PSFK 2017 Speaker Interview: What The Supermarket Could Look Like In 2065
In the lead-up to our conference, Studio Industries CEO Mike Lee teleported me in a time machine to the grocery store of the future, where experiences will reign over products
When you think about how much the digital age has transformed the world around us—how Netflix has disrupted the film industry, Spotify the music industry, Apple the telecommunications industry—the one industry that seems to be left in the dust while everyone else is riding off into the sunset is the food industry. Just think: computers have evolved at supersonic speed over the last few decades – from being the size of a room during the Apollo space race to being literally the size of a speck of moon dust. Step into any grocery store today, however, and as you take out your iPhone to check your shopping list and listen to your Spotify weekly playlist, the food aisles you’re browsing haven’t changed that much at all. The physical products themselves are still distributed, laid out and sold in a familiar fashion—for customers to manually pick up and put in their shopping cart, scan at a checkout and pay for at a cash register.
We’re used to going to places like the Apple store to interact with products and be inspired by them, but very little of our trips to the grocery store result in some sort of learning or mind-stimulating experience. Studio Industries and Food Market founder Mike Lee, however, believes the future of food is finally having its a-ha moment. In his words, the food industry looks just like Silicon Valley, except it’s 10 years behind and twice as slow. Why? Because food is a tangible physical thing and not just pixels, and therefore, is more capital intensive.
I got Mike to teleport me in a time machine to 2065 to show me his predictions on what the future supermarket will look like and that the key to the food industry of tomorrow is to offer an experience over products.
Emily: When people hear the name “Studio Industries”, it’s hard to pinpoint what exactly the company does. Could you walk us through it?
Mike: We do food design, which is applying design thinking to the food industry. In other words, we focus on designing new products and new experiences for large multinational corporations, startups, and everything in between.
We’re trying to really just raise the bar for the level of quality of food products out there. I started doing this years ago when I was at Chobani, working on their innovations group doing essentially the same thing—doing food design and thinking about what are the new products and what are the new platforms that the company should go to. That’s what we do.
When did you first get sparkly-eyed over the future of food?
The future of food really was sparked shortly after we started Studio Industries about four years ago. We realized that, as an agency starting out, we were going to be only as good as some of the briefs that we would get.
We wanted a space for us to think really aggressively about what food could be. That really lends itself to thinking about what could happen deep into the future, deeper than most people were thinking. Most of the time, it’s people that are designing products are looking at maximum a two or three-year timeline, if that.
More times, it’s like a one-year timeline. That’s fine. We do that during most of our work. We created this project called the Future Market as a way to imagine what could happen 10, 20, 30, 40, 50 years out in terms of human behavior and in terms of technology, and how would that impact the way the food system works?
We took a page out of the auto industry, creating concept cars as our inspiration. We produced these concept products that really illustrate what could happen in the future the same way that Ford or GM produces a concept car every year that shows what could be the thing that we’re driving 10 years from now.
We apply that to what we could be eating in 10 to 20 years time. That’s really where the passion for the future of food stemmed from.
Teleport us in a time machine to your vision of what the grocery experience could look like in 2065. What are your predictions?
There’s a lot of predictions, but I think a few of the ones that are most interesting to me are the idea that grocery stores in general are going to completely be redefined. For one thing, if you think of a grocery store today, it’s really just a site of distribution.
It’s really just a place where stuff was made somewhere else and then you pick it up at the grocery store. That’s essentially what it does. I see, in the future, that changing to the point where grocery stores are not just sites of distribution, but they’re sites of production.
It’s essentially looking at the farming system and shattering it into tiny little pieces all over the country. You look at something like Whole Foods in Brooklyn, and they’ve got the Gotham Greens rooftop garden farm over there, where they’re making basil that literally goes downstairs and is sold and consumed by people.
That is a first really big sign of saying, “Hey, grocery stores aren’t just places to pick stuff up. You can produce things there too.” For fresh produce, I think that’s going to happen in less than 50 years. It’s already happening and it’s going to be more and more common.
If you look on the other side of what else can we grow in a small amount of space, you look at things like cellular agriculture, where people are taking meat cells, culturing them and duplicating them in clean labs.
Hopefully one day you can do that in a grocery store where maybe you don’t need a cattle farm to supply the meat for the butcher counter at a Whole Foods or some other grocery store. You can literally just culture it in the same way you could ferment beer on-site.
