Does Food Economy 4.0 represent new or old thinking?

During my work career, I have been dealing with hundreds of companies as well as their leaders and owners. At times, it has felt a little silly to be lecturing this target group about the basics of doing business, because, actually, they are the ones who should be teaching me. That group of corporate representatives has naturally included plenty of such business genius that it has left me stunned with admiration and taught me a lot as well. On the other hand, there have also been people who are running their everyday operations with admirable perseverance, but who seem to lack a clear picture of what they should be doing and for whom in terms of business.

In other words, what are the customers’ needs and how they should be served? Companies often refer quite easily to how important customers are to them, but if their potential customers themselves do not feel that the company considers them or their needs important, business will not grow. In the changing world, the foresight regarding customer needs is increasingly important.

Let’s look ahead!

In the early years of the 2010s, I was involved in the running of the Future Shop Club. There we got together with the actors in the trade value chain and discussed the transition within the sector and envisioned what it was leading to in the speciality goods trade. There were actors involved who set out to renew their business activities right there and then. However, there was an even larger number of those who said: “We already have an online shop and, therefore, everything is OK.” Perhaps needless to say, but there are very few of the latter group left still running commercial operations today. The changes brought on by digitalisation and changed consumer behaviour in speciality goods trade have been immense.

Basically, the transition in the trade sector has had very little to do with online shopping. Only very few people understood or believed this at the beginning of the 2010s, even though it did not require much prophesying skills to see the change. All that was needed was to raise your gaze from your own feet and look ahead.

Now the food economy is going through a similar change as the speciality goods sector in the early 2010s

The customers used to the new-age speciality goods trade now expect a similar change from the grocery sector as well. On the other hand, the new smart production and smart logistics practices that are revolutionising the manufacturing industry offer the food industry and its value chain models on how to organise themselves in a new manner that would serve both the consumers and the environment.

VTT’s new Food Economy 4.0 vision of an era of smart consumer-centric food production provides three change paths, which we are actually already taking:

  1. from mass production to personalised solutions
  2. from centralised to agile manufacturing and distribution
  3. from horizontal to vertical food production.

Does Food Economy 4.0 represent a totally new kind of thinking? The answer is no. The consumer-centrism of Food Economy 4.0 means genuine and active dialogue between consumers and trade or consumers and producers.

I myself have grown up on a farm. Therefore, as a child I saw close up how my parents were engaged in genuine social dialogue with the customers of the farm, taking their individual needs into account in production. Then society changed, and cost-efficiency pressures got the upper hand. The interaction between consumer-customers and the operators in the food chain waned away.

In Food Economy 4.0, the interaction is revived again – this time, assisted by digitalisation

The commercial way of thinking about the importance of genuinely catering for the customers and their individual needs dates back centuries. Digitalisation just offers a new way of implementing this better and in a larger scale than has ever been possible before.

The change towards smart and consumer-centric food production is already under way. To see that, all you need to do is raise your gaze from your own feet and look ahead.

The new era means significant changes in the food chain and its business models (see Food Economy 4.0 vision for examples). The basics of business operations – what?, for whom? and why? – will remain unchanged even though the methods – how? – changes. Maybe it is still necessary to remind people about the basics after all.

Jaakko Paasi VTT

Jaakko Paasi
Principal Scientist
Business, Innovations and Foresight

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