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Latest start up trends in disruptive times

Finnian O'Luasa, Manager France & Belgium

Digital Food Lab is an insight and strategy firm specialised in Food start up trends. In their recent report on start up trends in France they state:  “In 2020, French FoodTech startups raised €606M, 50% more than in 2019 (Digital Food Lab, 2021). Growing in such a context was a feat.” Much of this growth was made up of three large deals: Ynsect, Innovafeed and Swile.  

Ynsect is an Agtech startup that transforms insects into premium, high-value ingredients for pets, fish, plants, and human beings. They produce Molitor and Buffalo mealworms in vertical farms and are currently building the largest vertical farm in the world, in Amiens, France. Ÿnsect's activity is carbon negative and meets the highest standards of verified social and environmental performance.

Innova feed is an Agtech startup that claim to have “The largest insect production capacity in the world with 2 production sites in operation, and a 3rd one announced in the United States” Their three insect feed value chains are trout (December 2018), poultry (June 2020) and pork (February 2021) (InnovaFeed, 2021).

Swile is a Foodservice startup that provides lunch voucher and staff engagement solutions.

Digital Food lab have classified startups into 6 categories:

  • Agtech (Farm management, robotics, urban farms, agricultural marketplaces and Ag-biotech).
  • Food Science (Alternative proteins, functional ingredients, drinks & beverages).
  • Foodservice (reservation platforms, management, payment, virtual restaurants, robotics, cloud kitchens).
  • Consumer Tech (nutrigenomics, appliances, recommendation, food experiences (ex brewery, vineyards), recipes).
  • Delivery (meal kits, restaurant delivery, new retailers, discovery box, Q-Commerce, Delivery robotics).
  • Supply chain (smart - autonomous store, packaging, foodwaste, data)

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Source : Adapted from DigitialFoodLab: https://www.digitalfoodlab.com/foodtech-in-france-2021/

Whereas French startups tend to be specialised in Agtech and Foodservice, European startups in general tend to be more food delivery and food science focused.

However, in 2020, DigitalFoodLab’s European data indicates a tripling of investment in alternative proteins. The leading 5 startup hubs from a European perspective are the UK, France, the Nordics, the DACH region and the Netherlands (Digital Food Lab, 2021)2.

Their report also distinguishes 3 generations of food startup trends: the first generation being mainly focused on restaurant delivery, the second generation saw a transition from restaurant to grocery delivery, the third and latest wave of startups sees future foods and automation (proteins, cloud kitchens, robotics).  A selection of the top 50 European startups representing this generation is available here. Their focus is on better foods for better future and food automation (delivery, cloud kitchens, robotics).

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Source: DigitalFoodLab: https://www.digitalfoodlab.com/foodtech-europe-2021/

Concerning alternative proteins, there is an array of substitutes ranging from plant based, algae, insects, cellular, fermentation and molecular agriculture. However cellular agriculture is still thought to be a long ways away, as described in this detailed article  that underlines scaling problems from lab to industrial scale and the ensuing need to manage the increased amount of waste generated by cells (The Counter, 2021). The conclusion is that beyond the facts themselves, no other expression than "leap of faith" sums up what it takes to create a business or invest in this space (cellular agriculture).

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Source: adapted from DigitalFoodlab

Time scale for these new proteins to reach market is also variable. Whereas plant based proteins are already available and slowly increasing market share, other sources based on technologies of cellular, biomass fermentation or molecular agriculture are on a horizon of five and even 10 years + before becoming a viable consumer choice.

However another aspect to take into consideration is consumer and stakeholder choice. From the latest Bord Bia study on Global Sustainability Insights, professional buyers consistently rank alternative proteins as the lowest of all topics for both their own business or when sourcing from suppliers, suggesting their focus is on less but better quality meat in their desire to meet sustainability targets (Bord Bia, 2021).

Similar to professional buyers, plant-based is the sustainability attribute least likely to influence grocery choice for consumers, and it is not closely associated with sustainability overall. This suggests it remains relatively niche, as consumers look to make their current diets that bit more balanced, as opposed to removing meat and dairy completely. It is a greater concern for younger shoppers so will become more important, but even for 18-24 year olds, it doesn’t rank in the top 10 of topics (Bord Bia, 2021). ​

​However, almost 2 in 3 consumers globally say they have made some effort in the past 12 months to eat more plant-based (Bord Bia, 2021). So there is no doubt that it is a growing category, but being “plant-based” on its own is not necessarily a key purchase or premium driver for the majority. Instead, communicating around sustainable packaging, food waste, and other attributes is more influential.

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Source: adapted from https://www.digitalfoodlab.com/alternative-proteins-talking/

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Image source: Digital Food Lab

References:

1. FoodTech in France in 2021 - Free report - DigitalFoodLab. (2021). Retrieved 4 November 2021, from https://www.digitalfoodlab.com/foodtech-in-france-2021/

2. FoodTech in Europe - 2021 - DigitalFoodLab. (2021). Retrieved 4 November 2021, from https://www.digitalfoodlab.com/foodtech-europe-2021/

Our story - InnovaFeed. (2021). Retrieved 4 November 2021, from https://innovafeed.com/en/our-story/

Lab-grown meat is supposed to be inevitable. The science tells a different story. (2021). Retrieved 4 November 2021, from https://thecounter.org/lab-grown-cultivated-meat-cost-at-scale/

European FoodTech Top50 2021 - DigitalFoodLab. (2021). Retrieved 4 November 2021, from https://www.digitalfoodlab.com/european-foodtech-top50-2021/

Ynsect, Premium Natural Feed. (2021). Retrieved 4 November 2021, from https://www.ynsect.com/en/

Smile at work. | Swile. (2021). Retrieved 4 November 2021, from https://www.swile.co/en

Bord Bia.(2021). Global Sustainability Insights. Retrieved 4 November 2021, from https://www.bordbia.ie/industry/insights/global-sustainability-insights/