Disruptive is the hottest buzzword in business. Veering out of leftfield, shaking up the established order, a disruptive business is innovative and clever. And grocery is a hive of disruptive activity. As well as giants like Amazon, smaller players are also making intriguing moves. So who are some of the best?
Blue skies at Glasto? Pigs might fly…
It’s lazy, hazy Glastonbury, and you’re lying on the grass staring up at the azure sky. It’s hot, so you need a drink, but you don’t feel like queuing. The solution? Fire up your smartphone and have a drone carrying a flying pig hover a chilled bottle of delicious cider to your GPS location, obviously. “That is the dream,” says founder Andrew Quinlan, who started producing cider from a small orchard near Glastonbury in 2004. “We’ve just started playing around with drones, and we’ve tested them and it works, but the current regulations mean we haven’t been able to take it any further. But there are all sorts of things to look at in the meantime. For instance we are about to launch a can because it’s lighter. Our existing drones could carry eight cans versus five bottles. So even if the drone is not a very serious thing right now, if we could turn it into a serious thing what could be better?”
Don’t want to waste perfectly good food? There’s an app for that…
Facebook and Spotify are disruptive alumni. And Accel, a venture capital firm that was an early investor in both, has done the same with Olio, a food-sharing app that attempts to positively disrupt food waste. Accel invested £1m in Olio just before Christmas. And Olio, which launched last summer in four London postcodes, has since launched across London and in Bristol and Brighton. From food nearing its expiration date in a grocery store to sausages from a household fridge, users upload a picture of the surplus food to the app, which is then collected from their home or another specified location by someone who wants it. Or they can drop it into an Olio drop-box in local stores. Olio has more than 35,000 users and has been used to swap food thousands of times so far.
Allowing small grocery businesses to catch up with the big boys, quickly
Gokart is a smartphone app that connects indie retailers and wholesalers. “I’m a born and bred retailer, my surname is Patel, I worked in my dad’s shop growing up, ran my own store for 10 years, then I worked for Nisa,” says founder Anx Patel. “In retail it’s hard to manage thousands of different products from different wholesalers using different systems. And you’re time-poor, working long hours, dealing with customers. So I wanted to free up time.” He also knew that wholesalers faced similar challenges. “They are time-poor too, margins are dwindling, costs are going up. And both sectors still rely heavily on pre-digital technology. We still go into wholesalers where they have a bank of 10 fax machines, and they all need a supply of paper, ink, and legible handwriting, and there are so many dialects that things get lost in translation. It’s hugely inefficient.” Patel says Gokart “leapfrogs” wholesalers into 2016 with an “out of the box solution, no pain, and in two weeks they have a mobile ordering app for customers. They haven’t done it to date because it’s scary, it’s not where their expertise is, and it takes time and money. But you can get onto our marketplace for £2,000 or have your own app for £6,000. You’re not spending tens or hundreds of thousands, it’s a fraction of that. And it works.” Patel says Gokart takes a “small commission on each order, ranging from 1% and as volume goes up it shrinks to 0.1%.” He says the “biggest user is Jimmy Docherty, he sends three orders a week, then we have 37 wholesalers including KerryFresh and we recently launched an app for a new wholesaler doing £40m a year called Freshway. And we are disruptive in a positive way. Amazon and Uber are destroying businesses but our sector is largely family-run. We empower them to play on the same field as the giants quickly.”
Making the perfect fruit match online
Like Tinder for lonely fruit merchants and hungry buyers, Fruitspot is the first online matchmaking service that connects buyers to growers in real time across the globe. CEO Jose Baptista says it will improve supply and demand imbalances, as well as crop and yield variability, by allowing growers to advertise excess stock and for buyers to post what they are looking for. He also believes it can address the staggering levels of waste in the supply chain by finding a home for oversupplied or rejected produce. Whole Foods has already signed up and Baptista remains in discussion with major UK supermarket chains. Fruitspot charges a service fee of between 2% and 3% of the cost of the order, which it says compares favourably to existing trade and distribution models. Insurance is also in place to ensure suppliers will always get paid by buyers.
Joining forces to win the grocery price war
Money has always talked loudly in grocery, but the volume has hit 11. The discounters are cleaning up, sending the big four spiralling into a margin-munching price war, but consumers still want more. And they are finding it, using online buying clubs like BuyMucho, which launched last October across selected postcodes in the South East. It allows people to group together to buy groceries in bulk and leverage that scale to realise cheaper prices. It’s now looking for fundraising to stagger a region-by-region rollout across the UK in 2016 and recently went from offering 1,149 SKUs to 1,770 with ambitions to hit 5,000. Promising up to 50% off brands, MD David Smith, who predicts the business will become profitable in three years, says recent customers had saved £45 on a £150 order and another of £23 on a £60 order.
Rise of the robot arms – is Moley ‘MK1’ coming to a sandwich factory near you?
Twelve months ago, speaking to The Grocer about the future of robots in food manufacturing, John Rainer, regional sales manager at robotic specialists Fanuc UK, said the next decade would see a “major acceleration” in the way they were used and that “the way robotic intelligence is constantly evolving makes a sandwich-making robot perfectly feasible”. But Moley’s robot (codenamed MK1) is more than capable of making a sandwich. It can produce Michelin-starred cuisine thanks to what Moley describes as “hands with multiple joints, numerous actuated degrees of freedom, tactile sensors and sophisticated control systems” that “reproduce the entire function of human hands with the same speed, sensitivity and movement”. So the potential for it to disrupt production lines and banish the need for a human touch is clear, whether they make premium sandwiches or sushi. And progress has been swift for Moley. The first patent was filed in February 2014, in May 2015 the prototype won ‘Best of the Best’ at CES in Shanghai. The plan is for it to be on sale for consumers by 2018. It’s not perfect yet – it can’t see anything for starters, so if the tub of mayo gets knocked out of place the resulting sandwich may end up a little dry. But the Moley robot is part of a far wider trend. According to Boston Consulting Group, spending on robots worldwide is expected to jump from $15bn in 2010 to about $67bn by 2025.
