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· Plant-based opportunity? “The time for food tech is now,” says venture capital investor
· Investors are hungry for meat-replacement technologies
Plant-based opportunity? “The time for food tech is now,” says venture capital investor
By Robin Wyers, Food Ingredients 1st
04 Feb 2019
Plant-based alternatives to animal proteins and crop gene editing tools are among the most promising areas for food technology investment right now, but the highly exciting field of cellular agriculture may be just too far down the horizon for traditional venture capital investors. This is according to Niccolo Manzoni, Co-Founder and Managing Partner of Five Seasons Ventures, a Paris-based venture capital firm focusing on the food and agricultural technology space. He also singled out pet food and personalized nutrition as platforms that the investment company, with a fund size of more than €75 million, is looking towards.
“The area that we are getting excited about is the shift away from animal-derived proteins, whether meat, dairy or both,” Manzoni tells FoodIngredientsFirst in a detailed interview.
He lists three main approaches when it comes to any non-animal derived protein.
Relatively speaking, the most simple platform is plant-based alternatives, says Manzoni, who has been investing in Food Tech since 2014, and created and managed a portfolio of 10 high-profile Food Tech companies, including Impossible Foods, Clara Foods, Beyond Meat, JUST, Perfect Day and Clear Labs, as part of a leading European family office.
“This is a super exciting area that we are looking at very closely. We are seeing companies emerging across Europe and the world as a whole, who are coming up with meat or dairy mimicking products and appealing to consumers. Companies such as Impossible Foods and Beyond Meat have proven that you can make delicious products at the right price,” he claims.
The second platform, in order of complexity, is the fermentation-based alternative protein space. “You could think of Quorn in the UK, for example, which has expanded internationally. It usually requires high capital expenditure since the fermenters are quite expensive. But the product coming out of the other end is pretty good,” he notes. “Quorn is by far the most successful and perhaps the first to use some outstanding technology and processes to make a plant-based product out of fermentation,” Manzoni adds.
The third platform relates to cellular agriculture, including clean meat, which operates at the forefront of technology. “It’s extremely deep technology that is basically about creating a new body of science. And it is potentially extremely revolutionary, but at the same time you should consider that because it is so asymmetrical, it could be a revolution or go down to zero,” he warns.
Because of the high technological risk and the fact that it is a field where, until very recently, nobody has been active before, cellular agriculture could carry huge rewards for successful innovators and investors. First regulatory and consumer concern constraints need to be overcome, however. “It will be important to have consumer acceptance of a product that gets manufactured in a petri dish as opposed to coming from an animal. Some consumers may find this concept ok, but for others, it may seem like ‘Frankenfood,’ which is not something that consumers are traditionally interested in,” says Manzoni.
Realistically, the first commercial product launch of a “clean meat” product at a small scale, is at least 5-7 years away. “In terms of mainstreaming, we are in my view over 10 years away,” he adds.
Through a leading European family office, Manzoni previously invested in US-based in vitro meat innovator Memphis Meats, where he gained significant exposure to this space. “Because of the time horizons, it doesn’t lend itself to the timeline of a traditional venture capital fund, which is usually 10 years,” he explains. “Having said that, we are seeing a number of funds who are taking an interest in this space. Rounds are happening and there is definitely an investable interest. This is because of the potential for this industry to really turn things upside down,” he adds.
Another promising field in the agricultural technology space is gene editing. Manzoni has a board seat on Tropic Biosciences, which is a company in which his company has invested.
Tropic Biosciences develops “high-performing commercial varieties of tropical crops which promote grower wellbeing, enhance consumer health and improve sustainable environmental practices, using cutting edge genetic editing technologies.”
“Tropic Biosciences is applying gene editing and CRISPR technology to tropical crops to start with, specifically bananas and coffee,” Manzoni explains. “They are working on specific traits which make this product either overcome some specific disease, which is maybe affecting some of these crops, or creating some consumer traits which make the products either tastier or better for the consumers or making some traits which are closer to the producers or processors of coffee,” he says. This could, for example, include lengthening the shelf-life of these products.
The investor believes that the time for food tech is now. “I think there has never been a better time for food and agri-tech to raise money than the current environment for food tech entrepreneurs and start-ups within the space,” he says. Manzoni notes evolving consumer demands, the slow response from the major incumbent food & beverage companies and the reduced cost in scientific discovery as key factors in this.
A recent report that Five Seasons authored with DealRoom on The State of European Food Tech 2018 found that an estimated investment of €1 billion was made in “next generation” food tech companies in 2018. There was 63 percent annual growth in investment in “next gen” since 2013, in 1,241 companies. Europe produced 9 unicorns (companies with a value of €1bn turnover or more) in Food Tech, in the Food Delivery segment in the past five years, for example, according to the report...
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Investors are hungry for meat-replacement technologies
By Molly Wood, WHQR Public Media (NC)
Feb 3, 2019
The Impossible Burger 2.0 arrives in restaurants around the country Monday. The company Impossible Foods won all kinds of "best of CES" awards at the big tech show in Las Vegas last month for creating a plant-based meat replacement that smells, tastes and looks like real beef. There's also all kinds of science going into growing meat from real meat cells. Molly Wood speaks with Larisa Rudenko, a biotechnology expert and a visiting scholar in emerging technology at the Massachusetts Institute of Technology. She says climate change, animal welfare and human health are all driving huge investment in meat-replacement technologies. The following is an edited transcript of her conversation with Wood.
Larisa Rudenko: So on the plant side, we probably have hundreds of millions of dollars pouring in from various sources, including some of the companies going public, and some of the big ones have valuations in the low billions of dollars. The clean meat space is a little bit behind it in terms of funding, but I would say, easily, that the funding has been in the tens of millions of dollars, maybe approaching hundreds of millions.
Molly Wood: What challenges might come up as some of these technologies and efforts start to scale?
Rudenko: So some of the potential downstream ripple effects, if you will, are: What are the components that go in? What is the supply chain like? Where are we going to get the ingredients that go into culturing these cells? Part of the downstream values-based effects are: What's going to happen to the people who currently are ranchers or farmers?
Wood: So while it seems like it makes a ton of environmental sense to just switch over completely, as with every technology, it has a lot of unintended consequences.
Rudenko: It does have unintended consequences, and part of the bit about unintended consequences is that you don't always know what they're going to be. I think one of the goals here is to have scale-up that's affordable so that this doesn't just become food for rich people and that it instead provides food for everyone.
Wood: At what point do you think — I mean, it's hard to predict — but at what point do you think that tipping point could occur?
Rudenko: I think it's really going to be depending on the technology that's used to scale up and to ensure that you can get the price point down to a reasonable level. The way to do this is not necessarily an immediate switch from one to the other, but rather a series of little steps, where we slowly start moving from traditional ways of providing high-protein food to people to more novel ways, but not necessarily in one single jump.
And now for some related links:
· Venture capital...
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