I think that’s a big macro trend that’s happening because the places in which we’re able to produce food are shrinking. I think more and more of it can happen on-site.
Over the last decade, grocery store center aisles have shrunk, leading people to think they will soon be extinct like the dinosaurs. What is your opinion on this?
I think the center aisles are definitely shrinking. There’s objective data that proves that. Fresh is definitely taking over. I don’t think the center aisles are completely going away, though. I think what the center aisles are doing is that they’re shedding their skin.
Older legacy brands like Heinz is slowly being chipped away at by companies like Sir Kensington’s. In every single category of product, even with Kraft Mac and Cheese and Annie’s Macaroni and Cheese, there’s better versions coming up.
I see a lot of that food metamorphosing into better, cleaner versions of themselves in the future. Not all of the categories are going to survive. There’s going to be some things that we’re just not going to have any more in the center aisles, maybe.
I think, for the most part, all that stuff is going to get a lot cleaner and a lot more sustainable. That’ll keep it strong.
What are some of the biggest ideas and shifts that we’ll be seeing in the food industry in 2017 and beyond?
I think the big theme around that is that we can have healthy, sustainable food that’s accessible to everybody. I think that’s some of the biggest idea and shift of how we can change in the future. It’s an aspirational dream of mine, but I think that’s where the industry is trying to get to.
What are the important consumer attitudes/behaviors around food that you see shaping the marketplace?
A lot of times, when you talk about the future of food, you only fixate on the technology, because it’s a little easier to say there’s this new gadget or new thing that is taking us into the future. I think it’s equally important to pay attention to consumer behavior and attitudes, because you can only really innovate when consumer attitudes or technology move in lockstep.
I think people are in this predicament where they want their cake, and they want to eat it, too. We know that the mass meat industry, for instance, is really resource intensive. Feed lots are not really good things for animals or the planet, but yet we still eat 80 percent of our plate is meat, as an American on average.
This is also not just an American thing, but it’s happening with rising cultures like China. As China is becoming richer and richer, they’re adopting a Western diet. That’s problematic if a billion people come online and start eating like they do in Texas.
For as much as technology and cellular agriculture can change us, we have to get away from these very resource intensive, environmentally challenging types of foods. Not stop them, but have a more mindful attitude about them, reduce the amount of meat you’re eating, increase the amount of vegetables you’re eating and so on. It feels soft, but consumer behaviors add up. That’s what makes the food producers produce what they want to produce.
There are now more places and ways than ever for consumers to buy speciality foods. How can retailers compete with this proliferation of competitors?
There’s so much competition to get food. I think it’s becoming to the point where, if it’s a commodity that you don’t need any experience around…If I just need to buy a box of salt, I don’t need any experience for that. I can just deliver that online.
If I want to explore cheeses, or I want to explore vegetables, or I want to do something like that, I’m open to having an experience around that. I think that’s the thing that’s going to be very hard to disrupt with digital, fresh direct food type things.
There’s still room for, I think, stores to become Murray’s Cheese Shop or Chelsea Market, where it’s a destination and an experience, and not just a place where you go pick stuff up. I say a lot that grocery stores need to start thinking more like the Apple Store.
People spend an afternoon in an Apple Store, check their email, and write. People have written novels on the computer there. How do you get it to a point where people want to linger around in your grocery store and just loiter? That’s when you know you’ve created a good experience.
Think, there’s not a lot of places you can real life food education without having to sign up for a cooking class or something like that, yet the grocery store is a place that we go all the time. Very little of our trips to the grocery store result in some sort of learning experience.
You’ve said in a former interview that in 10 years every retailer will have some sort of vehicle to identify and cultivate new start-ups. Why is this partnership with startups so important for retailers? And what are some of these vehicles you have in mind?
I think there’s a lot of examples of different accelerators and incubators out there. Chobani Food Incubator is one of them. That’s an example of a big brand looking for little brands that are innovating faster.
Chobani’s not even as big as some of the other big ones, like General Mills and stuff like that. The truth of the matter is, I think right now, large brands have forgotten how to innovate a little bit. They maybe haven’t forgotten, but they’ve stalled a little bit on their engine on innovation.
They’ve focused much more on saying, “Hey, there’s thousands of startups out there. Let’s just wait and see which one is doing the best, and then we can acquire them, or we can invest in them.” You’re seeing literally, General Mills is a great example, actually.
