FoodTech: food industry start-ups are booming

FoodTech represents a growing ecosystem and a source of opportunities, as explained at this 2018 Alter’Native Food conference talk.

FoodTech : an opportunity for Europe

This roundtable, taking place at the 2018 Alter’Native Food forum, addresses FoodTech and the future prospects offered by these start-ups, which are revolutionising the food sector from end to end of the production chain.

Focus on FoodTech in France and Europe

With a new start-up springing up almost every day, FoodTech is an asset for Europe. Six broad categories can be distinguished as the driving forces in this sector:

  • AgTech: supporting farmers with the latest techniques.
  • FoodService: bringing new clients to foodservice, or implementing new types of foodservice.
  • Media: many FoodTech start-ups are reinventing how to provide food information.
  • Delivery and retail: new ways of delivering meals, notably via mobile apps.
  • FoodScience: new food products.
  • Coaching: companies answering questions about what we should eat according to our personal profiles.

FoodTech therefore concerns all entrepreneurs who have an interest in food matters, from end to end of the production chain. The first European study conducted on this issue was designed to inspire entrepreneurs and provide investors and manufacturers with the essential data. It also sought to provide more information about what is going on right now, and to spur on FoodTech in Europe.

Some European key figures

Nearly €4.2 billion have been invested in FoodTech in three years. This sum mainly concerns Deliveroo, Hello Fresh and Delivery Hero, three companies which together account for 60% of all funds raised over the last three years. Yet there are more than 1600 start-ups across Europe.

Europe represents 16% of the world’s investments in FoodTech, whereas the European food industry as a whole represents 25% of the world’s industry. There is therefore an investment shortfall in Europe.

In terms of investments, France is in fourth place for the past four years, behind Germany, the UK and the Netherlands. The number of fund-raising operations exceeding €500,000 is very high in France, but the volume of investments worth over €20 million is very low. Taking Germany as a comparison, a lot of money is given to a limited number of start-ups in Berlin, whereas in Paris small sums are given to a large number of young FoodTech companies.

Retail, FoodService, FoodScience and AgTech are equivalent areas in terms of start-up volumes, but currently 80% of investments are allocated to retail and delivery companies.

Read also :  Decoding the future of food

What is the role of the investors?

FoodTech represents a major opportunity for investors, since it is a relatively vast, new market.

It is important to pick the most promising opportunities, since the industry is not structurally a source of large profit margins. Yet it nonetheless requires investments, production capacity and quality control. It is therefore subject to the constraints of a long-term business model. This must ultimately involve support for the entrepreneurs, or else being taken over by a major industrial player.

The long-term challenge consists in feeding a world population that will reach 10 billion by 2050. This food will have to be financially accessible and provide the necessary nutrients.

How are manufacturers behaving in the face of these emerging start-ups?

According to Christophe Breuillet: “We can see that the manufacturers have high expectations for FoodTech, which is meant to address various challenges revolving around better food, sustainable food, in the service of the consumer.” FoodTech is associated with three major promises: eating pleasure, preservation of health capital and reduced environmental impact.

This sector is of interest to both industry and the academic world, in particular regarding FoodScience. One of the big challenges for tomorrow is to produce better-quality food. France is not necessarily behind the curve on this, although it does have some catching up to do compared to other countries.

FoodTech represents many challenges, and it poses many questions for manufacturers, who are generally looking for support so as to be able to work with these start-ups. This means that an ecosystem is currently being built up, to serve as a genuine growth accelerator for this future-oriented sector.

Speakers: Christophe Breuiller, VITAGORA; Thomas Fournier, SOPEXA; Matthieu Vincent, DIGITALFOODLAB and Antoine Fine, EUTOPIA

Focus on Eutopia

Eutopia has been investing for three years in these new food brands, and is finally benefiting from an alignment between the new technologies and the changes in expectation on the part of consumers

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