Digitalization of the Food Service, Hotel and Retail Industries – A Talk with HORECA.digital
The METRO Group works with startups through its subsidiary HORECA.digital. Sabine Flechet from HORECA.digital shared information about the company’s background and its activities.
Please tell us about yourselves.
HORECA.digital is a business unit of METRO and was founded in 2015. It aims to advance digital transformation in the food service industry. We are an international team working on various initiatives involving topics such as digitalization and innovation in the food service and hotel industry. Retail was just recently added. We develop digital solutions for the food service industry and establish distribution channels both for our own digital solutions and those created by startups. We also run our METRO Accelerator program and invest in startups in the fields of hospitality tech, retail tech, food tech and food innovation, while also keeping an eye on trends in the hospitality industry.
Which industries are the startups from that you work with? What do you offer them?
We work on different projects with startups. With the METRO Accelerator for Hospitality, which we have coordinated together with our US partner Techstars since 2015, we promote the development of innovative digital solutions for independent entrepreneurs in the food service industry. We just recently added a new program in 2017 for the retail industry. In other words, we run two accelerator programs annually. Each program includes ten international teams who spend three months in Berlin to improve their business ideas, test products and increase their chance of receiving funding. We invest in the participating startups as does Techstars.
Our investment department is responsible for investments in our accelerator portfolio. The same department also takes care of investments in more mature startup companies, which are often made together with other professional investors. The supported startups develop solutions for the HoReCa industry, the retail industry and the food tech industry.
In the food tech industry, we also give innovative startups the opportunity to test their products for three months in our METRO Cash & Carry and Real markets. The initiative is coordinated by NX Food.
A further significant advantage for startups working with METRO is the assistance provided in establishing efficient distribution channels. In concrete terms, we give the startups access to more than 500 restaurants in Berlin, Paris, Barcelona, Milan and Vienna. These restaurants serve as a test market where the startups’ digital solutions are tried out. If the solutions are successful in the test market, we offer the startups a lead generation partnership. Our sales division uses the customer contacts from METRO Cash & Carry to present the digital solutions. If the customers are interested and agree, the startup is given the contact as a lead. With our assistance, startups are able to offer their solutions, which are most often digital, to the appropriate independent companies in the food service and hotel industry.
What criteria are used to select the companies you would like to work with?
We have different criteria, and it depends on the type of collaboration. For the METRO Accelerator program, we mostly look for teams that are just getting started. Direct investments are made in companies that will make a contribution to the digitalization of METRO’s core customer groups or have an application for METRO Cash & Carry or Real. We look for rapidly growing companies with excellent management teams. In lead generation partnerships, we work with startups that have initial success with customers but still need to expand their reach. Regardless of what kind of collaboration, the solutions and innovative ideas should simplify the lives of independent food service companies.
Which startups are eliminated from potential collaboration from the very beginning?
Companies are not considered qualified for investment if they would not generate an adequate return on investment for us. We also prefer teams and companies that are open to feedback. As a company that is guided by customer feedback we gather feedback on every product and solution that we offer or test. We look for startups that believe in a broad reach and becoming a successful market player. The founders need to be genuinely motivated to move their business forward.
Do startups need to worry about you getting too involved?
Quite the opposite. Startups can expect to hear opinions and ideas from us, for example in hospitality tech lead generation. We do not want to get involved with operative business at all and support startups with product tests and pilot testing so their products are better adapted to market needs and then scalable. We have no intention to buy the startups or have majority ownership.
Which stage is the ideal time for startups to contact you?
Because we offer different formats, we can work with startups in any stage.
The trend of the year is…
We have noticed significant interest in different economic systems and data analysis for the food service industry. In retail, indoor positioning systems with various applications for sensors can be seen as an innovation trend.
Last but not least: whom should startups contact if they would like to meet up with you?
That depends on the subject. If it is about food tech and product placement with us, interested startups can find information and register at http://nx-food.com/.
For our accelerator program, startups that would like to apply can find all necessary information at https://www.metroaccelerator.com/.
If it is a matter of establishing contact with the investment department for more mature startups, then startups should feel free to contact me directly at my email address email@example.com.