A perfect storm for food
We often reference four big global megatrends: resource stress, demographic explosion, technology tectonics, and hyperconnectivity. We overlay consumer trends like health and wellness, a yearning for purpose, higher ethical demands of companies, a drive towards richer experiences and good ol’ better value.
Most industries are affected by these dynamics, but none feels the effects more acutely than the food industry.
The food sector – from farm to fork – is in a perfect storm. From one direction, there’s booming consumer demand for health – where food is increasingly recognised as playing a fundamental role – all compounded by ballooning healthcare costs. From another, land and water crises are increasingly under pressure from booming populations and emerging middle classes with new buying power for animal protein, all underscored with the massive greenhouse gas impact of livestock farming. And finally, genetics, engineering and information technologies are coming together to create an explosion of solutions for plant-based alternatives, new distribution mechanisms and health-driven food consumption.
According to the market research firm Mintel, the marriage of food production and technology could solve our close-to-breaking global food supply. As suggested by the UN, so-called ‘agritech’ may help combat the undernourishment suffered by an estimated 854 million people worldwide. ‘Golden Rice’, a new strain of rice created by researchers in Germany and Switzerland, consists of three new genes that help produce provitamin A and is viable for mass distribution – a potential solution to the public health challenge surrounding the vitamin A deficiency rife across South-East Asia and Africa.
This food-tech explosion also meets the demands of the conscious consumer. Allied Market Research foresee the global meat-alternative market reaching $5.2 billion by 2020. According to a 2018 Mintel report, European consumers now find lab-grown, cultured, or synthetic meat appealing. They predict that scientifically engineered food and drink will continue to attract the eco-conscious consumer – most notably, the millennial cohort. Gen Z are likely to follow suit. One Green Planet, an online platform for the green consumer, states that “protein from animal-based sources is becoming obsolete and the future of food, without a doubt, is plant-based”.
Food giants are responding. Cargill, who control 70% of the US beef market, sold off two thirds of their cattle feedlots in the US last year in order to expand its North American-based protein business by exploring plant-based protein, fish, and insects. Similarly, in 2016, Tyson Foods the world’s largest meat processor, announced the launch of Tyson New Ventures LLC, a $150 million venture capital fund dedicated to exploring innovative, new forms of protein and ways of producing food. And Unilever have now invested in Netherlands-based food project Plant Meat Matters, whose first product endeavour is the creation of an entirely plant-based steak that they say “looks, cooks and tastes just like meat”. The all-vegan steak is set to hit restaurants and supermarkets globally as early as 2019.
But it’s not just Big Food. New entrants are flooding in, supported by smart capital from the tech-sector. Formerly Hampton Creek, Just, a plant-based foods producer, received massive Silicon Valley investment from the likes of Khosla Ventures, Yahoo! co-founder Jerry Yan and Salesforce.com Inc. CEO Marc Benioff. They’ve even had external endorsement from the World Economic Forum who named them a “Technology Pioneer” in 2015 (past companies include Google, SoundCloud and AirBnb). And it doesn’t stop there, Beyond Meat and Impossible Foods have also gained serious investment, with the latter set to open a large-scale production facility in California that will see their production rate rise by 250%. Impossible Foods CEO Patrick Brown is on a mission: “In twenty years, we want to be producing more than half of the world’s supply of all of the foods we’re getting from animals. We need to grow on that scale because the problem we’re addressing [climate change] is so urgent.” No wonder the likes of Google are queuing up to invest in Impossible.
Clearly, the food industry is set to change on a dramatic scale. The scale of change is so vast because the factors driving it are so multifaceted, fast-moving and seemingly inevitable – from technology and climate change to health and population growth. The industry is at a tipping point and any business serious about being truly sustainable (financially, environmentally or otherwise) must connect with these trends to know and plan for what the future brings. It’s scary and exciting in equal measure – but reasonably predictable, with eyes fully open.