Expanding our investment focus to foodtech.
Wheatfield with Crows, Vincent van Gogh, 1890
‘I’ve decided to stop eating meat, dad. There’s too much cruelty involved in making and putting meat on our tables, said Tomas, during breakfast. Out of the blue!’
‘Surely, we can find meat with a more humane treatment of animals.’ I said quickly bringing up a solution to avoid all the potential adjustments in our already complex family menu riddled by allergies, moody tastes, and diets.
‘By the way, I prefer you don’t mention my decision outside of home. Just be natural about it.’ my son responded, then 16 years old, ignoring my solution and trying to control his distaste. I realized my response was, in a word, idiotic.
Humans are the ones responsible for all the cruelty and waste related to food. Humane has become an empty word.
Tomas and millions of vegans, vegetarians & pescatarian object to the values humans have compromised to produce more and cheaper food. Their protest exposes a food industry reaching the limits of exploiting our soil and stock.
The good news is that innovation is happening throughout the food value chain. And some of the most interesting tech companies in the world come from entrepreneurs reimagining seed, ingredients, food, and distribution.
Indeed, responding to the challenge of feeding the extra 1.4Bn mouths expected by 2050 lies in technology.
Agtech startups, that include a marriage of data, farming, and technological innovation, will help to achieve higher levels of productivity, efficiency, and environmental sustainability. AppHarvest for example is developing indoor farms to grow vegetables, thereby changing how food is grown using 90% less water, no soil and resulting in 30 times more yield per acre than a regular outdoor farm.
In light of the pandemic, chronic diseases such as diabetes or obesity, have raised health concerns and needs for healthier ingredients. Startups in Latin America such as Done Properly in Chile or Michroma in Argentina are tackling this issue by developing alternative ingredients that are sustainable, nutritious, and even healing.
More recently, some new companies have been focusing on the second generation of ingredients that may seem straight out of a futuristic movie. Using fermentation, insects, or even growing cells in laboratories, these new kinds of ingredients may revolutionize the future of our plates.
Worldwide, the fast-food industry generates annual revenues of over $500 billion. The rise of health and sustainability concerns has convinced fast-food giants to collaborate with alternative protein startups and create meatless burgers. In 2019, Burger King launched the Impossible Whopper using a plant-based patty from Impossible Foods.
With more and more players in this space, the alternative protein space is hitting the ground, catching-up more than $2.8B of funding in 2020, +60% compared to 2019. This trend should create opportunities for novel ingredient companies to grow even faster.
The general trend towards e-commerce and increasing urbanization, reinforced by the lockdown, have been boosting demand for food platforms. Still, there is a lot of space to grow with changing consumer behaviors to local, fresh and convenient foods.
The meal delivery startup HelloFresh has been riding this wave by providing meal kits of fresh ingredients to families and offering an alternative to grocery stores during the pandemic, reaching 2.5M active customers in the US at the end of 2020.
Fascinating, right? That’s one reason we want to get more involved.
More, this sector resonates with our mission to support entrepreneurs solving the hardest problems in Latin America. Our investments in Robinfood and Cornershop brought us closer to foodtech by helping us understand the distribution opportunity for prepared food and grocery distribution.
If you hear talk about fermentation and alternative meat at ALLVP, it’s because we’re searching for formidable founders building the next great Latin American foodtech.
It’s both personal and urgent.