Investing in Agri-Food Tech: Building Resilient Food Systems

Investing in Agri-Food Tech: Building Resilient Food Systems

As the world begins to pick back up the pieces after Covid-19, investor mindsets are changing & the global business landscape is accelerating digital transformation and unlocking opportunities for innovators offering solutions to new challenges we now face in the food supply chain. One bright spot has been the increase in agri-tech investment due to the opportunities and power it offers to a now fragile food supply chain as we search for ways to adapt through recovery and growth.

Andy Ziolkowski, Managing Director of Cultivian Sandbox, which invests in innovative food and agriculture technology says that; “Given the disruptions in food supply due to the pandemic, we have been looking at areas including indoor farming, logistics, food safety and traceability. Software businesses in both  agtech  and  foodtech  are more attractive. In general, it seems these businesses are less disrupted by social distancing and changes in their business operations.” 

Without the effects of covid, farmtech has seen an uptick in investment; according to Agfunders 2020 Farm Tech Investment Report agtech funding is up 370% in the last 6 years but as COVID19 uncovers a fragile supply chain with food shortages, production halts and transport restrictions at the forefront new trends have been emerging to gain investor interest. Agtech startups are developing disruptive new solutions to redesign a more resilient food supply system for our future across the industry, including in robotics, blockchain and automation

 

 

Challenges & solutions in post-covid agtech

With agriculture renowned as being a more traditional sector, what challenges are startups currently facing in breaking into the industry? 

 

 

 

 

 

From agriculture to agtech: farmers first

Although for many robotics and automation may seem like a futuristic concept, farmers have been powering technology for years. Even traditional farmers are used to working with machines. However, as technology becomes faster and more complex, the farmer must always be at the forefront of its implementation. Is it easy to understand & adopt? Does it really solve the problem at hand? Its for this reason that many larger companies are seeking collaborations with more agile-minded startups that always start with the farmer. VC Spero was impressed with agtech startup Tortuga, as they focus solely on working hand-in-hand with farmers and adapting to their feedback.

“The tech industry has not had much to offer farmers, frankly. Farmers are really good at what they are doing and it’s only recently that tech has gotten to the point that we can do very fancy machine vision stuff to help, whether it’s identifying disease via drones or finding perfectly ripe strawberries and picking them.” – Marc Tarpenning, co-founder of the renowned electric vehicle manufacturer Tesla & part of the board at Tortuga. 

 

 

Localized supply chains

Globalization will be challenged and this is pivoting thinking (and funding!) to a more localized supply and distribution system. The main trends supporting this shift are supply chain assurance, food security, and geopolitical reliance. 

The Agricultural Outlook report 2018-2027 published by the Food and Agriculture Organization (FAO) of the United Nations states that of the total land area of the MENA region only one-third is agricultural land (cropland and pastures), and only 5% is arable (cropland). The rest is either urban or dry desert. This means a strong dependency on import.Singapore is the second most populated country in the world yet relies almost solely on importation to feed its population. Southeast Asia food tech accelerator GROW recently announced the launch of a new program focused on food security. Branded Singapore Food Bowl, the program invites startups working to build a more decentralized agrifood ecosystem.

 

 

The digital revolution

With clients and farmers further away from each other than ever, there is an increasing need for more digital solutions across the industry. Startup Farmobile sells hardware to aggregate data coming from farm equipment and stores it for farmers to share with advisors or even sell it to third parties through its data store. In recent months the startup has seen a spike in demand and CEO Jason Tatge believes this is directly tied to Covid19, with farmers wanting to follow a digital strategy better positioned to deal with the long-term effects of the pandemic. 

“In times of social distancing, there are some aspects of technology that will be more suitable than others. For instance, our technology is very low-touch and built for virtual data collection and sharing between farmers and trusted advisors. It removes the need for an agronomist to go out in-person to get a jump drive,”  Tatge told AFN.

 

Fortifying a fragile food system

With food supply being stretched across the world, now is the time for agtech to have its moment. The need to do more with less has never been greater. With many restaurants and foodservice establishments closing amid covid, many farmers who relied on this supply chain were left in limbo, with tons of produce going to waste.

