Supply Change Capital’s Outlook for 2025
Our team gathered to share our forecast for the future of Food Tech in 2025. Top investment themes range from AI-enabled supply chain transformation to the GLP-1 revolution.
Our Venture Partner Neil Willcocks characterized the market evolution: “As we look to 2025 and beyond, the food technology sector is still in a transformative phase, shifting from hype-driven investments to practical applications and solutions at realistic valuations. The Gartner Hype Cycle framework highlights how the industry has moved past inflated expectations to a more productive phase, focusing on scalable innovations despite reduced investments since the early 2020s."
The GLP-1 Revolution stands at the forefront of potential disruption to America's trend of diet-driven chronic disease. Data shows that GLP-1 consumers have cut food purchases by 11%, shifting away from salty and sweet snacks toward fruits, vegetables and nuts.
As Noramay Cadena shared, “According to data analysis from Trilliant Health, the prescription volume for GLP-1 medications saw a 300% increase from 2020-2022. One in eight adults (12%) has taken a GLP-1 prescription drug for weight loss and/or diabetes (KFF Health Tracking Poll May 2024). These drugs cause disruptive appetite characteristics; both family and social dining will need to adjust.”
We predict that new business models and products will emerge to address these changing eating habits. At the same time, pharma innovation will focus on addressing drug drop-off rates due to cost and delivery format.
Functional Food & Wellness Integration: The functional food and wellness sector is rapidly evolving, driven by a growing demand for "food as medicine" products and natural GLP-effect alternatives. Sushmita Mukherjee foresees the development of “More functional foods responding to the ‘food as medicine’ movement.”
As consumers increasingly seek holistic wellness solutions, we see innovation in personalized nutrition offerings that align with changing eating habits. This convergence of health-focused products with scientific innovation creates significant opportunities in the metabolic health and sustainable weight management space.
AI-Driven Food System Transformation: We expect AI's impact to expand across the food industry, from hyper-personalized shopping experiences to supply chain optimization, waste reduction, and enhanced inventory management. Integrating technologies to create insights from unstructured data will unlock new value across the supply chain.
“AI is impacting everything,” said Shayna Harris. “Start-ups that help business functions better talk to each other and integrate data and insights will drive enormous value - especially when overlaid with external data. AI can do this at a much faster rate than humans. Of course, the products will need to solve real problems, but it has enormous implications for procurement, logistics, ESG data monitoring, and more.”
Supply Chain Technology Integration: We saw more than 100 deals in 2024 that were focused on supply chain technology, and we anticipate seeing more as the availability of data and the ability to utilize machine learning continues to change business. Armand Dawkins forecasts an increased interest in “Technologies that improve inventory management and supply chain efficiency,” given the ongoing supply chain disruptions due to external factors like climate change and natural disasters.
Rachel Stinebaugh expanded on this point, sharing that “AI will be especially impactful in the supply chain, where there is a lot of pen and paper and unstructured data that hasn't quite come to the point where it could generate analytics/insights (usually because there's such a high volume of reports that people don't end up reviewing the data in an actionable way). Great examples of this in the SCC portfolio are companies like Terrantic, and moving forward, I expect we'll see some deal flow in traceability and supply chain risk management.”
Labor and Automation Evolution: The food and agricultural sector faces critical workforce challenges, with over 50% of US farms and 80% of restaurants reporting labor shortages.
Jeff Zheng pointed to Fresh Fruit Robotics as an example. He said, “This robotics startup can identify when produce is ripe for harvesting. It provides a solution for the labor shortage and automates a very labor-intensive process.”
Technology will be essential in addressing this gap through agricultural robotics, large-scale farming automation, and innovative workforce management solutions.
Market Outlook: The market environment is expected to become less constrained with increased M&A activity, where major players like Mondelez are seeking 'bolt-on' acquisitions in better-for-you categories. With approximately $500 billion in private equity dry powder and continued corporate investment in sustainability-driven technologies, deals and valuations will move this year. Sara Kakadellis believes, “While investment in food tech has seen a big downfall, AI-driven technologies could reverse this trend.”
On the other hand, inflation and rising food prices may constrain potential acquirers, and valuations are expected to remain subdued. Founders face adoption hurdles in the novel technology space and can anticipate policy-driven regulatory challenges.
Emilio Montemayor Tatum is optimistic about the corporation’s role in sustainability in the coming years. He believes that “As sustainability practices become the norm, investing in transformative technologies that are profitable and have a clear sustainability goal will continue to increase in demand. Big corporations are continuing to push for these types of technologies because not only does this help them reach their P&L goals but also keeps them in line with international agreements on sustainability.”
We remain cautiously optimistic about 2025, anticipating increased M&A activity but slow-growing valuations (outside of AI-centric start-ups). While fundamental challenges persist, the policy landscape continues to evolve. Success will hinge on strong business operations, particularly in sustainability, health-focused technologies, and AI applications, tempered by market conditions and technology adoption rates.