Plant-Based Production is Transforming the Face of FoodTech and Here’s How…

Apr 12 · 9 min read

Quick takeaways

  • Environment and sustainability is linked to our production of food
  • Wealthy countries tend to eat more animal protein — we over consume it
  • Animal protein takes an incredible amount of resources to produce
  • Food production creates a lot of greenhouse gases — about the same as transportation
  • The last decade has seen a lot of money move into FoodTech — we will continue to see more funding as technology improves and the environment moves to the front of the agenda

first taste of alternative meat was entirely by accident. I went to Harvey’s (a Canadian burger chain) to grab a quick lunch to satisfy my burger craving. Instead of ordering my regular, I decided to switch things up when a promotion caught my eye. The burger looked good — it also helped that the burger was cheap. After getting home and after taking a bite, I remember thinking that the burger tasted a little funny— it was a little heavy on the spice side. But if this was how the burger was supposed to taste, then I wasn’t going to question it. It wasn’t amazing but it wasn’t bad either. It was decent enough to satisfy my burger craving. It wasn’t until a couple of hours later when I examined a flyer from Harvey’s promoting the burger that I realized I had eaten the Lightlife Plant-Based Burger.

All of this to say that despite it tasting a little off, I didn’t question my alternative meat burger from a burger made from cows. We have come a long way from the veggie burgers of old.

Unilever’s ambition is to generate revenues of 1B euros in the next 5–7 years in the plant-based meat and diary alternative sector. This is a 5 fold increase from their current revenues of 200M euros. They are hardly the only ones looking at getting a big bite of the plant-based meat pie (puns intended) currently worth $11.1B in 2019; the sector is expected to grow at a CAGR of ~14% to $35.5B by 2027. While that seems like a big number, for context, the global market for meats was about $950B in 2018.

But plant-based meat isn’t the only sector generating new excitement. On the alternative-dairy side, the market is expected to grow at a CAGR of ~12% to $35.8B by 2026 from $13B in 2018 . Although soy and almond are by far the biggest segments, from anecdotal experience, I expect Oat-based milks to capture an ever increasing share of the market in the coming years (Oatly is delicious).

Illustration 1: Global marketsize in 2019 for alternative dairy. Source: Statista

Meanwhile the marketsize of vertical farms was about $4.4B in 2019 and is expected to grow to $5.7B by 2025 at a CAGR of 20%. (If interested, I’ve written in greater depth on vertical farms which you can read about here).

Current Landscape and the Sustainability Problem

As in most other verticals, megatrends are going to play an important role in the development of the shifting Foodtech sector. But amongst them, sustainability and environmental concerns are at the top. We may not like to admit it, but the environment and the food we eat are invariably linked together.

Sustainability and Environment

A survey conducted by the European Commission showed that 94% of Europeans considered that protecting the environment was important to them personally. Another survey, conducted by the UNEP across 20 countries with 8000 young adults found that the challenge around environmental degradation was the second most important topic only second to poverty.

Illustration 2: Percent of people who listed environmental degradation as their biggest priority Source: European Commission

According to TheWorldCounts Project, we would need 1.77 planet earth if we are to maintain our current rate of consumption and lifestyle. This is despite the fact that a large portion of the world continues to develop and catch-up to the lifestyle and consumption habits of North America, Europe and other select wealthy countries. More than that, the world population continues to increase and will continue to do so for the foreseeable future.

At our current rate of population growth and development, we will probably need 3 full planet to sustain ourselves by 2050.

There’s a strong correlation between a country’s wealth and the consumption of animal protein. As we get wealthier, we have greater disposable income to eat animal protein, which tends to be more expensive. But even then, we are eating more protein than we need. In the European Union, Canada and the US, we consume almost double of what we need.

Illustration 3: Relationship between meat consumption and GDP per capita. Source: Ourworldindata
Illustration 4: Protein consumption by region. Source: World Resource Institute

I understand that a lot of us find animal protein to be delicious (I include myself in that group of people), but it tends to be horrible for sustainability. If we look at the number of litres it takes to produce a kg of animal protein, it’s magnitudes higher than vegetables, cereals and fruits. The only comparable to animal protein in terms of water consumption per kg is nuts.

Illustration 5: Number of litres of water to produce 1kg. Source: Mikonnen and Hoekstra

If there’s anything to be gleaned from the above, it is that the production of protein is ridiculously water intensive. We can’t just keep using our freshwater at the rate we are doing now. Something has to give. The future droughts that we often like to talk about are already here: Cape Town, California among many other places.

Of the habitable land on earth, 50% of it, the equivalent of 51M square kilometers is used for agriculture. For reference, that’s bigger than the size of Spain. We often talk about transportation and how bad internal combustion vehicles are for the environment. Indeed, that knowledge has led to a strong shift towards electric vehicles in the sector. What a lot of us also fail to realize however, is that according to the Centre for Climate and Energy Solutions, the agricultural sector produces as much greenhouse gases as the transportation sector. And it turns out that a lot of that agricultural production is used for livestock feed: 55% of the calories we produce is consumed by humans, 36% for animal feed and 9% for fuel. In the US, the difference is even more striking: 27% is consumed, 67% goes to animal feed and the rest to making fuel.