Startup Clean Crop technologies that aims to prevent crop loss and extend produce shelf life recently secured $2.75 million in seed funding. Their sustainable powered solution zaps the air around food after harvest with electricity to create ionized gases and after processing, the gases revert back to the air without leaving any harmful residues on produce.

The company is part of a collective of emerging startups raising funds in an effort to reduce food waste. Tropic Biosciences recently raised 10 mil to use its gene-editing technology including CRISPR to optimize coffee and banana crops.

 

 

Corporate input

It isn’t just startups making a B-line for agtech, increasingly more corporates are seeking to give back to the land with more sustainable practices as consumers care more about the environment than ever. The good news for agtech startups is that their target end-users provide an essential function: growing food. There will always be demand for food and now larger brands want to work with these startups to offer the added benefit of sustainability to their consumers. 

Multinational food manufacturer General Mills recently partnered with farmers and suppliers in an attempt to implement more sustainable practices on 1 million acres of soil, including for oats, dairy and wheat by 2030.  

“It’s a big deal for food companies because we make food that relies on agriculture. So when we think about what we need to be doing, and the fact that so much of the landscape is actually being degraded right now, it’s an opportunity to do it differently,”Shauna Sadowski, head of sustainability for natural and organics at General Mills.  And General Mills isn’t the only company promising to carry out more sustainable operations, a handful of big industry players such as Hormel Foods and Danone North America are promising their clients to focus more on practices that are nicer to our planet by investing more in regenerative agriculture. 

Danone recently partnered with food tech startup Brightseed for example to research the health potentials of some of its key plant-based ingredients, starting with soy. Brightseed is a biosciences and precision nutrition startup that’s looking into plant nutrients for human health using AI.

 

In our next webinar we will be delving into all things agtech, including the keys of investing in the space & the companies leading this change. We’ll be joined by industry experts Anne Greven, Global Head of F&A Innovation Startup Rabobank, John Friedman, Director of AgFunder Asia & our very own Jose Luis Cabañero CEO of Eatable Adventures. Secure your place this 2nd of July at 15.00 (CEST) 

SIGN UP HERE!!

 

 

 

 

 

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Webinar Open Innovation

Last Thursday, June 18th, we added another edition to our series of international webinars as we delved into open innovation in the food industry, to discover and analyse the benefits of startups and corporates working together.

In our latest episode “Accelerating the growth of the Food Industry: The power of open innovation” we were lucky enough to host Sejal Ravji, Director of Open Innovation at Calidad Pascual ; Maria Paula Rios, Director of Innovation and Strategy at Team Foods and José Luis Cabañero, CEO and Founder of Eatable Adventures, who shared their visions and insights from their professional experiences with open innovation.

 

 

 

Here are the key takeaways from the webinar in case you missed it:

 

Constant changes in the agri-food sector

For Sejal Ravji, one of the changing aspects in the agri-food space is the introduction of technology, and with it comes the need to develop innovation quickly and efficiently. “Technology is accelerating all changes. The great challenge now is to predict where the changes are going and where value is generated in the ecosystem. It is in this space where innovation is born”, he stated.

José Luis Cabañero, who said that there has been a wave of disruptive new startups in the past few years, commented that “they are daring to develop new models with technology, such as artificial intelligence, which can be very beneficial for companies who want to present a unique and differentiating product.”

For María Paula Ríos, “Big companies have to start looking outside of their own teams to challenge themselves. We have begun to realize that those companies, which have a longer history, have to look beyond where there is greater knowledge and to work hand in hand with other agents,” said María Paula Ríos.

 

Corporations and Startups: a profitable collaboration

 

For both Sejal Ravji and María Paula Rios it is essential for a corporation to choose the right startup to work with carefully but the most important thing is to know what the objective of the collaboration is. According to the Director of Open Innovation at Calidad Pascual, the purposes of a company can be many: “What new technologies do you want to incorporate? What new markets and businesses do you want to reach? Do they need a venture capital fund to invest in other businesses?” He stated.

As for José Luis Cabañero, “it is essential that both parties understand the limitations of these relationships. Startups have to understand the rigidity of corporations, just as these companies must understand the fragility of startups. ”

 

Startup & corporation collaboration

Collaborations between startups and larger companies are not as simple as one may think, due in part to the structural differences and clashes in business culture between both parties. However, if a mutual commitment has been established the end result can be promising.

