Technology is changing the CPG and retail landscapes, thanks in part to companies like Spoon Guru and its co-founder, Markus Stripf. When he joins our CEO Gary Nowacki on the Conception to Consumption (C to C) podcast, they’ll examine how the consumer experience has changed during the pandemic. Plus, how brands can use this to their advantage, competing on features other than price.
In addition to offering a more personalized approach to grocery shopping, among other things, they also make it easier for everyday consumers to avoid food and beverages they don’t want in their diets. Whether they’re faced with dietary restrictions caused by allergies and intolerance or simply trying to achieve healthier eating habits, a combination of artificial intelligence and machine learning can help them meet their individual needs. Learn more about this startup and why big international names, like Tesco and Woolworths, are sharing this technology with their customers.
Markus Stripf: If you can’t compete on price and you may struggle to compete on price with Amazon, then you have to compete on experience. And technology will be your friend. You have to meet the consumer at where they’re at, and you have to listen to the consumer and understand really how they change and what they require.
Gary Nowacki: This is C to C, where we cover innovation in the food and CPG business from conception to consumption.
Welcome to C to C, everyone. Today, very interesting guest, very interesting company. You’re going to learn all about it. Markus Stripf, who is founder and chief product officer, and marketing officer of a company called Spoon Guru. Markus, welcome to the podcast.
Markus Stripf: Hi, Gary. How are you?
Gary Nowacki: Good, good. So, Markus, you had sort of an unusual personal background and journey getting into this space. You did not take the normal path into consumer product goods and retail. Tell our listeners about your journey.
Markus Stripf: Yes, I ended up in this industry almost by accident. I was in the music industry before. I was working as a musician, and then I worked for a large record company just as the entire industry collapsed literally overnight. I joined the music industry in 2000 and overnight the bottom fell out of that industry.
Piracy was rampant and the business model literally disappeared over a few days. And I was part of that transformation, really. I lived through that digital transformation when Steve Jobs launched iTunes and Daniel Ek launched Spotify. And I was very happy in my career.
But I stumbled across a very common problem through observing my wife, who happens to have a number of intolerances and allergies. And I saw her struggling in a supermarket, reading the back of her label, trying to work out what she could eat and what she couldn’t eat. And I thought that is just crazy. That in this day and age, people still find it so difficult to find suitable foods for their individual needs.
And that’s when I basically got together with two friends who are also now co-founders in Spoon Guru, and we set up the company to solve that very specific problem. People have specific dietary preferences or health objectives. They’re looking for specific foods that comply with their diet, but they’re impossible to find.
Google doesn’t really help you. Supermarkets struggle and we are solving that problem effectively. We are a specialist search engine for foods and recipes that finds exactly the right foods for your individual needs.
Continue reading the transcript:
Gary Nowacki: Interesting journey. And Mercedes, our podcast producer, also came from the music industry, so we’re happy to have you both here. Sorry for the economic disruptions there, but a good final outcome.
Markus Stripf: Yeah.
Gary Nowacki: So, Markus, tell our listeners, how does it actually work?
Markus Stripf: Yeah, so we basically build a platform that uses a combination of artificial intelligence and machine learning. And we combine that with nutritional expertise and that allows us to classify products and assign hundreds and hundreds of dietary attributes at individual product level to make those products discoverable and searchable. And we license our technology to retailers around the world.
Tesco in the UK, Woolworths in Australia, Albert Heijn in Holland. All those retailers leverage our technology to provide highly personalized shopping experiences to their shoppers. And that has been our current focus. We’re focused on capturing global retail opportunity, but we’re also now looking at expanding into other areas health and life science and fitness.
Because on top of the fact that most people—it’s actually 64% of the world’s population now has some form of dietary requirement. But on top of that, people just want to be healthier. And those trends have been accelerated if anything by COVID. But now people very much care about their personal health and the health of the environment, and they have very, very specific preferences or requirements. And we make it easy for our retail partners to respond to those individual preferences or goals.
