What will it take for foodtech to start getting as much attention as fintech?
From food waste to obesity, there are plenty of problems with Britain’s food system for entrepreneurs to tackle, so it’s hardly surprising there’s also a host of foodtech companies that are whetting the appetites of consumers and investors alike. But there’s clearly more that needs to be done to grow the ecosystem. Aiming to do just this, yesterday’s YFood Insight & Innovation Day event brought together investors, startups and a food futurologist to explore the challenges facing foodtech and the opportunities ahead.
But for the sector to thrive and command as much attention as the likes of fintech, it's perhaps helpful to define exactly what foodtech does and doesn't mean. Nadia El Hadery, co-founder of YFood, the platform aimed at driving foodtech innovation and organiser of the event, said foodtech refers to the technological innovation applied to the food value chain from farm to plate to bin, taking in aspects like production, transportation and storage, processing, marketing, distribution, consumption and disposal.
And while in the past four years exciting “clusters of innovation” have emerged in the foodtech space, El Hadery highlighted that there are some major opportunity gaps waiting to be filled. And a big part of the solution needs to be greater collaboration between startups and corporates. Unfortunately, one problem with this is that larger firms aren’t always great at innovation or being open about what they need help with. “We need more transparency from brands about their problems,” she said. Continuing on the theme of startup-corporate collaboration, Mackenze McAleer, president of Arise, the agricultural technology startup, said that corporates have a responsibility to support startups but that “the gap between entrepreneurs and industry is enormous”.
There are some promising case studies that show how businesses are trying to close that gap though. Representing the corporate world was John Isherwood, head of sustainability at Pret a Manger, who has driven collaborations with players like WeFarm, a startup that supports small-scale farmers. Isherwood admitted that startups have the potential to solve problems bigger companies can’t tackle on their own. “We’re a business that’s really great at selling sandwiches and coffee,” he said. “What we’re not really great at is innovating around the sides."
And while startups using technology to tackle the problem of food waste was a major theme of the day – Snact, YellowLabel, FoPo and bio-bean are all in the food-waste space – there are clearly other areas ripe for disruption too. Chris Persson, general partner, RECAPEX, the investment firm, expressed an interest in entrepreneurs who are looking for ways to help people eat smarter food and sees a myriad of opportunities around breakfast – which he maintains is the new dinner. And the investor doesn't think there’s a shortage of food-related issues either. “We are ruining our world and this needs to change,” he said.
But while the event showcased innovative players attempting to do just this, such as indoor-plant growing system Evogro and “nutritionally complete food” product Huel, one of the biggest barriers startups come up against is funding. Taking part in a panel discussion, Gary Goodman, CEO and founder of Yumpingo, the company that provides restaurants with data-based insights, said that if he had one wish, it would be to transport America’s investment culture to Britain. Speaking to Elite Business, he elaborated: “You could count the number of people in the UK who have made successful exits and then invested back into startups on one hand. In the US, there are loads of examples: there’s a culture of investing in early-stage businesses and there’s perhaps a lack of that here. We just don't have the same community.”
As it gears up for London Food Tech Week, Britain’s foodtech scene is clearly coming of age and may soon be supported just as much as fintech. But startups, corporates and investors alike need to be hungry for it.