FoodTech Weekly #6 by Daniel S. Ruben

FoodTech Weekly #6

Hi there,

In #3 a few weeks ago, I covered a conversation I had had with Liisa Smits, Founder and CEO of Ignitia. I mentioned that they were looking for warm introductions to farmers associations and cooperatives in Brazil (and also that Liisa is looking to buy a new home in the Ede-Wageningen area of the Netherlands, where she's relocating). Yesterday, Liisa mentioned to me that a number of you readers had heeded the call and reached out to her, offering to provide warm intros to very relevant coops, aggregators, ag associations etc. in Brazil. Hearing this made me incredibly thrilled -- this is the power of community.

There's just one of me, but 500 or so of you. I already knew you were smart and awesome. And that most of you actuallyreadthe newsletter. Now I also know that you're willing to help others in the FoodTech Weekly community. For that, I'm grateful. (To keep growing this community, please share the signup link on your social media and with your professional contacts).

Onwards.

Highligths

• Conversations: N/A

• Noteworthy: Researchers turn CO2 into fat; Infarm on track to raise $200M; lots of alt. protein news.

• The Profile: Victor E. Friedberg

• Random Stuff: Leather made from apple pulp. Locust swarms on three continents. And more.

Conversations

Noteworthy​

• Plastic waste is surging, as COVID-19 drives restaurants to use more disposable packaging; millions of livestock are being 'depopulated' / 'euthanized' (i.e. killed but not processed into meat because there's no capacity to do so); food waste increases as milk, eggs, onions and other products are dumped because farmers cannot find buyers -- the pandemic is impacting the food system in tons of ways. I was recently interviewed by future food insights company AGFO for their report on this topic (it's worth reading!). Among other things, I said that "I think we’ll see a bigger focus on transparency and traceability in the future, from farm to table. Food safety will now be firmly on the political agenda. The crisis is leading to food waste so technologies to reduce waste or improve sustainability are interesting from an investor perspective. The crisis will also increase the speed of automation through the food value chain, from production, distribution and to consumption."

• The Spoon released their Food Tech 25 list for 2020, of 'the best, brightest, and most innovative companies' in the future of food space. Lots of cool companies are featured, including e.g. Apeel Sciences, Blue Nalu, BIOMILQ, Karma, Perfect Day, and IntegriCulture (all startups we've covered in previous editions of FoodTech Weekly). 

• Alternative animal feed company Calysta is building its first commercial scale plant, in Chongqing, China, together with a local partner, Bluestar Addiseo. The plant will be operational in 2022 and will eventually produce 0.1M metric tons of animal feed per year (as comparison, total global production of animal feed is around 1,000M metric tons per year). Calysta produces single-cell protein (bacteria) - which together with insects (leading firms: Protix, Ynsect, EnviroFlight, Entocycle etc) and algae (e.g. Corbion, Veramaris) are the leading contenders to substitute fishmeal and fish oil. These ingredients are made from wild caught fish, a resource which is already exploited beyond capacity.

• In a trial, dairy calves fed leaf extracts from eucalyptus had lower methane emissions by up to 60%. Volta Greentech and Mootral are startups working to produce algae and garlic/citrus respectively (and feeding these to cows), to achieve similar effects. New Zealand is currently mulling a mandatory emission price on agriculture by bringing farm emissions under its Emissions Trading Scheme; particularly livestock farming emits greenhouse gases. FAIRR believes the 40 largest meat companies may face a $11B carbon tax bill by 2050. These forecasts help explain why companies like Volta and Mootral have gained a lot of interest recently. 

• Indigo Ag, the world's highest valued agtech startup, raised $300M. 

• Swedish researchers has managed to use electricity to turn CO2 into fat, calling the process Power to Food (the story was first reported by AGFO, in Swedish). While companies like Solar Foods have managed to produce protein, this is the first time fat has been produced. The scientists believe that by building a production facility adjacent to a paper mill which emits 570,000 metric tons of CO2 per year, they could turn these emissions into 170,000 metric tons of fat, which would supply 6M people with cooking oil, and replace the need for e.g. palm oil which has negative impacts in terms of deforestation. The Power to Food process would be highly energy intensive, requiring 50% of the output from a standard nuclear power plant.