“I have spoken to many startups, and we know that collaborating with a corporation is not easy because there is a different speed involved. In a company, the processes are usually slower than in a startup,” Sejal Ravji acknowledged.

For María Paula Ríos there is no single collaboration model to choose from, it all depends on the characteristics of each company, but what is common to all models is the need for flexibility on both sides. She stated that there must be full cohesion between both teams and this is exactly where the success in her companies open innovation strategy lies “What we want is to be able to work with a startup since it has a differential knowledge that contributes value and enhances our products. Only by doing this will we get to the next level, together.”

 

KPI´s in open innovation

José Luis Cabañero highlighted two classes of KPIs to measure the effectiveness and the final result of open innovation between startups and larger teams: there are KPIs that are associated with business growth; while there are other KPIs that are more difficult to measure such as the number of products launched.

Sejal Ravji and María Paula Ríos agreed. The Director of Open Innovation at Calidad Pascual added that “when the corporation is clear on its objective, it is easier to identify and measure the KPI”. The Director of Innovation and Strategy at Team Foods also added that “if there is a project that does not generate value, it won’t survive”

 

 

 

 

Missed this webinar? Check out the video 

 

 

Accelerating the growth of the Food Industry: The power of open innovation

Accelerating the growth of the Food Industry: The power of open innovation

Open innovation is a formula that is gaining increasingly more strength and traction as a model for attracting talent, technology and disruptive business models. By embracing open innovation companies can tap into new powers to transform their organizations, reaching objectives that would otherwise be unattainable without the use of these methodologies.

One of these methodologies is what we call Corporate Venturing, the streamlining of innovation processes within larger corporations, through the introduction of agile startups in the development of new products. It offers larger teams the opportunity to closely understand the needs and demands of consumers and provide untouched know-how for a more flexible and efficient adaptation to said needs, in both production and distribution capacities.

We held our own webinar on Open Innovation with our partners Eatable Adventures, who invited some of the leading companies in the industry such as Mondelēz International and Sainsbury’s. In the insightful webinar episode Gil Horsky, Innovation Director of SnackFutures from Mondelēz International, and Milena Lazarevska, Head of Future Brands at Sainsbury’s explained the advantages of working with startups from their direct experience. Horsky acknowledged that “working with startups is very important,”adding that within the last few years it has been growing as a “top priority”. Lazarevska agreed, stating that establishing agreements with startups allows corps to gain a quicker turn around on product tweaks and consumer needs.

At Eatable Adventures we understand the importance of open innovation and would like to delve further into this topic to gain even more insight into the impact of corps working with startups and vice-versa. We have the pleasure of working with two of the largest corporations in the food sector: Alianza Team® and Calidad Pascual

 

Alianza Team® and their experience in the lipids sector

Alianza Team® a leading Colombian company in the food sector, is committed to the well-being and future of food and works to develop lipid-based food-tech products and solutions with high nutritional components for a range of food spaces like bakeries and restaurants.

Alianza Team® aims to nurture a better future and has established three business units: Team Foods, Team Solutions and Breden Master. Located in Colombia, Alianza Team® also boasts a significant presence in Chile and Mexico while working on developing ambitious expansion to wider markets. They are currently launching their next mission in a call for projects; Hack the Food System, which focuses on seeking the most disruptive foodtech startups across the lipids ecosystem which are capable of providing innovative responses to the new challenges we face in the food system, including new processes and technologies for nutrition improvements, food functionality and production sustainability.

Alianza Team® invests in startups through albora ™; its corporate private equity fund.

 

Calidad Pascual: building the future of food

Calidad Pascual aims to “Give their all for the future of food”. A company with a strong family essence, led by solid values and a certain sense of transcendence, which provides consumers with food products and services that help improve the well-being of society.

Pascual Innoventures is a Calidad Pascual open innovation vehicle to immerse yourself in the entrepreneurial ecosystem and create alliances with startups that share their philosophy; all while anticipating global food needs. For them, this philosophy is fundamental; a culture that begins with the premise of creating value wherever they can. Its about giving the consumer a memorable experience and, at the same time, contributing to the survival of our planet.

