Last year drew to a close with many successful investment rounds and new partnerships for ambitious foodtech innovators, but what’s yet to come? 17 investors comment
Future Food-Tech is gearing up for its flagship San Francisco summit, which takes place through an online platform on 11-12 March. Ahead of the event, the organiser, Rethink Events, spoke with 17 active investors and accelerators committed to driving forward investment and partnerships in foodtech. Here, they share their predictions and priorities for 2021.
Personalised nutrition is a trend that had been gaining momentum pre-Covid-19, but now we are seeing nutrition and immunity play an increasingly important role in consumers’ decisions and diets.
For Rob Beudeker, investment director at DSM Venturing, there has been a rapid increase in addressing consumer needs to support their immune system.
He noted that ADM Venturing has supported and will continue to support important developments in personalised nutrition enabled by digital technologies and new sensors.
“Consumers want to take their destiny in their own hands to the greatest extent possible,” said Beudeker. “We believe that these trends will continue to be relevant in 2021 and beyond.”
Health and mood
There is growing interest in foods with health-related benefits, as consumers take a proactive approach to improve their mental and physical wellbeing.
“We invest in health and happiness, and food couldn’t be more central to that vision,” said Holly Jacobus, investment partner at Joyance Partners. “I’m very pleased to see that this year, with all its trials, brought increased focus to food and its importance in regulating health and mood.”
Jacobus expects 2021 to bring even greater scrutiny to how we grow, manufacture and package food, and pointed out to Hamama, Finless, and Curie Co. as prime examples in each category.
“I also expect to see a bit of a domino effect in lab-grown meat with the most recent Singapore announcement,” she added.
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Novel food ingredients
This year has the potential to accelerate commercial viability for novel food ingredients as we connect the dots between innovation, investment and collaboration.
For Dan Philips, managing director at Cultivian Sandbox, partnerships between large food companies and technology start-ups will bring novel food ingredients into the mainstream.
“We’ve seen co-development and investment partnerships of this type accelerate in recent years,” said Philips. “These efforts will soon bring about the intersection of technology advancement with large-scale production that will deliver commercial viability. We’ve been talking about it for years, and are closer than ever.”
Data, biotech and innovative foods
Despite the challenges of 2020, there have been many positive outcomes and lessons learned. Reflecting on the past year, what priorities are most urgent now?
“The Covid-19 pandemic has taught us a few lessons. The first would be how working together, as a global community, can bring us to science-based and proven solutions,” said Nadav Berger, founder and managing director at PeakBridge Partners. He noted that such a lesson happened with the vaccines. “Hopefully, we’ll see the same with smart, science-based better ingredients and foods.”
Berger noted the second lesson is about how fragile the supply chain and food security are, and to manage it better we need to use more data. “Therefore, at PeakBridge, we have decided to focus on these three domains: data, biotech and innovative foods.”
Alternatives to animals
As consumer demand accelerates towards more sustainable options and reduced environmental impact, so does the need for alternatives to animal-derived products.
Ela Madej, co-founder and partner at Fifty Years, said: “We’re excited to support founders replacing every aspect of the ‘animal agriculture stack’. Humanity is currently using animals as pieces of production technology to convert plant-protein inputs into outputs we like to eat, drink, or wear – this is 44,000-year-oldtechnology!”
Madej argued that 2021 will bring an acceleration of using biology or other methods to make the same animal-derived products people love, but without the animals.
Deena Shakir, partner at Lux Capital, is also positive about the move away from animals. She said: “I’m so excited to see the applications of innovation in the software space to food, and I believe we’re only at the precipice of innovation here.”
Shakir argued that while there has been much focus on consumer 1:1 replacement products, she is bullish on the investment opportunity of business-to-business. This, she said, enables F500 companies to keep up with changing consumer and environmental pressures from over-consumption of animal-based products.
When Eat Just unveiled its regulatory approval with Singapore Food Agency at the end of 2020, the global food industry celebrated this milestone with them. This achievement could kick-start a succession of announcements from cell ag pioneers and regulators this year.
“Food industry participants will need to identify which trends – food delivery, sustainability, transparency – will continue post-Covid, and which will revert to pre-pandemic levels,” said Rahul Ray, director at Tyson Ventures.
Ray argued that as cultured meat progresses towards regulatory approval and consumer acceptance, Tyson Ventures is excited about the platform technologies that will enable the delivery of these proteins sustainably and cost-effectively.
Jonathan Berger, chief executive at The Kitchen FoodTech Hub, concurred. “I hope to see the role of cellular agriculture grow significantly to help humanity reduce animal farming,” he said.
Berger noted that we all know that this source can offer more sustainable and healthier proteins and that it is up to technology to solve the cost challenges we face. “I am most excited about new ways to reduce media cost – the ‘feed’ we use to grow the cells – that will result in affordable scale-up.”
Cellular aquaculture is an emerging industry heading for significant growth and expansion in 2021. Product launches scheduled for later this year from companies such as BlueNalu promise to shake up the future of seafood and offer consumers new choices.
