Why there is more food, more noise, and more competition, and what to do about it
(Based on a talk I gave at the Independent Food and Drink Academy, Leeds, September 2017. I’ve also published this as a Medium Series designed to be read on a phone — if you’re a Medium user, I’d love your feedback: The Plenty Problem (Series))
The biggest driver of change right now is technology. It may not always feel like it, with Trump and Brexit, the economy and the climate.
But while all these things are changing the world at a linear rate, some of them in ways that can be reversed, technology continues to drive change at an exponential rate.
And you can’t un-invent technology (though if Lil’ Kim gets his way, we may be fighting the next World War with sticks and stones).
Technology drives change through one mechanism. It lowers friction.
Technology might just as well be called ‘tools’. What tools do is allow us to achieve a given end with less effort. It doesn’t matter whether that end is predicting the weather, putting a satellite in space, or portioning a chicken. The right tool makes this easier.
Of course once one person has the tools to do things quicker, faster, cheaper or better, everyone else needs them in order to keep up.
It is this competitive imperative that maintains the accelerating effect of technology, whether it’s an arms race between governments or a profit race between corporations.
Or, just us at home keeping up with the Joneses.
Where technology intersects with the other challenges that we all face, at home and at work, it has five distinct effects. I’m not going to talk through all of these today, but I want to pick out two with particular relevance to your businesses.
Diversity, and Performance.
Technology has lowered the friction involved in starting and running a business, to the point where we’ve had record numbers of start-ups in recent years. This might also be driven by the poor state of the employment market but technology is a very large factor.
I do a demonstration in some of my workshops where I get teams around a table to touch all the key sources they need to start a business. In the space of twenty minutes a small team can do almost everything they need to get a business going. Source supply, set up a website, register with companies house, create a marketing campaign.
What’s the one thing they can’t do in that time? Open a bank account. But finally that seems to be changing.
Opportunities and threats
The result of this growing diversity is both opportunity and threat.
Technology means you have access to more suppliers than ever before. There just are more, and they are more connected.
Global suppliers connected by high speed communications networks, shared payment systems, well-worn paths for goods, and common languages. And local suppliers, who previously may only have been found by word of mouth but who now tweet out their wares.
Technology means you have more competition. There’s more information about how to start. More sharing of a culture of food. More access to the information about skills, requirements, and where and how to sell. More competition for premises.
Technology means there’s more channels of communication between you and your customers. But also more noise on those channels.
And this brings me to the second change effect of technology. Information flow.
We all deal with a higher rate of inbound information now than at any point in the past. We are bombarded with multimedia messages across a huge range of channels from the billboard across the street to the little battery powered magic box in our pockets.
You might not be surprised to learn the results of some research I did with Salesforce on the future of retail.
We surveyed seven thousand millennials around the world, and far and away the greatest influence on them is not television or celebrities, but their peers.
This is what creates the environment for recommendations being so powerful but it also inserts a huge amount of distractions into your communications with a potential customer.
Attraction and retention
In short, there’s always somewhere else to eat and always a friend trying to drag them there.
So what do you do about this?
One approach is to keep attracting. Pulling a constant stream of new visitors to your pop-up, stall, restaurant or bar. But increasingly large brands are directing their attention to retention. I recently spent some time with the heads of direct marketing agencies and they were all conscious of their clients investing in the tools of retention: customer experience and customer communication.
Is this a better approach for food start-ups?
The problem with building relationships is that it is expensive. It takes time to build engagement, and at small scale there’s limited opportunity for, or value from, automation. If you’re going to build a relationship, there have to be better returns from it for you than the occasional dinner.
One option is to sell more than food. The early days of any start-up — not least a food or drink start-up — is about building a brand. If your brand appeals there may be all sorts of opportunity to sell beyond your experience. Just look what you can sell by sticking the Frozen sisters on a product.
Perhaps you can become a retailer for your suppliers? Perhaps your brand is strong enough to support your own merchandise?
Circle of influence
The other option is to turn those customers you invest in, into your marketing force. This is something I see a lot as a judge of the UK Social Media Communications awards. The conscious creation of a circle of influence to amplify your message, achieving both attraction and retention.
(Something I don’t see many food start-ups doing is maximising the value of the content they already produce to feed this hungry group of influencers. Not actual food but information and media around it. The kitchen is a rich source of content. Share it.)
When doing this though, you have to be aware of the changing context of the world that your customers live in. And here the news is perhaps more positive.
Macbook. Fixie. Beard.
I’m fond of joking that there is a generation of young men in cities across the UK who own nothing but a Macbook, a fixie, and a beard. You could probably generalise by dropping the beard.
The point is that much of the media clutter of past eras has been eliminated by digital platforms, at the same time as a clear cultural shift from acquisition to experience — as shown in recent ONS stats.
Demand for third space
In parallel with this demand for more experiences, we are seeing people face declining space in their homes. More people are sharing homes, later and later in life. That might be single people or couples sharing houses for longer because of the cost of getting on the property ladder. Or it might be four generations sharing the same home.
I recently contributed to a project on the 4G (four generation) kitchen being run by the National Innovation Centre for Ageing at Newcastle University. There were considerations of safety and accessibility but also design: how do you make a shared space desirable to everyone? Perhaps you can’t.
Of course, we used to have a shared space we could all go to, to get out of the home. It was called the pub. But over time the meaning of the pub has shifted, its role in community declined, and ultimately many of the older pubs that fulfilled this role have closed.
Maybe it’s time for a renaissance?
Desire for the physical
The third contextual trend to consider, is the growing valuation of physical experiences in an increasingly digital world.
There’s no doubting the convenience of digital — it’s very low friction. And hence it consumes the bulk of the market. But the resurgence in vinyl that we have seen, as well as the sustained viability of print books, suggests we still value a tactile experience. In fact, we value it all the more.
And, bar one, there is no more tactile experience than eating.
The best of times, the worst of times
In summary then, you are starting up at perhaps the best moment for a food business. A growing share of household spend goes on eating out. There is a clear focus on experience in popular culture. And a rising appreciation of physical experiences in contrast to the increasingly digital nature of the everyday.
But you also face some of the greatest challenges. More competition. And more noise for you to cut through to reach potential customers. You have access to ‘weapons grade’ marketing tools unavailable to any previous generation. But so does everyone else.