Reverse engineering - Big foods dirty little secret 🤫

Reverse engineering - Big foods dirty little secret 🤫

By
Nicola Spalding
February 8, 2021

It’s one thing to use an app to reverse engineer a recipe from a food picture, but some big companies may be using ‘deformulation’ to help ‘inspire’ their product development. There's even whole labs dedicated to it. But what do the little guys think?

This LinkedIn post by Veronica Fil, co-founder of plant-based cheese brand Grounded Foods, got us thinking. How many startups out there have experienced the same thing?

Putting blood, sweat and tears (and your life savings) into product development, only to send over concepts to a friendly retailer/corporate, and never hear back. Then a few months later, stumbling upon an inferior imitation of your product on the shelves of a major supermarket. Not. Cool. 🙅‍♂️

🛒 Reverse engineering happens a lot, especially in retail. Here’s why:

  • Buyers and product developers are under a lot of pressure to constantly find the next big thing, whilst coming under budget. Product ranges need to perform (bring in money), be under target for waste and markdown (not cost money), and be trend-led (bring in customers...and money).
  • Retailers have established relationships with big suppliers, startups typically don't. It's easier, and often quicker for retailers to just skip the small guys and go direct.
  • Small businesses sometimes struggle to produce in large volumes/work to a JIT supply chain demand. If a product is out of stock, consumers (and the boss) see a gap on the shelf, money is lost and the Buyer is in trouble.
  • Cost implications: either the product is a risk so small volumes = low retail margins, or a small business won’t have the same economies of scale as big businesses = low retail margins.

All of the above leads to using startup ideas as ‘inspiration’. In other words. big food finding new concepts, working to figure out how they’re made and how they can be emulated without breaking the bank or the law.

❌ Here’s why it’s a bad idea:

  • It’s totally, completely, utterly unethical. None of the above points excuse that. It may save on budget and time, but it's simply bad business practice.
  • If you do it enough, you'll get a bad rep. Trust us, small business owners talk and they're not afraid to name names.
  • People will stop bringing you ideas and you'll lose the true innovation which makes a product range great.
  • If all products are made by a small range of suppliers, whatever their size, the whole range starts to look (and taste) the same. Startups bring a differentiation to the market, that the big guys just can’t copy. Consumers will see it, and it’ll start to reflect in sales performance.

💡Takeaway:

For a startup, it’s a balancing act between fiercely protecting your IP and actually selling some stuff. Make the right connections, evaluate the market and talk to your peers to find out who treats startups well and who doesn’t.

Has this happened to you? Or do you have any tips to help startups stay safe? Hit the ‘reply’ button and help keep our shelves diversified.

Become a FoodHack+ member to get unlimited access

  • Access premium publications
  • Get listed on our directory
  • Join a Global Community

It’s one thing to use an app to reverse engineer a recipe from a food picture, but some big companies may be using ‘deformulation’ to help ‘inspire’ their product development. There's even whole labs dedicated to it. But what do the little guys think?

This LinkedIn post by Veronica Fil, co-founder of plant-based cheese brand Grounded Foods, got us thinking. How many startups out there have experienced the same thing?

Putting blood, sweat and tears (and your life savings) into product development, only to send over concepts to a friendly retailer/corporate, and never hear back. Then a few months later, stumbling upon an inferior imitation of your product on the shelves of a major supermarket. Not. Cool. 🙅‍♂️

🛒 Reverse engineering happens a lot, especially in retail. Here’s why:

  • Buyers and product developers are under a lot of pressure to constantly find the next big thing, whilst coming under budget. Product ranges need to perform (bring in money), be under target for waste and markdown (not cost money), and be trend-led (bring in customers...and money).
  • Retailers have established relationships with big suppliers, startups typically don't. It's easier, and often quicker for retailers to just skip the small guys and go direct.
  • Small businesses sometimes struggle to produce in large volumes/work to a JIT supply chain demand. If a product is out of stock, consumers (and the boss) see a gap on the shelf, money is lost and the Buyer is in trouble.
  • Cost implications: either the product is a risk so small volumes = low retail margins, or a small business won’t have the same economies of scale as big businesses = low retail margins.

All of the above leads to using startup ideas as ‘inspiration’. In other words. big food finding new concepts, working to figure out how they’re made and how they can be emulated without breaking the bank or the law.

❌ Here’s why it’s a bad idea:

  • It’s totally, completely, utterly unethical. None of the above points excuse that. It may save on budget and time, but it's simply bad business practice.
  • If you do it enough, you'll get a bad rep. Trust us, small business owners talk and they're not afraid to name names.
  • People will stop bringing you ideas and you'll lose the true innovation which makes a product range great.
  • If all products are made by a small range of suppliers, whatever their size, the whole range starts to look (and taste) the same. Startups bring a differentiation to the market, that the big guys just can’t copy. Consumers will see it, and it’ll start to reflect in sales performance.

💡Takeaway:

For a startup, it’s a balancing act between fiercely protecting your IP and actually selling some stuff. Make the right connections, evaluate the market and talk to your peers to find out who treats startups well and who doesn’t.