Gary Nowacki: So, the retailer pays for it. They pay for your product and solution, and then the consumer utilizes it.
How does the consumer utilize it? Do they utilize it more often planning a trip to the grocery store in advance, or do they use it on their smartphone? How does it all work?
Markus Stripf: Yeah. So generally, we are deeply integrated with retailers’ infrastructure. So, a consumer would leverage our technology when they conduct an online search. For example, they may go to tesco.com and search for gluten-free cake with high fiber, for example. All the search results that are returned are powered by Spoon Guru. We are an omnichannel play.
So, retailers also leverage our technology in their native apps. We allow or our retail partners allow their shoppers to scan barcodes, for example, to see whether a product is suitable for their needs. And if it’s not suitable, the retailer can then recommend suitable alternatives, which is also powered by us.
Our technology integrates with digital shelf edge, smart shopping carts, install applications, and, of course, CRM and loyalty programs as well. You can think of us a little bit like Intel Insight. We power retailer apps to personalize the shopping experience. And the consumer generally interacts via the retailer’s apps and websites with us.
Gary Nowacki: So what are consumers saying about this? What are stories you’re hearing out there of real-world consumers using your application?
Markus Stripf: Well, I mean, they love it because we take the hassle out of finding the right foods. It’s just so complicated and cumbersome and frustrating really to decipher the unpack information.
Generally, most people would like to lead healthier lives, and I’m one of them. But I’ve been in this business now for seven and a half years. Without looking up the actual number, I don’t know what my daily recommended intake of salt is or sugar. And why should I be counting teaspoonfuls of sugar? There must be easier ways in this digitally-enabled age.
I’m happy to tell you what I like and what I don’t like. But you have to make it easy for me in return for my data. Make it easy for me. It has to be convenient, but it also has to be reliable because, obviously, you can imagine if you have a food allergy or an intolerance, they see our margin for error. So, not only does the experience need to be without friction ideally and transparent, but it also needs to be highly accurate and reliable.
So, we are solving all of those consumer problems, really. We’re making it easy for you to find exactly the right foods for your needs. And therefore, we are saving you time. We’re bringing you more choice. And hopefully, you’re discovering things you love, you wouldn’t have found before.
Gary Nowacki: Well, that’s terrific. So, now turn it to the other side of the equation, Markus, please.
So, what’s it in for the retailer? Does the retailer sell more product? Do they have happier customers? Are there other benefits to the retailer?
Markus Stripf: So the main advantages, I mean we really help retailers to connect with their shoppers in a whole new way. And the main advantage is really is it increases customer loyalty, but it also drives revenue and market share.
Our retailers really see this as a point of differentiation when they work with us because it gives them a competitive edge. It’s difficult to compete on price in a low-margin business. So, you have to be able to compete on experience and that’s something we bring to the table.
We allow retailers to really personalize the shopping experience to the nth degree, to really meet the customer’s individual needs and that gives them an edge in the market. But it’s also really good for business.
We see increases in basket sizes, average order value goes up, customer satisfaction goes up significantly, return frequencies go up. So, across the board, we’re hitting all the main KPIs just by being able to provide a better shopping experience for our retail partners.
Gary Nowacki: You mentioned something from the consumer standpoint that’s certainly been a hot topic for a while, which is their data. And you said, give me some value in return for my data.
So how does that all work? How do the retailers leverage this new data, what’s it do for them and how do they protect the consumer data?
Markus Stripf: Yeah, I mean this is a critical, critical point, obviously. So generally, some of the programs we power for our retailers are on an opt-in basis.
So, for example, we are about to launch a brand-new product called Health+, which allows the shopper to stipulate their health goals and objectives. And then, we analyze the consumption and purchase behavior, and we allow—and we give the shopper feedback in real-time, how they are doing against their stated goals.
So that program can only happen on an opt-in basis. But the shopper clearly understands if I tell you what my preferences are, I expect a certain service in return. And I also expect that you protect my privacy throughout this experience.
