Food: the most disruptive sector?
A few months ago, we were talking to one of Europe’s largest private equity firms. Surprisingly (to us at least) they wanted to talk about the power of sustainability to create new business opportunities and drive disruptive change.
What had triggered this seemingly Damascene conversion we asked. The answer was straightforward. Today the ‘hot’ area to invest in, they said, is the intersection between food, technology and sustainability. And the reasons for investor excitement were firmly rooted in some of the megatrend issues sustainability professionals are familiar with – global population growth, resource scarcity and health epidemics.
The example they gave was Hampton Creek, a food technology company based in San Francisco focused on making healthier, more sustainable food and finding new ways of utilizing plants in food products through building “the world’s largest database of plants”. Since launching in 2011, they’ve raised $120m with heavyweight investorsincluding Facebook co-founder, Salesforce founder and the owners of one of the largest food conglomerates in Asia.
They don’t have the first, or even necessarily the best, protein-replacement products. But what has caught the imagination of the investors has been this small organisation’s ambitious mission to use the food system as a platform for disruptive change driven by the CEO’s mantra of “What would it look like if we started over?”.
Its first product was Just Mayo – mayonnaise without eggs – which rapidly created sufficient market disruption to worry the likes of giants such as Unilever, makers of Hellmann’s who launched their own version of an eggless spread early in 2016. This so- called mayo war is part of a more fundamental shift with purpose-led new entrants coming on to the market who can compete with well-established iconic brands and appeal to consumers who distrust ‘big food’ and are looking for ‘authentic’ and ‘natural’. And you can see it with partnerships too. Last year, Hampton Creek teamed up with Compass Group, the world’s largest food servioce group.