FoodTech Trends: How to Stay Afloat While Everyone Is Sinking

Dark stores, drones, and contactless sales were the mainstream of 2020. It looked like the new era of FoodTech had really begun, and entrepreneurs were looking for more effective business models.

Maxim Bontsevich, CEO of the dev.family Development Studio, which specializes in grocery e-commerce projects, mobile and business automation in food tech, talks about how information technology has changed our diet and what trends we need to watch out for now in order to survive.

Time Saving

This trend can be illustrated by the YPA startup we work with. The app allows you to save time by pre-ordering food at fast-food outlets. You can use it in restaurants and cafes to choose a dish based on reviews and recommendations and order it without a waiter.

Another example is our online table reservation platform. It is nothing like ‘leave your number, and we’ll get back to you’. You go to the website, see in real time what tables are available, make a reservation, leave a pre-order, and come back at the right time.

YPA required integrations with all popular terminals in Belarus. Online table reservation is a special software for waiters’ tablets. It generates a huge amount of analytics with the use of which you can get to know your audience better and make personalized offers.

However, saving time in FoodTech is not just about eating out, it is also about cooking, shopping, and drawing up menus. That is how grocery delivery services with recipes, groceries without recipes, ready-made restaurant dinners and meals came about. During the pandemic, their popularity increased greatly, as did the number of offerings. So those who want to catch the last train should seriously consider the service.

Healthy Lifestyle

I have noticed that today the companies that offer weekly meal plans stay as far away from fast food as possible. Fixed calories, vegan or keto meals are all aimed at the middle+ segment who are willing to spend money on health but are not willing to spend time on cooking. They were the ones who diligently downloaded apps during the pandemic and said they would continue to use them after the pandemic.

Healthy lifestyle is also about various healthy substitutes: green salt, artificial meat, food additives, superfoods. Their number is growing every day.

Environmental Friendliness

Society’s environmental concerns have had an impact on FoodTech. Consumers increasingly prefer recyclable packaging.

Thanks to IT, it is possible to find out how much plastic each user of a food delivery app saves, and then calculate how much it will cost to get rid of such dishes. On the other hand, you can offer recycling, as Local Kitchen does.

Another chapter in the sustainability story is the use of scooters and bicycles in delivery instead of cars, which have become an everyday part of life.

Personalization

Personalized discount offers work better than Black Friday. Transfer the discount card to the app and review the customers’ purchases so you can make personalized promotional offers.

Another level of personalization is demonstrated by startups that develop products at the intersection of nutrition and medicine. For example, you take an online rapid health test to determine your genetic predisposition to diseases. Based on these results, they can develop menus for you to control your diet with a personalized nutrition plan.

Reducing Costs

Uberization, a digital transformation of the industry in which the intermediary between buyer and seller disappears, is considered the guiding principle here. It is replaced by online platforms. Uberization saves on organizing logistics and marketing budgets. For the FoodTech industry, these are all kinds of restaurant aggregators.

The next way to reduce costs are vertical farms, a set of modular structures with shelves for growing plants. They are connected to the cloud and fully controlled by software and remote specialists.

The modules can be installed directly in supermarkets, restaurants, or warehouses. This optimizes the cost of growing fresh herbs, berries, and vegetables, their distribution, simplifies logistics and levels out product spoilage.

One InFarm (vertical farm) replaces 250 m² of classic fields, requiring 95% less water, 75% less fertilizer, and no pesticides.

Click&Collect systems (networks of pickup points and parcel stations, where everything is based on Scan&Go technology, i.e. without a salesperson) are another way to reduce costs.

The most successful foodtech project of this kind, Briskly, has introduced contactless payment without a salesperson in Azbuka Vkusa stores, five in Moscow and seven in St. Petersburg. The app allows making purchases three times faster and has increased revenue by 15% in three months. At the time of launch its price was estimated at $10,000, and after attracting $370,000 of investment, its price rose to $10 million.

How a business can do its own market research

Micromarkets and take-and-go stores are appearing in residential buildings. They work through the B-Pay app, to which the card is added. If you want to buy something, you just scan the bar code with your phone camera and leave with the goods. The protection against robbery in such stores is provided by the neural network in the video surveillance system.

Decentralization

The global trend toward decentralization has led to a desire to organize purchases from local producers in order to optimize logistics costs. For example, Yandex.Lavka has not only fulfilled the need to get fresh food as quickly as if you went to the store yourself, but has also allowed local brands to display their products and even promote them in the app.

Integrations

Earlier I mentioned the integration of the app and terminals such as R-keeper in restaurants. We set up the integration of terminals with a personal account for the Japanese restaurant Ronin. After that, the number of online orders went up to 80–90% even before the pandemic.

By eliminating emails, CRM, and other unnecessary tools we saved time for the client and got rid of human error. And with the help of clever algorithms we increased the average check.

Super App

This is about an ecosystem in which several functions are combined at once. The pioneer here is Gojek, an app which was originally a call center for courier delivery and motor cabs, and then expanded with the services GoRide, GoSend, GoShop, and GoFood. Today Gojek combines about 18 services on its platform. Then WeChat appeared, and it allowed to order groceries, get a cab, and watch movies at home during the pandemic. In the United States, the most famous super app is Uber, which introduces Uber.Eats and Uber.Wallet after the cab service.

What to Do and How Much It Costs?

Services in the FoodTech category entered the Top 3 downloads during the pandemic and took first place, gaining all-time highs of 36%. Do you know what it means? We need to act as quickly as possible. Here is a rough order of magnitude for the basic features that will keep your business running during the ongoing pandemic.

Let’s consider a system that will consist of a website, iOS & Android mobile apps, and a server part, where all the logic rolls around, and all the data is stored. You wanted to make it more modern, based on the trends.

You do not need a simple delivery website where customers can order food with payment online, but also a personal account, automated processes with the kitchen, customized integration with the terminal, an expanded customer base with analytics, and everything synchronized with the app. This will cost about $30,000.

A delivery aggregator or marketplace in the food industry with all the integrations will cost $40,000+.

Or, if you want to make online table reservations in your restaurant, then you need a website, internal accounting and reservation management software. This will cost about $40,000.

How to Reach the Maximum

In 2022 foodtech investment reached $9.2 billion, down 16% year on year. Investment into foodtech startups grew fastest in India, while the US, Europe & China contracted..All in all, the companies closed 331 deals worth $8.6 billion. Do you want at least a slice of those billions? Then:

1. Automate your processes. This will take some of the burden off employees and improve logistics.
2. Think through your investments. The cost of robots can exceed the potential benefit, so consider your company’s budget.
3. Tracking shipments will reduce losses related to logistics. Collecting plastic for recycling will provide a return on investment.
4. Implement contactless shipping and payment.

But most importantly, stop thinking that you can simply repeat someone else’s experience. You have to be proactive. While you are waiting, the coffee shop next door will quickly grow into a high-tech franchise, and you will be back at the bottom of the ladder. Act before it is too late.