Prof Göran Roos - Food South Australiafoodsouthaustralia.com.au/.../2011/07/foodsa_summit_goranroos.pdf · Prof Göran Roos “Manufacturing for the Future” Thinker in Residence,

Prof Göran RoosProf Göran Roos“Manufacturing for the Future” “Manufacturing for the Future” Thinker in Residence, South AustraliaThinker in Residence, South Australia

Chairman, VTT InternationalChairman, VTT InternationalHonorary Professor at Warwick Business School, Warwick UniversityHonorary Professor at Warwick Business School, Warwick University

Visiting Professor, Innovation Management and Business Model Innovation, VTT Technical Research Centre of FinlandVisiting Professor, Innovation Management and Business Model Innovation, VTT Technical Research Centre of FinlandVisiting Professor, Business Performance and Intangible Asset Management, Centre for Business Performance, Visiting Professor, Business Performance and Intangible Asset Management, Centre for Business Performance, CranfieldCranfield University, University, CranfieldCranfield

Senior Advisor, Asia Pacific, Aalto Executive Education AcademySenior Advisor, Asia Pacific, Aalto Executive Education AcademyPartPart--Time Professor, Strategic Design, Faculty of Design, Swinburne University of TechnologyTime Professor, Strategic Design, Faculty of Design, Swinburne University of Technology

[email protected]@intcap.com

World population growth World population growth

Climate change Climate change

Environmental degradation Environmental degradation

Demographic change Demographic change

Rising wealth in emerging markets Rising wealth in emerging markets

Food safety Food safety Food safety Food safety

Health costsHealth costs

Technological change Technological change

© Copyright Göran © Copyright Göran RoosRoos 22011011

HealthHealth

ConvenienceConvenience

IndulgenceIndulgence

Eating outEating out

Ethical foodEthical food

SustainabilitySustainabilitySustainabilitySustainability


Industry Consolidation and TransformationIndustry Consolidation and Transformation

CustomerCustomer--driven open innovationdriven open innovation

Food production in the emerging marketsFood production in the emerging markets

Association of food and health benefitsAssociation of food and health benefits

Organic foodOrganic food

Ethnic foodEthnic foodEthnic foodEthnic food

Experience economyExperience economy

Interdisciplinary basis for technology based innovationInterdisciplinary basis for technology based innovation

Bigger scale or unique offeringBigger scale or unique offering

Quest for efficiencyQuest for efficiency


Aiming for “good

enough” quality at

rock-bottom prices

i.e. the

customer/consumer

Extract high margins

by aiming for “high

perceived value”

offerings that the

customer /consumer

ΔΔ DemandDemandHistorical Demand

customer/consumer

perceive no

differentiated value

customer /consumer

perceive deliver

differentiated value

Emerging Demand

Price*Quality Positioning


ScaleScale--Intensive Intensive Industries [e.g. Industries [e.g.

Skim milk powder]Skim milk powder]

Specialised Supplier Specialised Supplier Science Based Science Based

Digital Digital Manufacturing Manufacturing Industries [e.g. Industries [e.g.

Designed Designed Personalised Food]Personalised Food]

Specialised Supplier Specialised Supplier Industries [e.g. Industries [e.g.

Organic]Organic]

Traditional Traditional Manufacturing Manufacturing

[e.g. [e.g. Jams]Jams]

Dynamic Dynamic Increasing Returns Increasing Returns

Industries [e.g. Industries [e.g. Luxury Branded Luxury Branded Food Products]Food Products]

Variation Intensive Variation Intensive Industries [e.g. Industries [e.g.

Personalised Food Personalised Food Bundles]Bundles]

Science Based Science Based Industries [e.g. Industries [e.g.

