New Innovation is Key to Growth in the Food Sector
Editor’s Note: This week FoodBytes! moves to Boulder, Colorado for the first time. The food and agriculture startup event has extended its series of conferences from New York and San Francisco to the Centennial State and next month onto Sydney, Australia!
The event revolves around a pitch competition between shortlisted startups. Ahead of the Boulder and Sydney events, Manuel Gonzalez, Rabobank’s head of corporate clients west coast region and the founder FoodBytes!, and Nick Fereday, a senior analyst of food and consumers trends at the bank, write about the increasing role of innovation in our food chain today.
In the US, the food industry is experiencing unprecedented change, and there’s no denying that small and emerging brands are poised to disrupt and capture market share from the larger players. A recent Nielsen study revealed that the leading 25 food and beverage companies accounted for 45% of total sales in the US in 2015, but drove just 3% of total category growth from 2011 to 2015. Although private label and mid-size companies — the following 75 companies — drove some of the growth, this particular Nielsen study concluded that it was the “long tail” of the 20k companies below the top 100 that drove 49% of all category growth. Let’s stop for a moment and acknowledge the enormity of that figure – each of those 20k companies is playing an integral part to revolutionize the industry.
The global food industry is also experiencing widespread change, and consumer needs and issues across the world are drastically different from one country to the next. Some areas are facing a global shortage and continue to struggle with the problem of access to food, while other regions are dealing with an enormous surplus. These issues require large scale solutions if we’re to address and mitigate these complex and global problems properly.
And with the proliferation of smaller, startup companies – like those 20k that account for 49% of category growth – it’s clear that the much-needed solutions will come from these burgeoning brands.
The desire to seek out this game-changing innovation was one of the reasons that Rabobank launched our FoodBytes! platform. As we head into our fifth event – taking place in Boulder – the amazement we feel at what these global startups are bringing to the stage never lessens. These individuals are creating products and ideas in direct response to a constantly evolving landscape.
While the companies we see at FoodBytes! represent a diverse mix across the food and supply chain, there are a few common themes we see across the board, making these companies worth paying attention to: disruption, sustainability and a love of tech.
In our world of food and agtech, disruption is a good thing. It’s necessary to incite positive, powerful, and lasting change. In many industries, changing the status quo is both challenging, and at times ill-received by those on the inside. In this industry, editing the way we think, create and produce is critical if we hope to meet the needs of a changing world. The companies we see at FoodBytes! are doing just that.
Take, for example, a company like Imperfect Produce, encouraging shoppers and supermarkets to embrace “ugly produce.” In the US, 1-in-5 fruits and vegetables grown don’t fit the strict cosmetic standards set by grocery stores, which usually means this perfectly edible food goes to waste. The folks at Imperfect Produce knew that it would take some consumer convincing – or disruption of the norm – to embrace the idea that “ugly produce” is just as good as what they’ve come to expect on store shelves. But, they’ve done just that – by sourcing produce from local farms, offering a sizable discount and delivering right to your door – customers throughout the Bay Area have learned to love the ugly.
Sustainability has become a cornerstone of nearly every business effort around the world. As we think about the growing global population, solutions that incorporate sustainability principles will undoubtedly rise above the rest. A huge majority of the startups we have the opportunity to hear from are built on a platform of sustainability, or consider it a major tenant of their brand DNA. Netherlands-based Seamore, the FoodBytes! San Francisco Judges Choice Award Winner, touts their sustainable practices as core to their growth. Seamore’s founder mistook seaweed for pasta, and after thoroughly enjoying the experience, created I sea pasta – 100% wild, handpicked seaweed from coastal Ireland. The methods by which this crowd-harvested I sea pasta is collected make it a truly healthy, sustainable option, and we suspect we’ll see the market for seaweed-based substitutes continue to grow in the coming years.
A Love for Technology
Tech – it seems to be everywhere. It’s in how our food is grown, sourced, delivered and consumed. It shouldn’t come as a surprise that startups today rely on cutting edge technology, and that seems to hold true across nearly every industry. Worth noting, however, is the surge in tech within an industry – food and ag – that also seems to be experiencing a “back to basics” shift in mentality. Never before have terms like organic, all-natural, fair-trade, non-GMO, and artisanal been so engrained in consumer vernacular. It’s as if we want the best that tech can offer us, but in a wholesome way – a true juxtaposition. That’s why, in our minds, companies that can embrace both sides of the spectrum are poised for greatness.
At this past FoodBytes!, we were supremely impressed with Foodfully founder Brianna McGuire, and her desire to address the massive issues of food waste using technology. Her app is designed to address the 70 billion pounds of food that Americans toss each year. Users of the app are reminded of the food they already have in their refrigerator or pantry with push notifications that send alerts when that food is at peak freshness, along with recipes and techniques for cooking and enjoying said food. It’s a simple concept; one powered by technology and designed to fit into our tech-centric lives.
As we gear up for FoodBytes! Boulder, taking place on Wednesday, October 26, there’s great anticipation for what we’ll see take the stage. The hundreds of companies we’ve had the opportunity to hear from, hailing from countries around the world, will be what shapes this very industry in the years to come.
Stay up to date with FoodBytes! events globally and make sure you apply to pitch in time next year by clicking here.