People always have been concerned with eating healthy food. In recent years with the growing concern about obesity, diabetes and heart disease, there is a growing realization that foods rich in fats and sugars are "bad for you." This has made eating vegetables even more desirable. They are packed with nutrients, but with minimal amounts of sugar and fat. However, their consumption levels in much of the U.S. have been low. One reason is difficulty in keeping them fresh, and the other is that they require significant effort in preparation. But, over the past 25 years, we have been going through a new type of "green" revolution, where fresh vegetables and prepackaged salads were introduced and have expanded our consumption of leafy greens.  This revolution is part of the continuous evolution in the food sector that aims to increase diversity of offering, convenience to consumers, and provide new business opportunities.
We held a recent workshop on implementing innovation in the agrifood sector on campus. Innovations are new ways of doing things. They include new technologies (drip irrigation, microwave) new institutions (micro-finance) or even starting to produce a product in a new place (growing flowers in Kenya). The innovator comes up with a concept or a basic model, and the challenge is to commercialize it. In agribusiness we frequently see these changes occurring with agriculture directly, which means building a supply chain and supply chains include several components. For example, if one dreams about producing a new type of wine in a valley in California — she needs to secure the feedstock (grapes), needs to build a processing facility (a winery), and then needs to establish a distribution network, which includes wholesalers, restaurants, and retailers.
One of the most amazing new innovations in recent years is prepackaged salads. A key person behind it is Jim Lugg , who was chief scientist and president of Fresh Express. Prepackaged salads are an outcome of many "relentless" innovations. Economics realized that innovations rarely occur randomly; they are induced by economic realities.
The prepackaged salad revolution started when Bruce Church, a major vegetable grower, was unhappy with the slow growth and unstable prices of the lettuce market, and wanted to develop a technology to add to the value of the product: fresh lettuce that tends to spoil and didn’t travel well. They relied on technologies originating at Whirlpool, and put Jim Lugg in charge of the team to find new ways to increase the shelf life and reduce the cost of lettuce. They first developed large containers of cut lettuce for food services. Then, after interviewing consumers, they realized that one impediment to consuming salads was the effort associated with cutting and washing, as well as the waste, associated with preparing salads from head lettuce. That led him to find a formula of gases that allowed for preservation of vegetables within enclosures for more than 10 days. This technique was the foundation of packaged salads. They realized that consumers would pay extra because of the reduced effort and waste, and even more for salads with different vegetables. They established a company — today Fresh Express — to market these salads.
Fresh Express had a supply chain that used leafy greens as feedstock and produced packaged salads. One of the major challenges in designing supply chains is whether to have a vertically integrated operation (all stages controlled by one company) or to establish contractual relationships with suppliers. To accelerate the growth of the processing business, Bruce Church, Inc. sold their farm and concentrated on all activities past the farm gate. They decided to diversify their product portfolio by providing salad dressing and other accompaniments with each packaged salad, as well as creating a range of blends to meet diverse tastes. Today, there are more than 400 types of mixed salads. While 30 years ago the main leafy green was iceberg lettuce, we now rely more on romaine, kale, spinach and other leafy green varieties ( Lin and Morrison 2016 ). Furthermore, the introduction of packaged salads reduced uncertainty to farmers because they can be assured a price through contracts rather than depend on variable prices in the spot market.
The new food revolution is more than the proliferation of salads. Concern about gluten and desire to discover new grains led to the introduction of quinoa, which is the original grain of the Andes. Most of the supply of quinoa was originated in the Andes and was limited. Chad Sokol , senior buyer at Costco, addressed the challenge of expanding a supply chain. Costco was especially interested in quinoa because of its profitability potential and because they are the largest retailer of organic products and quinoa and exotic grains are important features of this market. Growth of quinoa is based on attractive attributes and promotion, but it requires maintaining affordable prices. Expansion of the market necessitates the encouragement and nurturing of new sources of supply. While modern farmers in Australia and Canada entered the quinoa market, Costco decided to encourage source production by helping farmers develop associations, access fertilizer, and improve production methods. Through these efforts, the supply of quinoa has increased substantially and is transforming from a specialty crop to a tradable commodity.
