Tuesday, 05 July 2016 14:55

Amazon moves into food

Written by  Pam Tipa
Ian Proudfoot, KPMG's global head of agribusiness. Ian Proudfoot, KPMG's global head of agribusiness.

Books and music company Amazon is moving into food and you can't ignore the power it will have, says Ian Proudfoot, KPMG's global head of agribusiness.

Amazon reckons in 42 US cities it can deliver fresh food to the front door within one hour – often faster than going to the supermarket.

"We won't be going to the shops, we will be using our phones to buy food, meaning we can interact much more directly with who is growing our food," Proudfoot told the NZ Veterinary Association conference in Hamilton.

Coca-Cola has bought a dairy company, pharmaceutical companies are moving into food and we are on the cusp of a financial and cultural revolution, he says.

"The biological technologies, the physical technologies, the digital technologies are creating a whole heap of new solutions."

KPMG asked 80 of the world's largest agribusiness countries what were the key opportunities and challenges facing their businesses. Volatility, trade agreements, natural resources, changing consumers, technology and climate change emerged as key themes.

"We are not getting the climate change theme nearly as much as they are across the world. The shift to low carbon economy is gaining pace, as is food safety. That is probably most important for your industry."

NZ has grown magnificently and achieved a great productivity level, but "the reality is what we do today will not be enough to get us where we need to be tomorrow," Proudfoot says.

People will farm in different ways and with different business models. Philadelphia Cow Sheds is an example: it crowd sources (i.e. sells an interest in an animal upfront); you buy an eighth of an animal, you'll get an eighth of that meat when that animal is slaughtered.

"In 25 years... we won't see supermarkets as we see them today. They will evolve and change."

Businesses like My Food Bag will be part of that change. It has recently disrupted itself by launching a 'bargain box' cheaper than its mainline product offering.

"We have for so long focused on the average, but the reality is the average doesn't exist. What we need to be thinking about is, what are the niches we are directing our services towards?"

We can segment our communities many ways now: age, gender ethnicity – and religion will be an important sector in the future. By 2030, 3.8 billion people will be members of various religions.

A growing part of the population will be the elderly who will be managing health conditions. "Things are changing very rapidly in food; we are on the cusp of the fourth industrial revolution."

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