Recently the food system has come under the spotlight for its contribution to global warming from deforestation caused by land conversion to agriculture, and methane from the livestock sector. The sector accounted for 31 per cent of greenhouse gas emissions in 2019, or 16.5bn tonnes of carbon dioxide equivalent, according to a detailed analysis by the UN Food and Agriculture Organization released at the COP26 climate summit in Glasgow.
With the global desire and now urgency to address climate change, The Food Tech industry which can directly addresses greenhouse gas emission via plant/cell grown food and waste reduction is set to continues its rapid growth, fuelled by record funding. In Q3 2021 alone there has been 306 deals and $10.1B raised by VCs. Impossible Meat is no longer impossible.
FoodTech companies, are typically a start-up that are developing products and services that change the ways food has traditionally been created, discovered, purchased, delivered, prepared, and consumed. Pithily described as Farm to Fork!
One segment attracting an influx in capital, bioengineered foods drew $2.2 billion in venture funding in Q3 alone, which is 3x Q2 deal values of $752.6 million.
The ecosystem encompasses bioengineered foods such as Eat Just’s cultivated chicken, Impossible Burgers and Beyond Meat, burgers, as well as emerging e-commerce solutions such as Gorillas’ ultrafast grocery services.
A Sample (50 of 1003) of Bio-Engineered Food Companies (source: PitchBook)
The primary drivers for the recent growth in FoodTech are.
- The digitisation of shopping activities and a continued push for on-demand everything.
- The food system is a leading source of food and packaging waste with demand for solutions that reduce waste, substitution with sustainable alternatives, or enable upcycling of waste.
Recent European Food Tech M&A includes.
- Peace of Meat, maker of plant/cell-based food was acquired in September 2021 for EUR 15.4 million by MeaTech (TLV:MEAT), helping to expand its strategy of developing scalable cell-based agriculture technologies.
- MyFoody, developer of a food buying, and waste management platform was acquired by a competitor Phenix for an undisclosed amount on October 12, 2021.
With the clear importance of FoodTech to the sector, and the growth of investment, expect significant M&A in 2022 and 2023 by existing Food and Agriculture companies, as they look to continue the digitisation of shopping activities and accelerate the rollout of more sustainable products and services.
The sample market maps below show the width and depth of FoodTech, including Food Suppliers, Intermediaries & Delivery, Industrial & Consumer Tech, and Discovery & Review segments (source: PitchBook).
