakeUp Factory challenges companies to face up to disruption
“We’ve been used to growing, transforming, packaging, distributing, selling, eating the same kind of food the same way for over 50 years… it’s over now.”
That’s the provoking statement from Kevin Camphuis, the debonair co-founder of ShakeUp Factory, an accelerator and venture capital firm for disrupting tech start-ups, with a focus on food and beverage.
The organisation has more than one string to its bow. Its role includes providing support to budding entrepreneurs to become food market leaders. It also assists larger organisations to collaborate on projects with nimble-witted start-ups so they can make breakthrough innovations that, in Camphuis' words, "they don't know how to do".
“Since we started at ShakeUp Factory we've welcomed about 50 start-ups,” Camphuis, who spent over 20 years in corporate strategic marketing before co-founding ShakeUp Factory in 2016, told FoodNavigator. “Some have raised up to €100m. We've also been able to offer our support to over 40 brands, food brands and retailers because they know this is where they can turn their need to innovate into a real project. So the purpose of what we do is not only to help start-ups and connect them with business opportunities but to make collaboration happen.”
ShakeUp Factory is based in the world’s biggest start-up campus: Station F, located in a 35,000 square meter building in Paris’s chic and artistic Left Bank. It is currently home to more than 25 acceleration programmes, supporting over 1,000 start-ups, all sitting altogether under the same roof.
"It's a nuclear reactor for innovation", enthused the Frenchman. “Everybody wants to come here and see what's happening, and you sense the energy that is here… any forward-thinking guy who wants to come here will come to innovate.”
Connecting Food, which uses blockchain technology to provide transparency in the food chain, is one ShakeUp Factory alma mater of note.
“When they started two years ago they were two guys, now they’re 25. They’ve been getting more than 20 projects over the past two years from international partners - this is thanks to them to them being here.”
ShakeUp Factory is also the partner in Europe for SnackFutures, Mondelēz International's innovation hub that is dedicated to unlocking emerging snacking opportunities around the world.
“Last year they came to us saying ‘we know we can't make the difference until we adopt new ways of thinking about innovation - we are too big, too slow, too processed... there is too much legal.’”
Mondelēz gave ShakeUp a loose brief to discover what kind of product it should make in order to meet the expectations of the target market, in this case: millennials. Interestingly, and demonstrative of ShakeUp’s creative ethos, it consequently embraced – not traditional market research and focus groups – but anthropological studies in order to understand what young consumers were looking for in a snacking product.
The anthropological studies involved observing a group of 25-30 millennials with “forward thinking habits" in-home and via interviews. “We go to them; we watch them; we film them; and we challenge them. This expertise is truly beneficial," according to Camphuis.
The result was the formulation, after a one year, of "the first ever snack that is zero carbon, 99% organic, 80% local ingredients, low processed, clean label, no additives and no substitutes".
‘The food industry needs to embrace disruption’
The expectations of younger consumers forms the thrust of why Camphuis believes the food industry must embrace disruption. The food industry is just starting experiencing a 2-tier disruption, he contends, featuring new generations of consumers with radically different expectations, combined with an unprecedented revolution of new technologies.
Start-ups are at the forefront of food innovation and will drive the disruption of the food industry. Meanwhile, big businesses need to embrace collaboration and utilise the start-up mentality to launch better products.
“The food industry has been making and growing ingredients, turning them into products, packaging them and selling them the same way for 50 years,” noted Campuis.
Now, new companies are on the scene with novel approaches in terms of the way they do and manage innovation. They have novel ingredients, processes, and are addressing novel claims and expectations like sustainability or health. Companies such as Beyond Meat, Oatly and White Wave Foods (now owned by Danone) have invented “new categories that the food industry couldn't invent… these guys paved the path for new categories that the food industry couldn't make because they were stuck to their traditional processes, ingredients, and ways of doing innovation.
"The food industry is just realising that it needs to reinvent itself,” he continued. Too often, he laments, "they don't understand what is truly new and what's about to disrupt themselves."
Mutual benefits
The solution for big companies? Collaboration. “Our role is to help them restructure their innovation organisation to really be open for collaboration with peers and third parties. We can help food companies connect and make experimentations and then make new development of services or products with newcomers.”
That’s not as easy as it sounds, however. Innovation is particularly hard for larger multinationals “because it means changing what they’ve been doing for 50 years”. It might be compared to turning round an oil tanker. Their challenge, he expands, is to realise "they are not in charge and leading the project and that they need to give responsibility to a third party”.
For example, Camphuis recounts sitting in a room with a well-known international brand for three days so they "could totally understand that before working with a start-up they had to totally reconfigure the way they were doing innovation".
“The advantage we have as an open innovation hub is that we have the capability to put every actor around the table and to have them work together.”
2019: the year of sustainability
Last year was “the year of sustainability”, believes Camphuis: a fact that again illustrates the challenge facing the food industry.
"2019 saw a radical shift in terms of understanding how sustainability issues have to be on top of any of the consumer expectations. This one is one of the most challenging for the food industry because the answer to that can only be systemic or holistic.”
It’s also a challenge no one brand or retailer can address alone. Solutions will involve all parties within the value chain. “This is where there will be a fundamental transformation of the food system in the five years and it really will disrupt the industry like never before.”
He continued: “How do we manage to deliver water on-the-go if people don't want plastic anymore? How do you manage to make plant-based solutions that are truly sustainable and unprocessed? How do we find more clean label and GM-free solutions? This challenge is enormous and means everyone in the food chain needs to change practices.
“A growing number of consumers understand that processed foods have an impact on health, that additives maybe effecting wellness, and that microplastics aren’t good. This trend is truly pushed by younger generations - they are connected, they are digital, they are online every day.”
As a consequence, the food industry needs to adapt to a shift away from traditional diets in Europe (once spit between ‘Latin’ and ‘Anglo Saxon’ eating habits). "For the first time ever, we'll probably have a universal language around food.”
You better be ready.
