Food and Technology’s Multiple Ingredients

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If you’ve ever eaten the meatless burgers made by a lab, or savored an kale salad that was grown on a hydroponics farm You’ve had the taste of food technology. It may seem like a fringe option for foodies who are a bit obsessed. But in the years to come the rapidly growing business will be commonplace and will change the way we eat.

What’s behind the growth of foodtech? Startups are looking for ways to create food that is more sustainable and efficient to counter the imminent risk of food insecurity as well as inefficiencies and negative environmental impacts in the livestock and agricultural industries. They are also aiding consumers in making better, healthier choices for their food.

Food production in the world isn’t up to the task As these statistics clearly demonstrate:

As per the United Nations, the world must increase its production of food by 60% in order to feed the estimated population of more than nine billion by 2050.
Changes in the climate, urbanization , and water shortages reduce how much arable land that we can utilize to grow food.
Around 690 million people across the world are affected by hunger.
The figure is predicted to rise to 880 million in 2030, which will be exacerbated due to the pandemic.

Foodtech startups are looking to fill in some of the huge gaps in the market and have sparked the attention of investors.
The many ingredients in food and technology

Beyond meats grown in labs or on city-based farms in vertical verticals, the term “foodtech” needs to be viewed as an enterprise that uses technologies such as artificial intelligence (AI), Internet of Things (IoT) and big data to alter aspects in the supply chain for food all the way from manufacturing to distribution.

The sector can be classified into six verticals or sub-sectors (definitions taken to The Digital Food Lab):

AgTech Startups that aim to improve output and the quality of crops by using drones, sensors, and software to replace humans. This vertical concentrates on agricultural products, next-generation farms, and urban agriculture.

Food Science: Startups are studying and creating new products for food that address environmental and health issues. The lab-grown meat, plant-based alternatives to meat and alternative protein sources fall in this category.

Food Service: New startups are changing the way that food-related businesses (hotels cafes, restaurants and hotels) are run in the present. The latest innovations dubbed’restaurants that will be the norm in the near future’, such as robotic chefs and cloud kitchens are part of this sector.

Coaching: Startups that educate customers and create the awareness of people about their choices in food, the benefits of healthy eating and assist people achieve their personal goals, such as fitness or managing chronic illnesses.

Delivery: Startups that dig into the issue of transport in the food industry. Food and restaurant delivery is discussed here.

Retail: companies that are developing technology-based solutions that optimize the functions of the retail food industry. This could include improvements to the back end, such as digitizing the supply chain, or front-end software to offer an improved shopping experience in the store.

Some incubators for food technology have more precise categorisations. However, the six verticals listed above offer an overview of the sector.

Why investors have a taste for It

Foodtech startups, due to their nature, require a lot of time to conduct R&D and stringent safety tests before they can bring their product on the market. In the case of For example, it took 10 years or more for Impossible Foods and Beyond Meat to become household names , with billion-dollar valuations. These companies are among the most successful success stories in the still-in-progress industry.

The interest of investors in foodtech has been growing momentum recently, partly because of the United Nations and other international organisations that are highlighting food insecurity as well as creating the Sustainable Development Goals (SDGs) to be achieved by 2030.

The Financial Times reported a surge of investors interested in investing based on Environmental, Social and Governance (ESG) principles. Investors channeled more than US 70 billion to Sustainable investment fund between the month of April to June of 2020 due to the growing awareness of the climate crisis.

The COVID-19 pandemic has also revealed our dependence on international supply chains, as well as the inefficiencies of traditional food production systems. The government has begun turning its focus on foodtech in order to ramp the production of food in the country and also. For instance, Singapore launched a SGD $30 million (US $21 million) fund to promote local food production on top of the current initiatives to ensure that the island’s ability to supply 30 percent of its food needs in 2030.

Private investors and foodtech VC are getting in the market too. As per Food Navigator USA, investment in US foodtech reached a record all-time high at US $8.4 billion during the initial three quarters of 2019. This is more than the record-breaking sum that was US $7 billion this sector earned throughout the year.

Alternative proteins have been an enormous success and have seen a huge increase in demand, with US research into alternative proteins and lobbying organization The Good Food Institute reporting a total of US $3.1 billion that was channeled in the area, an increase from US $1 billion figure for the year 2019.

Innovations in the field aren’t limited to most advanced Western markets. For Southeast Asia, investment in the region’s foodtech and agriculture startups increased up to US $350 million during the initial six months of 2019. It is in line to surpass the full-year total which was US 423 million.

In this case, the pandemic and lockdowns haven’t stopped the pace of innovation, with a variety of foodtech businesses responding to the situation and showing resilience. After the disruption of imports from abroad and consumers turning to local stores, farms and food delivery services.

With the global outlook for food production, the sustainability issues and the constantly changing food trends, the foodtech’s popularity isn’t likely to slow down any time very soon. It’s a good moment to consider taking your place at the table. Tomorrow’s foodtech innovations are already being ready to be served.