Everyone’s gotta eat – and it makes for a big industry. Globally, food and agriculture is a $7.8 trillion industry. Its also growing (pun intended): global investments in the food and agriculture sector have grown three-fold since 2004 and, according to McKinsey, on average have demonstrated higher returns to shareholders than other sectors. In the US, agriculture, food and related industries generated 5.5% of the country’s GDP at $992 billion, $137 billion of that coming directly from US farms.
Despite this activity, there are several unmet challenges facing stakeholders across the supply chain in food & agriculture – including threats posed by climate change. And startups hungry to solve problems and make money doing it are stepping up.
In Israel’s hive of entrepreneurial activity, for example, startups are focusing on a range of issues such as reducing contamination in foods, lab-grown meat and packaging that is better for the environment.
The founders of Inspecto began developing a “nanoscale portable device for early detection of food contaminants in the field” after watching an exposé on the news revealing significant levels of contaminants in foods in Israeli supermarkets. (According to the USDA, as much as 85% of the food supply in the US carries pesticide residues.) Such contaminants can lead to pesticides to accumulate in the human body.
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Inspecto is starting with a device that detects a contaminant in coffee called acrylamide, which can also be found in potatoes, chocolate, bread and other food items. A number of companies have signed up to pilot the product in its first deployment, including Israel’s Strauss Coffee and Chinese coffee manufacturer Shinho.
“The problem with identifying contaminants in food is they’re in extremely low levels of concentration, in parts per million, in some cases, parts per billion,” CEO Avner Avidan told NoCamels. “What we’re doing is using a combination of optical sensors that allow us to isolate the contaminant we’re looking for and amplify its signal a million times over. The idea is to have this technology implemented in various points in the supply chain, so if we’re talking about coffee, it’s going to be used in coffee roasters, manufacturers, at the point of sale of coffee beans.”
Others are more focused on growing food in a lab. Tel Aviv-based SuperMeat is the latest company to develop meat made by growing animal cells rather than by raising animals, sometimes called “clean meat.” The approach avoids the large environmental toll of raising animals and the ethical struggle of being responsible for the death of the animal in order to eat it. SuperMeat raised $3 million in seed funding in January and expects their first product – a lab-grown chicken meat – to enter sales within the next two years.
The environmental impact of plastic is a major issue for all sectors, but especially the food industry due to its ubiquitous use for packaging and transportation. TIPA (“drop” in Hebrew) has created a fully compostable bio-plastic packaging.
Founder and CEO Daphna Nissenbaum aimed to create a sustainable alternative to plastic, but realized its degradability was only half the battle; decomposed plastic may still leave behind micro-particles that contaminate the environment. Thus, Nissenbaum and her team developed flexible packaging that can become compost within 180 days. Their material is being used in both the food and fashion industries, including Dutch retailer Ekoplaza, Dutch coffee producer Peeze and by fashion designers such as Stella McCartney, Mara Hoffman and Gabriela Hearst.
Meanwhile in the UAE, a new app is allowing restaurants to sell off their excess food at discounted prices. BonApp launched in January and has 85 eateries in Dubai on board. Excess mounds of food in the city’s signature brunches and loaded buffets get tossed away, much to the frustration of Erika Daintry, Malin Raman Delin and Alice Kaboli, the Nordic all-female trio behind the startup and app.
Restaurants with excess pre-packaged foods, unsold meals and freshly-baked products can list their spare produce on BonApp. Users receive notifications when a nearby establishment has fresh inventory for sale, which they can purchase through the app for discounts of up to 60 per cent on the usual retail price and go to collect it in person. BonApp makes money by taking a cut of the transaction.
The idea behind the app is not new; many startups are helping retailers donate food to charity or sell it via an app, such as Flashfood, Food Cowboy and Food Shift in the US, Neighbourly, FareShare and FoodCloud in the UK, FoodLoop in Germany, Zéro-Gâchis in France, Froodly in Finland, Canada-based Ubifood, and Too Good To Go in the US, UK and several European countries.