Has this happened to you? Or do you have any tips to help startups stay safe? Hit the ‘reply’ button and help keep our shelves diversified.

Become a FoodHack+ member to get unlimited access

  • Access premium publications
  • Get listed on our directory
  • Join a Global Community

It’s one thing to use an app to reverse engineer a recipe from a food picture, but some big companies may be using ‘deformulation’ to help ‘inspire’ their product development. There's even whole labs dedicated to it. But what do the little guys think?

This LinkedIn post by Veronica Fil, co-founder of plant-based cheese brand Grounded Foods, got us thinking. How many startups out there have experienced the same thing?

Putting blood, sweat and tears (and your life savings) into product development, only to send over concepts to a friendly retailer/corporate, and never hear back. Then a few months later, stumbling upon an inferior imitation of your product on the shelves of a major supermarket. Not. Cool. 🙅‍♂️

🛒 Reverse engineering happens a lot, especially in retail. Here’s why:

  • Buyers and product developers are under a lot of pressure to constantly find the next big thing, whilst coming under budget. Product ranges need to perform (bring in money), be under target for waste and markdown (not cost money), and be trend-led (bring in customers...and money).
  • Retailers have established relationships with big suppliers, startups typically don't. It's easier, and often quicker for retailers to just skip the small guys and go direct.
  • Small businesses sometimes struggle to produce in large volumes/work to a JIT supply chain demand. If a product is out of stock, consumers (and the boss) see a gap on the shelf, money is lost and the Buyer is in trouble.
  • Cost implications: either the product is a risk so small volumes = low retail margins, or a small business won’t have the same economies of scale as big businesses = low retail margins.

All of the above leads to using startup ideas as ‘inspiration’. In other words. big food finding new concepts, working to figure out how they’re made and how they can be emulated without breaking the bank or the law.

❌ Here’s why it’s a bad idea:

  • It’s totally, completely, utterly unethical. None of the above points excuse that. It may save on budget and time, but it's simply bad business practice.
  • If you do it enough, you'll get a bad rep. Trust us, small business owners talk and they're not afraid to name names.
  • People will stop bringing you ideas and you'll lose the true innovation which makes a product range great.
  • If all products are made by a small range of suppliers, whatever their size, the whole range starts to look (and taste) the same. Startups bring a differentiation to the market, that the big guys just can’t copy. Consumers will see it, and it’ll start to reflect in sales performance.

💡Takeaway:

For a startup, it’s a balancing act between fiercely protecting your IP and actually selling some stuff. Make the right connections, evaluate the market and talk to your peers to find out who treats startups well and who doesn’t.

Has this happened to you? Or do you have any tips to help startups stay safe? Hit the ‘reply’ button and help keep our shelves diversified.

It’s one thing to use an app to reverse engineer a recipe from a food picture, but some big companies may be using ‘deformulation’ to help ‘inspire’ their product development. There's even whole labs dedicated to it. But what do the little guys think?

This LinkedIn post by Veronica Fil, co-founder of plant-based cheese brand Grounded Foods, got us thinking. How many startups out there have experienced the same thing?

Putting blood, sweat and tears (and your life savings) into product development, only to send over concepts to a friendly retailer/corporate, and never hear back. Then a few months later, stumbling upon an inferior imitation of your product on the shelves of a major supermarket. Not. Cool. 🙅‍♂️

🛒 Reverse engineering happens a lot, especially in retail. Here’s why:

  • Buyers and product developers are under a lot of pressure to constantly find the next big thing, whilst coming under budget. Product ranges need to perform (bring in money), be under target for waste and markdown (not cost money), and be trend-led (bring in customers...and money).
  • Retailers have established relationships with big suppliers, startups typically don't. It's easier, and often quicker for retailers to just skip the small guys and go direct.
  • Small businesses sometimes struggle to produce in large volumes/work to a JIT supply chain demand. If a product is out of stock, consumers (and the boss) see a gap on the shelf, money is lost and the Buyer is in trouble.
  • Cost implications: either the product is a risk so small volumes = low retail margins, or a small business won’t have the same economies of scale as big businesses = low retail margins.

All of the above leads to using startup ideas as ‘inspiration’. In other words. big food finding new concepts, working to figure out how they’re made and how they can be emulated without breaking the bank or the law.

❌ Here’s why it’s a bad idea:

  • It’s totally, completely, utterly unethical. None of the above points excuse that. It may save on budget and time, but it's simply bad business practice.
  • If you do it enough, you'll get a bad rep. Trust us, small business owners talk and they're not afraid to name names.
  • People will stop bringing you ideas and you'll lose the true innovation which makes a product range great.
  • If all products are made by a small range of suppliers, whatever their size, the whole range starts to look (and taste) the same. Startups bring a differentiation to the market, that the big guys just can’t copy. Consumers will see it, and it’ll start to reflect in sales performance.

💡Takeaway:

For a startup, it’s a balancing act between fiercely protecting your IP and actually selling some stuff. Make the right connections, evaluate the market and talk to your peers to find out who treats startups well and who doesn’t.

Has this happened to you? Or do you have any tips to help startups stay safe? Hit the ‘reply’ button and help keep our shelves diversified.