Illustration 6: Global Manmade greenhouse gas emissions. Source: Centre for Climate and Energy Solutions
Illustration 7: Global land use. Source: OurWorldinData

It’s incredibly inefficient to use land, water and other resource to produce plant calories only to then convert that to animal calories. According to Yale’s Center for Business and the Environment, it takes 25 plant calories to produce 1 calorie of beef; 15 plant calories to produce 1 calorie of pork — even chicken, the most efficient meat on a per calorie ratio still takes 9 plant calories to produce 1 chicken calorie.

This itself wouldn’t be a problem if we had unlimited resources. But we don’t. And with the population projected to increase from the current 7.7 billion to 10.9 billion by the end of the century, we’re going to be adding a lot of people to our blue floating rock. In a perfect world, the food we produce would be perfectly allocated to everyone — we certainly have enough since we collectively waste 1/3 of the food we produce for human consumption. But we’re really bad at properly allocating resources.

But let’s entertain that scenario — the scenario where we perfectly allocate the food we produce to everyone. Even then, we would be in trouble. The farmland that has kept us going for thousands of year is degrading. The topsoil that we need to grow crops is disappearing faster than it can be created. To quote myself in a piece about farming without soil:

Each year, over 75 billion tons of topsoil are lost to land degradation. Similarly, 12 million hectares of land is lost to desertification — an area that could produce 20 million tons of grains (for those wondering, that’s the equivalent of the world’s 9th largest producer of grain in 2019 — Argentina). With an ever-increasing number of mouths to feed and with productive agricultural land becoming rarer, the world is facing a looming food security disaster.

There’s a huge opportunity in FoodTech to transform the way we eat and the way we view food. The way we have traditionally done things — grown food — is not sustainable. More than that, it’s probably not feasible if we look far enough into the future. Not in a world where our topsoil is being destroyed and our cities are running out of water. These problems are ones that we faced yesterday and that we will continue to face tomorrow — unless we come up with a new solution. Alternative milks and lab created meats are just the start. I think VCs have long-ago recognized this and have provided funding into the space as a result of that. But there’s still so much to do — we’re still at the tip of the iceberg.

Funding in FoodTech

Illustration 8: Foodtech funding in millions of dollars per geography. Source: Pitchbook
Illustration 9: Foodtech funding in millions of dollars and number of deals completed per year. Source: Pitchbook

Foodtech has see an incredible explosion in investments over the last decade. Over that time period, the Asia and the US have both funneled huge amounts of cash into the industry. Europe as a whole lags behind the two.

However, the last decade has seen most of the investments being made into Foodtech infrastructure and supply chain: online food ordering, online groceries etc.

Although I think there is a still a lot to do in terms of improving those areas, I think the more exciting opportunities, as highlighted by the environmental and sustainability problems, lie in the actual creation of new food.

The Investors

It shouldn’t come as a surprise to see that the Foodtech sector has generalist firms that invest across different verticals — mostly related to Foodtech infrastructure, platforms etc. — and those that invest primarily in Foodtech — in verticals that have to do with alternative foods. It should be noted that the splits below were done entirely with the way things fell into place e.g. no generalist European fund in the top 25 over the last 20 months. If we extend the time horizon to 5 years, we find that 14 of the funds that were the most active in the last 20 months, were also the most active in the last 5 years. This suggests that if you are an entrepreneur in Foodtech, starting with those 14 funds is likely to be a good idea. I’ll caveat that by saying that I don’t have data on things that include how many deals each fund sees, their dry power etc, deal size median/average, which would play into how often will they invest over the coming years.

Illustration 10: Top 25 Foodtech investors over last 5 years (right). Source: Pitchbook
Illustration 11: Deals completed in Foodtech by most active investors over last 5 years. Source: Pitchbook

Final Thoughts

The fact that money is being put into the sector is fantastic. Advances in science and technology makes it possible for us to re-imagine the way we will eat. I love the idea that I wasn’t able to tell the difference between a plant-burger and beef burger without paying close attention to the two. But I want more. I want a beef burger produced in a way that minimizes things like water, land and other resources. I want a future where our use of resources to produce food is minimal. We need it to be. The money being put into the sector is a great start — and I can’t wait to see where we end up in the next decade.

If you have comments, questions or criticism, message me on Twitter @Lawrence_Ou or on Linkedin and I’m happy to chat and discuss!

All opinions expressed above are strictly my own and do not in any way represent past or present employers.

Included VC

Providing opportunity, access & knowledge to break into VC — literally changing the face of Venture.


Written by


Aspiring VC, current strategy consultant interested in all things entrepreneurship, VC and tech.

Included VC

Included VC: the first of-its-kind fully funded global Fellowship designed to provide opportunity to underrepresented and overlooked aspiring VCs who are actively committed to breaking into, and pursuing a career in venture capital.


Written by


Aspiring VC, current strategy consultant interested in all things entrepreneurship, VC and tech.

Included VC

Included VC: the first of-its-kind fully funded global Fellowship designed to provide opportunity to underrepresented and overlooked aspiring VCs who are actively committed to breaking into, and pursuing a career in venture capital.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store