FoodTech Predictions for 2023: Investors Share Their Insights
The past 12 months have been a rollercoaster for the food industry, with the pandemic leading to unprecedented challenges for entrepreneurs.
By Milo Runkle
However, it's also led to the emergence of exceptional technologies that can outlast downturns and overcome these challenges. Funding from FoodTech investors enables these founders to develop and scale impactful technologies. FoodHack asked 20 high-impact investors what they predict for the year ahead.
Christina Ulardic of Astanor Ventures predicts a focus on technologies and business models that pragmatically address challenges related to human health and the climate crisis. Specifically, regenerative agriculture and soil health have proven difficult to address through venture capital, but they hope it will receive more attention in the coming year. The field of synthetic biology is also expected to evolve and provide solutions for a "bioeconomy," which will require rethinking of supply chains, increases in energy efficiency, and investment in infrastructure.
Christian Guba of FoodLabs predicts that Agtech ventures will emerge from the shadow of alternative proteins with the help of synthetic biology. Plant-based alternatives will continue to struggle in 2023 as 'plant-based 2.0' is still 1-2 years away until the necessary enabling technology comes to market. He also predicts that the second wave of infrastructure startups in biomanufacturing will be vertically integrated and analytics-driven, and alternative packaging will get the attention it needs to address the plastic problem and health crisis from microplastics. Molecular farming startups will also challenge precision fermentation incumbents.
Steven Finn of Siddhi Capital predicts that higher value, lower inclusion rate products and ingredients will prove to be the most immediately investable opportunities. However, he also predicts that innovation will temporarily slow down for a few key reasons: companies preserving cash and focusing on their north star, customers moving slower, and brilliant people choosing not to start companies in the current funding market.
Kevin O'Shaughnessy of S2G Ventures predicts that cellular protein will provide safe, sustainable food, and that food will become central to the effort to prevent chronic disease and improve health outcomes. Novel ingredients will also elevate plant-based foods to a new level of performance in terms of taste, health, and cost competitiveness.
Albrecht Wolfmeyer of Proveg Incubator predicts that the taste and texture of plant-based and fermentation-derived products will reach new levels with exciting launches of fungi and algae-based products. He also predicts that more clean-label solutions will be developed as consumers prioritize health, sustainability, and transparency. Precision fermentation will also make big waves, and cultivated meat, seafood, and dairy will grow through takeovers, mergers, and fundraising rounds.
Steven Molino of Clear Current Capital predicts that 2023 will be the "year of the reset" for plant-based offerings. He predicts that many mediocre brands will cease operations, while there will be increased consolidation and M&A for the remaining players. New entrants will realize the need to truly innovate on taste and texture in order to meet consumer expectations.