5 forces steering investment into the food of the future
NutritionInvestor speaks with Tony Hunter to examine the driving forces paving the way for the next-generation food industry
Tony Hunter has spent 30-plus years in the food industry and knows the journey from product development to market like the back of his hand. His background in food science and technology has served him well in his role as a conference speaker and consultant famed the world over for his stand on the future of food – in September he made headlines with an article discussing food as a technology investment.
“About three years ago, I started to see a real change in the rate of technology coming into the industry,” he says. “Food has been a pretty ‘sleepy’ industry – it didn’t have that tech focus of exponential change that we’ve seen in other industries, but that’s changing.”
Hunter argues the emergence of plant-based and cellular agriculture has been fundamental in the changing landscape we see in the food industry today.
“The more I started to follow what was going on with these technologies, the more I could find,” he says, noting there is an enormous amount of new technologies coming out, particularly around genomics, the microbiome, and synthetic biology. “Synthetic biology will revolutionise the whole food industry and, I think, the whole world.”
Genomics: Paving the way for food as medicine
Hunter believes the future of food can be defined in two words – personalised wellness. He argues the concept of wellness lost its hippie connotation and has become mainstream. “The future of food is not only about nutrition but about your cognitive and emotional health put together,” he says.
In this context, the new technologies emerging today are being developed to give consumers a very personalised experience.
“For example, companies are developing new technologies that take data from DNA or the microbiome to determine what type of protein is good for you,” says Hunter. “Existing technology enables people to look at the genome sequence and see its ability to metabolise food,” he adds.
Personalised genomics is the science of coding all or part of a person’s DNA sequence to deliver tailored health and lifestyle advice. Biotech and foodtech companies are tapping into this arena capitalising on dramatic reduction costs seen in genome sequencing in the past 20 years.
Nutritional science company Zoe is one example of start-ups unlocking the potential of using science to achieve ‘personalised wellness’.
Operating from offices in Boston and London, Zoe conducted the world’s largest nutrition study, working with researchers and machine learning experts from Massachusetts General Hospital, Stanford Medicine, Harvard T.H. Chan School of Public Health, and King’s College London, seeking to understand why even identical twins react to foods in different ways.
The study, known as Predict, identified a wide range of inflammatory responses after eating, even among apparently healthy people. Predict focused on dietary inflammation because it’s linked with increased risk for conditions, including heart disease, type 2 diabetes and obesity.
Researchers concluded that improved weight management and health could be achieved by eating food that is personalised to reduce dietary inflammation.
After three years in development, Zoe created a lab-quality at-home test based on the cutting-edge tests used in clinical trials. It provides comprehensive insights covering the gut microbiome and markers of dietary inflammation, including both blood sugar and fats.
Zoe’s technology also uses artificial intelligence to understand consumers response to thousands of foods and provide them with a personalised programme available through an app.
Canomiks is another example. The US-based start-up uses genomics, bioinformatics, and an AI-based platform to test and certify biological efficacy and safety of ingredients and formulations.
Leena Pradhan-Nabzdyk, chief executive at Canomiks, explains: “The basis of food is an ingredient, and the basis of human life is a gene. By leading the way in understanding and mapping the relationship between ingredients and human genes, we are making food as medicine a reality.”
Canomiks is among the start-ups presenting at this year’s Future Food-Tech New York in December.
Corporations are also tapping into personalised nutrition, and Nestlé’s wellness ambassador programme in Japan is a prime example. The initiative engages consumers with the use of DNA testing, social media shares and artificial intelligence to create personalised diet plans for the participants. They then receive lifestyle recommendations and supplements formulated to make nutrient-rich teas and smoothies.
Microbiome: Trust your gut
The second force driving the future of food comes from the microbiome – the genetic material of all the microbes that live on and inside the human body – Zoe is a testament to the correlation of DNA and microbiome in helping to determine individual reactions to food.
Advances in pre- and probiotics are attracting the attention of foodtech investors, and the $8.6 million that Sun Genomics raised in Series A in June confirms the trend. Led by Pangaea Ventures, the round included Danone Manifesto Ventures, the corporate venture capital arm of the French dairy giant.
Sun Genomics was founded in 2016 and hit the market with Floré, a microbiome test and gut probiotics solution. The company uses whole-genome sequencing to evaluate different digestive system data points, and ensure that customers receive a completely personalised product based on their unique gut profiles.
“People eat the same food but their glycemic index levels go to the roof and others remain stable. Nutrition is extremely personal,” says Hunter. He argues any company in the longer-term that can claim some degree of personalisation of their product is going to do really well.
Advances in cellular cultivation have enabled the development of an entirely new sector in the food industry made up of companies developing new technologies that cater to the need of cell-based food production.
