Disruption in the Food industry - It’s not just about technology!

FBT and Customer Loyalty Programs For Food and Hospitality Businesses

Disruption in the Food industry - It’s not just about technology!


With the Fourth Industrial Revolution (as some are calling it) at our door – disruption is the key word in the modern age. The concept of disruption has been a core philosophy of the tech industry, and has led to transformation in various industries such as communication, entertainment, and finance.

Our clients in the food industry are not immune from disruptive forces. In this update we explore some of the key factors affecting the food industry and how food service providers are responding.

The difference is in the food industry it is not just about technology, there are four other disruptors at play.


After decades of passively accepting the food industry’s offerings without a high degree of public scrutiny, consumers are now increasingly demanding change. This emerging generation of 18 to 30 somethings want to make their own choices and not be fed a processed message. These Millennials want to see credibility and authenticity and demand that there is transparency in the way food producers label their products.

They are prepared to pay top dollar for food (either in restaurants or shops) but don’t expect a top seller to be a top seller for too long – they are a fickle bunch – meaning the food industry needs to stay on its toes. Food service providers need to become trusted advisors and suppliers of new products and adventurous food experiences. And be willing to adapt their offering!

Changing Demographics of Sydney and Australia

There is an increasing sentiment that you can’t dictate what people eat, but you can make sure consumers are very clear on what they are putting into their bodies. The latest census figures confirmed that the major growth in population in cities (especially Sydney) is from Asian countries. As the population changes there will be a corresponding change in food habits.

Asia is also one of the largest market potentials for Australian food distributors. In our recent ESV Food and Hospitality Roundtable, we heard Tim Harcourt, chief economist, author and host of the television series ‘The Airport Economist’ discuss how the Australian exportation of goods and services is now largely dominated by China. This will certainly affect how food and hospitality evolve both locally and internationally. The Australian food industry has the potential to capitalise on this increasing demand from Asia thanks to the reputation of quality among our local products.

In America, the larger corporations have a well thought out Latino strategy to capture that market- how many Australian companies have a well thought out Asian strategy? Have you got yours?


As technology changes at a rate of knots, so too does the global cultural shift towards a desire to live more healthily and for governments to be increasingly focused on having healthy and productive citizens. With some saying Australia faces an obesity epidemic, food businesses will continue to face demands for healthier options. There are already loud calls for governments to continue to respond and introduce new regulations and taxes, such as a call for “sugar and fat taxes." Food providers would do well to keep up with this issue and continue to explore healthier options.


With the recent proposed purchase of Whole Foods, Amazon will well and truly be in the Food industry faster than the experts initially thought. Nobody knows where they will end up but it will be a bumpy and exciting ride and one which we will be watching with interest. Initial thoughts are that Amazon’s arrival could put downward pressure on farmers and packaged good manufacturers. One thing for sure is that its purchase of Whole Foods signals its confidence in the organic and natural foods space, which is obviously a growing segment for a number of ESV clients.



Consumers are also shopping with their smartphones and have a wealth of information available about the food they buy and can now make smarter choices on the spot.

There is a trend that over time will result in the production of food becoming more automated and technology increasingly replacing human labour. Automated food manufacturing will enable consumers to more easily personalise their food and incorporate their personal and health preferences – it is already happening.

The one thing that is clear is that change is upon us. The food industry is being disrupted, and during a period of disruption the one thing food retailers can ill afford to do is nothing. Do not be scared of disruption – embrace it – it may well lead to the creation of new and more profitable revenue streams.

Not all ideas will be successful. However, if food businesses do not react to these trends, then their established brands could soon be rendered unviable, disrupted by new ideas designed to serve up the ever-evolving consumer with taste and choice that suits their needs.

Should you have any questions in relation to disruption in the food industry, please contact us or speak to your ESV engagement partner on 02 9283 1666.