Food in a Connected World

14 min readMar 31, 2016

Mobile technology has come a long ways. The birth of the internet, open search, social networking, cloud computing, and mobile computing has transformed all aspects of our civilization and individual lives. It has profoundly organized and optimized the way in which our society operate, connecting once disjointed supply chains into interoperable services built on a technology stack. So it’s an incredible and exciting time to be in tech.

As the CEO of a technology focused food startup, I often think about the question, “what will the people in 2020 eat?” Realizing the food chain is probably due for a complete redesign, and I’m not alone. In the last 5 years there’s been a tremendous amount of growth in food tech. New apps, kitchen appliances, meal subscriptions, even radical farming techniques are created everyday by hungry entrepreneurs. More than $4.6B has been invested in Food Tech in 2015, hoping the startups will grow beyond their subsidized beginnings into the hearts of mass consumers. So far, we’ve yet to see that happen. Unlike communication, finance, and transportation, food is perishable, vital, and cultural. So I think any new venture that touches food either directly or indirectly, should consider how it fits into the anthropological context in order to survive and thrive.

The Big Issues

Overconsumption

The food system is nowhere near perfect. Up to 40% of the food produced in the US ends up in a landfill. Meanwhile, 2 out of 3 adults are considered overweight or obese. Something is seriously wrong with the system, and everyone is paying the price for it. Surely there are enough incentives to fix it, so why isn’t it fixed? Let’s take a step back and ask ourselves, “why do we eat?” We know food gives us nutrients to grow and repair our body. It also gives us the energy to move around. But usually, eating is the response to hunger. What you eat is largely guided by your craving and what is easily accessible to you. The amount you put on the table is governed by the size of your plate. You stop eating when you feel “full”, which actually kicks in 5 minutes later. When you go out to eat, it doesn’t matter if you’re 100 or 180 lbs, you get the same plate of food. When you look at the nutrition label on a bag of chips, you’ll see that “for every x chips contains y% of some recommended daily nutrient for someone on a 2000 calories diet”. But what if I’m not on a 2000 calories diet or don’t remember everything that I had today? The more I examine the system, the more I realize that almost every aspect of our relationship with food is shaped by these antiquated user experiences that encourage perpetual habits of over-consumption.

Unnecessary Waste

Usually if you look in the fridge, somewhere in the back corner, something is going bad. On average, we throw out about 20% of our food. That’s about $1,500 worth of food trashed a year for a family of 4. If you pile it up, it looks like this:

Surely any sane person would not condone this, yet we’ve come to accept it as a rounding error from shopping. For most of us, grocery shopping isn’t a science. We don’t have a process of acquiring the exact ingredients needed to cook x number of recipes for the week for y number of people. Rather, it’s window shopping by walking around the grocery store. And you’ll notice that the whole-foods are always around the edge of the store, while the processed food is in the middle, taking up the majority of the store. Because the grocery business makes little to no margin on fresh produce (10% of it ends up going bad), the stores are carefully engineered to sell you as many other products as possible as you walk around. Furthermore, because many people have to drive to the store, they’d rather over shop, than under shop. So usually, you end up with a lot more food than you actually need. It’s not all bad at first, because once you pack everything into your fridge and cabinets, there’s this momentary sense of pride. Then you try to eat as much as possible throughout the week, but something always never gets used, and expires. So it’s not surprising why an astonishing amount of food ends up in a landfill.

Food Inequalities

In order to keep up with our ever increasing appetite, agriculture was industrialized with the help of pesticides, fertilizers, GMO and machines. Diverse local agriculture evolved into fragmented monocultures spanning across hundreds of kilometers. Industrialization didn’t end there. As society became more urbanized, cooking was also industrialized. It’s now cheaper to buy a breakfast burrito at the drive-through than an avocado. It really astounds me how this is economically possible, since one has gone through layers of machinery and workers, while the other is plucked straight from a tree. But I suppose it’s the nature of economy of scale, and government subsides. Which plays a hugely important role in the types of food consumers at various income levels decide to buy. On average, millennials make $33,000 a year, and 12% make more than $75,000 a year ($1442 a week). For the person making $30,000 ($576 a week), they spend $127 a week on food (22% of salary) or $6 per meal, whereas the person making $75,000 spends $180 (12%) or $9 per meal. The different between $6 and $9 is the difference between having a industrialized food diet vs. a whole food diet.

