On Friday I was on an interesting Center for Food Integrity webinar entitled, “CFI NOW: 2020 Epiphanies & Our Crystal Ball,” during which Kevin Ryan, founder of Malachite Strategy and Research, teased what he called "The Coming Food Industry Shake-up."

In addition, I recently read former Meatingplace blogger Janette Barnard’s Prime Future e-newsletter where she discusses when Amazon might jump in further to the supply chain similar to Walmart with their its bottling plant and Costco with its chicken operation. These two pieces of information led me to this blog and the question: Is 2021 the convergence of food retail, restaurant and CPG?

Pre-Covid we had already seen what I’ll call Wave 1 and 2 of the convergence of food retail, restaurant and CPG (consumer packaged goods), and in 2021 I think we’ll see the culmination of this melding of industries in even more new and different ways.

Wave 1 – I would describe Wave 1 as my early working career, 2010-2015, which saw the rise of natural, organic and private label foods taking center stage. We had already seen throughout this time period that grocery retail was starting to innovate on their own in the absence of CPG innovation. Private label foods grew tremendously with retailer brands like Kirkland Signature from Costco or Simply Balanced from Target (now Good & Gather is their primary food & beverage private label brand). There started to be a slight pivot from CPG to get into this innovation cycle through acquisition of brands like Annie’s by General Mills in 2014 and Enjoy Life Foods by Mondeléz in 2015.

Wave 2 – is post-2015, and I would describe it as the rise of grocerants and acquisition of meal delivery kit makers. It’s marked by landmark acquisitions like Plated by Albertson’s and Home Chef by Kroger as well as the merger of Amazon and Whole Foods. We also saw influential regionals like H-E-B and Hy-Vee bring in more restaurants to their grocery stores with Hy-Vee’s build-out of its Market Grille concept and then its partnership to put the Wahlburgers restaurant chain into some stores.

Now, accelerated by COVID and the downturn of restaurants — combined with consumers' desire for convenience and them becoming more accustomed to subscription models that bring products straight to their door — I think we’re going to enter Wave 3 or the convergence. In the meat industry I could see this as more direct-to-consumer specialty models similar to ButcherBox; as more brand promotion of heritage breeds exclusively offered through select retailers; or perhaps meat companies getting into the ghost kitchen game by creating their own restaurant brands focused around their meat products and getting those products out direct-to-consumers through that channel. The latter might be a natural strategic fit for some of the meat industry’s giants as they already have robust recipe collections and corporate chefs on staff that could focus on menu development.

During the pandemic, I firsthand saw smaller brands like my cousin’s Chicago foodservice brand, "How Bao Dat?," go from a 2019 pop-up brick and mortar restaurant to a 2020 fully digital pick-up/delivery restaurant operating from a ghost kitchen. As we come out of the pandemic in 2021, I think the meat industry will need to iterate and quickly figure out its place and how to play everywhere in this new blurred marketplace.

Wishing you all a happy, healthy and safe holiday season!

2021: The Convergence?

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