Food technology is a branch of food science covering the production, preservation, quality control, and R&D of food products. As consumer demand shifts, the food-tech sector evolves to include delivery, packaging, sustainability, and waste reduction. Innovations in these areas allow food companies to adapt to the changing marketplace, costs, and consumer preferences. Today we see innovation across the entire supply chain – from production to consumer products. This article will highlight how technology is used to make food safer, more nutritious, affordable, convenient, and better-tasting.
Indoor Controlled Agriculture
Growth in this segment is being driven by improving farming output and quality of products using technology such as sensors, software, devices, and product innovation. Data and metrics are vital to optimizing the operations and allow farmers to manage, organize, and delegate tasks. Indoor Controlled Agriculture is gaining adoption in the US but has been a staple for decades in other countries. Dutch growers have more acres “under glass” than the size of Manhattan and have been perfecting the industry for the last 50 years. Investment in this industry continues to grow with more than $500 million invested in 2020 despite retail and consumer changes caused by the pandemic.
One of the opportunities in this sector that will help improve the supply chain is sharing data between systems. Our investment in Gotham Greens showcases the opportunity to improve our environmental footprint with dramatically reduced land and water use; reduce food waste with increased shelf life due to the proximity of the production to the consumer, and stabilize production output in a controlled indoor environment.
Ingredient Innovation
Consumer demand drives innovation with ingredients. There has been a shift in consumer preferences towards environment-friendly and natural products, which has forced the ingredient manufacturers to focus more on research & development of naturally extracted solutions with minimum processing and nutrient-rich ingredients. 77% of food and beverage manufacturers plan to either create new product innovations or improve current product ingredients in 2021.
This is driving substantial growth in the ingredient manufacturing sector, anticipated to reach $42.6 billion by 2025. This growth will be made possible by the use of technology and unique processes to produce healthy ingredients at scale while maintaining costs. Our investments in Nutriati and Mycotechnology showcase the strength of clean nutrient profiles and technology to enhance both food taste and healthfulness.
Science-backed Personalized Nutrition
The global personalized nutrition market will grow from $8.2 billion in 2020 to $16.4 billion by 2025. As consumers become more aware of the benefits of consuming nutritious foods, they are choosing a more personalized approach at the intersection of science and nutrition. This growing awareness has led to increased acceptance of products with higher nutritional value, projected to drive the demand for personalized nutrition. Advances in technology and the rise in investments and collaborations by key players in the personalized nutrition market are factors that will provide investment opportunities. Growth in consumer demand for specific tools, such as apps, genomic testing kits, and personalized nutrition programs is expected to continue for the next decade.
Products and services in this sector, known as the active measurement segment, provide customized recommendations based on individual requirements and meaningful science. The growing demand for tools by consumers to obtain personalized dietary advice based on nutrient, metabolic, and genetic profiles is projected to drive the demand for testing kits, apps, and personalized programs. We also expect to see increased scientific support for products that promote good microbiome health, such as fermented foods and beverages. While we are in the early stages of this segment’s development, we are seeing new categories and strong leaders emerging. Through Manna Tree’s investment in Evolve BioSystem, we see the power of personalized nutrition to support the healthy development of a specific population, in this case, infants.
Food Safety
Food manufacturing was hit hard by the effects of the pandemic, and the industry’s growth depends on companies ensuring that safety standards are upheld. Improving safety will maintain the trust consumers have with the products they buy. Safety standards aren’t just for the consumers and the food they purchase but also for the people producing the food.
With the increasing number of food-related product recalls over the last decade, consumers are demanding more transparency from manufacturers. Instead of ignoring the issues, manufacturers are innovating to allow for more openness with consumers. Growth in cleaning services is expected over the next five years as manufacturers implement new protocols. The segment is expected to grow with a CAGR of approximately 7% over the next five years, reaching a total of $2.7 billion by 2026.
While there are more growing segments than just the ones mentioned above, what is clear is that consumers are driving demand for access to information, safety, data, and products that can make them healthier. Manna Tree’s portfolio includes some of these innovative segments such as indoor controlled agriculture, personalized nutrition, and tech-based ingredient innovation. We are closely tracking innovations in all these segments and the companies that can emerge into growth-stage investments.
Sources:
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https://www.igrow.news/igrownews/2020s-indoor-farm-venture-capital-bonanza
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FoodManufacturing, March, 2021
