Photo by Flickr user Michael Stern, CC BY-SA 2.0

The Food Movement: The Tech Industry and How It’s Changing How We Eat

Magdalena KLEIN
Jan 3, 2017 · 5 min read

I am a huge fan of cooking and eating and food culture in general. So, I decided to kick off this inaugural series of blog posts with some research on food technology. The topic of food is not only close to my heart and stomach, but I love how such a primal human need can be met with better or more available options when technologies are used to assist. However, due to the different ways technologies can be applied to various stages of food development, production and distribution, this topic becomes broad and demanding.

Investments

In 2016 we saw some huge investment initiatives. Right before the end of the year, in the beginning of December, Tyson Foods launched a 140.95€ venture fund to back food and agricultural startups. Their plan is to invest in startups focusing on solving the problems surrounding food production, distribution, nutrition, food waste and safety.

Earlier in the year, Campbell Soup Company invested 117.46€ million in Acre Venture Partners, a venture capital firm that funds the future of food. In a statement to investors, Campbell president and CEO Denise Morrison said, “We believe defining the future of real food requires new approaches and new business models.”

Additionally, mid-year, Kellogg launched a venture capital fund called Eighteen94 Capital (1894). Their aim, according to Fortune, is to invest in “startups that are pioneering new ingredients, foods and packaging.”

Market Predictions

A few years back, Research and Markets projected food growth would be at a 4.5% CAGR between 2015 and 2020, while reaching 2.85€ trillion in revenues. Startups have been operating in the food tech space for some time now, and in 2015 alone they raised 5.36€ billion with 275 deals.

In 2016, however, there were some critical prediction shifts. CB Insights forecasted that the 2016 year might end with less than half of these deals being closed, but as of now it’s still too soon to tell. Additionally, the company expected that startups may receive less than 2.35€ billion in funding.

Food delivery

Grocery and food delivery companies such as FreshDirect, AmazonFresh, Deliveroo, UberEATS and Instacart have been the most successful in this marketplace. As Bloomberg noted, “food delivery seem to be a veritable venture capital obsession”.

Comparatively, companies bringing private chefs to homes and private events have not fared as well as delivery startups. Dinner Lab, Kitchit and Kitchensurfing were all forced to close their operations during the first half of the last year.

Different Perspectives/Different Challenges

From both the global and developing spectrum, the industry faces a myriad of challenges. In developed countries, the food tech industry is set to meet diverse expectations and people’s needs: home delivery, quality of product, knowledge of origin of ingredients, waste reduction, assorted food “experiences”, or meeting dietary restrictions.

From a societal perspective, the challenges of the industry are related to climate change, economic, and medical aspects. According to the study published by Oxford Martin School, a dietary switch to one that relies less on meat and more on fruit and vegetables could save up to 8 million lives by 2050, reduce greenhouse gas emissions by two thirds, lead to exponential healthcare related savings, and avoid climate change damages in the trillions.

The Oxford Martin researchers clearly intimate that climate change will not be slowed by technological processes alone, and that cultivating and adopting healthier and more sustainable diets is paramount in diminishing its negative impact.

Selected companies

Here is an overview of 5 companies that I believe elicit not only the vastness of the food tech industry, but also show how complicated and challenging some of these food related problems can be, and how these companies are grappling with them.

Booster Ag-Tech

Founded: 2014

Country of origin: Argentina

Problem: Unpredictable changes in weather are negatively impacting agricultural workers, and their ability to predict yields.

Solution: A highly accurate weather forecast model, built from scratch, powered by the most advanced technologies of Artificial Intelligence, which generates extremely accurate weather and climate predictions for the food and agriculture value chain.

Urban Vine Co

Founded: 2016

Country of origin: USA

Problem: In urban areas with limited space, rooftops are a popular choice for not only outdoor gardens, but “indoor” greenhouse farms as well. Beyond the obvious space advantages to rooftop farming, there are several other reasons why rooftops are more advantageous for agricultural production; such as access to rainwater, ample expansion space, decreased likelihood of pest interference, potential air flow benefits, and effect of urban noise on urban rooftop plant growth. The potential of the global vertical farming niche will be worth 3.73€ billion in 2020, according to projections.

Solution: Goal of the company is to promote a sustainable future via small scale urban agriculture. urban | vine provides small-scale urban farming products and urban farming content.

Greenease

Founded: 2013

Country of origin: USA

Problem: A need to find food service businesses based off of several user preferences or food qualities including free-range, grass-fed, gluten-free, and many more.

Solution: Greenease is a resource that connects consumers with restaurants, cafes and grocers that buy from local and/or sustainable farms. The mobile app is currently live on iOS in Washington DC and New York City. Listing on Greenease is completely free for company’s locally-sourcing businesses. All they ask is that businesses provide their farm names so consumers can learn about where their foods comes from when dining out.

Local Food Lab

Founded: 2012

Country of origin: USA

Problem: How to launch a successful food technology business.

Solution: Local Food Lab is an academy that supports entrepreneurs by offering them workshops in major U.S. cities. They cover broad topics such as food industry trends as well as more specific subjects such as business plan writing for food startups.

Cabbige

Founded: 2014

Country of origin: USA

Problem: How to enhance performance of small farms

Solution: Cabbige delivers business intelligence solutions, including price optimization, digital record-keeping, product profitability analysis, and sales and channel analysis to small farms to help them strengthen their business with intuitive digital tools.


Did you like what you have just read? Are you interested in similar, in depth research or know someone who’d like to read a similar piece from me? Shoot me a message at me[at]magdalena-klein.com.

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Magdalena KLEIN

Written by

Researcher and consultant focusing on digital innovations @MagdalenkaKLEIN

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