EY + Endeavor NWA | Industry Event Recap
Rob Dongoski, EY’s Agribusiness Leader, hosted an intimate, interactive session with a small group of high-growth Endeavor Entrepreneurs to discuss the future of food and farming through trends in supply chain and consumer behavior. We’re sharing a few insights from the q+a session hosted at the event.
If you’re interested in learning more about exclusive events for Endeavor Entrepreneurs, reach out to our team.
What future trends will we see in food delivery and pick-up with consumers?
The rise of ghost kitchens is here to stay. Fine dining has been hit the hardest with a decrease in consumption by 85%-90% in the category. In regards to QSRs/fast-casuals, delivery solutions is a business model discussion worth exploring. For companies looking to maintain their brand during deliveries, they may opt-out of trusting “all-delivery services” such as UberEats, Waitr, etc. We could see some of these companies establish their own delivery services.
Do you have any forecast on acceptance with 3D printing food? What are the biggest hurdles in human consumption?
It is a novel food category, and I believe that consumers will drive the conversation. We have to be transparent with people about where their food comes from. If it’s 3D printed, we have to make the decision if it’s worth exposing to a consumer as they make the purchase decision. Similarly, if I want organic produce (lettuce, tomato, etc.), do I care whether they are grown inside a building that has never seen the sun? Or do I need to know that the produce is grown outside? As a consumer, am I obligated to know that information? I think we are moving into an era of more transparency.
Animal proteins vs. plant-based: Is there any new innovation in the way that cattle are being raised from a sustainability perspective that will be better for the environment or do you think that long-term animal proteins will fade away?
When I analyze plant-based proteins in the market today, they have a lot of visibility. The cynic could argue that it is less healthy to eat plant-based proteins by asking, which plants are they and what’s the nutrient content? If you look at the nutritional value of a plant-based protein vs. its traditional counterpart, fats, carbs, and proteins are similar but the sodium levels are three to four times higher in plant-based proteins. Some of the models need to be challenged, and I think they will continue to improve and get better. However, I do think animal agriculture and plant-based protein agriculture will coexist. Animal agriculture has to become more efficient and sustainable. Water usage, gas, are all needing evaluation. I am seeing innovations around wastewater and how it is converted to potable and usable water. I would expect to see innovation continue on the animal protein side. In fact, we have to see it.
Has there been anywhere particularly that you’re seeing long-term hybrid crop development having big bets placed? Do you see major shifts in investments?
One of the challenges with getting seed hybrids to market is 10 years and 1M dollars. Some of that is inherent for plant growth. My intuition as a non-scientist, we’re seeing innovations happen in lots of crops: wheat, rice, lentils, etc. Some will say that will see a rise of innovation in the cannabis plant, dissecting the medicinal and real value areas of cannabis. The investments are still weighted heavily in traditional and as we think about some of the more novel science, I’m hopeful that we will see an increase of investment in other categories.
Do you currently see the trend of companies offering fewer choices in regards to SKUs, what does that mean for the number of products that consumers see on shelves?
During Covid, we saw massive SKU rationalization. We saw 50-70% fewer SKUs being brought to the market and it’s forced a lot of the big brand companies to say “What SKUs really matter for us?” Naturally, I think we will be seeing less choice from that. When we transition into “dark store” formats, does brand matter, or is it more about availability? However, on the fresh food side of the store, we might see an increase in brand mattering more than availability.
How will people overcome their fear of biotech? For example, GMOs, farm and seafood cultured meats, etc.
Science and marketing are at odds right now and today, marketing trumps science. If a consumer reads a study typically it’s funded by an association or company that creates suspicion with the consumers. The consumer sentiment becomes a really interesting thing to watch that we can’t macro segment anymore.
What kind of transparency do you think we will see from the larger agricultural conglomerates?
It’s not an option. We have to prioritize more transparency in the food system or consumers will reject it. The challenge continues to be, telling the story the right way. Transparency has to move forward, and in order to put a label on a package claiming that this food is “sustainable”, it’s not just the food that you purchased. It’s the package, transportation, and sourcing as well. The transparency question is not one single company transparency, as much as it becomes a full system of transparency in order to provide consumers with what they want. Lastly, you see two populations that emerge (1) those who care about transparency and sustainability and who can afford it, and then those who don’t care about it or can’t afford it. In the short term, we will see affordability be a factor.
About Rob Dongoski
As a partner with EY for the last 20 years, Rob has served clients in the Food and Agribusiness sector, working with a number of Fortune 500, Global 1000 and private companies in various capacities. Rob has assisted clients in developing their growth strategy, innovated their business model, completed buy-side and sell-side transactions and led significant enterprise transactions. As the founder of EY’s Global Agribusiness Center, he has led EY professionals in all regions of the world to serve their Agribusiness clients. Rob holds an MS in Agricultural Economics from Purdue University, MBA from Indiana University and a BS in Accounting from Millikin University.