Marisa Drew, chief sustainability officer and global head of sustainability strategy, advisory and finance at Credit Suisse, said: “Transforming global food systems to feed our growing population while staying within the planet’s boundaries is one of the biggest challenges the world faces. The burgeoning field of cultivated seafood will surely have a profound impact on meeting this challenge.”
Drew argued that the potential for this food sector is exceptional. “With nominal land or water requirements and created in a completely clean environment – without the need for antibiotics or counterproductive supply chain inputs – this food sector can provide food security for our planet of 11 billion people.”
Bennett Cohen, partner at Piva Capital, also predicts rapid growth in the cell-based seafood space. “Due to continued traction in plant-based meat alternatives for pork, chicken and beef, it will become increasingly hard for start-ups to differentiate from an already packed shelf and stand out of a crowded market,” he said.
Cohen noted that there is still white space for new foodtech entrants in the seafood sector, where start-ups have more opportunities to own a product category, such as shrimp, salmon, or crab. “Alternative seafood will be the next wave in the clean meat movement, which will attract increasing investment in 2021 and years to come.”
There is hope that this year will see an acceleration of solutions focused on sustainability through collaboration, partnerships, and investment.
David Huggins, vice president, Nutrition Fund Manager at BlackRock, said: “What we eat is one of the single largest contributors to global emissions. This is a major challenge for the food industry, but also humankind. However, with challenges come opportunities. I believe 2021 will see a number of breakthrough events, where innovative food technologies will make real strides towards scaling up solutions to help the world feed itself sustainably.”
For José Luis Cabañero, chief executive and founder at Eatable Adventures, witnessed mission-driven start-ups breaking into the foodtech space with bold new ideas and fresh technologies.
He said: “The food segment is at an inflection point where technology is transforming the industry towards a more efficient, highly productive industry with a leaner resource impact. We expect 2021 will consolidate several emerging technologies that will aid the transition to this more efficient food system.”
For Costa Yiannoulis, investment director at CPT Capital, 2020 has seen some major milestones for the foodtech sector. “From record levels of investment in alternative proteins to the first regulatory approval for cell-cultured meat. I expect 2021 to build on this with strong acceleration in both innovation and investment.”
Yiannoulis noted the Covid-19 pandemic has only served to highlight the need to build a more resilient food supply chain and we are now at the foothills of a major shift in this sector. “We expect to see more opportunities across the value chain, but particularly upstream in the supply chain to enable more nutritious and more sustainable products.”
An irreversible move to direct-to-consumer
Innovators are rising to the challenge of an acceleration in direct-to-consumer model.
Niccolo Manzoni, founder and managing partner of Five Seasons Ventures, noted that entrepreneurs are launching new ideas, developing new solutions in 2021 as we witness the emergence of new and fast-growing food brands, born-digital, made by millennials, for millennials.
“At Five Seasons Ventures, we witnessed enormous growth in direct-to-consumer food brands in 2020,” he said, noting that Covid-19 accelerated a trend that was already in the making in the past years. “We believe that consumers’ online shopping behaviour has reached a major inflexion point, and a point of no return.”
Supply chain traceability
Food traceability systems are increasingly seen as invaluable to all stakeholders from across the agri-food supply chain, including the end-consumer.
Julia Reichelstein, an investor at Piva Capital, argued that with climate change increasingly top priority, consumers will demand more sustainable products – especially from our food and agriculture industries.
“More insight and traceability will be called for on everything from how food gets produced, to how it was picked and transported,” said Reichelstein. “Because of this demand, new technology companies with advanced smart tracking and data analytics capabilities will bubble to the surface, working with farmers and providing direct food intelligence to consumers, restaurants, and grocery stores.”
Reichelstein noted that new innovative solutions, such as edible bio-tracing, could bring breakthroughs, driving cost down and usage up. “Expect to see an increase in funding to those start-ups that can solve this challenge of food traceability on a larger scale in 2021.”
Larry Page, principal at Lewis & Clark AgriFood agrees with the focus on supply chain traceability. He argued the pandemic has permanently altered the world’s food system. “Food companies now recognise that a secure, adaptable supply chain is essential for delivering food to where it will be consumed. I think the food sector will continue to set investment records in 2021, and supply chain safety and security will be a key area of focus.”
The role of technology in tackling food waste will also be high on the agenda this year for many investors and technology innovators.
“Food waste is a massive problem, and Covid-19 has only exacerbated this further,” said Priti Youssef Choksi, partner at Norwest Venture Partner.
Choksi noted that, luckily, numerous technologies exist today to address food waste, but we need both capital and consumer pressure to help them scale. “I’m excited to see more innovation in the food supply chain, especially in the form of AI-powered software solutions.”
There was no doubt that these 17 investors are entering 2021 with fresh optimism, increased excitement and a renewed sense of urgency to support transformative technologies that can solve the critical issues facing our food system.
About Future Food-Tech
More than 100 high-profile agrifoodtech investors will join the virtual Future Food-Tech Summit on March 11-12. Many of them will host roundtables, join plenary sessions and connect with other delegates through 1-1 video meetings.
Are you an active investor within the food industry, looking for new collaboration and investment opportunities? Or are you a start-up looking to partner, scale or raise your next round?
Contact Elliot Wood to discuss your participation at the summit.
Date published: 8 January 2021