The transformation in the food sector is moving beyond salads and grains, according to Professor Michael Boland . Concern with sustainability and animal welfare make many mainstream agribusiness firms change practices. He points out that non-animal meat and milk are not abstract visions, but rather exceedingly viable products. There is significant investment in new technologies that use tissue engineering techniques, developed for regenerative medicine, to produce cultured meat. For example, Silicon Valley investors support the efforts of medical biochemists to start much of this work , and the products are becoming more affordable. The non-animal meat industry is growing, and companies (for example, one and two ) are aiming to replace hamburgers, chicken parts, and in the future steaks and pork. The production to non-animal meats is still based on conversion of crops to meat, but is expected to require much less feedstock and land per unit of meat. The transition to non-animal milk is embodied by the growing production of soy, almond and other crops. The properties of these milk products are improving with new knowledge. For instance, these crop-based milks don’t require refrigeration. Thus, this transition is reducing the climate change footprint of agriculture.
Consumer demand for fresh food at home without needing to shop provides niches for new innovation and food products to be shipped to consumers directly. Indeed, according to Don Barnett , the CEO and CFO of Sun Basket , several major arrangements emerged to take advantage of these opportunities. Many restaurants offer to send on demand meals and some major retailers send groceries to the house. Emerging companies offer curated food on demand (e.g. Munchery, Good Eggs), while others (e.g. Sun Basket, Blue Apron) offer subscription-based meal kits delivered to the home. These kits contain recipes and ingredients requiring different preparation times. The differentiation between the companies is in the variety and content of menu, the amount of required food preparation, and price. For example, in the case of Sun Basket provide healthy, mostly organic, premium, and relatively easy to prepare foods. They may have several menu lines, for example "paleo" diets. Two key elements in the performance of home delivery food kits are (i) intensive use of information technology, social media and data mining for marketing and consumer acquisition and follow-up as well as logistics and (ii) shorter supply chains than traditional grocers with reliance on direct purchasing at the farm level and dedicated shipping to reduce transportation costs. The market for home delivery meal products has potential of $10s, or even $100s, of billions in the U.S. alone, and the future of the industry and its structure are still being shaped.
While thus far we spoke about the food revolution in the U.S., a faster food revolution is happening in developing countries. Professor Thomas Reardon presents evidence of a rapid scaling up of modern cold storage technologies in India and other developing countries, which he names the quiet revolution. One notable example is introduction of cold storage potato in the potato sector in India. Almost all potato farmers in India use cold storage facilities that enhance food security and the range of products and locations where potatoes can be used. The investments in the technology are taken by large extent by local businessmen. Investment in cold storage is associated with improved efficiency in value chains because of lower waste. Availability of cold storage has contributed to the availability of credit to farmers and the establishment of contractual relationships provide more reliable supply to food retailers. Adoption of cold storage was a key element in the emergence of supermarkets in developing countries. Supermarket networks required reliable supply of produce and contributed to formalizing food production and transport networks, which in turn further enhanced the use of cold storage. The investment in cold storage by supermarkets required significant inflow of credit to the rural sector and was associated with significant build-up of human capital, and capacity to absorb technologies from abroad. The supermarket revolution in developing countries expanded product availability technologies like packaged salads, and their adoption and the supply chains to produce them are likely to expand in the future. Because of the low labor costs and urban density in developing countries, we already see many forms of distribution of cooked meals, some relying on information technologies, and the meal sector is likely to develop in many countries as well.
The food sector is one of the oldest industries in the world, but it is still evolving, taking advantage of new innovations, new knowledge and consumers’ willingness to experiment and pay. The big challenge is implementation of new ideas, which requires identifying clear demand, and optimizing production processes and supply chains. Entrepreneurs pursue profits taking advantage of unique market power while recognizing risks and constraints in terms of credit and skills. This results in different structures – some cases emphasize in-house processing combined with contracting, while others have a vertically integrated system. But as time goes, strategies must adjust to competition and to take advantage of new technological and market opportunities. "Relentless innovation" is a major feature of successful agrifood businesses. It is important to recognize that food systems tend to be bifurcated , and while some innovations are targeting the mass markets and aim to address food affordability and convenience, other innovations target affluent consumers. But over time, through improved technologies and learning, the reach of all new innovations increases and the quality of the food experience is enhanced.  Furthermore, with globalization, successful innovations that start in one country may spread across the world.
 Overall consumption of vegetables has been stable or declined, but there has been a substitution from potatoes and head lettuce to different leafy greens and vegetables. (See USDA ERS, Lettuce Statistics )
 This is consistent with the threshold model of adoption and diffusion of innovation.