It’s been well-documented that “big food” companies today are under immense pressure. Many macro factors are at play, making it a tough time to compete. Things started shifting for big food nearly a decade ago and have been steadily unraveling since. A great 2015 Fortune article, “Special Report: The War on Big Food,” remains one of my favorites and still holds true today. The article reveals that consumers are saying no to processed foods and yes to short, recognizable lists of ingredients. They want foods that are “clean label,” all natural, local, authentic, etc. As a result, big brands have lost favor — and consumers’ increasing desire to eat local has only made things more challenging. In short, the scale advantages of big food have been upended. Company size is actually a disadvantage, underscored by bureaucracy and slower decision-making.

Recently, things have only gotten worse for big food. First, “The Germans Are Coming!” began with the expansion of successful German discounters and European private-label growth leaders Aldi and Lidl into the U.S. Aldi has been experiencing explosive growth in the U.S., while Lidl, a dominant force in the grocery scene across Europe, has faltered a bit since entering the U.S. market in 2017. But private label has finally started to gain share against branded products after years of remaining flat, and many studies show that once consumers switch from brands to private label, they don’t come back.

Then the mic dropped on June 16, 2017. I remember that day well. My phone and email were blowing up with the 8 a.m. CDT announcement — my day was upended with this hallmark moment for the food industry. Someone shot me a note at 2 p.m. asking if I heard about it. “Have you been living under a rock today?” was my response. We had a feeling Amazon’s acquisition of Whole Foods was a pivotal point in the food and beverage world at the time of the announcement — and to date performance has exceeded our expectations. Once again, I believe this spells more trouble for big food. E-commerce comprises only 2% of the $800B retail food and beverage market today. We see this increasing to 20% by 2025 — a ~$150B shift. And while we see announcements seemingly every day of grocery retailers making moves to catch up, this significant shift to e-commerce hasn’t been on big food’s radar until very recently — and now they are scrambling to figure it out. One has to think e-commerce’s “endless shelf” and speed to market are going to benefit smaller, more nimble players.

That brings me to the first big problem facing big food that gets less press than the well-documented issues above: Most people in big food companies don’t want to make a decision because they aren’t empowered or incentivized to do so (or both). This creates an endless bureaucracy that I’ve termed a “bad game of Chutes and Ladders.” Let me explain: At big food companies, a lot of quality work is done in the lower ranks. You climb a ladder, remove some details from your initiative to perhaps make it less controversial or more palatable to decision-makers, and then scale another ladder to middle management. Then you climb another ladder — and maybe another (and another), depending on the size of the organization. However, if at any point in this journey someone has made a change to the initiative, you take the chute to the very bottom and start over. And when you do finally reach the decision-makers after waiting months to get time on their calendars, the idea is so delayed and watered down that instead of remodeling the entire house, you end up just painting the bathroom. A system needs to be in place to encourage quick decision-making and to view the fast failure that may come with it as a learning opportunity, followed by swiftly getting back on the horse to face the next challenge.

The second big underlying issue to address in big food is within operations and the supply chain. Early in my career I spent time in operations in a variety of industries, putting my industrial engineering and lean manufacturing training from Michigan (Go Blue!) to work. I’ve seen lean embraced nearly everywhere — starting with automobiles (through Toyota and then the rest of the industry), and then in aerospace, durable goods and service environments. However, big food is still largely stuck in mass production land (you can have any color Model T you want as long as it’s black), where “big runs” are king. But today’s consumers want variety — and SKU proliferation is increasingly needed to manage price pack architecture across channels. Lean — not mass production — is the answer for today’s food world. Why? Mass production results in waste and a battle to get things through the plant after six months of Chutes and Ladders to reach a decision. Initiatives again get watered down, rejected or sent to co-packers. Again, incentives are critical to this issue. Operations personnel tend to be measured on things they control: cost, quality, scrap, efficiency, throughput, etc. However, they are typically given no incentive for making higher-profit items that command a price premium (and profit), such as single-serve offerings, because they aren’t evaluated on that measure.

Who is winning as big food faces these two big, underlying issues? It’s “small food,” and here’s why: Many smaller companies are run by owners who are the heart and soul of the business. They are passionate and quick to make decisions, and are not afraid to fail fast and learn from their mistakes. They have embraced lean production. They have all the incentive in the world — their success goes straight toward their bottom line and reputation. They don’t have the bureaucracy for Chutes and Ladders or the time to waste with mass production inefficiencies. If big food companies transform their rank of bureaucracy decision-makers into small business-unit owners with a heart and soul, lean production, empowerment, and the right incentives — we can see a comeback from today’s challenging environment. If not, we will continue to see big food shed assets of noncore businesses they can’t manage as swiftly as smaller players in the market (and pay huge multiples to buy businesses for value creation they lack through internal R&D).