It may seem redundant to say that the world has changed and the only thing that is permanent is change. However, the food world is mutating at great speed in the last decade and the health crisis caused by Covid-19 fostered the creation of a new digital consumer. This new kind of consumer promotes healthy food consumption and is conscious about the effects that wastes cause to the environment, but has little time for hand-made cooking. Entrepreneurs can explore this gap with creativity and close it, or at least make it more narrow.
Moreover, there is a kind of consumer that has developed IT knowledge during forced lockdown, which creates a good scenario for using technology to solve our problems.
Thus, I dare to sketch three tendencies to be explored in the following years: sustainable eating, functional food, and of course, scalable and replicable models in contexts grater than in a kitchen.
Sustainable Eating
There is a significant challenge in the whole chain of values in the food industry: from the raw material production, food transformation and its commercialization to the its consumption and the food waste caused. It is necessary that every chain is sustainable. There are already some start-ups leading some blocks, such us Beyond Meat, an American start-up that produces planted-based hamburgers, which has been invested in by Bill Gates and that is already listed on the stock exchange.
There is also a strong connexion between Foodtech and Agtech, as food production is the weak point of sustainability. According to a UN report, in the following 30 years, the world's population will grow from the current 7,700 millions to 9,700 millions. Moreover, a study carried out by Nature Sustainability magazine, shows that with the current amount of food production, only 3,400 million people will be able to eat in a balanced and sustainable way, with an average consumption of 2,355 kcal per person per day, without jeopardizing future generations' lives. This is why, in Alaya Capital, we have invested in Kilimo, a platform that allows its users to make efficient use of water resources in food production, and we expect to incorporate many more innovations in this area.
Functional Eating
Another debt of sustainable and healthy food is its difficulty for adapting to most of the cosmopolitan population's fast pace of life. 75% of the world's population is changing their diets in order to take care of their health. However, in a hyperactive world, we cannot expect to prepare food in a traditional way. This is where we find a great challenge of joining what is healthy and sustainable with the current-consumer's pace of life. In Alaya Capital, we made our first bet on this area in Simpleat, which, with its innovative method on frozen food, sustainable and functional eating is possible with less waste. This is a kind of food-tech through which, in only fifteen minutes, a home-made and nutrient-rich meal is taken to your table.
Scalable Business Models
The most widely known scalable model based on technology in this area is Delivery Food. We have already seen the speed of food delivery services such as Rappi, Glovo, Pedidos Ya y Ubereats, to permeate the market, transforming the whole industry and creating huge demands for restaurants, which goes far beyond the available supply.
This is where the concept “dark kitchen" was coined. These are industrial cuisines, which work exclusively for the delivery of food and which lacks a dinning room, a waiter, a terrace or any other kind of services. In plain view, this model seems to be perfect to escalate and make restaurant's business models more profitable and attractive. This is where Venture Capital will undoubtedly focus on.
This tendency changed consumers' behaviour, by allowing them to consume a wide variety of delivery food such as Thai-food and Hawaiian food, which have become a trend. In this area, some players begin to appear, such as Digital Restaurant, Foodology, Kitchen United or Cloud Kitchen, startup of the ex Uber Travis Kalanick CEO. They propose to rely on dark kitchen in order to have an array of brands that serve each public under the "long tail" model.
There are plenty of possibilities and this is a traditional industry which is yearning for change in the whole value chain. Undoubtedly, a great solution is technology through data and the constant learning of this information. Once again, who does not digitalize, dies. Not even food is exempt from this.