Start-ups tapping into this space typically enter the market with a business-to-business model ripe for exponential growth. New technologies include the production of cell lines, growth medium, and the scaffolding required to produce whole-cut meats. Orbillion Bio, Biftek, and Novel Farms are early-stage companies in this arena and supported by Big Idea Ventures, the $50 million fund that invests globally in alternative protein businesses.
“Cell-based products are all interlinked and have to work together to make a profit,” says Hunter, noting that today, alternative protein has become a strategic essential ingredient.
“Everywhere you look there is alternative protein,” says Hunter. “New food products come to market all the time made from peas, from mycoproteins, from electricity, from air, from biomass or algae.” He argues alternative proteins have become ubiquitous because consumers want protein, and that demand isn’t going to stop – the population is expected to reach 9.7 billion people by 2050.
Did Hunter say food from air and electricity? Yes, and Solar Foods is the pioneer. Headquartered in Helsinki, Solar Foods is the first company to produce food by using air-captured carbon dioxide in a complete and continuous mode, including the preparation of final food products.
Through this process, which uses air and electricity as its primary raw materials, the company produces Solein, an entirely new kind of nutrient-rich protein with a complete amino acid profile.
Founded two years ago, Solar Foods has raised €18.5 million from venture capital funds and strategic investors, including Finnish food giant Fazer Group.
Foodtech companies are using biotechnology tools to produce the food of the future. “We can manufacture food products using fermentation technology, genetic editing and engineering that’s unimaginable,” says Hunter, noting that a good example is current developments in the production of vanilla.
Roughly 18,000 metric tons of vanilla flavour is produced annually, however, about 85% is vanillin synthesised from the petrochemical precursor guaiacol – there isn’t enough vanilla orchid to produce the volume of vanilla flavour demanded by industries like food and cosmetics.
Companies are addressing the shortage with synthetic biology to replicate the natural properties to deliver clean label products.
One such example is the partnership between global chemical giant BASF and Boston-based biomanufacturing company Conagen to tap into the flavour market with fermentation-based technology. Conagen has cultivated a microbe that can take glucose and turn it into vanillin.
And the proprietary technology of cell-based milk producer TurtleTree Labs is built on synthetic biology. The start-up has developed a methodology for inducing mammalian mammary cells, suspended independently in a growth medium in a bioreactor, to lactate and produce real animal milk suitable for consumption, including mothers milk.
TurtleTree Labs raised $3.2 million in seed funding last June and seeks to licence its technology in a business-to-business model.
The fermentation boom
The Good Food Institute released in September a comprehensive report on fermentation technology, arguing the biotechnology process is the next pillar of growth in the alternative protein space.
The report showed that globally, alternative protein companies attracted $1.5 billion in venture capital investment in the first seven months of this year – $435 million was invested in fermentation-based protein companies. Perfect Day’s $300 million Series C is the largest capital raise in the fermentation segment to date.
Several of the world’s largest food and life science companies, including DuPont, Novozymes, and DSM, are also developing fermentation-derived product lines and solutions tailored to the alternative protein industry. And meat processor giant JBS is tapping into the fermentation-based protein market through its new plant-based brand, Planterra Foods.
For GFI, fermentation is powering a new wave of alternative protein products with huge potential for improving flavour, sustainability, and production efficiency. It argues many alternative protein products of the future will harness the plethora of protein production methods now available, with the option of leveraging combinations of proteins derived from plants, animal cell culture, and microbial fermentation.
A sustainable industry
Genomics, microbiome, alternative protein, fermentation technology, and synthetic biology are five forces shaping the next-generation food industry, but these technologies emerge behind one purpose – feed the populace of the future sustainably.
The Covid-19 pandemic revealed the flaws in the supply chain of the food ecosystem, and the future dependence on food production by countries without obvious agricultural resources such as Singapore and the UAE. “Sustainability doesn’t come from redistributing food, but by equitably distributing the means of production,” says Hunter.
Hunter argues that technology that doesn’t require land or a large amount of fresh water could be implemented in the middle of a desert. “As long as you have a bit of water and raw materials you can make food, at a far better rate per hectare than conventional agriculture. It’s about doing a lot more, with fewer resources.”
Today’s food technology is expensive, but Hunter believes continued cost reductions are on the horizon alongside performance boosts due to economies of scale.
“A plant-based burger is more expensive than the conventional product, for example, but look at the volumes! Plant-based meats represent 1% of the market. If you double the volume, the cost of production drops by about 10-15%,” says Hunter.
Hunter argues there’s also a lot of room for foodtech companies to reduce production costs by improving the technology as well. “Once you digitalise the idea of food and technology, then you’re subject to Moore’s law, where you get that doubling every x number of years. Food is now on the exponential curve, and that’s a fundamental change for the food industry of the twenties,” he concludes.