But we sometimes compare it to Netflix or YouTube. The more you engage with those types of platforms, the more personalized the experience gets, the more curated the experience gets. And the user of those platforms understands the trade-off. I’m happy for you to mine my data, and in return, I expect you obviously to honor my privacy, but also to use that data to my benefit, to my advantage.
And we think that analogy should apply to retail as well. I happen to be a vegan. I haven’t eaten meat in over 20 years. And still, especially right now, I’m getting daily email offers for Christmas turkeys. It’s frustrating for me. It’s a completely wasted opportunity for the retailer who sends me these marketing messages because they don’t convert.
My retail of choice by now should know that I haven’t purchased any meat products in the last 20 years. Why are they still sending me irrelevant offers? So as far as the consumer is concerned, or as far as I’m concerned, I would be more than happy to let my retailer know what I like and what I don’t like, if the shopping experience is, after that, more relevant and fun and more tailored towards my individual needs.
Gary Nowacki: So you’re doing a lot for the consumer. You’re helping them not just find the products that they want, but also find complimentary products so they can maybe cook an entire meal based on their criteria.
And now maybe you’re also helping them with their health goals. So, is it completely free to the consumer or do you envision a premium model where consumers buy up to some of these more advanced functions?
Markus Stripf: It’s really up to our retail partners to decide how they want to leverage this technology. But generally, they offer it as a free service really, in order to drive customer loyalty and improve net promoter scores, really.
We would not expect a consumer—within the retail environment, you could imagine that this technology could also be used in an insurance context or in a fitness—it could be part of a fitness app and then it could potentially be a premium service where a consumer takes out a subscription or pays for this kind of service.
But within a retail context, I think, again, retailers need to be able to differentiate themselves and compete and they see this as a value add that allows them to improve customer loyalty.
Gary Nowacki: Are you or the retailers able to mine the data to pick up on trends? Hey, we hear a lot about paleo, for example, but here’s what’s really going on. Here’s how many people are really doing paleo? Are you analyzing that data?
Markus Stripf: Yeah, absolutely. We analyze data in real-time because some of our modules, like our swap algorithm, for example, needs to be able to swap out products in real-time. So, we see, effectively, live transactions and we use that wealth of data in order to analyze now and next insights.
What are the new fads or dietary trends? The flexitarian movement, for example, or the plant-based trend is huge and it’s growing exponentially. And it’s driven by the younger demographics. Where some of the biggest segments, like the gluten-free segment, it is actually the biggest food preference, if you want, but it’s pretty stagnant with other trends like driven by concern for the environment, the plant-based trend, which I’ve already mentioned.
People are looking for eco-friendlier choices; those are trends we are seeing effectively develop in real-time. And we use that information to inform our retail partners. But also, manufacturers can also benefit from that, obviously, because it allows them to understand whether gaps in their categories and whether over index or under index against specific dietary trends.
Gary Nowacki: I was going to ask you next about the CPG manufacturers and brand owners. Is that your main value proposition to them, showing them data on trends?
Markus Stripf: Yeah. We have, until recently—until now, in fact, we have focused on providing services and digital tools to retailers exclusively. We have had a lot of interest from manufacturers over the years, and we’re now expanding our capabilities to support them with those types of insights.
What are the new dietary trends? What are people looking for? What kind of attributes are they searching? Those types of services and insights we will be able to package up and offer to manufacturers.
Gary Nowacki: Good, good. Well, congratulations on that. So, Markus, what you do sounds fantastic. Sounds like benefits the retailers, benefits the consumers, benefits maybe the planet through better eating choices and health and all these other things. Now you’re trying to benefit CPG owners.
So, it all sounds great. But as we all know, with technology adoption, there’s always speed bumps. So what are some of the bigger barriers you’ve seen in rolling out this solution?
Markus Stripf: Yeah, that is a great question, and we would hope that the status quo would fall more quickly. The experience, especially the online experience around the world really, and the biggest culprits are often some of the biggest retailers on the planet. The experiences can be poor.