 

In Eatable Adventures next webinar “Accelerating the growth of the Food Industry: The power of open innovation”, which takes place next Thursday June 18th at 17:00 (MAD), 10:00(BOG), 11:00(SCL), we will be joined by Sejal Ravji, Open Innovation Director at Calidad Pascual; María Paula Ríos, Innovation & Strategy Director at Team Foods and José Luis Cabañero, CEO & Founder of Eatable Adventures, to share their companies experiences in open innovation.

SIGN UP HERE!!

 

 

 

 

 

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Webinar Riding the Plant-Based Wave: Leading the Food Revolution

On Thursday June 4th, we launched the latest edition of our series of international webinars on innovation in the food sector, with an aim to discuss the most relevant initiatives facing our food system today.

In the webinar “Riding the Plant-Based Wave: Leading the Food Revolution” we were joined by industry experts Nir Goldstein, Managing Director-Israel of The Good Food Institute; Elizabeth Gutschenritter, Managing Director, Alternative Protein at Cargill and José Luis Cabañero, CEO of Eatable Adventures, who shared their visions and insights into the present and future of alternative protein.

 

 

Nir Goldstein explained that one of the main goals of The Good Food Institute is to work on increasing the production of plant-based meat substitutes, to ensure they offer sustainable products that mimic the taste and texture of their animal protein counterparts. 

Elizabeth Gutschenritter stated that for Cargill an important objective is to offer clients and their customers food in a more sustainable and safer way. “We work throughout the supply chain to meet this need, and we have seen that protein consumption has increased worldwide for years,”.

 

Here are the key takeaways from the webinar in case you missed it:

 

Increased demand for plant-based products in recent years

For Nir Goldstein, there are four main reasons for this increase: economic, health, environmental and animal welfare awareness. According to his forecast by 2030, these products may occupy 10% of global meat market consumption. “This sector has attracted more investment this year than in all of last year,”.


Elizabeth Gutschenritter agreed and added that this increase resides in the interest of consumers demanding more sustainable and healthy products on shelves, although 93% still continue to eat meat.

Startups as an innovation engine

Innovation continues to be vital for corporations which increases the need to collaborate with startups, which offer more agile mindsets and increased ability to adapt faster and more efficiently to consumer demands, essential if wanting to achieve competitive advantages in an often crowded market.

For José Luis Cabañero, mutual support between corporations and startups is imperative to satisfy new consumer demands, adding that innovation and speed are the most important tools today to survive in the market.

 


Success stories of collaboration between startups and industry in plant-based

One of the collaborative success stories that stands out for José Luis Cabañero concerns the University of Berkeley, which launched alternative protein training programs along with incubation programs for startups in the sector

“There have been a lot of investments in the sector, especially in marketing and in the R&D departments in cell-based and plant-based. Our partners are helping us to bring the product closer to the market ”, acknowledged Elizabeth Gutschenritter.

For Nir Goldstein, the best success stories come from experience and learning that one internalizes when discovering how to move forward in the future. “There are a significant number of products that are in the initial phase of flavor texture adaptation, but are not developed on a large scale. Startups must move from pilot tests to more industrial developments to find out if they like their products on the market or not. ”

 

Effects of the pandemic on the plant-based boom

Nir Goldstein stated that despite the effects of the pandemic we are still seeing startups securing significant investments which represents a positive trend in terms of funding and growth. “For example, Impossible Food got a half-trillion dollar investment during Covid-19. We see growth in the food sector of 200% that is partly driven by the consumption of alternative protein products,”

Elizabeth Gutschenritter predicts that plant-based consumption will increase in the coming months. Why? Consumers are seeking healthier and more sustainable-driven food and this will remain post-covid. To keep up with the squeeze of new consumer behaviour, companies are developing and launching fast solutions, like KFC in China.


 

 

Missed this webinar? Check out the video 

 

 

Webinar Israeli Startups Showcase: Solving New Challenges in the Food Industry

We recently launched a series of international webinars with the aim of providing a scope of insights from the main pioneers of the food tech industry where we cover the most pressing challenges our food system now faces amid the current covid crisis. In our latest episode we travelled (virtually!) all the way to Israel where we hosted our webinar in collaboration with the Economic and Commercial Mission in the Israeli Embassy in Spain and the Israel Export Institute.

