From Farmgate to Plate: Top Food & Ag Innovation Trends for 2021 - Our predictions for new methods, ideas and processes that are creating more ...
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From Farmgate to Plate:
Top Food & Ag Innovation
Trends for 2021
Our predictions for new methods, ideas
and processes that are creating more agile
and sustainable food systems
2021 INNOVATION TRENDS 1
The confluence of climate change and the issues created by the pandemic,
both economic and logistical, threaten the food security of millions around
the world. COVID-19 proved that our food system is vulnerable - exposing
weaknesses as it disrupted the supply chain at nearly every point. While the
food value chain also showed remarkable resilience, it’s now clear that the
ability to achieve collective sustainability goals – and long-term business
growth – requires new ways of thinking and operating.
“The pandemic validated the need for real innovation and substantive
investment to solve the challenges we’re facing,” said Anne Greven, global head
of food and agribusiness innovation and the FoodBytes! platform at Rabobank.
“Companies that are planning for the next 10 to 15 years are investing heavily
in innovation, and they’re seeing those investments pay off much sooner than
they imagined. They’re seeing the returns now.”
In the second half of 2020, Pitchbook figures show the aggregate amount of
capital invested in the food and ag space increased, from $4.1 billion to $6.9
billion as food companies began to recover from the initial onset of COVID-19.
This upward trend in F&A investment is also reflected in the FoodBytes! startup
network: alumni raised $532 million in 2020, more than doubling the $250
million raised in 2019.
As we move into 2021 with a new recognition of the need for innovation,
FoodBytes! shares predictions for the top innovation trends that will continue
to drive sustainable change this year and highlights startup alumni that are at
the cutting edge of these accelerating trends.
2021 Innovation Trends
1
Sustainable supply chains
2
Improved resource management
3
The next frontier of nutrition
2021 INNOVATION TRENDS 2
1
Sustainable
Supply Chains
COVID-19 disrupted supply chains across the board resulting in
panic buying, which drove price increases, shortages in some areas
and excessive waste in other channels. While the food chain adapted
fairly quickly, it did expose an opportunity for greater readiness and
responsiveness ahead of the next crisis the food industry may face.
“Players all along the supply chain need to prepare for what could be
around the next corner and invest in solutions that are innovative,
digital, diversified, flexible, resilient, efficient and transparent,” said
RaboResearch’s Steve Nicholson, VP, senior analyst for grains and
oilseeds, during the markets forum at Rabobank’s annual Food &
Agribusiness Summit in December 2020.
In addition, consumers are demanding more visibility about where
their food comes from. Despite consumer cost-consciousness driven
by the economic pressures of the pandemic, sustainably-marketed
products maintained their market share, even seeing growth in key
demographics such as millennials.
These examples build a strong case for increased traceability. Head
of RaboResearch North America Roland Fumasi sums up the industry
shift: “I usually talk about transparency in terms of the consumer
demanding it, but it’s become clear that transparency is critical for
value chain participants, regardless of consumer demand. There
are opportunities for potential cost reduction as transparency is
increased in the supply chain.”
2021 INNOVATION TRENDS 3
I. SUSTAINABLE SUPPLY CHAINS
Traceable Technology: Blockchain and Beyond
Blockchain solutions are becoming more sophisticated, and
other tech-enabled tools are helping track inputs with increased
transparency along the supply chain.
STARTUPS TO WATCH:
Improves traceability at the smallholder farm level via a mobile platform. Farmforce replaces
existing paper-based processes to help farmers secure sustainable sourcing and grant
visibility down to the field level for a fully traceable supply chain. Farmforce has gained
traction with over 500,000 farmers on the platform across 30 countries, with major corporate
customers including Kellogg’s, Cargill and McCormick.
Helps farmers produce more food with fewer resources using a proprietary crop and
weather sensor, the Arable Mark, which makes farming more predictable. The company has
research collaborations with ag giants including Bayer, Syngenta, BASF and Corteva and is
now focused in driving visibility further down the value chain. In 2021, the team is focused
on piloting with CPG players who want to optimize their yield per acre; Arable currently has
projects running with Ferrero, Lamb Weston and Mars.
Delivers near real-time information and informs better business decisions by allowing grain
elevators and cooperatives to digitally connect with their growers through an innovative software
platform and ecosystem. Investors include FoodBytes! Pitch members Continental Grain Company
and Germin8 Ventures. Bushel touches more than 22 percent of U.S. grain volume and has 60,000
active farmers on its platform, with partners including Scoular and Continental Grain. Like Arable,
Bushel is looking further downstream to build relationships with CPG players to help optimize
their grain ingredient supply chains and bolster their sustainability stories for the end consumer.
Connecting Food offers a food transparency platform for food manufacturers based on
blockchain technology to protect and build brand equity in the food system, including
a smartphone app to prove sustainable sourcing. The European company counts Barilla,
Mondelez and Walmart among its customers and is planning to expand its footprint to the
U.S. in 2021.
2021 INNOVATION TRENDS 4
I. SUSTAINABLE SUPPLY CHAINS
Improved Animal Health
The pandemic heightened animal welfare concerns from consumers – and
accelerated calls to find new ways to lower the environmental impact of
animal agriculture.