Search results that are returned are wrong often, which could pose a significant risk for the consumer. But also, often not only our false or wrong search results returned, often the retailer can’t actually find the right products in their own catalogs that match the consumer-specific search term.
We are trying to work with the entire industry to innovate. But there are challenges. This is a relatively conservative industry compared to others. Retailers have to deal with multiple legacy systems that don’t necessarily want to play ball all the time.
And to be frank, COVID has thrown up a lot of challenges for retailers around the world. There are now logistical challenges, operational challenges that need to be overcome first before some of the more aspirational innovations can be driven forward.
But those are really the main issues. We are coming across multiple legacy systems, so it may not be as easy as we would like it to be for a retailer to fully embrace the capabilities we can bring to the table and focus. Since COVID, the focus is entirely on supply chain issues and operational efficiencies.
Gary Nowacki: Sort of crossing the chasm, early adopters, etc. Have you experienced all that in your sales cycles out there bringing new customers on board?
Markus Stripf: Yeah, I mean, some, you know, we’ve had a fantastic relationship with Tesco in the UK who really wanted to be seen as an innovator in this space. With Woolworths in Australia, for example, really, really have really embraced the health agenda.
They understand they have a corporate responsibility to do their bit to improve the health of the nation, and they decided to work with a specialist service provider like us to help them accomplish that strategic goal. So, yes, there will always be some who are leading from the front and others who are behind the curve, but that comes with the territory.
Gary Nowacki: I’m here with Markus Stripf, who is founder and chief product and marketing officer at Spoon Guru. Markus, you just started to touch on the pandemic and how it’s impacted your business.
Can you expand on that a little bit more, what are you seeing? We’re about 20, 21 months into the pandemic here in November of 2021. What are you seeing across retail and consumers and your business as the pandemic continues to march on?
Markus Stripf: So some of the trends we saw before COVID have been accelerated. Even before COVID, people were more conscious about what they consume, and that is really one of the dominant trends now, I think people pay much more attention to what they put into their bodies.
A recent survey showed that 78% of Americans are now paying more attention to their health since COVID, and adopting a healthy diet is a critical part of that objective of being healthier. The fact of the matter is people either want to or need to be healthier as we come out of COVID.
A lot of people adopted bad habits, bad eating habits, and they need help, they need their supermarkets to make it easy for them to adopt a healthier diet. Of course, ecommerce, we’ve seen significant increases now in adoption rates for ecommerce, and we expect those to stay.
People have been educated now, and they have embraced ecommerce as a tool to shop for their groceries. And we don’t think those levels will drop again to pre-COVID times, which is an enormous opportunity. Ecommerce, buying your groceries online and having a more personalized and tailored experience is a huge opportunity, I think, for the entire industry.
But I think that the biggest trend is people simply care more now for their personal health and the health of the planet, and they want to know, they are demanding more transparency, but they also want the convenience. It has to be easy for them to find the right foods for their individual needs.
Gary Nowacki: Markus, maybe you’ve touched already a little bit on it, but what can you share with our listeners for what’s next for you and what’s next for Spoon Guru?
Markus Stripf: We are really excited about the opportunities within retail. We are really excited about launching this new product called Health+ that will help people to meet their individual goals.
It’s steeped in behavioral science because, again, we know most people want to lead healthier lives, but also the vast majority actually fail to meet their goals, because it’s just too difficult. So we see our role as a digital enabler that supports people around the world to find the right foods for their dietary requirements and health objectives.
We are excited about the opportunity within retail because I think, as I read the other day, that 80% of a household’s income for the entire food budget is spent at retail. The other 20% is spent in restaurants or takeaways, but that’s where people get their food.
And diet, being able to eat more consciously is a huge topic. It’s probably the dominant topic of our time. Healthy people, healthy planet. And we see our role as a digital enabling all of this.
There are other opportunities within the wider food ecosystem. The internet of things, smart kitchen applications, supporting people at home when they cook, and of course the wider health category, primary healthcare. And of course, life science is a very, very exciting area for us to explore.
