Thanks to the pandemic, foodtech booms during Q228 Aug 2020
The foodtech ecosystem was already evolving rapidly, but when the pandemic shifted business across the globe, technology-driven growth became even more vital to the CPG ecosystem. Plant-based products, cellular agriculture, online grocery and VC investment are all key areas that a new report from PitchBook identified as segments that will be redefined by the appearance of Covid-19 in the market.
Foodtech companies raised $3.7 billion in funds during Q2 2020, a 27.6% increase from $2.9 billion raised in Q2 2019. Median deal sizes rose overall as well, climbing 34.7% year over year to $4.2 million. PitchBook identified online grocery services and delivery as a primary driver behind this surge in investment. Xingsheng Selected, a Chinese online grocery startup, inked the largest deal this quarter with a $400 million price tag.
The market research company said that there will be continued positive growth in the online food service retail market for the foreseeable future; PitchBook also said that there is a long runway for growth in this sector, especially for early-stage startups. While online grocery sales remain a minimal share of the total grocery market—currently representing only 2.0% to 4.0% of total sales—the industry is expected to grow to 20% of total grocery retail by 2025.
Already, growth has been impressive, with the market research company reporting that sales grew 450% since August 2019 and monthly U.S. online grocery sales now reaching $6.6 billion as of May 2020.
Bio-engineered and plant-based foods also received a lot of attention this quarter. The global bio-engineered foods market is expected to be valued at $65.5 billion in 2020, and PitchBook forecasts the segment to grow to $104.6 billion by 2025. Part of this enormous jump in valuation is due to the company’s prediction that cellular meat and dairy products will arrive on the market by 2022. The caveat to this prediction is that a regulatory framework for cellular agriculture needs to be established in governments worldwide. Despite the dilemmas resulting from the lack of regulatory structure – this includes lawsuits over labeling requirements and persuading consumers of the safety of bio-engineered meat – companies like Perfect Day, Impossible Foods, Beyond Meat and Memphis Meats are forging forward with significant success.
As evidenced by the money pouring into the space and the continued market growth, consumers are interested in alternative ways to nourish their bodies.
In fact, the Chinese government has been promoting a reduction in meat consumption which coincides fortuitously with Beyond Meat’s choice to expand into China's retail market with its initial launch into in 50 of Alibaba's Freshippo grocery stores. In other parts of the world, Covid-related plant closures and questions about the hygiene of consuming animal-based products produced in plants with a history of Covid-19 cases has pushed the growth of plant-based alternatives.
Going forward, PitchBook anticipates that many of these forced changes to the food ecosystem will become permanent. Analysis of the data “revealed the vulnerabilities of the traditional food supply chain and highlighted technology's critical role in providing a safe and efficient avenue to obtain food.”
HN-Novatech launches seaweed heme ingredient in Singapore
28 Sep 2023
Korean food technology company HN-Novatech secures $4 million in funding and has unveiled a proprietary seaweed heme ingredient for healthy plant-based alternatives in Singapore.Read more
Proudly made in China: Tips to tap into the guochao trend with success
19 Sep 2023
Thanks to the guochao trend, Chinese consumers see ‘Made in China’ products as trendy and Western brands are capitalising on this with regional flavours or Chinese-style branding. But guochao has become more nuanced and consumers are increasingly wise ...Read more
Healthy and humane: Noochies launches pet food that is factory farming-free
15 Sep 2023
US pet food brand Noochies uses nutritional yeast to make its meat-free, healthy dog food and freeze-dried snacks for cats and dogs – a humane pet food range that is free from factory farming meat, it says.Read more
Industry first: Mosa Meat becomes first cultivated meat startup to gain B Corp certification
11 Sep 2023
A first for the industry, Dutch cultivated meat company Mosa Meat announced that it has received B Corp certification and will soon apply for regulatory approval across the globe.Read more
Premium dairy launches defy cost-of-living crisis
6 Sep 2023
From Häagen-Dazs’ Cultured Crème yoghurt to Boursin’s black truffle and sea salt cream cheese, some recent premium dairy product launches suggest there is still appetite for gourmet products despite the cost-of-living crisis.Read more
Breakthrough buckwheat brands promote brain health claims
25 Aug 2023
As buckwheat emerges as a superfood ingredient on the plant-based scene, attention is turning to its brain health claims and the research behind buckwheat’s ability to enhance cognitive function.Read more
European Court of Justice to weigh in on French plant-based name ban
23 Aug 2023
France’s Conseil d’Etat has asked the European Court of Justice’s (ECJ) to provide clarification on whether the upcoming French law to ban the use of 'meaty' terms for plant-based foods is valid. “This is a pivotal moment, not just for France, but for ...Read more
Unilever reduces plastic in Pot Noodle packaging
21 Aug 2023
Unilever is trialling new packaging for its Pot Noodle brand in the UK that is 90% paper and will reduce the use of virgin plastic, it says.Read more
Familiarity over foodtech: Is this the end of disruptive product development?
14 Aug 2023
Consumers are opting for traditional product purchases over disruptive, novel launches amid growing inflation, according to a Rabobank report.Read more
Well-known brands win over US consumers with unique and nostalgic flavours
7 Aug 2023
Consumers in the US are increasingly being drawn to unique and nostalgic flavours, introduced by leading national brands like Oreo and Jell-O, says Mintel.Read more