Andrea Cova is the Co-Founder and CEO of Soul-K, the Italian B2B food-tech scaleup that revolutionises the HO.RE.CA and Large Organised Distribution sectors for client brands.
Previously, Andrea was the Founder and CEO of ComLab, a company operating in qualitative market research. Andrea also served as COO at FAB, a food-marketing brand, with the mission of translating the message that the Brand-Client wants to transmit to its stakeholders in an experience lived in first person and easily usable.
You have been working in the food industry for many years. In 2016, together with Matteo Minardi, you founded Soul-K (formerly SoulKitchen), an innovative platform for the HO.RE.CA and Large Organised Distribution sectors. What business opportunity did you spot? How did the idea of Soul-K come about?
Andrea: It all started from my professional experiences in the food industry and the field of qualitative market research.
I started working in the food industry during my first year at university. My parents took over a small restaurant, where I began working to earn some money. Over the years, the family business grew, and we managed several restaurants, up to creating a banqueting business under the brand name FAB. We then sold the FAB business to an Italian entrepreneur, and I stayed in FAB to run the operations for a couple of years.
Then, in 2014, I decided to found ComLab, a company dealing with qualitative market research with a technological approach. At ComLab, we developed a range of software and technologies for sentiment analysis and scaling the research model.
So in 2016, I put together almost ten years of experience in the catering business and the technology development and market research industry. And I decided to create a company that would have changed and simplified my life if it existed when I was in the catering business.
Soul-k is, in fact, a company that tries to solve the primary problems of the restaurant industry, such as (i) human resource management, i.e. finding the right human resources, defining the correct number of staff, managing the training activities, the personnel turnover, etc.; (ii) the problem of managing the product in the warehouse, trying to minimise the risk of food waste; (iii) research and development activities, which is difficult for a restaurant to manage, i.e. all those activities that concern product engineering, testing, market feedback, adapting the product to the market, etc.
These were the three core needs Soul-k is trying to satisfy.
Soul-K is a brand-new system to manage all internal kitchen processes. Can you tell us more about the business model of the company?
Andrea: Soul-k is a cloud-based kitchen and has the ambitious goal of implementing the genuine concept of food as a service, creating a central architecture that allows scaling operations efficiently by leveraging technology.
We are a B2B company that works with HO.RE.CA. (mainly restaurant chains) and the retail industry for gastronomy and free service areas.
We produce fresh food products on behalf of our customers. Based on their needs, we study and develop the product, engineer it, standardise it – to minimise food waste – and deliver it daily. This enables our customers to reduce their warehouse stock, minimise their need for human resources and investment in production machinery, and reduce fixed costs and CAPEX.
We are a first-mover worldwide. The big challenge we are taking on is to build a food production industry based on the concept of just-in-time, very lean manufacturing.
The food industry has continuously operated with in-line productions. However, an in-line production is challenging to be modified and must be run at full speed in search of optimisation. To be preserved, the product is then either frozen or chemically processed for stabilisation.
Soul-k, on the other hand, operates with batch production. It allows it to be incredibly flexible, and therefore to meet the flexibility and customisation needs of the restaurateur.
To do this, Soul-k has always invested heavily in technology. To date, we have invested almost five times more money in technological development than we invest in food production machinery.
We have built a very complete and complex infrastructure, which allows us to manage from the inbound customer order to the delivery of the product. For example, we have developed: a business intelligence tool for forecasting the quantities of product in stock per SKU based on production in the following days; a related tool that auto-generates procurement; a tool that assigns daily work to each operator, based on a series of parameters linked, for example, to the operator’s skills, timing and so on. These tools are then embedded in an RFID-based tracking system, which contains all the product information from a food and logistics point of view for every package we produce.
What results have you achieved until now? What are the development plans of Soul-K?
Andrea: From an operational point of view, thanks to the technological infrastructure created, we now have a stock turnover of finished products of 1.7 days. The procurement tool allows us to reduce food waste and make the process efficient, so much so that the raw material we use for processing arrives at our plant twice a day.
Today we have more than 55 employees, about 40% of whom are direct staff, i.e. cooks, warehouse workers, packers, drivers, etc.
We have a central plant that produces for Italy and Europe. When a territory becomes big enough, we open a spoke (according to the spoke-hub model), a refrigerated warehouse with the same technology as the central hub.
In January 2022, construction of the new production plant will start, including all existing technologies and other technologies such as cobots, automated warehouses and a range of even more advanced automation.
We plan to build a production plant in the UK in mid-2022 and the first production plant in China in early 2023. So China and the UK are currently the markets with the highest demand for our products.
So, Soul-K is a “scaleup”. What are the main issues that you are experiencing in growing a tech company such as Soul-k? And what will be the following challenges?
Andrea: In my opinion, the biggest challenge is the ecosystem in which you grow a company.
Soul-k is a dramatically complex company, as it is a manufacturing business, with logistics management, significant investments in technological development, and so on. The ecosystem and the market in which Soul-k has grown – Italy – has been the biggest challenge of all, also for raising funds. We are the typical company that needs a lot of money. And finding investors willing to invest in CAPEX and understanding that there is such a complex project, which no one has ever done, was very difficult.
The other big challenge is to transfer the habit of using technology to the whole company. Changing a typical factory setting and training staff to live with the technological tool daily and sometimes being guided by a device is difficult at all levels of an organisation. It is hard to explain why people have to do things differently, even if better than they have always done. And that can become a blocking element.
One last question. What are the trends of the foodtech industry that you find more attractive?
Andrea: There is a universe to be explored in foodtech.
Consumers today want transparency, and they want to know what they are eating, what is good for them and what is good for the world. So today, traceability and transparency are the most critical factors for the consumer. Companies are working on this through blockchain systems to guarantee security throughout the production chain, using NFC systems or QR codes so that a consumer can discover information on the product bought at the supermarket or restaurant. This information will become increasingly essential and part of consumers’ habits.
Other interesting foodtech trends relate to procurement and access to local products. I see several systems being developed to manage procurement, cut the supply chain, connect producers and restaurateurs, and work with logistics in between. Some systems also manage the warehouse and the stocks of products.
Then there is the area of e-grocery delivery, companies like Gorillas and Everli. The exponential growth of this business model, confirming the delivery trend, well represents the change in consumption habits. In the food sector, the growth of high-quality ready-to-eat food is stealing market share from the HORECA sector, focusing on speed linked to impulse purchases and price points. Just like browsing the Netflix catalogue to choose a film instead of going to the cinema, you browse the e-grocery catalogue. Every day what I want, when I want it at the right price.
The entire industry, both restaurants and supermarkets, will have to update to follow these changes, revolutionising the whole supply chain, from R&D to production to logistics.
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For more info on Soul-K, visit: https://www.soul-k.com/en/home-page/