The food-tech space has gotten hot over the past few years. Industry specific funds and accelerators have sprouted to advance these companies and lots of $$$ are pouring in to revolutionize an industry we consider outdated but in reality has always been innovating.
The food industry has thin margins. Consider the many interested parties involved by the time it reaches the shelves in your local grocery store, all looking to make a $1. Each link in the chain has been innovating to optimize their slice of the pie to capture more profit. From the raw materials to manufacturing to shipping and stocking the aisles – all have seen significant progress over the years.
This need to optimize is especially true for the producers for two reasons. The first is economical as mentioned above. Aggregating the raw materials and creating a product that needs to hit the shelf at a price point the consumer is willing to pay while allowing for everyone in the chain to make money. Otherwise it just does not work.
The second is health. We have been learning just how bad our eating habits have been for our bodies and the search for healthier food is no longer reserved for the do-good-health-nuts of yesteryear.
All this comes to play in the alternative meat industry. We already have major players in Impossible Foods and Beyond Meat, with many start-ups at various stages of development following quickly behind them. It has been fascinating to learn about this industry and I have come to a key observation. The food industry is all about marketing. Brand recognition is critical and differentiation is not just by taste, health attributes or cost. Those become secondary as brands compete for your love. But first they need to get you to pick them up off the shelf.
On a recommendation from Ben Wiener, I have been reading Billion Dollar Burger by Chase Purdy. The sub title says it all: Inside Big Tech’s Race for the Future of Food. So far it has been a great read providing the insights above and more.
If I were to define it a little differently than I originally stated above: The food industry has always required innovation. They are changing how they innovate, adopting tools and practices from high-tech and start-ups. Is this really different than industries that had little to no-innovation till the past few years such as prop-tech?