FoodTech

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FoodTech Sector FAQs:
  • Mobile Apps now account for 60% of digital restaurant orders (RestaurantDive).

  • According to the U.N., the Digital Food Industry could be worth as much as $815 billion by 2030.

  • The food-tech market size was USD 220.32 Billion in 2019, and it will reach USD 342.52 Billion by 2027, at a CAGR of 6.0% (Emergen Research).

  • Funding in the FoodTech sector has grown at a 53% CAGR since 2011, according to a new report from global venture capital fund White Star Capital.

  • The COVID-19 pandemic has provided strong tailwinds to the sector overall with online food delivery, groceries, and Direct to Consumer (D2C) prepared meals at the forefront.

  • Online Food Delivery Segment Accounted for Largest Market Share of 45.4% in 2019, says Emergen Research.


Introduction

The emergence of new technologies, mobile app-based services, and many others has led to a massive transformation in how the food industry operates.This integration of food and technology has given birth to food technology, popularly known as 'FoodTech'. FoodTech is the emerging sector exploring how technology can leverage to create efficiency and sustainability in designing, producing, choosing, delivering and enjoying food.

Nevertheless, technology has been changing everything around us. It is changing the way different industries function worldwide, and the food industry is no exception. With over 1,700 FoodTech companies, predominantly startup companies, registered and mapped on Forward Fooding's Global FoodTech map, there is a clear drive towards including robotics, drones, 3D printing, AIs and more into the food industry.


What Is Food Tech?

Food Tech involves companies and projects that use technologies such as the Internet of Things (IoT), Big data and Artificial Intelligence (IA), among other things, to turn the agri-food industry into a more modern, sustainable and efficient sector in all its stages, from food preparation to its distribution and consumption.

These research and development (R&D) projects are generally in the hands of highly innovative startups that are investing heavily in trying to provide creative and technological solutions to contemporary challenges such as:

  • Population Growth And Its Repercussions On Food Security

  • The Digitalisation Of Society

  • The Effects Of Climate Change

  • The Lack Of Natural Resources

  • Food Waste

  • The Environmental Impact Of Food Production.




Food as an Industry

There is no more extensive industry on our planet than food and agriculture, with a consistent, loyal customer base of 7 billion. The World Bank estimates that food and agriculture comprise about 10% of the global GDP. It means that food and agriculture would be valued at about $8 trillion globally based on the projected global GDP of $88 trillion for 2019 (Tech Crunch).

According to Emergen Research, North America dominated the global market for Food Tech in 2019, with a share of 43.1%.

On the food front, a record $1.71 trillion was spent on food and beverages in 2018 at grocery stores and other retailers and away-from-home meals and snacks in the United States alone. During the same year, 9.7% of Americans' spent their disposable personal income on food — 5% at home and 4.7% away from home — a percentage that has remained steady amidst economic changes over the past 20 years.


Food Tech at Present

Today, grocery ordering and delivery represents the largest food-tech category. In contrast, meal order comprises the most significant number of privately held, venture-backed startups in food tech globally. Last year was an exceptional year for food tech, with a record-breaking $16.9 billion in funding recorded (Tech Crunch).




FoodTech Industry Defining The Future

Innovations in FoodTech that can meet consumers' increasing needs of convenience, health, the freshness of the products, and environmental sustainability will define the future of the FoodTech industry. Moreover, a recent report by Google and Boston Consulting Group (BCG) prophesied that the FoodTech sector is estimated to grow at a CAGR of 25-30% to USD 8 billion by 2022.

  • Research and Markets predicted the Global Food Tech Market to Grow Over $250.43 Billion by 2022.

  • There is a vast interest in healthier and more sustainable food options.

  • Food tech enables producers to meet this new demand and tackle food poverty in a world where climate change often severely impacts agricultural outcomes.

  • Food tech startups work on a wide range of solutions such as climate-smart farming, transparent supply chains, plant-based proteins, personalized nutrition, restaurant tech, meal kits.

  • They employ almost various technologies, including artificial intelligence (AI), Blockchain, satellite imaging, data analytics, robotics, and more.

  • From the life sciences, solutions use cellular agriculture, genetic engineering, bioinformatics, and microbiome analysis.




The Impact Of Food Tech

Food Tech is one of the most active sectors for investors, with overall funding of USD 34.9B in 2.7K+ companies (Tracxn).

Food Tech companies account for a tiny part of the agri-food industry, but they have become the sector's vanguard. Some of these startups quote on the United States Nasdaq technological stock market, such as Beyond Meat with its famous laboratory vegetable hamburger that has been financed by some renowned names as Bill Gates, the co-founder of Microsoft, and the actor Leonardo Di Caprio.

The potential of the Food Tech startups even convinces market analysts. Platforms such as Research and Markets offer studies including the Global Food Tech Market Analysis & Forecast 2016-2022 that estimate the sector's total value will be over 250 billion dollars in 2022 thanks partly to electronic commerce's popularisation growth of the internet and the penetration of smartphones.




Trends And Examples Of Food Tech

The most significant trends in the food revolution caused by the FoodTech companies include biotechnological agriculture, agricultural product trading platforms, bioenergy and biomaterials, agricultural robotics, organic foods and the new crop systems. The TechFood Magazine portal identifies some Food Tech trends:

  • Personalized diets: This global market is worth 127 billion dollars and has found success in Japan with a program that uses AI, social networks and DNA to create menus adapted to each person.

  • Vegetable proteins and synthetic meat: Laboratory hamburgers are receiving good reviews and causing a sensation among the wider public. There are also prototypes for fillets of artificial meat that might see the market within 2 or 3 years.

  • Snacking and Upcycling: Insects, seaweed, and waste salmon skin are ingredients that we can already find in the category of healthy hors d'oeuvres, with an international market that could reach a value of 32 billion dollars by 2025, according to Grand View Research.

  • Food traceability: Supermarkets and hypermarkets are starting to use blockchain technology to guarantee, for instance, that their chicken meat comes from antibiotic-free poultry.

  • Automation in supermarkets and restaurants: Robotic waiters and chefs, remote-controlled delivery vehicles and drones that oversee the display shelves and take inventories in real-time are some of the innovations in retail sales.




Food Tech Market Drivers:
  1. By Technology Segment:

  2. The mobile app segment revenue will expand at a rapid CAGR of 6.2% from 2017-2027 (Emergen Research). Increasing global adoption of online food ordering via mobile apps is currently driving the mobile apps segment.

  3. By Service Segment:

  4. Online Grocery delivery segment revenue will expand at a rapid CAGR of 6.8% from 2017- 2027 (Emergen Research). The online food delivery segment accounted for the largest market share of 45.4% in 2019. Easy availability of advanced online payment options, cash-on-delivery, and favourable discounts are factors driving preference and adoption of online food delivery channels.




Some Food Tech Trends That Will Be Trending In The Near Future
  • Artificial protein (lab-grown meat) – Lab-grown meat has become an alternative food option.

  • 3D food printing – 3D food printers allow for personalized and precise nutrition containing the correct percentage of nutrients required for a particular gender, lifestyle, or medical condition.

  • Food robotics – Companies will employ robotics to advance product consistency and overall efficiency.

  • Personalized nutrition – Personalized diets and meals are already making their mark on the food industry.

  • Food waste – Social impact companies and startups are generating viable business models to solve this problem. Food preservation technology companies are leading the way in reducing food waste while improving product quality during transportation.

  • Internet of Things – Devices and equipment with built-in sensors into one network of data that continuously exchanges information.

  • Food safety – Automation used to monitor and maintain health safety standards.

  • Delivery – AI and drones will use to automate food delivery.


Food Tech Startups

Some Tech-enabled startups specifically involved with the ordering/delivery of food to consumers or the creation of next-generation foods includes:

  • Online ordering platforms

  • Meal kit delivery

  • Prepared food delivery

  • Grocery and alcohol delivery,including farm-to-table and grocery subscriptions

  • Next-generation food development




Conclusion

Technology will continue to play an increasingly critical role in producing the food we eat, packaging and delivering the food. Investments in food tech will continue to increase to help deliver on the promise of healthier, more sustainable food systems for the world. Partnering with CogentHub will ensure that your customers and shareholders can have access to unhindered support 24/7 and will keep you ahead of the curve.


Sandipan Deb

Sandipan is a consultant in a information technology company. His area of expertise are content writing and blogging. He has been in the industry for 4 years. Also, he loves travelling and trying different cuisines.