Over-consumption, food waste, and food inequalities are all complex systemic issues. The good news is we have the potential to fix them. There’re more food than we need, not the other way around. Machines gave us scale, but took away the balance of a healthy diet. To me, these are the kinds of challenges computers are great for. So the question becomes:

“How can we leverage the power of computers to help us provide better food to satisfy the needs of billions of people in 2020?”

The Valuation Model

Before I go into this question, I’d like to propose a valuation model to think about the economics of food. As a tool to help us quantify a) production cost, b) consumer value, c) the societal value of food products, and d) correlations.

a) The Production Cost of a Food Product

Producing food requires 3 major steps:

Farming — Growing the food (vegetables, fruits, livestock, lab, etc.)
Processing — The process of turning farmed foods into derivatives that’s not yet consumable (rice, corn starch, tofu, chicken wings).
Cooking — Converting processed food into consumable food.

For each step, there is a cost associated to producing a yield of food product. This gives us the cost function:

Cost(step) = (packaging+distance+labor+storage) / (yield - waste)

Where:

Yield — How much useful goods are produced.
Waste — How much unconsumed good are produced.
Labor — How much human resources is involved.
Packaging — How much packaging and preservation is involved.
Distance — The transportation cost to travel to the next step.
Storage — How long it’s usually stored.

So the total production cost of producing a final yield of food that can be consumed is:

Production Cost = Cost(farming)+Cost(processing)+Cost(cooking)

b) The Consumer Value of a Food Product

There are 6 main factors that affect the perceived value of a food product to a consumer:

Price — The cost for one.
Freshness — How long until it’s expired.
Taste — How much it appeals to our senses.
Involvement — How much work are you involved in before consumption.
Repeat — How often it’s consumed or feels like it.
Clarity — Food miles, nutritional, additives, farming process, ethics.

Some of the factors impact the perceived value positively while others negatively such that:

Consumer Value = (taste+freshness+clarity) / (involvement+price+repeat)

c) Societal Value of a Food Product

There are 7 major macroeconomic factors to consider:

Knowledge — the general knowledge about the food. What it is, where it comes from, and how it was made.
Nutrition — the nutritional value to our requirements.
Cultural — how much meaningful relationships are created around food.
Physical — how much hard labor is required from humans.
Overproduction — the excess food produced compared to the population needs.
Environmental — the environmental damage caused by farming, processing, and waste.
Inequalities — the gap between food quality at various price points.

Societal value = (Education+Nutrition+Culture) / (Overproduction+environmental+inequalities+physical)

By combining all of these models we get:

Points = (Consumer value + Societal value) / Production cost

d) Correlations

When Involvement increases,

Overproduction decreases
Knowledge, Physical increases

When Clarity increases,

Overproduction, Distance decreases
Knowledge, Cultural increases

When Distance decreases

Yield, Packaging, Storage, Waste, Overproduction, Environmental, Inequalities decreases
Knowledge, Nutrition, Freshness increase

The Stages

Using this valuation model, let’s examine some of the food production stages and methods.

There are 5 main stages of the food supply chain evolution.

Pre-Industrial — Work is done by animals+humans in communities.
Industrialization — Machines gave us economy of scale and distance.
On-demand — Digitization of physical services gave us convenience for a price.
Cooking automation — Democratization of food services gave us clarity, and less waste.
Decentralized production — Brought everything closer to create a sustainable society.

The Valuation

If we plot each production method vs. my valuation, you end up with something like the below chart:

Note: These are my own valuations. Feel free to download the spreadsheet and play around with your own valuation.

Summary

Production methods will go full circle from decentralized/disconnected, to centralized/dysfunctional, and finally to decentralized/digitized. It’s interesting that society started out as community farmers, and will likely end as community farmers.

Companies trying to innovate food should understand which model it lives in and how it impacts the production cost, consumer value, and societal value of food products.

Automation used in industries gives economy of scale, but ultimately drives down quality of the food. However, automation under the people’s ownership will give us on-demand superpowers. It has the potential to disrupt the entire supply chain resulting in massive societal value.

We are what we eat, yet there’s so much we don’t know about the food we’re eating and how it’s affecting us. As we start to regain our connection with real food, and develop the collective wisdom through the of help information technology, may we truly understand what we’re made of.

The Details

Stage 1: Pre-industrial

Before the invention of engines, animals + humans did all the work. There is a real connection to food, and people worked hard to feed themselves and their families. Cold climate made many regions largely uninhabitable, people relied on food reserves and hunting. Food production was local since long distance transporting were not feasible, making food variety limited to the local ecosystem. As time went on, people started to outsource parts of the food production process.

