Getting a Taste for Trends in Foodtech
Highlighting the big-name foodtech trends that are attracting big money
By Tanisha Lele
The food and beverage industry is transforming expeditiously. As a result, several new trends have rapidly risen up, creating the demand for innovative young companies and products.
Today’s consumers have certain unbendable demands and high standards that they refuse to compromise on. The need for transparency between producers and consumers has increased, and consumers have come to understand their power in dictating what the market produces.
In such a constant environment of change, foodtech startups are gearing up for a battle to grab the largest share of this US$2.2 billion market (the overall meat market is worth US$1.7 trillion). With the world moving toward more responsible living, it is no surprise that plant-based startups are on the rise. But enhancements in food technology aren’t just limited to product changes: they have also led to an evolution in the production and packaging of these products.
Some of the most noteworthy changes in the food industry over the years include:
Food delivery startups: The past few years have witnessed a sudden jump in the number of food delivery startups. An e-service report published by Statista in 2018 established that while restaurant-to-consumer delivery still enjoyed the lion’s share of profits, the number of food delivery outlets, and their revenues, were growing rapidly.
Since the COVID-19 pandemic hit the world, food delivery startups have flourished even more, coming to the rescue of people across the globe who are trapped at home. Social distancing may have affected most people negatively, but for these businesses it became an unmistakable business opportunity. These food delivery ventures might be among of the few businesses to come out of this situation stronger.
Plant-based startups: With veganism and vegan alternatives growing in popularity, it is no surprise that plant-based meat startups are growing. Consumers want responsible, clean, and ethical produce, and organic and natural diets are no longer limited to health-conscious people. If nothing else, the amount of capital and dealmaking in this space is social proof of the interest it has garnered.
Impossible Foods, arguably the world’s best-known alternative meat producer, raised a US$500 million round in March 2020, bringing the company’s total funding to $1.3 billion. Impossible competitor Beyond Meat listed on the NASDAQ exchange in May 2019. In January this year, THIS, a plant-based meat startup in UK, made headlines for raising a GBP4.7 million seed round. A few days ago, Evo Foods, a plant-based egg startup in India, the first of its kind in the whole of Asia, attracted its first angel investor, Ryan Bethencourt.
As per the Deloitte UK Plant Based Alternatives report, Unilever’s acquisition of The Vegetarian Butcher and Danone’s acquisition of Alpro are some of the biggest investments made in plant-based food technology. Due to the high demand for plant-based products, the market has developed and grown, offering ample opportunities for willing entrepreneurs.
Automated Robots: Popular culture from last century predicted that robots would be serving humans by the 2000s, but as we entered the 2000s, we were still way off. At this point, far from it being normalized, it’s a surprising novelty to see robots performing automated tasks at restaurants and hotels.
These robots are programmed to do everything, from making a pizza to topping up a glass of wine. Apart from hospitality and cooking services, robots are widely used in meat butchery. They’ve proved invaluable to the industry as they add precision to the task, and eliminate the risk of human injuries. They are also used to help in dairies and in food processing.
Automated robots are now also employed in urban farming. Iron Ox is said to be the first vertical farm that is (almost) completely run by robots.
Packaging: As more and more people are waking up to the reality of microplastics and plastic waste, there’s an increasing outcry for responsible packaging. Sustainability is by far the fastest-growing trend in the foodtech industry.
Plastic, which used to be the most-used material in packaging, is now a big no-no. Many food packaging businesses have switched over to biodegradable materials in light of changing consumer sentiment. But despite changing tastes, consumers still want packaging to be lightweight and disposable, opening new avenues for innovation.
One company taking advantage of this is London-based Notpla, which has developed a seaweed-based replacement for plastic. Earlier this year, the company launched seaweed-lined takeaway boxes, which can decompose within four weeks in a home-composting set up.
Urban Farming: From rooftop farming to vertical farming, agritech startups have done it all. The benefits of urban farming are plentiful, and so it is no surprise to see that it is flourishing in cities across the globe. The produce from these farms is usually for local consumption, which in turn helps solve problems like food insecurity and unemployment. It also leads to the growth of responsible startups and environmentally-friendly businesses.
Aerofarms and Babylon Micro-Farms are two of the most well-known urban-farming ventures. While Aerofarms specializes in growing plants without soil or sunlight, Babylon Micro-Farms offers more of an on-demand service for indoor farming.
Sustainability: Several foodtech startups are focusing on sustainable practices in food production, leading to a decline in waste. By stocking just the number of vegetables or fruits required, using minimum resources, recycling products, and stocking only local, seasonal produce, foodtech startups and supermarkets are moving toward responsible food production and retail.
According to Crunchbase data, 2018 was one of the most profitable years for early investors in foodtech, with a number of eye-wateringly large deals taking place in this space. Swiggy, India’s leading food delivery venture, scored a $1 billion fundraise in December 2018, while in Brazil, iFood raised $500 million in November of the same year. AgFunder’s Agri-FoodTech Investing Report found that $19.8 billion was invested into foodtech in 2019, with an accompanying graphic from the report showing an all-time peak in the second half of 2018.
The demand for clever use of technology in the food and beverage industry may be on the rise for various reasons including climate change, innovation, employment opportunities, and digitalization, but whatever the reason, startups are making the most of it. Every industrial sector has to keep up with the ebb and flow of various trends, and the winners will be defined by those who truly improve the consumer experience.
Header image by Lewis Fagg.