My 2019 (Sustainable) Foodtech Overview
As climate impact of agriculture and food production comes under the spotlight — with global food production accounting for 25–30% of emissions from 2007 to 2016 (IPCC report) — in 2019 we have seen an explosion of foodtech start-ups tackling the problem across the global chain.
From synthetic biology and alternative proteins, to robotics, agTech & AI, urban farming, and traceability/sustainability platforms, technology is playing an increasing and critical role in our food production, packaging, delivery and recycling.
As a foodtech investor at firstminute Capital, I’m excited and optimistic by all these opportunities as they will help deliver on the promise of a healthier and more sustainable global food system.
Reflecting on the rapid evolution of technology, the vast digitalisation opportunities, and a more conscious consumer base, below is a (non-exhaustive) list of sub-sectors and early stage start-ups that I found particularly compelling in 2019.
- Synthetic bio & Alternative proteins
As we’re predicted to be 10 billion people by 2050, finding new ways to feed the planet that are both nutritious and sustainable is a necessity. Thanks to improved technologies in synthetic biology and fermentation, we have seen great progress in the alternative proteins space.
Plant-based protein substitutes are already in the market, with Beyond Meat and Impossible Foods leading the way. As the plant-based proteins market is set to expand from just under $5 billion at present to about $85 billion over the next decade, according to a UBS report, we’re seeing a multitude of early stage companies cropping up. The most interesting plant-based meat company I saw last year was THIS, which produces plant-based chicken and bacon bits mimicking the identical taste, texture, appearance and smell to meat (I’ve tasted it and it’s delicious!). Founded in 2018, THIS is one of the fastest-growing brands in its category with 30–40% MoM revenue growth and is now available in 140 restaurants across the UK.
Using a similar fermentation process to plant-based meat, we’re also seeing other protein substitutes such as plant-based dairy companies like Legendairy Foods, which recently raised a $4.7 million seed round with Agronomics, and egg whites from cell cultures (ie. Clara Foods).
On the lab-grown meat side, while not yet commercialised, companies such as Memphis Meats, Aleph Farms, Mosa Meat, Meatable, Future Meat Technologies, and Fork & Goode, are too, making considerable advancements. I actually believe that cultured meat and fish, such as Wild Type which creates lab-grown salmon, could hit our plates as early as 2022!
2. The rise of insect farming
While insect-based protein substitutes have now been on our food menus for a while, there is an increased interest in using insects as feed for pets, pigs, poultry and fish. The major environmental advantages of insect farming is that 1) it requires less land and water than livestock while producing lower greenhouse gas emissions, 2) insects have high feed conversion efficiencies and 3) they can transform low-value organic by-products into high-quality food or feed.
With the insect market set to be worth almost $1.2 billion by 2023, we’re starting to see large investments in the space, such as Paris-based Ÿnsect which raised $125 million last year to scale up its animal-feed insect farming enterprise.
On the earlier side, last year I met with Nasekomo, which also produces sustainable insect products for the feed and agriculture industries. This Bulgarian company allows the conversion of organic waste into an alternative protein source, which is then used to feed fish and livestock. Similarly, Beta Bugs breeds and sells high performance insects strains for the insect and aquaculture feed market, starting with the black soldier fly.
3. AgTech, AI & Robotics
As the world population continues to grow and land becomes more scarce, we’re seeing an increasing number of innovative AgTech solutions using AI, automation and robotics, that allow more efficient farming, using less land to produce more crops and increasing the productivity and yield of those farmed acres.
For instance Biome Makers, which raised $4 million with Seaya Ventures and JME Ventures last year, uses advanced data analytics, genomics and AI to analyse a soil’s ecosystem by extracting the DNA of the soil’s microbiome. It then provides automated recommendations on treating/preventing diseases to both farmers and manufacturers of agricultural input products (ie. fertilisers). The value proposition for the farmer is to improve farm yield, reduce spend in chemical products and increase life expectancy of the farm’s soil. And for the AgInput producers, it validates the effectiveness of their products at a micro level (on a crop-by-crop basis, in specific locations). Think 23andMe for AgTech with actionable insights.
On the animal farming side, SomaDetect, which raised $2 million in August 2019, has developed an in-line sensor that, when combined with deep learning algorithms and visualisation software, measures key indicators of milk quality and health, including fat, protein, somatic cell counts, and progesterone.
And we’re also seeing a lot of innovation in robotics in farms. Cambridge-based Vegebot is a vegetable-picking robot that can autonomously identify and harvest iceberg lettuce, one of the more manually demanding crops for human pickers. Trained using machine learning, Vegebot is able to distinguish healthy lettuces ready for harvest. Similarly, Dogtooth Technologies is developing a new fleet of fruit-picking robots using computer vision and AI that will navigate autonomously down polytunnels, find ripe strawberries, and carefully pick those suitable for sale.
4. Urban farming
As we’re making progress on the development of rural farming, we’re also seeing plenty of innovation in vertical farming and urban agriculture technologies for smart cities. The idea is to utilise city space more productively and efficiently, while providing citizens with access to fresh produce without additional land usage and with shorter transportation distances.
For instance, Daphni-backed Agricool is a vertical farm that grows strawberries in containers spread throughout urban areas of Paris. The company retrofits old, unused containers to accommodate both LED-lights and aeroponics systems making it possible to grow juicy and sugary strawberries year-round.
Another type of indoor farming is NYC-based Smallhold’s mushroom ‘Minifarm’ which grows 11 different mushroom varieties and distributes them three-quarters grown in its climate controlled, DIY ‘Minifarms’. Inside, embedded sensors allow Smallhold to constantly monitor growth and adjust inputs such as lighting and temperature. Smallhold has been distributing its farms through partner restaurants and retailers in the NY area, including Manhattan’s Mission Chinese restaurant, Kimchee Market in Greenpoint and a Whole Foods store.
In 2019, I’ve also learnt about the fascinating development of urban aquaponics which addresses land scarcity issues in smart cities by developing a smart water environment, which combines fish farming through aquaculture and crop farming through hydroponics. French company Agriloops is an interesting example, producing fresh shrimps and vegetables via salted water aquaponics.
5. Sustainability & Plastic free
While some companies focus on the food itself, many others are exploring how to process, package and distribute our food in a more sustainable manner. Most importantly, last year was a turning point for the CPG space with the European Union banning single-use plastic. As such, Notpla is developing biodegradable packaging solutions. Their first product, Ooho, is a flexible packaging capsule for beverages and sauces sachets made of seaweed and plants. Ooho is not only biodegradable in 4–6 weeks but also edible, making it a fun and plastic-free way to drink water or juices while on-the-go (such as for the London Marathon, where Notpla produced 42,000 capsules) or even alcohol cocktails at festivals! Beyond events, Notpla is now also partnering with several restaurants and food delivery companies, including Just Eat, to supply them with compostable dressing sachets.
6. Supply chain & Traceability
And finally, as we’re becoming increasingly conscious of the production, distribution and packaging of our food, food traceability and supply chain visibility have become important themes in 2019. Traceability enablers, such as blockchain technology, will continue to expand and get new adopters as they enable fast identification of quality and origin of products. Particularly exciting startups in this sector include Ripe.io, Provenance and Safe Traces.
We’re only at the beginning of the sustainable foodtech revolution. If you’re building, investing or thinking about this space, I would love to hear from you!
- The environmental sustainability of insects as food and feed. By Arnold van Huis and Dennis G. A. B. Oonincx. September 2017