Innovation: Food Convergence

Posted on September 6, 2010

The convergence of the food, personal care, healthcare, and health services industries is happening, and this article explores opportunities in this area, and the deep strategic thinking that must happen for ideal positioning.

September 1, 2010. It was one of those scorching hot days in downtown San Francisco that makes you think about global warming. I popped out of BART just in time to race to the Peet’s at 2nd and Howard to meet with Mike Dovbish, Managing Director of the Nutrition Capital Network. After some exploration, I learned that there is no Peet’s at 2nd and Howard. A few minutes late I found Mike and the Peet’s at 2nd and Mission. What a day to explore on foot! To cool down, I bought the green iced tea (with healthy catechins, if freshly brewed). I paid rapt attention in Peet’s since I knew I’d be meeting with the Jean-Michel Valette, the Chairman of Peet’s in a day or two.

As I began talking with Mike, I listened actively, taking note of his word usage. He didn’t say food, or beverage much. He said the words nutrition, health and wellness a lot. I stopped him and asked him to define the markets as he saw them, and he drew me this very map:

The Nutrition Capital Network sees lots of young innovative companies looking for money or strategic partnerships at their conferences (three times a year). Most of them are innovating in the health and wellness arena. He started throwing out examples of healthy innovations, and I recognized most of them in large part because I’d read a book, Anticancer: A New Way of Life, by David Servan-Schreiber that my mother had sent me to read months ago. (My mother still sends me articles and books all the time. Do all mothers do this, or is it just mine?) But for that book, I’d have been clueless, so I had to wonder how much of this will really go mainstream?

But I began to wonder, as I sipped some more green iced tea, what if all these industries continue converging, and Mike’s drawing, in the future, started to look like this:

What would a product look like if it truly addressed all these markets? Who will be the companies to become big players in this converged reality? I thought about a case study I wrote back in July, 2009 called Out of the Industry Innovation where Paul Dijkstra, CEO of InterHealth Nutraceuticals, Inc. has been investing in proof-of-efficacy, just like the pharmaceutical world, to move his company forward in the functional foods area. Then I thought about Mendel Biotechnologies that for years has been modifying seeds for increased crop yields. But now they have begun blending the farming supply chain with the fuel and electricity supply chains to sell carbon neutral fuel (Miscanthus grasses) from land unsuitable for crops. Read Cross-Linking Supply Chains & Establishing New Value Allocations.

I asked Mike Dovbish what he’d look for in a food and beverage product or company if he were investing half his life’s savings. Four of the five factors had nothing to do with taste. One of them was nearly identical to one of two critical factors that Peet’s Chairman Jean-Michel told me on Friday of that same week.  Click to read about that in, “Who Holds the Presumption of Integrity?”  And stay tuned for more perspectives from industry leaders, and be sure to mark your calendars for the big event the afternoon of December 8th, 2010.