New technologies and innovations are taking over the world by making their way through every industry. The Food Technology industry has had no choice but to be prepared for these changes since, after all, they have the largest customer base, made up of the entire population. According to the World Bank, the industry comprises an estimated 10% of the world’s GDP and is therefore one of the most important, and most responsible in sustaining ourselves, our planet, and our economy.
With an increasing taste for sustainability and the desire to reduce environmental impact among consumers, food producers and manufacturers are faced with new challenges. People want to know everything — what they are eating, where it comes from and all the consequences that come with it. For example, this means that many of us have turned towards sustainable meat alternatives, nutrition tracking devices, or making sure we are using recyclable packaging just to name a few. We aren’t the only ones making substantial decisions. Leading food giants like Cargill, have also jumped on the bandwagon to meet this demand for transparency from their customers. Cargill started testing blockchain technology in 2017 in order to show turkey buyers precisely where each bird came from, while the Norwegian Seafood Association partnered with IBM in June 2020 to leverage their blockchain to ensure food traceability in its supply chains.
Investors, too, are now hungry for investing in this large market, which according to figures from Research and Markets, will be worth as much as $250 billion by 2022. Within North America, a large portion of FoodTech investments goes towards plant-based foods. S2G Ventures, a Chicago-based investment firm, has created a new oceans and seafood investment team with commitments of up to $100 million. 301 Inc, the venture capital arm of General Mills, has injected cash into multiple plant-based food companies, such as Gathered Foods, Kite Hill, No Cow, and Beyond Meat. FTW Ventures, an American team of venture capitalists has unveiled a new food-tech fund of $4 million looking to support seed entrepreneurs. And the list goes on. With Venture Capital giving this sector a lot of attention, the Good Food Institute states that $741 million was raised in the first quarter of 2020 alone by startups in the plant-based space in the US.
In addition to the consumer-focused sector exploring alternatives to meat products, we see two more distinct areas of opportunity. First, visibility throughout supply chain and manufacturing including tracking and tracing using AI and robotics, and secondly, within the processing and distribution of produce to reduce food waste. According to a study by Boston Consulting Group, food waste is expected to increase by a third to 2.1 billion tons in the next 10 years, which would be worth $1.5 trillion. US-based Crisp, raised $12 million in Series A funding this year for their demand forecasting platform for food suppliers and distributors to manage food waste while increasing revenue. Another example for one of these innovative companies is Misfits Markets, an e-commerce platform that sells ‘ugly’ produce, who recently raised $85 million in their Series B round.
From new founded startups to established industry leaders, food technology is attracting a wide range of players all trying to innovate in this field. Additionally, the pandemic has led to a far quicker realization of the need for these changes which is shown by plant-based sales accelerating twice as fast as animal meat sales in the US during the onset of Covid-19.
JBS, Cargill, Tyson Foods, and National Beef, are four of the biggest animal meat producers in the United States as they control more than two-thirds of all beef-processing. However, three of them have already incorporated plant-based options.
Tyson Foods launched its Raised & Rooted product line offering plant-based nuggets in 2019 as well as burgers made from beef and plants. Through Tyson Ventures, the company’s venture capital fund, Tyson Foods has also continued to invest in alternative protein startups including MycoTechnology and Memphis Meats.
Cargill, also an investor in Memphis Meats, unveiled its plant-based patty and ground produce early this year. “Producing plant-based products across our global supply chain is the logical next step to expanding our ability to meet consumer needs and bring new value to this category.” said Elizabeth Gutschenritter, managing director of Cargill’s alternative protein team.
In early 2020, JBS USA’s subsidiary, Planterra Foods, launched Ozo, a plant-based protein brand that offers burgers, meatballs, and ground meat. In June of this year, the largest meat seller in the world, also released its own line of plant-based burgers and chorizo alternatives.
Other corporates such as Nestle, made big moves into the plant-based space in 2017 when it acquired Sweet Earth and used its plant-based ground beef option in products which previously contained animal-based protein. After experiencing increased growth for Sweet Earth in the US, their involvement has only grown in sustainable foods, culminating the launch of an R&D accelerator, to help launch sustainable dairy products and plant-based dairy alternatives. Now after also introducing a veggie burger, they plan to infuse $100M into building a plant-based food facility in China as of May 2020.
And of course, no two companies have played such a big role in popularizing this industry than US-based, Beyond Meat and Impossible Foods. Both companies have achieved significant milestones including Beyond Meat’s soaring IPO, and Impossible Foods closing its most recent round of US$500 million bringing their total funding to $1.3 billion. With multiple notable investors, celebrity endorsements, and product launches with companies from Burger King to Tim Hortons, we are surely going to see them making more headlines and shaping the future of FoodTech.
While technology startups and food manufacturers are leading the way, governments and leading scientific bodies have also been eager to get involved. Canadian Prime Minister Justin Trudeau recently announced a CAD$100 million (US$74 million) investment in Merit Functional Foods, a Canadian firm specializing in the production of plant-based proteins. The investment will help the company enhance production of their pea and canola proteins which have already been picked up by Nestle, to develop their own meat-free options. The Canadian government also invested £150 million (US$110 million) in plant-based protein farms in 2018. Figures from the National Research Council Canada predict the market for alternative proteins to expand at a rate of 14% by 2024 as concerns around our health and environment grow.
Meanwhile, in the US, the National Science Foundation has awarded UC Davis a US$3.5 million five-year grant for research into cultivated meats. This is the first major US government grant into cellular agriculture for the production of sustainable protein.
With consumers now more switched on to green issues, and companies paying attention to their corporate social responsibility, the food and agriculture industry is shifting to innovate and provide for these different tastes. The pandemic has also shone a light on the fragility of our supply chains, which means the food of our future will depend on how we produce, manufacture, and distribute supplies while still prioritizing health, sustainability, and quality. At Brinc, we’re excited by the developments in the industry and always looking for ways to support startups and corporates in promoting solutions to help make a positive global impact.