Gary Nowacki: So going forward, a lot of exciting things. Congratulations on all your success. But what do you see as the biggest speed bumps or challenges to continuing to make inroads with your solutions out there?
Markus Stripf: I mean, the food ecosystem is just a very, very fragmented world, and it needs the entire food industry to come together to collaborate, to drive innovation.
Again, we look at what consumers want. They want complete transparency from farm to fork. And there’s a number of solutions now that are being investigated. Some of them are technology-based, like Blockchain. I think consumers have a right to know what they consume, and they’ve got very specific requirements.
But those things are not going to get solved overnight. We need collaboration across the board, and we think technology will play a significant role. But technology alone is also not going to solve it. So, we need people to really be prepared to collaborate, and not just to accept the status quo.
Gary Nowacki: Yeah, it is a big big industry, and massive and global in scale, and very fragmented, as you said. So Markus, I asked all of our guests the same question. It’s a two-part question.
What advice to give to two different sets of folks? First, innovators already in this CPG and technology space, and secondly, people just starting their career in this space. What advice would you give?
Markus Stripf: Well, you have to find something you’re passionate about. And what I love about startups is, they identify a problem, often without looking. They stumble across a problem, pretty much like we stumbled into this space. We saw a problem, and we thought we can probably use our experience from different industries and sectors and our knowledge to solve this problem.
So, I guess that’s my—but you have to commit. And this is not just a two- or three-year thing. We set up a company, and then you may get lucky, and you exit, and you spend the rest of your life on the beach in Havana. [Laughter.]
It’s a rocky road and there will always be challenges and hiccups. But if you pick something you feel passionate about, that’s going to get you through it because that is so energizing. And then when you get great feedback from people whose problems you’ve actually solved, that’s incredibly rewarding and motivating.
But that’s what I would say. Find something you feel passionate about, because you will lose a lot of sleepless nights over things you will never anticipate in advance. But if you feel passionate about and you’re personally, yep, invested, then that makes it so much easier for you to keep going and ultimately be successful.
Gary Nowacki: Be passionate, but also be patient.
Markus Stripf: Yeah. [laughter] Yeah.
Gary Nowacki: Excellent advice. Markus. Before we go into a wrap-up, any other comments or words of wisdom you’d like to share with our listeners?
Markus Stripf: So today the story broke in the UK that Amazon is now coming into this space. Amazon announced this morning that they’re opening up 260 Amazon Fresh stores to take the fight to the incumbent retailers. So that’s really going to put the cat amongst the pigeons.
And again, to my earlier point, if you can’t compete on price, and you may struggle to compete on price with Amazon, then you have to compete on experience. And technology will be your friend. [Music.]
And you have to meet the consumer at where they’re at, and you have to listen to the consumer and understand really how they change and what they require. And then you have to respond to that. Otherwise, you may stop being relevant, and you may not be able to compete.
Gary Nowacki: Interesting developments with Amazon. And if folks want to get in touch with your company or you, I assume they just google Spoon Guru and go to your website, or follow you on social media?
Markus Stripf: Yeah. Yeah. We are in all the usual platforms, but it’s Spoon.Guru. You can find us easily. And then yeah, you please get in touch with. We’d love to talk to anybody who wants to have a chat.
Gary Nowacki: Excellent. Excellent. Well, very exciting products. And congratulations on your success with big companies, big retailers like Tesco and Woolworths. And keep going. We’re rooting for you to succeed, Markus, because you’re on an important mission.
Markus Stripf: Thank you, Gary. It’s been great to talk to you.
Gary Nowacki: I want to thank my guest today, Markus Stripf, who is founder and chief product and marketing officer at the very innovative technology company, Spoon Guru. Markus, thank you so much for being on the podcast today.
Markus Stripf: Thank you, Gary. Take care.
Gary Nowacki: Thanks for listening to C to C, where we cover innovation in the food and CPG business from conception to consumption. Just type the letters C-T-O-C, no spaces, to find us on iTunes, Stitcher Podbean, and Google Play.
This episode of the C to C podcast originally aired November 23, 2021.