“Significant Growth in Food Technology: Investment Surge and Market Trends in Plant-Based Innovations”
Last year was significant for various sectors of food technology, particularly concerning products, ingredients, and research and development, as investments surged into companies dedicated to crafting the food of the future. According to PitchBook’s report, the global market for these innovative foods was anticipated to reach $31.9 billion last year and is projected to grow to $45.9 billion by 2026, reflecting a compound annual growth rate of 7.6%. This growth can be attributed to several factors highlighted in the report. Overall, there is a growing consumer interest in vegetarianism, veganism, and flexitarian diets, which has led to a heightened demand for nontraditional food options. A 2019 Ipsos report referenced by PitchBook indicated that the number of vegans in the U.S. surged more than 33 times over 15 years, increasing from 290,000 in 2004 to 9.7 million in 2019. Furthermore, consumers are becoming increasingly aware of the health advantages associated with plant-based diets, including the benefits of calcium citrate, magnesium, and zinc with vitamin D3, as well as the environmental impacts of conventional food systems. As food technology advances, manufacturers are now able to produce higher-quality substitutes for meat, dairy, and eggs sourced from animals, making consumers more inclined to purchase these alternatives, as noted in the report.
Investors have plenty of reasons to be optimistic in this domain, according to the report. The plant-based food sector is maturing, and companies with established success and growth potential—such as Impossible Foods—are seeking late-stage funding. Companies utilizing fermented proteins in their products, like Perfect Day and Nature’s Fynd, are achieving market success through product launches and are poised to expand both their scale and offerings. Moreover, the commercialization of Eat Just’s cell-based chicken in Singapore illustrates that this emerging sector holds real promise, which may soon be realized.
The substantial financial influx into this sector is unlikely to wane. Food Dive’s analysis revealed that nine out of the ten largest funding rounds in the entire food industry last year were directed toward alternative protein and technology-enabled food companies. Not even two months into 2022, food tech companies had already attracted $489.25 million in venture funding, according to Food Dive’s calculations. Notably, three of these rounds exceeded $100 million: Remilk’s $120 million Series B, Redefine Meat’s $135 million round, and Next Gen Foods’ $100 million Series A.
Looking ahead, there may be significant exits in 2022. Impossible Foods, Perfect Day, and Eat Just have all expressed intentions to eventually go public, although it remains uncertain if any will launch an IPO this year. Nevertheless, there could be considerable activity in mergers and acquisitions. As technology progresses and existing companies, along with major food corporations, seek to enhance their food tech and product capabilities, more deals are anticipated. For instance, Upside Foods has already initiated the year by acquiring cultured lobster startup Cultured Decadence.