This stage has 3 major production methods:

Family farming, Self cooking

Production Cost = 7.50
Consumer Value = 1.24
Societal Value = 2.30
Points = 4.72

2. Community farming, Self cooking

Production Cost = 6.75
Consumer Value = 1.86
Societal Value = 2.30
Points = 6.43

3. Urbanized community, Self cooking

Production Cost = 3.88
Consumer Value = 1.75
Societal Value = 1.71
Points = 8.94

Stage 2: Industrialization of farming, processing, and cooking

With the invention of engines, the yield per farmer dramatically increased. Driving the need to scale, and the demand for larger/cheaper land. Trains, and automobiles enabled transportation across large distances, increasing variety and production. But as distance increased, so did many of its side effects.

This stage has 7 major production methods:

Urbanized Community, Self cooking

Examples: Small town farmer’s market

Production Cost = 3.03
Consumer Value = 1.91
Societal Value = 1.27
Points = 10.50

2. Urbanized City, Self cooking

Example: Safeway, Trader Joe’s,
Kitchen Appliances/Tools: LG, Samsung, Nomiku, June Oven

Production Cost = 2.58
Consumer Value = 2.00
Societal Value = 0.83
Points = 10.98

3. Urbanized City, Restaurant cooking

Examples: Milestones, Ruth Chris

Production Cost = 1.25
Consumer Value = 1.73
Societal Value = 0.71
Points = 19.58

4. Restaurant Delivery

Examples: JustEat, GrubHub, UberEats

Production Cost = 1.75
Consumer Value = 1.90
Societal Value = 0.57
Points = 14.11

5. Fast food / Drive through

Examples: McDonalds, Burger King, Subway

Production Cost = 0.73
Consumer Value = 1
Societal Value = 0.33
Points = 18.20

6. Premium fast food

Examples: Chipotle, Freshii

Production Cost = 1.25
Consumer Value = 1.77
Societal Value = 0.63
Points = 19.21

7. Urbanized City, Grocery store cooking

Examples: Safeway, Loblaws, Longos

Production Cost = 1.52
Consumer Value = 1.31
Societal Value = 0.88
Points = 14.38

Stage 3: On-Demand food

source: https://chowdy.ca/wp-content/uploads/2015/02/chowdy-vegetarian-5.jpg

As we look to our mobile devices for information, we begin to develop a new type of relationship with it. It became our personal assistant and we expect it to do more things for us. When the information about our physical world became digitized (restaurants around us, menus, ingredients etc.), our mobile devices gave us a new sense of clarity, and power. The menu all of the sudden got a lot bigger. While the perception of value increased, it wasn’t accessible to the majority. Since the fundamentals of production cost have remained the same, on-demand services incurred further production costs.

This stage has 5 major production methods:

Aggregate Grocery Delivery, Self cook

Examples: Instacart, Amazon Fresh, Google Express

Production Cost = 2.58
Consumer Value = 1.67
Societal Value = 0.79
Total Value = 9.52

2. Direct Grocery Delivery, Self cook

Examples: Quinciple

Production Cost = 2.75
Consumer Value = 2.40
Societal Value = 1.75
Points = 15.09

3. Grocery Subscription, Self cook

Examples: Blue Apron, HelloFresh, Plated, Gubble

Production Cost = 1.34
Consumer Value = 1.44
Societal Value = 1.46
Points = 21.57

4. Meal subscription

Examples: Munchery, Sprig

Production Cost = 1.59
Consumer Value = 1.47
Societal Value = 0.92
Points = 14.99

5. Nutrient Subscription

Example: Soylent

Production Cost = 0.72
Consumer Value = 0.92
Societal Value = 0.36
Points = 17.73

Stage 4: Cooking Automation

source: http://www.iglotex.pl/about-iglotex/production-technology

Cooking Automation is the reduction/elimination of human involvement in converting processed food into consumable food. This process can be referred to as a Recipe. Besides fruits, most of the food we consume are recipes made from a combination of ingredients, cooked using one or more techniques, arranged in a specific form factor. This makes the culinary arts of recipes limitless. It also makes generalize recipe automation extremely complex. However, specialize recipe automation was invented, creating the majority of the processed foods people has come to love. This accounts for most of the boxed foods in our grocery stores including cereal, bars, chips, soups, microwave meals, pizza, etc. As consumers outsource all aspects of the production process, the Societal Values of food products dropped significantly. But can we utilize Cooking Automation differently to benefit society?

This stage has 5 major production methods: