06 Mar 2018 --- Foodtech start-ups are popping up all over the world as entrepreneurs tap into emerging food and beverage trends, fueled by the aim of creating pioneering products that resonate with today’s (and tomorrow’s) mindful consumer. From US meat-free innovators raising huge sums of money to finance the future of lab-grown meat to smaller European independent entrepreneurial start-ups entering different ingredient sectors, the age of the successful start-up within the food tech space is undoubtedly upon us.
And in a nod to successful start-ups all over the world, this week is officially Startup Europe Week (SEW) – a pan-European coordinated startup event series to promote entrepreneurship and to showcase the available local resources for start-ups and people looking to start a business.
Some of the SEW goals include showcasing best initiatives promoted by regions to support entrepreneurs, provide live consulting sessions on how to open a company, apply for a grant, etc and share among regional officers what other regions in Europe are doing and what can be leveraged locally. On top of that, representatives are also connected to investors and corporates to create stronger local ecosystems.
Over the last few weeks, FoodIngredientsFirst has been focusing on some of the most exciting startups making waves in the food and beverage industry right now. Developing disruptive ideas from scratch is no easy task but let’s examine some of the most recent and promising newly-established businesses.
The demand for healthy snacks for children is a market in itself and Dutch-based startup Fruitfunk – which makes snacks entirely from fruit and uses a process where moisture is removed from the fruit very quickly, keeping the fibers, minerals and vitamins intact – saw that there was an increasing need for an alternative to sweets snacks, establishing itself in 2014.
Fruitfunk was daring enough to develop a completely responsible products range, something which the company believes big confectionery players might be hesitant to do.
Co-Founder of Fruitfunk, Rob de Weert, knows a thing or two about the challenges of launching a startup.
“Starting a new company and introducing a new brand to the market should not be taken lightly. It is difficult to introduce your products in the market as an unknown brand. It takes a while before you are taken seriously by suppliers and supermarkets. For them, it is a risk to work together with a new brand because it brings uncertainty regarding rotation from the shelves,” he tells FoodIngredientsFirst.
“Next, to that, we have no enormous marketing budgets to spend with the retailers, so we have to focus on health benefits and the corporate social responsibility retailers need to take in their assortments. We also had to convince consumers, because for them our product was new and brought questions. Consumers weren’t used to the look of the products.”
“We do not use artificial colorings and flavorings in our products, so our products look different than regular candy. We see that the mass-market is slowly moving into a healthier way of living.”
Nevertheless, de Weert points out that one of the biggest challenges is for Fruitfunk to get its message across by informing retailers and consumers about what’s healthy and what’s not.
“We are a disruptive player in a pretty conservative market. The A-brands in our branch has a reason to stick to their current production processes. We do things differently, but that needs extra clarification,” he adds.
Regarding expectations for the future, Fruitfunk wants to have a leading and inspirational roll in it for retailer and end-consumer, standing out in a traditional confectionery market.
“We are convinced that through the transparent way of communicating with our brand we can become a category captain in the field of responsible snacking for children in Europe,” de Weert concludes.
New insect protein producer, Flying SpArk Ltd
Recently, Flying SpArk Ltd joined the first “IKEA Bootcamp” start-up accelerator in Sweden – a project that encourages startups that are working to solve some of the key problems that are most relevant for improving IKEA’s future business: affordability, circularity and accessibility – and this includes food innovation.
This new food-tech company focuses on all-natural protein extracted from the Mediterranean fruit fly for human consumption, promoting the safe, sustainable ingredient that is high in protein, calcium, iron and potassium and, unlike meat, is odorless and virtually cholesterol-free.
Click to EnlargeThis Israeli start-up taps into the common school of thought that questions how the world will manage to feed nine billion people by 2040 through traditional livestock farming with all its destructive ecological impacts on the environment, putting forward “the meat you should eat” instead – insects.
More precisely, a protein-rich, reduced fat powder made from the larvae of the Ceratitis Capitata and a high-quality insect oil that contains palmitoleate (omega 7), an unsaturated fatty acid with multiple health benefits.
“We have already tried to create a few food applications such as meatballs, nuggets, pastry, pasta, milk-like drink, tofu-like, health bars and cookies,” Oram Yerushalmi, Ph.D., co-founder of Flying SpArk tells FoodIngredientsFirst.
“Most likely we will expand our offering, at first, other species of flies, due to their economic and environmental advantages, and after that other insects as well.”
According to Yerushalmi, millennials are the early adopters of this type of protein, following surveys that Flying SpArk carried out on the East Coast of the US, but they are not the sole focus.
“Insects can replace protein or flour in food formulations and they taste great. There are already a few options in the US and European markets, as well as recipes and cookbooks of insects for inspiration.”
“We get a lot of interest from consumers as well as from food companies that are looking for alternative and affordable protein sources.”
Millennial purchasing power
As one of the largest generations in history, millennials are reshaping the economy because they’re in their prime spending years, representing the dominant demographic in markets around the world.
Not as interested in big corporate brands as previous generations, millennials have a much-weakened sense of brand loyalty and tend to favor smaller, boutique and independent firms. The successful startup is a concept they inherently understand and like to support.
Driven by a greater need to know about the transparency, ethics and sustainability policies of a company, the spending power of millennials can transform business through their natural tendency to share and promote on social networks. Making a product “Instagramable” can seriously boost its credibility amongst this high-spending demographic that is always looking for the next big thing.
Growing veggies under LED & lab-grown meat
Some of the most exciting food tech startups include non-traditional and, at times, rather odd ways of approaching traditional farming.Click to Enlarge
Take the growing trend of cultivating vegetables, salad leaves and micro herbs under high-tech LED lighting systems that need no very little or no irrigation to produce fast-paced high-yielding crops.
There’s Growing Underground, a burgeoning business in central London which transformed a disused subway station, that was once used a shelter from Nazi bombers during the Blitz of the Second World War, into a unique farming system that grows a range of crops for the capital’s foodservice industry and selected retailers.
Using the latest hydroponic systems and LED technology, sustainably grown fresh microgreens and salad leaves are cultivated year-round 33 meters below the busy streets of Clapham in a pesticide-free environment.
And all over Europe there are many variations of this trend of growing veggies in unique environments.
Another stand-out startup in this arena is Nemo’s Garden by Ocean Reef Group.
Just a few years ago, the founders came up with the concept of utilizing the properties of the large bodies of water – constant temperature, united with the natural evaporation of a surface of a liquid in contact with an air space – to create an underwater greenhouse.
Now some biospheres have been created and a wide range of vegetable crops are grown in sealed pods that sit on the seabed close to the Italian coast, providing an alternative solution to growing food in a responsible, “small-footprint-on-earth kind of way,” as the business puts it.
In contrast, lab-grown meat is probably one of the biggest innovations in the world of food tech, attracting a lot of media attention and large-scale investments from the likes of billionaire businessmen Bill Gates and Richard Branson who recently backed US-innovators Memphis Meat.
Although at the moment, a lot of the innovation seems to be happening in the US, Europe is taking on lab grown meat too.
At the beginning of this year, groundbreaking Israeli food-tech startup, SuperMeat, raised US$3 million in seed funding and joined forces with one of Europe’s largest poultry producers, PHW, establishing itself as a significant contender in the global shift towards lab-grown clean chicken.
“PHW has time and again left the beaten path in conducting our business. This approach (cultured meat) not only facilitates the development of best-in-class animal welfare concepts in our core poultry business but will also lead to the strengthening of our vegan product portfolio, confirming our leading role in the global consumer trend towards a cleaner, more protein-rich diet,” said PHW-Gruppe's CEO Peter Wesjohann.
“The equity investment in SuperMeat is evidence of our forward-thinking strategy. SuperMeat is consistent with our pursuit to provide Europe with sustainable, clean foods – we do not see this transaction as a financial investment but rather as the beginning of a long-term strategic partnership.”
Food startups are helping to shape what foods and beverages are on offer to the world right now as well as being a big part of whatever comes next.
What we will be eating in years to come will, in some part, have some connection with the success of certain businesses that we now see in the startup phase.
As the world of business moves towards greater sustainability, transparency and a circular economy, not to mention such game-changing digital advancements like blockchain technology, getting in at ground level on certain food-related concepts could prove to be extremely fruitful, both literally and figuratively, for the future.
By Gaynor Selby
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