They acquired Annie’s a couple years ago which was a huge acquisition. They have a brand incubator called 301, which is essentially their vehicle to source little brands, give them support, and give them to tutelage to the point of, “You guys are all grown up now. We want to acquire you.”
That’s the way of innovation right now. I still think retailers and brands in 10 years will start to do that. They’ll keep doing that in 10 years. I also think they’re going to have to start thinking of how they innovate internally.
There’s only so many times you can pay $800 million for a macaroni and cheese company before it becomes really cash intensive.
What about the biggest thing you’ve learnt about the industry since you’ve started out?
I always say that the food industry looks just like Silicon Valley, except 10 years behind and twice as slow (laughs).
The same disruption that I think happened to Netflix disrupting movies, iTunes disrupting music, Spotify disrupting music, all of the digital media, social media disrupting news organizations, that’s happening right now with small startups with big companies.
It’s just happening at more of a glacial pace, for the simple fact that food is not pixels. It’s harder to innovate, and it’s much more capital intensive. I think the patterns of innovation repeat themselves. You’ve got a lot of big companies that are losing market share to small groups of people.
Then on the same side, you’re getting a lot of small companies getting tons of investment capital, not always in the most sober way. It’s the same thing that happened in the early 2000s with the tech boom is happening with companies like Juicero right now, getting hundreds of millions of dollars, $80 million to create a juice machine that you can just recreate with your hands.
It’s crazy. That’s what I’ve learned, is that the pattern is not terribly unique when it comes to innovation.
I think as an innovator, and when you’re making new things, it’s really smart to always, if you’re introducing something new, is you need to always anchor it to something that they’re familiar with. I think people freak out when everything about your idea is completely new and exciting.
It just becomes this amorphous thing, where there’s no anchor to what it all means. If you can introduce the newness a little bit more, and little bit more, it does wonders for how you can sell an idea or get an idea across.
I have this thing that I say that it’s the reason that they rate cars in horsepower, because before a car, the horse is all you knew. Saying, “No, this thing has 100 horsepower,” that instantly gives people a frame of reference for what this new invention could be.
I always try to keep that in mind. It’s very useful, because there’s a lot of institutional knowledge in the food industry. You have to meet people in the middle.
That’s why with the future market, we still talk about it as an actual grocery store, even though in the future, grocery stores might be completely distributed. We still think that people have a visceral response and understanding when they step into a grocery store. They know what to do. It’s a great tool to communicate new ideas with.
What can we expect next from Studio Industries? Are there any new projects in progress?
On the future market, I can’t say too much about this, but we’re going to have a very big installation happening in late June in New York City. There’s something very physical coming in that respect that is going to be very exciting, and we’ll be announcing that pretty soon.
We should be able to announce it at the conference. Then a lot of our energy is also focused to a new business called Alpha Food Labs. It is not a new business.
Essentially, it’s a new moniker that my wife and I are putting our company underneath. My wife runs the website Food+Tech Connect. It’s basically like PSFK, but only for food.
We just soft launched a company called Alpha Food Labs. What Alpha Food Labs is is it’s an innovation platform for food companies. We support startups, and we support large corporations. For startups, we give them mentorship and tutelage. We give them access to resources to help them scale up.
For larger companies, we introduce them to startups. We also help them with their internal innovation projects. That can range anywhere from doing workshops to training staff on design, to doing an actual fast prototyping project, where we’re taking some idea that they have and making them real very quickly.
That’s what Alpha Food Labs is. We’ll be building that a physical space in Brooklyn later this year.
We’ve already started doing projects behind the scenes with a number of large companies, and we have some startups in the queue. Work is happening on it, but it’s open to the public.
Thanks for the glimpse into the supermarket 50 years from now! Come see Tom take the stage to talk about the future of the grocery retail experience at our PSFK 2017 conference on May 19. Get your tickets today before they sell out!
Mike Lee is the founder and CEO of Studio Industries, a Food Design & Innovation agency, specializing in the application of design thinking to food products and experiences. His experience in food design & innovation has covered a wide range over the past 10 years. Most recently, Mike led product development initiatives on the Innovation & New Ventures team at Chobani. At Chobani, Mike focused on building out the Greek Yogurt maker’s product platform into new categories and he drove the product design process from research, insights and ideation, to food, flavor and packaging development, and then finally to business planning and production. Mike also led the development of the company’s innovation pipeline process, which impacted both the company’s product development methodology as well as the culture of innovation across all employees.