Plant-Based Alternatives: Bringing Sustainability into the AgTech Industry
Market Growth Fosters Innovation
Plant-based meat comprises approximately one percent of the overall meat market in the U.S., and plant-based milk makes up about 13 percent of the U.S. milk market. Although the alternatives are rapidly penetrating the market, plant-based meat has a lot further to go. Since the alternative food industry is at a nascent stage, it has yet to draw the attention of equipment manufacturers. Currently, many plant-based meat producers leverage extruders as a centerpiece in their production process. Although it is widely used in the food industry, the equipment is not specifically designed for the process.
The cultivated meat sector, on the other hand, is also witnessing a similar trend. For instance, the bioreactors used for the cultivation of meat from animal cells are designed for pharmaceutical purposes. Hence, the equipment is not ideal for the process, especially if the companies decide to scale up their production. Also, the growth medium leveraged for the cultivation of meat is adopted from the pharmaceutical industry and is not optimized for the process.
The growth of the alternative food industry will not only fuel technological innovation but also motivate the manufacturers to invest in equipment that is more suited for the sector, including production machinery for plant-based meat and scaffolding for cultivated meat.
The growth of the alternative food industry will not only fuel technological innovation but also motivate the manufacturers to invest in equipment that is more suited for the sector
The growth of the alternative food industry will not only fuel technological innovation but also motivate the manufacturers to invest in equipment that is more suited for the sector. For instance, we made an investment in Barcelona-based NovaMeat in order to accelerate the development of their proprietary plant-based meat manufacturing technologies. NovaMeat is developing ground-breaking technologies to manufacture the next-generation of plant-based meats and we are excited to help them along this journey.
The Impact of Rules and Regulations
Recently, the FDA and the United States Department of Agriculture (USDA) announced a formal agreement to jointly oversee the production and marketing of cell-based meat and poultry products. This shared regulatory framework was designed to ensure that cell-cultured products derived from the cell lines of livestock and poultry are produced safely and are accurately labeled. Regulatory policies like these can have a positive impact on the industry. Since the alternative food sector is at a nascent stage, compliance will help in creating good public opinion. It will eliminate avoidable accidents and improve attention to safety. The establishment of robust standards is imperative. Even if one company is compromised, it is likely to have ripple effects across the entire industry, thus, potentially poisoning public opinion. However, a well-defined compliance process can ensure certainty and contribute to the growth of the sector.
Nurturing Productive Business Partnerships
The emergence of the digital era has transformed human interaction. Social media platforms now form the center of communication. In such a complex landscape, direct interactions can bolster the development of dynamic relationships. For instance, the investment decisions of our firm are based on the results obtained from evaluating the entrepreneurs. The due diligence process involves interaction with the entrepreneurs to assess their potential for collaboration. Their willingness to consider alternative ideas indicates a productive relationship post-investment. It assures us that we can foster effective partnerships and seamless exchange of ideas.
A practical approach during the evaluation of business relationships is to request references. If they have collaborated with other business leaders in the industry, their testimony will help in establishing reliability and trustworthiness before moving forward with the investment. At the same time, it provides substantial insight into a potential business partnership.
Upcoming Trends in the Industry
Plant-based burgers are swiftly establishing their presence in the market. Organizations ranging from large food companies to rising startups are investing in plant-based burgers. The market has yet to explore the chicken and fish sector, but big players in the industry are realizing its potential and taking steps to cash in on the opportunity. I believe chicken and fish can achieve the same scale of success as plant-based burgers. For instance, Good Catch Foods, a company we co-founded and have backed heavily, has made a lot of progress in plant-based tuna. We recognized the opportunity in the seafood sector, which was not being addressed, and decided to deploy a significant amount of our resources toward the effort.