What's the Recipe for Success?
April 13, 2009
Three key trends driving the food industry today are shifts toward health and nutrition, ethnic foods, and cost reduction, said Bob Goldin, AB ’76, MBA ’77, executive vice president of Technomic, Inc. “Demographics, if nothing else, are going to speak loud and clear to the need for all of us to eat healthier,” Goldin said during the opening panel at From Farm to Fork: Innovations in the Chicago Food Industry.
“Ethnic foods, especially Hispanic, are moving away from the traditional Mexican and traditional Italian,” he said. “The third trend is a major move on the part of food providers in all sectors to cut costs. That has some significant ramifications on willingness to market and innovate.”
The daylong event, sponsored by the Polsky Center for Entrepreneurship, along with the Chicagoland Entrepreneurial Center drew a standing-room-only crowd at Gleacher Center on April 13. Focusing on innovation and entrepreneurship, the conference featured nine panels and a keynote speech from Thomas Parkinson, founder and CTO of the online grocery store Peapod. View all of the sessions online.
In the last two years, the food industry has undergone dramatic change after years of stability in its input costs, said Cathy Jaros, managing director of Amherst Partners, LLC. in the opening panel, “New Food Trends in the Global Economy.” Jaros said, “Ingredient costs started going up, whether it was wheat or oil, due to global demand. Crude oil prices went up, so transportation, packaging, and materials started having this big, significant impact on the way companies were run.”
When the economy collapsed, consumers shifted to eating at home and saving money, she said. “You don’t go to Starbucks for breakfast,” Jaros said. “You don’t go out for lunch; you bring a frozen entrée. If you look at the ways people are eating over the last six months, there are dramatic changes. Suddenly what was a static category — frozen foods — is now booming again because it’s a good substitute for the way people used to eat.”
In order to meet Walmart’s standards for sustainability, Azteca Foods, Inc. was required to justify the packaging for some 100 items, said Arthur Velasquez, ’67, president and CEO of the Chicago-based company. Velasquez was surprised at the request, but ultimately found the process valuable to Azteca’s bottom line, he said.
“It took a lot of work, but it was very helpful to us,” Velasquez said. “We cut down some film on our packaging and took a look at all our packaging. Now it has us looking at other areas in the company. It was good to go through that exercise. It’s going to be a part of doing business, even how we ship to various distribution points.”
At a time when attendance at food conventions and trade shows is down, the large turnout for From Farm to Fork is a sign of the excitement generated by the entrepreneurial food business, said Marc Schulman, president of The Eli’s Cheesecake Company. “The trends of larger companies create many opportunities for everyone here,” Schulman said. “The interest in authentic, real products is similar to the story behind the food entrepreneur, when you can say, ‘This is what I did, this is what my father did, and this is my family’s recipe.’”
The Farm to Fork Conference was part of the Donald W. Hamer Exploring Entrepreneurship Series, sponsored by Donald Hamer, ’58, which examines specific industries that are key to the economic growth of the region. As part of this initiative, a follow-up white paper to be issued this fall will include insights and recommendations from the conference proceedings as well as research conducted by students and faculty that highlights the issues facing this vibrant industry in the context of the global economy.
— Phil Rockrohr