5 foodtech market trends for 2022

According to PitchBook Data, investments in foodtechs exceeded US$ 28 billion in 2021, up 85% compared to 2020

Janeiro 4, 2022

By Marina Salles

A better sausage for you. A child-approved flavored chicken. An ecological dairy. A miracle that makes everything sweeter (and healthier!). That's how the foodtechs responsible for raising more than $28.8 billion in the Venture Capital market from January to September 2021 sold themselves to consumers and, why not, investors.

Faced with a new boom in the market of alternative and fermented proteins, online fresh food stores, and ready-to-eat and healthy food marketplaces, investments in foodtechs accumulated an increase of 85% in the first nine months of 2021 compared to the entire year of 2020, and the trend is to maintain growth in 2022 on different fronts, according to the American research and software company PitchBook Data.

Based on a series of market surveys, AgTech Garage News highlights below the five trends that these investments have highlighted and whose curve promises to escalate in 2022:

1) Boiling fermented proteins on the rise

In a second report on foodtechs, PitchBook Data points out that record VC funding of fermented proteins over the past year will spur widespread and significant adoption of this technology by 2022 for the production of food and dairy products independent of the animal kingdom.

_{Perfect Day and its animal protein-free ice cream with a milky taste}

The first launches have already reached the consumer in restaurants, cafes and convenience stores and the expectation now is that large companies are convinced of the potential of these proteins to guarantee their production in scale. We're talking about hamburgers, cream cheeses, and ice creams, like the one from the American startup Perfect Day, which received US$ 350 million in a round led by Temasek fund and Canadian CPP Investments.

Perfect Day uses the fermentation process to create milk proteins (casein and whey) with characteristics that promise to be the same as those found in milk. After the launch of its first ice cream, the idea is to license the technology to large companies. Today, the startup already works with Brave Robot, Graeter's, and Nick's brands.

2) Laboratory meat consolidating

In the view of Food Technology magazine editors, published by the Institute of Food Technologists (IFT), the sector of alternative vegetable and animal-based proteins is also likely to remain strong and undergo a consolidation phase. In this area, mergers and acquisitions are expected in 2022, after an acceleration movement of startups that reached the market first and the rapid reaction of food industries, which invested heavily to protect themselves from a seemingly inevitable disruption in their chain.

_{On the market, Beyond Chicken highlights it’s crunch and juiciness}

So far, the leading plant-based foodtechs including Impossible Foods and Beyond Meat, have accumulated enough money to make bold moves, experts say. While traditional meat companies the size of Tyson Foods and Cargill have shelled out considerable capital to also accelerate the technology of lab meat startups such as New Wave Foods, Memphis Meats, Aleph Farms, and Future Meat Technologies.

In regulatory terms, for the time being, laboratory meat has only been approved in Singapore, Asia. In the United States, it needs to go through the scrutiny of the Department of Agriculture (USDA) and the FDA to reach the shelves. In any case, the US government is supporting the cause and has allocated a five-year grant worth US$10 million to Tufts University to establish the National Institute of Cellular Agriculture in the country.

3) Fight against food waste even stronger

Marketing expert and founder of  Hazel Technologies, Pat Flynn has strong arguments about the potential of the foodtech market to reverse food waste. In 2021, Hazel raised $70 million from US private equity firm Pontifax AgTech and Singapore sovereign wealth fund Temasek, in addition to other players, to multiply the shelf life of fruits and vegetables by three by means of sachets that release a somewhat “magical” steam.

This steam (which may contain an antifungal agent or an active ingredient to neutralize the fruit ripening hormone) is yet another tool in the fight against food waste, which reaches ⅓ of the world's agricultural production every year.

Given that this wasted food still emits 8% to 10% of global greenhouse gases, investing in this market is a necessity that is gaining appeal among investors. If we were talking about a country, according to the Food and Agriculture Organization of the United Nations (FAO), food waste would have the third-largest carbon footprint in the world, behind only the US and China. Hazel Technologies sachets, which can be placed in bulk product cartons immediately after harvest, are already in use by more than 160 customers in 12 countries.

_{Hazel Technologies sachet box increases durability of avocados}

In this promising market, Apeel Sciences raised US$ 250 million in 2021 when it was valued at US$ 2 billion. The startup has developed a plant-based film that increases the shelf life of fruits and vegetables. The film has no smell or taste and keeps the food moist while avoiding contact with the oxygen in the air. 

While Too Good To Go, founded in Denmark, had an investment of US$ 31 million by helping establishments in several countries to sell food, in an easy and fast way, that prevents it from spoiling. Through an app, local businesses offer discounts and surprise packages to delight consumers.

4) Delivery of fresh products accelerating on the way up

After a year of staggering growth and billions invested in fresh food delivery startups, this market is maturing fast, according to Sam Panzer, a German foodtech enthusiast, and expert in Customer Success at marketing technology company Talon.

_{To retain the consumer, Gorillas offers friendly prices for deliveries}

The expectation now is for mergers and acquisitions, as well as the debut of the first IPOs (initial public offering) and SPACs (special purpose acquisition companies, which have no commercial operations and are formed strictly to raise capital through). 

On the delivering market, startups that started operations in the last few years and received funding are keeping rates extremely low (such as Gorillas, which charges US$ 1.80 to take the customer's order to their door), while deliveries from supermarket chains like Whole Foods, Kroger and Wal-Mart charge are around US$ 10. The question remains how the increase in food prices will impact this market. So far, consumers seem to be comfortable paying a delivery fee, because it is convenient.

5) Meal kits back to table

For years, the term “meal kit” has described Blue Apron's pioneering business model by subscription, where customers receive pre-portioned ingredients and step-by-step instructions on how to prepare their own meals at home. But the definition is gaining new meanings and becoming more diverse, according to the AgFunder, which shows clear signs of growth in this market in a new context, driven by the pandemic.

_{Blue Apron's cooking kit was pioneering. Nowadays, other companies innovate in the sector.}

“Meal kit” can now mean anything from a box full of home-cooking treats, a pre-made frozen meal or even perishable items. The Brazilian Live Up, for example, specializes in fresh and frozen meals and in the last two years has added items such as meat, fresh agricultural products and dairy products to its menu. The foodtech raised US$ 32 millions in one of the biggest investment rounds in its sector in the first half of last year.

_{Main investments in meal kit foodtechs in the first half of 2021 (Source: AgFunder)}

"Food, for a lot of people, is much more exciting now than it was decades ago and a lot of people are defining themselves to some degree in relation to their diet: 'I'm vegan, I'm vegetarian, I only eat organic.' It's much more personal and emotional than before", stated Brad Dickerson a year after Blue Apron was listed on the New York Stock Exchange. The future of food is changing and startups like Sweden Curb Food are no longer afraid to say they are helping to "bring world peace to the dinner table".