With so much innovation in the food space, from realistic meat alternatives to delivery technology solutions, there is an abundance of promise for tech investors looking to grow rapidly and at scale. When it comes to return on investment, however, investors need to be savvy with whom and where they decide to invest. Does technology, therefore, make a recipe for success or disaster?
What is food tech?
Food tech encompasses several areas including restaurant technology, connected kitchen appliances, meal kit start-ups, online food shopping, food ordering and delivery apps to name a few. With the plethora of food tech opportunities available, it is obvious why investors are watching the development of this sub-sector so closely.
'Meat free' no longer just for vegans
Founders and investors are paying attention to the trend towards healthier and more sustainable food. With the advent of 'meat free Mondays' and environmental implications of our food front and centre, the meat free industry has become much more universal. Consumers expect an alternative as close to the real thing as possible, which requires research, innovation and investment. As a still relatively new segment in the food industry, there is plenty of room for new players to appear. The meat substitutes market was worth an estimated $4.63 billion in 2018 and could reach $6.43 billion by 2023, according to research firm MarketsandMarkets.
Philanthropy, food and tech – for the compassionate investor?
Purpose has become the new normal. Individually and collectively there has been a tide change for consumers; how does my lifestyle affect the world? The average household loses £470 a year because of avoidable food waste, whilst those with children lose £700 (BBC, 2017). Globally we produce more than enough food to feed every single person on the planet. However, it is unevenly distributed.
Technology can help; by implementing short supply chains we can reduce the amount of waste, especially in warmer climates where food spoils more quickly. An onus on responsible sustainability is imperative, especially in the UK where the way we live, work and socialise is rapidly becoming more urbanised.
Investors and founders are motivated by huge opportunities for growth but also wish to have a longer lasting impact, driven by the pressing need to create sustainable food options.
Using technology to build brands and trust (quickly)
There has been a collapse in trust in recent years across brands and across sectors. Millennials and Generation Z place a lot of emphasis on trust, making it an integral feature when choosing how to engage and build loyalty amongst this audience.
There are less and less barriers to entry allowing many early stage companies to get their product to market quickly. Trust is being built by via new technologies as well as platforms and networks. A technologically savvy audience is looking to their social media timelines and market validators such as trust pilot for recommendations on brands, products and services. Consumers of the future are making data driven decisions.
Creating convenience in tandem with longevity
The key question, for founders and investors, is how do businesses make consumers’ lives more convenient, whilst generating a memorable experience that ensures repeat business?
Some may argue that’s the trillion-dollar question… and the answer, likely to be one that encompasses the use of technology, probably so far, most effectively demonstrated by the likes of Deliveroo, Just Eat and Trivago, to name a few.
The continued use of technology across all sectors is inevitable and there is no stopping it. Demands on consumers’ time becomes ever greater and efficient use of technology can assist. The most successful tech platforms are the ones that combine convenience with engagement. For example, using AI to “remember” consumers’ preferences and predict what might be of interest...without being too annoying (or creepy)!
The advent of tech communities and champions of innovation, such as YFood, is evidence of the direction of travel. This reflects the need to innovate and share insight in bringing businesses and consumers together, whilst also giving the community a fighting chance of getting their business to succeed.