How ‘Disruptors’ are exploding business models

Disruption is all about throwing things into confusion and disorder. For better or worse, that’s a familiar scenario to many in the food industry right now.

According to a recent report by KPMG’s Consumer Markets practice, big companies are having major trouble dealing with disruption. Nearly all food, drink and consumer goods and retail companies are in some stage of active business transformation, the consultancy reported. However, some 82% of these companies “do not consider themselves to be highly effective at managing change,” KPMG found. That’s a sobering finding, and the report outlines strategies to address this.

Another good resource for understanding the depths of change is SN’s new roster of 25 industry “Disruptors." This list identifies people driving transformation, from the well-known to the little-known. How are they accomplishing this? Here are five ways disruptors are overturning the industry’s business models:

• Making It About Food: Brian Cornell leaves little doubt about the sweeping changes he plans for Target Corp. The company’s chairman and CEO is focused on “reinventing food,” and in the process “transitioning from grocery, which is transactional, to food, which is more personal and inspirational.” Specifically, this means emphasizing fresh and health and wellness and appealing to younger shoppers.

• Melding Together Format Styles: Disruptors tend to attack tradition, and that’s the case with Oscar Farinetti, founder of Eataly. His unique Italian specialty food concept pulls ideas from a variety of formats, from restaurant to retail. This mix-and-match approach is working, based on the company’s feedback and its expansion plans.

• Targeting a New Generation: You may not be familiar with Fetch Rewards, but you probably heard of Millennials. So has Wes Schroll, CEO of Fetch and himself a member of Gen Y. His frustrations with shopping models led to the creation of a mobile application that attempts to remake the shopping experience with younger consumers in mind. Shoppers use their smartphones to scan products, get discounts and rewards, and move quickly through checkouts. This is disruptive because it was built from the ground up to differentiate from a traditional shopping experience.

• Remaking Sourcing Models: Even the most innovative and disruptive products and services need sound business strategies to succeed. Paul Lightfoot, CEO of BrightFarms, developed a new sourcing model for his company’s greenhouse-grown produce (a product that in itself is disruptive). Lighfoot’s approach is to build greenhouses only after long-term supply deals are in place with retailers, a departure from industry norms. Having that guarantee has boosted the company’s ability to raise capital and grow.

• Rethinking Health and Wellness: Much of the food industry has embraced efforts to make products healthier, but for the most part that has started and stopped with food. Suzy Monford, CEO, Andronico’s Community Markets, is changing the paradigm by emphasizing fitness as well. Her new and ambitious program aims to get shoppers and employees more active, and it has catchy branding phrases like “FitMarket” and “FitBank.”

Will all our disruptors reach their ambitious goals? That’s unlikely. But they have already succeeded in one sense by shaking up how we think about things. That’s why their stories needed to be told.