FI April 20, 2017

FOOD COMPANIES ACQUIRE TECHNOLOGY

The food and beverage industry is increasing its investment in technology through acquisitions, according to Hasti Afsarifard at the Plug and Play Tech Center. Afsarifard says food processors spend around 0.8% of revenue on R&D and beverage companies about 0.3%. By comparison, pharmaceutical companies spend up to 20%, and most tech companies will spend around 10%. To keep up with tech, food companies are buying. There were over 600 acquisitions in the industry in 2016. The most active sectors were soft drinks with 74 acquisitions, packaging with 64, dairy with 58, and ingredients with 51. Alcoholic beverages also had highly active sections with 49 acquisitions in wine, 41 in spirits, and 37 in beer.

DIGITAL CURRENCY

Coinbase, a pioneer in the world of digital currency, has just launched a beta version of Token, a new tool which allows consumers to purchase food and other goods using an app on their smart phone. Digital currencies like Bitcoin and Ethereum bypass traditional banks and credit card companies and promise to lower the cost of financial transactions. Token is a mobile browser for Ethereum apps and includes a messenger and an Ethereum wallet. Digital payment systems are growing rapidly in China on mobile platforms such as WeChat. Token promises to make them popular in the US soon too.

RUSSIAN FAST FOOD

One of Russia’s largest fast-food chains, Teremok, is trying it's hand in the US, selling its unique style of fast-casual Russian cuisine to the masses in Manhattan. from two locations in Union  Square and Chelsea. Their unique fare includes bliny, borsch, and buckwheat kasha. The chain’s founder, Mikhail Goncharov, told New Yorker magazine they had come to the US because it was "the motherland of fast food.”

THE DEATH OF BOTTLED WATER?

Researchers at UC Berkeley and MIT have developed a portable device to create water from air. The device uses a special material combining zirconium and adipic acid to collect water molecules from the air at night and uses a condenser to release the water during the day. It can produce nearly three liters of water over 12 hours for every kilogram of the zirconium-acid material. But don't expect it to replace bottled water soon. The cost of high cost zirconium is a big barrier to scaling. Researchers are testing with lower-cost aluminum, but it's still early days.

BURGER KING AD:  DUMB OR SMART?

Burger King's sly attempt to hijack voice-activated speakers in a TV viewer's home got them a lot of publicity, but also a backlash from consumers. The short ad (watch here) had an actor saying, “OK, Google, what is the Whopper burger?” to try and trigger a nearby Google Home device to describe a Whopper from a Wikipedia entry. Problem is Wikipedia entries can be edited by anyone and the ad quickly prompted many inappropriate edits. The ad also drew a lot of negative comments from consumers miffed at having their home devices hijacked by an advertiser. 

DEAL OF THE WEEK

PetSmart is paying $3.5 billion for Chewy, a Florida-based online retailer - the largest e-commerce deal to date, in fact. More evidence that bricks-and-mortar retailers need to write very large checks to gain quick access to a digital customer base.  Chewy built a $880 million/year online business in part by paying close attention to customers. A lesson to online wannabe's in the human food business. 

MEAL DELIVERY WARS IN SAN DIEGO

Fierce competition has developed between meal delivery services in the San Diego area. The war is being fueled by the aggressive tactics of Uber’s food-ordering app, UberEats, according to the San Diego Tribune. As Eats pushes into the city's outlying suburbs such as Chula Vista, Poway, and National City, rivals such as DoorDash, Postmates, and GrubHub must follow. Uber's deep pockets may win out, however. Since arriving in June 2016, it has expanded coverage to an estimated 97 percent of the county’s population, or more than 3 million people. “On-demand food delivery is a notoriously low margin business, so a lot of these startups are trying to go for economies of scale to achieve profitability,” Zoe Leavitt, consumer tech analyst at CB Insights told the Tribune. The real question is how many cities can these start-ups afford to blanket before they run out of cash.

SUGAR IN FOOD

A German consumer interest group Verbraucherzentrale Hamburg is making the case for better information on sugar content in foods through visualizations such as the one below for Nutella. Their work follows in the footsteps of the BBC's revealing 2015 documentary The Truth About Sugar.

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