Evolutions role in guiding food industry
Oct. 8, 2013
Debating evolutionary theory usually does not involve business or management issues, much less those matters that touch on food processing and retailing. Most often, this is a subject best left to religious advocates or philosophers, deferring management of businesses like food to the hard-headed or more thoughtful. Several recent commentaries, including one reflecting on a visit to the Galapagos Islands where Charles Darwin devised his views of evolution, helped make clear that the business of food is as much directly connected to and potentially affected by the workings of his theories as any other sector of humankind. Indeed, there is much about evolution and its effect on the environment that applies with great force to how food is made and sold.
John Kay, a British economist who often writes for the Financial Times, helped make the connection between what Darwin proposes in his theory of evolution and how business is conducted. Writing from the Galapagos Islands in the Pacific Ocean off Peru, Mr. Kay points to how the 19th century English scientist developed his appreciation for evolution unfolding without being managed. He notes that evolution is driven by three elements — variation, selection and replication. Changes representing advantages are replicated. The result is not always improvement, but primarily is adaptation to the local environment.
Relating this evolution to business, Mr. Kay says, “Modern business has resulted as a result of the variation that comes from experiments in products and business methods, the selection by customers and capital markets of adaptations that add value (and the rejection of those that do not), and the replication by competitors of strategies that succeed.” He adds, “Evolution is a process of trial and error that receives regular feedback and tends to reproduce success. That is equally a description of how a market economy aligns productive capabilities with consumer needs.”
Nearly coincident with this article appeared an interview conducted by McKinsey & Co. with Dick Boer, the chief executive of Ahold, the Dutch-based international grocery chain that has been undergoing a major transformation in reaction to lackluster performance in the early 21st century. Abandoning hypermarkets in favor of supermarkets and smaller stores is only a part of the effort Mr. Boer is leading. He focuses on four areas of emphasis that reflect how Darwin’s theory helped this company change. These are transparency in product sourcing, help for employees and customers in leading healthier lives, reducing the group’s impact on climate change, and assuring that stores are “part of the community.” In the latter area, he stresses the importance of serving low-income neighborhoods.
In what could be called a Darwinian approach to meeting food needs of the future, Mr. Boer underscores the need for fundamental change by the food industry in helping to serve a global population of 9 billion forecast for the middle of the present century. Thus, he says that Ahold is focusing on carrying through with three promises — to be a better place to shop, a better place to work and a better neighbor. In very much the scientific approach that won the favor of Darwin and his followers, Mr. Boer says the group has developed specific ways of measuring its performance against each promise. “We have a clear understanding of how we’re going to measure ourselves, both in the hard key performance indicators and in perceptions,” he adds.
Mr. Kay laments that evolutionary thinking has made scant progress in social sciences, which he attributes to misunderstanding. For many, evolutionary theory leads directly to eugenics, or racial profiling, something that the world has largely rejected. Thus, he underscores that evolution does not mean “survival of the fittest,” but the survival of adapters. Like Mr. Boer and Ahold, adapting to a rapidly changing world of food requires adaptability. And here is where Darwin and the food industry come together for the benefit of the industry and an adequate global food supply.