2023 Trends and Predictions
What's cooking in food and ag tech? Our team shares our latest musings.
We have just under a decade to curb the worst of the climate crisis, and the food system has a big role to play - to the tune of 30%+ of annual emissions. With this looming deadline, our team got together to share our annual trends & predictions. Founders - consider this a challenge! While each theme zeros in on different specifics, the underlying thread is about feeding the planet safely, and sustainability, in the years to come.
Noramay’s Predictions
Ag tech: Beyond IoT -- An increasing sensor infrastructure enables farms to partner with corporates to reduce water consumption under creative and complementary business models. Agriculture currently accounts for 70% of all freshwater withdrawals globally (World Bank). The v1 hardware + Internet of Things (IoT) wave of water consumption savings models has been slow to scale and requires substantial OpEx to service. In this next wave, we expect to see companies leveraging existing infrastructure to offer low to no switching costs/effort.
Eggstreme basics -- Eggs have dominated food headlines over the last several months and my parents have talked about the increasing cost of everything more than I can remember! We often look to technology for marketplace accessibility and last mile solutions, but I'm looking for ways in which AI can help the upstream production of staples -- with the purchase of ingredients/inputs and for pricing hedging to flatten out the curvy impact of emerging climate or health concerns, such as the Avian flu.
Infrastructure + IP factories -- As the global precision fermentation market increases (projected to grow from USD 1.6B in 2022 to 36.3B by 2030), there will be an increased need for rapid strain development, testing, and batching. We expect the infrastructure side of this business to change fast; what we're looking for are ways in which the industry can be supercharged by tiger teams that can rapidly iterate, help companies vertically integrate with a commoditized supply of equipment, and offer IP development at scale.
Shayna’s Predictions
Biomimicry for agricultural innovation. In its simplest form, this means studying and imitating nature’s biological and chemical processes to design systems, structures, and strategies for sustainability. Entrepreneurs and scientists are learning how to replicate the best of nature, and early stage startups will develop methods for healthier soils, waterways, and more. We are interested in companies that use biomimicry to enable climate-smart agriculture.
Rethinking staple commodity production – with fungi. Climate change is impacting our food supply chains and disrupting commodities. We will increasingly look for new and novel ways to produce ingredients locally using mycelium. Mycelium is the root-like structure that typically grows underground and sustains what we see above the soil - mushrooms. Mycoprotein is a high-protein, high-fiber food source that has a low environmental footprint and can be produced in flexible environments.
Artificial Intelligence (AI) to Address Food Waste: Over 20% of our food ends up in landfill in the US, representing between 8-10% of global emissions, according to the UN Food and Agriculture Organization. Startups that address food waste via predictive analytics and AI will gain market dominance and address the thorny issues that players along the supply chain – from farmers to retailers – have had a hard time getting under wraps. And there is economic value to be reaped. McKinsey estimates that an additional $127 billion in topline revenue could be generated by 2030 should AI be applied to manage waste from farm to fork.
More on Forbes.
Rafaella’s Predictions
Innovation with ancient ingredients. Crops that have been historically hard to grow in industrial agricultural environments are finding resurgent paths into our food through synthetic biology, vertical farming, and regenerative agriculture. They will find a path to mainstream commercial adoption.
Carbon Insetting. It is becoming more standard that companies “apologize” after the fact for their carbon emissions by purchasing offsets. However, innovative business models can and will be built around doing less harm from the outset. It won’t be easy, but this could result in the rise of a new tech-enabled industry.
Reverse logistics for waste reduction. We know the challenges of sustainable last mile delivery in DTC, cold chain, and grocery, and we continue to look for innovations in that space. Going further, companies will build robust logistical systems that complete the product life cycle to bring what is left on plates back to the farm, thereby decreasing waste and GhG impact.
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Love the insights. Very interesting perspective on biomimicry. Soil, particularly humic acid and the lignaceous polyphenolics have great potential but to date, no big business there. Too bad too. Re mycelium, sadly there is major concern with protein digestibility due to the insoluble fiber composition. It prevents digestion. This is very problematic nutritionally and not being addressed. Quorn, a long time player, did so but they are the one and only. Beyond Meat is battling legal suits for not meeting protein claims. I’m betting the mycelium crowd will battle even more.