• Berlin-based indoor farming company Infarm - growing e.g. herbs and salads on site at restaurants and supermarkets - has $140M committed of a $200M Series C funding round, sources to FT report. Vertical/indoor farms are interesting because they reduce the need for pesticides and herbicides, they are water efficient, and they can grow large amounts of produce on a small area, in a controlled fashion. On the flip side, the technology requires a lot of energy for HVAC and LED lights. Other well-funded startups in the space worth knowing about are Plenty and AeroFarms. 

  

  Image source: Infarm

• Lots of news in alternative protein this week. I mean lots. The first quarter of 2020 saw more investment into alternative protein ($930M) than during all of 2019 ($824M). Meati Foods is launching fungi-based steaks (check out their pictures). Mexican plant-based cheese company Heartbest raised $2M from Blue Horizon. Chilean plant-based foods startup NotCo raised $30M and will expand to the U.S. and Mexico. Israeli startup Redefine Meat has announceda high-volume 3D printer for plant-based steaks (again, check out the pictures!). Hungarian startup Plantcraft is using bananas and discarded grapes to build plant-based deli meats. And KFC Hong Kong just launched some Meatless Nuggets. It's worth noting that there are concernsabout the health impacts of some of the new alternative protein products.

The Portrait
Victor E. Friedberg started out as an accomplished pianist at The Juilliard School in New York at age seven. In the mid-90s, he ran KODE, an early version of a social network, funded by Motorola Ventures. He was also an Executive Director at WIRED, and co-founded Launch.org, a PPP between NASA, USAID, the U.S. State Department and NIKE, to accelerate innovations to solve global challenges. In the food community, he's likely most known for co-founding S2G (Seed 2 Growth) Ventures in Chicago, one of the leading FoodTech VCs. The idea was to develop a triple bottom line fund - healthy people, healthy planet, and healthy returns. At S2G, Victor led the firm's investments into e.g. Beyond Meat, Ripple, Maple Hill Creamery, FishPeople, Lavva, and Apeel Sciences, among others. S2G has so far invested into about 40 exciting startups. In 2017, Victor founded FoodShot, where he today is Chairman. FoodShot Global is a platform to harness innovation, capital, and collaboration, to transform the food system. With its 20+ partners (philanthropies, VCs, corporates, research institutions, NGOs and more), FoodShot can do everything from early-stage research grants, seed, venture and growth stage equity, blended finance, debt, and growth capital. Also, FoodShot supports in-field pilot testing, manufacturing support, product validation, commercialization / scaling, and more. The first FoodShot focused on Innovating Soil; this year's FoodShots focuses on Precision Protein and Innovating Soil 3.0. Victor is a visionary and a builder, and his efforts will have significant, lasting impacts across the food system.

Random Stuff

• Why venture capital doesn't build the things that we really need (MIT Technology Review).

• Beyond Leather Materials just raised $1.1M to make sustainable leather from apple pulp. This seems like a smart solution to monetize a food byproduct. The startup will use the funding to expand the team and open a new production facility in Copenhagen. 

• Argentina, India, and Kenya are on different continents, and are yet all currently fighting huge locust swarms that are devouring crops - causing gigantic economic losses and threatening food security. Can tech help solve this?

• This bothers me: The number of published research studies led by women has dropped during the COVID-19 pandemic, likely due to unequal childcare responsibilities (h/t CB Insights). Surely we can do better?

Proportion of research papers accepted where the first author is female, by month of submission over past five years.

​I love you.
Daniel
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Disclosures: I'm a consultant to the Rockefeller Foundation Food Team. I'm a mentor at accelerators Katapult Ocean, Big Idea Ventures, and Bloomer. I'm an advisor to Noquo Foods, BIOMILQ, Volta Greentech, Veat, IRRIOT, Rootically, Holistal, Vultus, and Ignitia; in some of these startups, I have equity. 

Boring disclaimer: The newsletter content is intended only to provide general and preliminary information to folks interested in FoodTech, and shall not be construed as the basis for any investment decision or strategy. I assume no liability as regards to any investment, divestment or retention decision taken by readers of this newsletter content.