THE CHALLENGES OF FOOD AS A COMMODITY
But Zvereff, who is a Peace Corps alum, believes their success has also stemmed largely from sensitivity to the culture surrounding the food industry as well as how personal food innately is. “Food is part of what defines a culture,” believes Zvereff. “If you’re not sensitive to these things, you can have certainty that you’ll be out of business soon. It’s a very sensitive industry. People are very particular about their food and they’ve always been that way. Anyone who wants to commoditize or standardize across the industry, if they do it without sensitivity, you can count on them falling out of business.”
And for aspiring (or current) food entrepreneurs, Zvereff has a word of advice and caution.
“You can raise a lot of money and subsidize an inefficient system, but that’s not going to last,” Zvereff says of some food delivery platforms. “People like Munchery and Blue Apron that have distribution centers can really drive those economics, those are the ones that are going to make it. If you have someone driving one trip to a restaurant and one trip to a house, it’s going to be very difficult to make money off of that–no matter how aggressive fundraising efforts are.”
THE MILLENNIAL FOOD CALL
Eve Turow Paul, the author of A Taste of Generation Yum, also has some ideas about why food and agriculture related ventures are surging–and why she doesn’t think food delivery startups will all last. “I’m a little confused by food delivery,” admits Paul. “I think it offers a level of convenience that people are always going to want. But I do think that food delivery systems in places like San Francisco are being over-invested in.”
Paul’s book sets out to answer why the Millennial generation seems to be so obsessed with food. After years of researching the question, Paul concludes the obsession is a direct result and response to a generation that grew up in a digital landscape. Specifically, Paul says, food serves the four areas of sensory depravation from screen time, the compulsion of self-branding, taking control of something in their lives and experiencing community.
“Millennials are on their phones more than any other generation except when it comes to eating,” concedes Paul. “We are more likely to be on our phones during religious services, while driving, in bed, in the bathroom. But when it comes to eating, we are less likely to be on our phones than Gen Xers and Boomers. We’re using this time with food to connect with one another and connect with our ingredients and to take a step away.”
‘THE CORE REASONS WHY WE ARE ENGAGING WITH FOOD ARE NOT SATISFIED BY FOOD DELIVERY SYSTEMS’
And that step away doesn’t mean keeping Postmates on speed-dial.
“The core reasons why we are engaging with food are not satisfied by food delivery systems,” believes Paul. “The core reasons why we are engaging with food can be amplified through more nutritious food, through more organic foods, through community agriculture programs, through in-home agriculture products. And I think there’s an immensely interesting future for food in the United States and I don’t think that Postmates is really it.”
Instead, Paul says, the world needs smart and thoughtful approaches to improving the many avenues for food growth and consumption in the world.
“There’s so much improvement to be made,” explains Paul. “Everything you know about successful startups is they are serving some gap in the system. There’s an opportunity to do something better. To make a process easier. To make something more efficient. To be delivering something people want and need that they don’t even know they want and need.”
And Paul believes successful and failed startups alike can make improvements. “I don’t know that you can come up with one solution to fix the food system and that’s where you need startups to do some brainstorming and experimenting and to get these investments and see what works and what doesn’t work.”
AN OVERWORKED GENERATION AND WASTEFUL GROCERY SYSTEM?
In a follow-up email to Poets&Quants, Paul explained she believes the amount of money and energy going into food delivery is a sign of “two very different things.” First, she believes people are working too much and secondly, there’s an inefficiency in the grocery system that is one of the last areas in food to be disrupted.
“This is a generation that graduated into the recession, when many companies learned that they could survive with less employees who simply worked more,” Paul wrote. “At the same time, a mentality in Silicon Valley arose that it was perfectly acceptable to work 80 hours a week. Mix this with the Millennial love for good eating and it’s a no brainer that people will want gourmet quinoa bowls to eat at their desk, since they really don’t have the time to go out and meet with friends.”
But, according to Paul, there could be vast opportunity in grocery. Paul describes the current grocery system as “incredibly wasteful” and “inefficient.” Paul says companies like AmazonFresh are “just the tip of the iceberg in terms of re-thinking the way we produce, distribute and sell our groceries.”
OPPORTUNITIES AND IMPROVEMENTS CONTINUE TO GROW
Paul’s definitely not alone in being skeptical of food delivery.
“They’re not instantly sustainable businesses,” Columbia’s Ponzo says of food delivery companies. “You have to grow a local customer base. Food is a multi-sense experience, it’s not just clicking on a computer. It’s a rich experience for consumers to have and there are a lot of variables going into if your brand is a good one or not. It’s not like a website where you can flip a switch and have a million customers.”
Ponzo and Rosenzweig mirror Turow’s beliefs on this generation of MBA student and foodie. “This generation of B-school students want to do something both good for the bottom line and good for the general population,” claims Ponzo. “Food startups are a shining light on the traditional value while making an impact on the world.”
The improving–or simply sustaining–the world and how humans consume food is a interesting and increasingly complex issue, believes Rosenzweig.
“Today people are really interested in working on food problems because they see the magnitude—with the growing global population—great disparity across the world in the links between food and health and food and sustainability are all very rich with both challenges and opportunities,” says Rosenzweig.
Indeed, the possibilities continue to seem immense, and business students are poised to pioneer the innovations.
“Now, food is not just what you go out and eat. It’s environment. It’s politics,” says Paul. “And in a lot of ways, it’s so exciting that some of these young business students could go out and make an incredible impact, not just in their communities, but globally, through some small or big invention they come up with. There’s an opportunity to re-imagine what food looks like. From how to source to how to grow to how to consume.”
TOP MBA STARTUPS: THE SERIES