The bits and bytes of food : study of emerging Internet-based food businesses

Abstract

As is the trend with a lot of industries, businesses in the food industry are also experiencing a shift towards the online world. This shift is driven by increasing convenience and popularity of doing business over the Internet and supported by rapid technological proliferation. The consumer-interfacing food value chain that includes consumer packaged goods brands, supermarkets and retail stores and restaurants and food service outlets is increasingly experiencing the emergence of many interesting internet-based business models. Many traditional business models across this value chain are facing competition from these disruptive online models that have the potential to redefine the existing way of doing business in the food industry. Built around important trends like growth in mobile devices, crowd sourcing, online marketplaces etc., consumers have welcomed these emerging online food businesses. Companies like Grubhub Seamless have successfully leveraged the growing use of smartphones while Instacart has gained popularity for applying crowd sourcing to grocery deliveries. Yet other startups have latched-on to the trend of changing consumer lifestyles and preferences. Pre-packaged grocery delivery services like BlueApron and Plated target working professionals with time constraints who aspire to cook and eat healthy food. The growing consumer interest has also attracted investors to this space over the past couple of years. There are currently more than 300 companies that offer products and services in the online food industry. With a large selection of offerings and business models, it is important for consumers, entrepreneurs and investors to understand the value proposition and future potential of these models. The thesis aims to address this by studying emerging or startup online food businesses with a focus on the consumer segment. The study relies on a framework that is based on inputs from existing investors, entrepreneurs and current thinking on internet-based businesses. The analysis also applies the platform concept to different segments of the online food industry. Understanding the dynamics of platform markets, which includes identifying key participants and drivers of adoption, will provide additional insight to entrepreneurs and investors. Lastly, the study is my attempt to understand the online food industry from the perspective of a potential entrepreneur and explore possible startup ideas for a future venture.