Functional Food]Functional Food]


Health and wellnessHealth and wellness

Green, Clean and SafeGreen, Clean and Safe

Food ExperienceFood Experience


High Value High Value Added to Added to

Green & Green & CleanClean

High High

Luxury and Luxury and Premium Premium Added to Added to

InputsInputs

High High FunctionalityFunctionality

South South Australian Australian

OriginOrigin

Premium Premium Indulgence Indulgence

ProductsProducts



InnovativeInnovative

Cheap ingredientsCheap ingredients

Ingredient easily integrated into the productIngredient easily integrated into the product

Evidence of health effects of the productEvidence of health effects of the product

No abstract relationships between Effect and FoodNo abstract relationships between Effect and Food

Authentic and credible product / Ingredients Authentic and credible product / Ingredients combination perceived by the consumer to add valuecombination perceived by the consumer to add valuecombination perceived by the consumer to add valuecombination perceived by the consumer to add value

Excellent sensory quality of products, guaranteed Excellent sensory quality of products, guaranteed freshness and high quality ingredientsfreshness and high quality ingredients

Few varieties, especially in the introductory phaseFew varieties, especially in the introductory phase

Small packaging size, correct choice of market timing: Small packaging size, correct choice of market timing: earlyearly--first or midfirst or mid--second quartersecond quarter

Empirical studies have shown feasible Empirical studies have shown feasible average price premiums of 10 to 20% average price premiums of 10 to 20% compared to conventional foods compared to conventional foods


The variables to play with: The variables to play with:

Excellent qualityExcellent quality

Very High PriceVery High Price

Scarcity and uniquenessScarcity and uniqueness

Aesthetics and Aesthetics and polysensualitypolysensuality

Ancestral heritage and Ancestral heritage and personal historypersonal history

SuperfluousnessSuperfluousness

Packaging is one of the most rapidly changing areas over the coming yearsPackaging is one of the most rapidly changing areas over the coming years


Sources: Charters, C., Lockshin, L. and Unwin, T. (1999); Consumer Responses to Wine

Bottle Back Labels, Journal of Wine Research, Vol. 10, No. 3, pp. 183-195.© Copyright Göran © Copyright Göran RoosRoos 22011011

GrapesGrapes 75%75%

BarrelsBarrels 10%10%

Wine Making MethodWine Making Method 6%6%

Wine MakerWine Maker 4%4%

Winery EquipmentWinery Equipment 3%3%

The Functional Factors The Functional Factors are more important than are more important than Brand and Cost ONLY in Brand and Cost ONLY in 5% of the market 5% of the market [Connoisseurs][Connoisseurs]

Winery EquipmentWinery Equipment 3%3%

Bottling planBottling plan 2%2%


Perceived Value

WHERE HOW WHY WHEN

HISTORY

ASPIRATIONS

LIMITATIONS

Occasion Life Stage Life StylePerceived Value

Actual Total Cost○ ○○ Identity○


1850 1940 1990

RetailerRetailer

ConsumerProducer

Retailer

ConsumerProducerProducer

Mu

st-Ha

ve

Bra

nd

RetailerRetailer

ConsumerProducer


Ha

ve

Bra

nd

2010

Retailer

ConsumerConsumerSocial

MediaProducer

2015

Retailer

ConsumerProducerProducer

Instantaneous Consumer Insight

+

Personalised Offerings

+

Direct-to-Consumer Sales


Basis of benefit

Organics

Sales volume

Retailers can use clever segmentation or price as ways to encircle

suppliers/manufacturers but the usual way now is via “benefit”.

Premium

CopycatCopycat

LowLow--costcost

Manufacturer’s

ValueValue

Organics

Fair trade

Hypo-alergenics

Functional foods

Low fat / cholesterol / other

Child-oriented

One serving

Other

Price-quality

Sales volume

PremiumPremium

LuxuryLuxury



Prof Göran Roos - Food South Australiafoodsouthaustralia.com.au/.../2011/07/foodsa_summit_goranroos.pdf · Prof Göran Roos “Manufacturing for the Future” Thinker in Residence,

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