25.02.2021 16:05

Innovations and food

Lessons learned from “Innovative Food trends and Retail Opportunities in the Baltics and Finland” – a webinar that took place on the 17th of February 2021.

The event was a Nordic- Baltic cooperation between Finncham, Finnish Chamber of Commerce in Latvia and Lithuania, Enterprise Estonia, Investment and Development Agency of Latvia, the Nordic Council of Ministers' Office in Latvia, Embassy of the Republic of Finland to Lithuania and the Embassy of the Republic of Lithuania to Finland.

We would like to share the ideas and knowledge gained from the event.

In the future, food could be disconnected from agriculture

The pioneering story by Solar Foods introduced the new reality of the carbon negative food production, that is already available in the pilot plant and with industrial scale coming soon. The carbon negative production process uses hydrogen and CO2 as a feed for cells creating a new protein free from meat and plants, yet, with all the necessary aminoacids being a real substitute to the traditional agriculture.

There is a new venture capital fund for food covering Nordics and Baltics

Nordic FoodTech VC is the first venture capital fund investing in early stage innovative future food and foodtech companies in Nordics and Baltics. The fund is aiming up to 50 M€ which will be invested in approx 30 companies making positive impact on people, planet and society. In addition to funding, the greatest asset is the extensive expertise of the team in the food value chain.

Booming e-commerce. Innovation is of value only if scaled.

As more consumers are choosing their groceries online, it has an impact also on the driving intensity and Co2 emissions, as learned from Barbora, the largest food e-commerce provider in the Baltics serving 12 thousands households every day that recently has also expanded the activity to Poland.

Food companies adding value- a need from retailers and consumers

Local, high quality ingredients with traceable origin and transparency are among the core values both for the food companies, retailers and consumers alike.

Yet, startups have good market entry points as well when adding more value than the traditional sector.

In addition currently more than ever consumers are health and diet conscious.

Sustainability as a business imperative – the cases of Fazer and Paulig

The young generation of consumers demand from brands not only good products but also alligning the message of the impact on the planet and the society. This is a trend all across the Nordic – Baltic region.

While consumers not always know what is the best choice, it is the responsibility and business logic of the brand to create the best solution. Pandemic has slowed down the innovative food product launches, putting higher efforts on sustainability and efficiency.

Fazer - having a variety of local brands across the region, “food with a purpose” and customer centricity, the company also brings technologies and new product development knowledge from Finland to the Baltics. Bread category is with the highest risk of food waste, thus innovation and right communication to the customers about the product choices is making a significant difference.

The constant improvement of sustainability is at the core of the company. Among recent achieved goals was the CO2 emission reduction in 2020 by 36% vs 2019 in the Baltic countries. 39% of Fazer products in Baltics Best Before Date was prolonged from 5 to 7 days. Also, the more sustainable packaging choices were implemented. The longevity of the products was improved as well as the more sustainable packaging choices were implemented. 73% of the products offered in the Baltics are vegan. And the Baltic operations development is linked with the overall company sustainability goals for 2030. Actively innovating not only by reducing salt and sugar content in the products but also experimenting with new raw materials with higher vitamin values as substitutes to more traditional choices, the company has captured the local flavours by introducing kefir as a product addition.

The Finnish family owned company Paulig has an inclusive and value-based culture with a strong belief in plant based future. The company already now has 90% plant-based product range. Consumers are becoming more interested, invested and hence conscious in making sustainable choices, which enables brands to have a dialogue with consumers and for consumers to impact the outcome. In order to maximize the impact, it must be a joint effort of consumers, producers and retailers.

Food industry can play a crucial role in global climate and health solutions, and Paulig has set the ambitious sustainability focus areas and ambitions for 2030. Paulig´s latest steps forward in implementing the sustainability program are achieving the CarbonNeutral® building certification for Vuosaari coffee roastery, testing of the renewable raw materials in packages as well as investments in sustainable food innovations.

Baltic retailer perspective on sustainability and collaboration

The sustainability depends on the cooperation with suppliers and stakeholders as well as openness to try new products. This was a shared value among retailers in the Baltics, as explained by Rimi by ICA, SOK Peremarket and Barbora.

While Baltic consumers are price conscious, there is also an ever growing interest to choose the products that have value beyond the taste and price. Company ability to invest back in the community becomes more and more important.

When purchasing products, the transparency with the suppliers all across the supply chain is crucial as it is to be open about the production process, and to care both for human but also animal welfare.

Origin, responsible production and full traceability as well as clear messages on packaging are improtant priority areas to communicate with the customers. Reduction of single use packaging is being rolled out as well.

The landscape in the Baltics is dynamic, with Prisma Peremarket by S-Group expanding their hypermarket presence in Estonia in 2021 and continuing to offer 24/7 service. New concepts for the bakery in cooperation with Fazer and shop-in-shop solutions are also aimed at offering fresh products and minimizing food waste as the company aims to limit it under 1%.

RIMI by ICA as group have high targets for the sustainability while also keeping the agility to introduce innovative procucts and testing them with the consumers. Working with startups and enabling local innovation growth through various initiatives also communicates the company values. The recent introduction of products without packaging will also have an impact on the reduction of use of plastics while empowering consumers to make conscious actions and be part of company or own sustainability goals.

Some futurism. If we were in 2035, what could we see?

While e-commerce will continue its high times with sophisticated automatized restocking options with electric deliveries, the importance of physical stores will remain. Whether those will be mere product tasting showrooms or still be part of the human socializing culture remains to be seen.

Personalized nutrition and well being and subscription based business models will be at another level.

The meat section at the stores might become “protein corners” with both dairy and meat category seeing significant alternatives.

Yet- above all- the great taste and emotional enjoyment will still be the drivers of choice in addition to inspiration and influence of thought leaders.

And the bread will be there, too.

In addition, we learned about the Nordic Council of Ministers' Office in Latvia research project and publication “Eight megatrends in Nordic Baltic food systems”. The megatrends range from the redesign of food systems and modern technological impact to changes in dietary preferences and consumption patterns, and even an identified trend of societal anxiety around changes linked to overconsumption and climate change.

#1 Technology will penetrate all areas of social life

#2 Food systems will be redesigned with a new set of goals

#3 Digitalisation will open new horizons

#4 Society will become increasingly polarised

#5 Products will be valued based on the amount of waste they produce

#6 A new appreciation for the environment will develop

#7 Anxiety and fear will become pervasive in our society

#8 New lifestyles will emerge and redefine our value systems

Presentations can be read here.
Recording of the event can be found here.

Article written by
Alise Barvika, Head of the Representative Office in Finland, Investment and Development Agency of Latvia