 

We were joined by four of the most disruptive startups across the Israeli startup ecosystem as we dug into the various solutions young companies can offer across a range of different disciplines during this time through the application of their innovative food technology:

 

 

Evigence sensors 
This innovative startup provides food freshness information through a small visual chip device which enables the user to see blind spots in the supply chain and can help reduce food waste and offer suppliers and consumers alike ease of mind regarding the safety of  food amid the current pandemic. The solution can be applied across the complete supply chain from the producer, to the supplier right to the end user. It’s easy to use and facilitates freshness indication of a range of food stuffs including meat, fruit and even frozen foods. The company have worked with a number of important brands like Mcdonalds, where they designed a number of sensors specially for their frozen buns so they knew when and how to store and serve them.
COVID: In times of covid its important that the full potential of food is activated. Consumers are becoming more cautious about the quality of food they eat – how do they know it’s fresh? How do they know it was stored correctly? This solution offers an easy to use and deployable solution that applies transparency across the food supply chain  including remaining shelf life. The added advantage is that it also helps promote more sustainable operations, as sustainability is more on the agenda than ever “waste is becoming even more of an issue”..”using our sensors you can reduce waste dramatically”.

 

Kitchen robotics
Traditional restaurants haven’t changed dramatically for the last 300 years, gathering ingredients, mixing, chopping, cooking, cleaning…but even before covid first buckled the food industry we started to see a shift in the way restaurants were running their operations. How? Many companies were turning to delivery options like Ubereats and Grubhub, which in turn borned a new trend: dark kitchens. These are off-premise, delivery only operations and Kitchen Robotics was developed in the midst of this shift, offering an automated robotic solution to create a variety of dishes.
The startup offers a four-way solution:
1.collecting 2.cooking 3.serving 4.cleaning with Its hardware capable of creating between 30 to 40 dishes an hour.
“If we solve the issue for dark kitchens the solution will be suitable for other industries as well”
COVID: “Almost every dining solution is trying to make a shift towards dark kitchens”. As restaurants close their doors many owners are looking for new business models to keep afloat amid covid, and this startups solution offers the answer to delivery-only, off-premise and take-away devoted business. Restaurant robotics offers a range of benefits including more efficient and automated operations, reduced labor necessity and increased consistency which is perfect for not only restaurants but other players in the food space like supermarkets, universities and hotels.

 

SRP analytics
In the business of grocery this startup is providing big data solutions to manufacturers. When you look at local neighbourhood stores you’ll notice they are lacking one thing: technology. They don’t have anything to manage consumer or manufacturer relationships. SRP analytics noticed this white space in the market and built a three-way platform that connects all the stakeholders in the supply chain. The platform collects information like recommendations on what goods the store owner needs to buy or what promotions manufacturers need to follow to sell more orders, and transforms them into insights. Utilizing this technology makes their day-to-day operations easier and helps create new revenue streams.
COVID: With more consumers in lockdown we are seeing an increasingly more digital world. Going online offers consumers a different approach to ordering food. “E-commerce is the king for consumers”. This solution offers the deployment of “different processes with minimal physical interactions.” With larger retailers suffering from extended delivery times, this app provides smaller local stores with more digital abilities and more options for consumers to avoid leaving the house.

 

Vertical Field
The vertical farming market is growing into a 10 million pound market with increasingly more investment interest and limited spaces for land to deal with overpopulation. This solution offers businesses the chance for a greener transition.
Vertical field has created a vertical farm in a 40 feet container which is controlled by an IT system to help optimize the plants environment. They shorten the supply chain and reduce intermediaries in order to bring the agriculture directly to the retailers and end user. Through this food supply chain short cut, they offer an easy to use platform which facilitates the complete management of the farms and allows establishments like supermarkets a long arm in price and quality, without the need to worry about weather conditions or logistics.
COVID: During the current climate the food supply chain has been frozen, with labor shortages and transportation halted, this solution offers a “grow your own” alternative. You know that the food you will consume has been produced safely and cleanly avoiding human touch and ensuring proper sterilisation. They avoid the use of pesticides and therefore provide fresher and cleaner produce which offer higher nutritional values. It also offers a more sustainable “touch”; these solutions help lower waste to roughly 5-10% for a more efficient supply chain as well as higher yields and constant supply.

 

Missed this webinar? Check out the video