Today, yet another app that helps businesses manage unsold inventory to reduce food waste announced impressive waste reduction results. Since it began in July 2017, Spoiler Alert’s ongoing partnership with leading meal kit company HelloFresh has enabled HelloFresh to:
- Decrease its landfill-bound organic waste by 65%;
- Reduce waste hauling pickups by 44%;
- Nearly double the percentage of unsold inventory donated to charities, from 33% to 61% of total volume; and
- Donate more than one million meals comprised of fresh ingredients to its local communities, based on USDA’s calculation of 1.2 pounds per meal.
“At Spoiler Alert, we recognize the massive problem that food waste poses to businesses and our planet. We’re using our unique platform and data analysis to change the status quo. With HelloFresh, the food recovery numbers speak for themselves,” said Emily Malina, Co-Founder and Chief Product Officer at Spoiler Alert. “HelloFresh has been a leader in their space in many areas, but this is one where they have really stepped up and are at the forefront of the industry. We have all been incredibly impressed with their team.”
The longest-running program for ventures tackling challenges in the food and agriculture sector is also based in the US. Food and Agriculture: US 2018 is being run by Village Capital in partnership with The Campbell Soup Company, and will train 12 recently-selected startups through workshops, one-on-one sessions with investors and more. The top two peer-selected companies will each receive $75,000 in pre-committed investment.
The 12 startups selected for this year’s cohort are:
- Athena Intelligence**: **Provides data driven services for the food and agriculture market, delivering insights that improve quality, crop yield and sustainability.
- Augean Robotics**: **On a mission to solve the crippling labor problem faced by farmers by making robots like Wall-E a reality, beginning first with Burro, a robotic following platform for work outdoors.
- Cambridge Crops Technologies**: **Creates natural and edible coatings for extending the shelf-life of perishable goods.
- Cerahelix**: **Manufactures advanced molecular filters that simplify the wastewater re-use process.
- Goodr**: **A sustainable surplus food management company, leveraging technology to combat hunger and reduce food waste.
- Grow Bioplastics**: **Developing a platform of naturally degradable and compostable plastics made from lignin, a waste product of the paper and biofuel industry, for applications in agriculture, food service packaging, and beyond.
- ProteoSense**: **Provides food processors with a biosensor technology that detects pathogens at the front end of the supply chain in 90 minutes or less.
- Pulp Pantry**: **On a mission to transform juice pulp, a neglected resource, into delicious and nutritious snacks that make it easy to eat more servings of fruits, vegetables, and fiber.
- Seal the Seasons**: **Brings farm-to-table products to grocers year-round by freezing and marketing local food from local farms.
- SwineTech**: **Provides technologies to prevent piglet deaths due to disease, starvation, and crushing.
- Vega Coffee**: **The first specialty coffee roasted at origin and delivered directly to customers in the US within 5 days of roasting. Vega Coffee upends the coffee supply chain by training women farmers in Latin America to roast and package their own coffee; customers receive unique curated coffees via subscription, and Vega's farmer roasters earn up to 4x more income than they would through the typical supply chain.
- Wexus Technologies**: **Wexus Technologies Inc is an IoT software company that empowers farmers and food processors to automate tasks and reporting, reduce waste and costs, and drive energy and water efficiency with its technology platform that remotely accesses utility data and billing systems.
“We’re excited to be supporting these 12 startups that are spearheading innovation in the food and agriculture industry,” said Daniel Sonke, Director of Sustainable Agriculture at The Campbell Soup Company. “Consumers are paying more attention than ever to how and where their food is grown. At Campbell, we’re focused on supplementing conventional agricultural wisdom with fresh thinking and new business models, while tapping into an ecosystem of innovative partners.”
The companies will participate in three four-day workshops where they will work through Village Capital’s investment-readiness curriculum and engage with potential customers, strategic partners, investors, and sector experts through one-on-one sessions, “mock board meetings” and other activities. The startups will also benefit from feedback from their peers as well as experts from Campbell, insurance company QBE and other firms. Financial firm UBS is also supporting the program as part of a larger project, VC Pathways, that supports the pipeline of diverse startups in several US cities by giving underrepresented (Black, Latinx, female) founders access to investors and strategic partners in their area.
In terms of tangible support, the program also provides resources for building a business, including Amazon Web Services (up to $5000 in credits), Hubspot for Startups (90% scholarship), connections to pro bono legal support through TrustLaw, and an investment analyst that will work closely with their teams to strengthen their case for investment.