Bored of the same old food and in need of inspiration? Get boxing!
It’s one of the biggest trends in grocery right now, and if the concept wasn’t disruptive enough, the volume of entrants crowding the market makes it so. Hello Fresh, Gousto, Riverford, Abel & Cole and Marley Spoon are just a selection of the players that allow one-time grocery shoppers to swerve the supermarket altogether by sending them everything they need to eat for a week in precise portions with full instructions. And it’s a global phenomenon. Marley Spoon is currently available in the UK, Germany, The Netherlands, the US and Australia. And the US market is swelling at a rapid rate. Blue Apron, one of the largest (recently valued at $2bn) sends over five million meals a month to Americans fed up with schlepping around the supermarket aisles.
Opening up a new front in the war on sugar, e-numbers and calories…
How to disrupt the soft drink category? How about introducing a fizzy drink with zero added sugar, sodium, artificial sweeteners, flavourings, colours or preservatives? Ugly Drinks are simply fizzy water, fruit oils and essences, and naturally occurring citric acid (see the zero-filled nutritional table that appears on cans below). “People have to feel like they are making a healthy choice but one that’s fun,” says co-founder Hugh Thomas. “It’s like someone who really loves bread, but then they are forced to eat a rice cake instead. We wanted to stay away from making people feel like they are making a dreary, miserable, healthy decision.”
So what else makes Ugly disruptive? “We are the first carbonated canned drink in Europe with no sugar or artificial ingredients playing in a space that is full of those things. We are in a white space between water and normal soft drink, so that makes Ugly an alternative to both people who enjoy drinking regular fizzy drinks and people that enjoy water.” That’s disruptive enough in terms of the liquid, but Thomas also says the Ugly brand name is a “nudge at brand names that over promise and under deliver. They promise extra functionality, extra nutrients, extra vitamins, but they are still full of sugar and sweetener. We are just sparkling water.”
Thomas met co-founder Joe Benn while the pair worked at runaway success story Vita Coco. They launched Ugly last Summer after spending 18 months developing the concept before handing in their notice.
Ugly, which comes in two flavours, is stocked in Selfridges and Whole Foods Market (plus independents) and retails for 99p. Cases can also be purchased from the Ugly website for £19.99 (plus £5.34 p&p for next-day delivery) for a case of 24 cans.
Taking the boring and bland out of health food
Chia seeds, boabab powder, bee pollen and coconut oil… esoteric health foods have never been more popular, but traditionally the sector has been “unexciting and disengaging,” says Nutriseed CEO and founder James Green. So it’s put marketing itself differently at the heart of its strategy. “We made our customer experience fun and playful, like when we launched Chlorella, which is a green algae similar to spirulina, we dubbed it Chlorella, Spirulina’s badass cousin and our customers began interacting with us in the same playful language and tone.” Customers also frequently post ‘unboxing’ videos online. And as well as marketing and presentation, Nutriseed’s online operation allows it to undercut high street rivals on price.
Food at your door within an hour, for free
Shell out £69.99 a year and £6.99 per delivery and Amazon will happily drop off a bag of groceries at your door (in Birmingham, Liverpool and London at least) within an hour via its Prime Now service. But online start-up Etefy will do all that for free. Founded in December 2015 by businessman Helge Leiduck, Etefy promises food and drink delivery to London postcodes within an hour at no cost, with no minimum order. “Even if you order a Mars bar at 2am we will deliver it within an hour, probably even faster,” says Leiduck. The same applies to the retailer’s organic breads, meats and veg, transported at speed from its two London warehouses. There’s even a 50% discount for new customers. So how does it do it? Low overheads and a dependence on high-volume orders, says the founder. Amazon – and the rest of the industry – will be intrigued.
Dedicated to keeping the party going for as long as you can… for a fiver
The Bevy app is a party animal’s dream. But it’s also smarter than that. Smartphones, motorcycles, GPS tracking, local c-stores, the gig economy and brand partnerships combine to create an average 20-minute delivery time to rush booze, cigarettes, snacks and more to thirsty Londoners, charging regular shop prices from nearby c-stores and whacking a flat £5 delivery charge on top. In the three months since it launched, user numbers are increasing by 50% every month, it has a 60% repeat order rate and the average order value is £38. There is no minimum spend. Currently, the service is available on Thursday, Friday and Saturday nights from 8pm to 6am but there are firm plans to go 24/7 as soon as possible. COO Marco Saio says Bevy is “transforming the traditional shopping experience into a 10-second checkout process. Our ‘Butlers’ are GPS trackable and deliver in an average of 20 minutes, making Bevy the fastest delivery service in retail.” Bevy’s gig economy drivers (who are fully trained up by Bevy) need their own motorcycles (plus an iPhone with waterproof mount) and are paid £10 per hour (plus tips).
Ice cream so healthy even supermodels give it a big lick
Wheyhey got a boost in 2013 when model David Gandy tried it, loved it, invested in it and promoted it. But even without his smouldering backing, Wheyhey already had plenty going for it. The ice cream, made from whey, a high-protein product from the cheesemaking process, also contains natural sweetener xylitol, which is actually good for teeth. And this year Wheyhey has been chosen by Food Vision, an event attended by fmcg giants, as “trailblazers” after it said Wheyhey delivered worthy innovation against some of the food industry’s greatest challenges “from personalised nutrition, the rise of the health-conscious consumer and the search for new food sources”.
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