RaboResearch Senior Analyst for Animal Protein Angus Gidley-Baird reports that
supply chain initiatives will be key in unlocking climate-friendly meat. “Carbon
neutrality or reduced emissions will become one of a number of attributes
associated with a product in a dedicated supply chain used to promote a
product, gain consumer trust, and maintain or build access into markets.”
STARTUPS TO WATCH:
Improves feed efficiency through an understanding of the gut microbiome,
enabling farmers to rely on less. Feed is a major component of both the cost
and climate impacts of animal production – accounting for almost half of
emissions overall.
Delivers novel oral vaccines through feed, creating a more cost effective,
safer and stable vaccination administration.
Uses novel gas fermentation technology to produce animal feed from
industrial carbon dioxide emissions. The team is looking to engage in pilots
this year to scale up its protein production and expand to new markets.
NovoNutrients was recently selected to test at feed giant Skretting’s
Aquaculture Research Centre.
2021 INNOVATION TRENDS 5
I. SUSTAINABLE SUPPLY CHAINS
Upcycled Products
Officially defined in 2020, upcycled foods “use ingredients that otherwise
would not have gone to human consumption, are procured and produced
using verifiable supply chains, and have a positive impact on the environment.”
According to Forbes, “the practice could help reduce the more than 70 billion
tons of greenhouse gases generated by food loss and waste, while creating new
jobs and innovative products.”
As consumers continue to seek products with smaller carbon footprints,
upcycled ingredients have become a key signal that a product is built with
sustainability in mind. Both big and small food players have shown an increasing
level of creativity as they integrate unused or repurposed “waste” ingredients.
FoodBytes! predicts that upcycled product growth will continue in 2021.
STARTUPS TO WATCH:
Connects farmers in emerging economies to global markets through a
vertically-integrated supply chain and portfolio of upcycled brands. CPG
category winner of FoodBytes! Pitch 2020, Agricycle has enabled 7,000
livelihoods to date globally and took part in the Target Incubator in 2019.
Upcycles whey byproducts from dairy manufacturers into a distilled spirit,
repurposing a food system waste stream to create a craft beverage. The
company launched in September 2020, with key advisors from industry
leaders including Blue Apron and Dairy Farmers of America.
2021 INNOVATION TRENDS 62
Improved Resource
Management
Increasing pressure from governments and consumers around
the globe are pushing corporate leaders to make investments in
reducing carbon emissions. Companies are also marketing these
milestones and are promoting their commitments through industry
partnerships and public goal-setting.
The European Green Deal, which has identified zero net greenhouse
gas emissions by 2050, has applied a “Farm to Fork” strategy focused
on shorter supply chains to reduce footprint in four key areas:
production, practices, consumption, and waste. This underscores
how efforts along the entire value chain are necessary to create
results.
FoodBytes! Pitch member General Mills, which was recognized by
Rabobank for its leadership in sustainability, has pledged to reduce
greenhouse gas emission and committed to 100 percent renewable
energy in operations by 2030.
In September 2020, FoodBytes! Pitch member Dole announced its
plans to meet net zero carbon emissions by 2030 as a part of its
Dole Promise – reflecting “the recognition that ‘business as usual’ is
unacceptable in the face of a looming food crisis.” These are just a
few examples of influential CPG companies who are demonstrating
their commitment to more sustainable practices and products.
There are a number of pathways to realizing resource efficiencies
and reducing carbon footprints. Below are four areas where
FoodBytes! predicts increased traction in 2021.
2021 INNOVATION TRENDS 7II. IMPROVED RESOURCE MANAGEMENT
Carbon Sequestration
Increasingly, consumers are driving the conversation around regenerative
agriculture as a means to reduce their carbon footprint through sustainable food
purchasing decisions. Maintaining healthy soil helps ensure that carbon is stored
in the ground rather than released into the atmosphere as harmful greenhouse
gases, 30 percent of which currently come from the food system. We expect
technologies that support soil health as a path to carbon sequestration to gain
momentum this year.
According to a recent RaboResearch report, agriculture can “play an important
role in sequestering carbon in plant stands and in the soil,” with the “first
initiatives to measure carbon sequestration at farms and rewarding farmers for
that” now coming to the market.
STARTUPS TO WATCH:
Designs and produces more efficient, sustainable agricultural chemicals to
improve crop performance and soil health.
Distributes soil testing kits that make sustainable land management more
accessible. Partnering with leading scientists and tech developers in the
regenerative ag space, AgriCORE intends to bring to market the first
affordable method of soil carbon content analysis that can be conducted
in-field.
2021 INNOVATION TRENDS 8II. IMPROVED RESOURCE MANAGEMENT
Water Reduction
Next to labor, water remains a major resource constraint. According to
the World Wildlife Fund (WWF), 1.1 billion people lack water access and by
2025, two-thirds of the world’s population could face water shortages. This
scarcity is driving increased interest in on-farm technology as an aggregator
for data points and use as a decision-making tool to use water more
efficiently in agriculture.
STARTUPS TO WATCH:
Improves water and resource management. The AgTech category winner of
FoodBytes! Pitch 2020, SWAN Systems plans on expanding from Australia
into the U.S. in 2021. Market traction to date includes 160 active accounts,
such as the Almond Board of Australia and Pernod Ricard.
2021 INNOVATION TRENDS 9II. IMPROVED RESOURCE MANAGEMENT
Waste Reduction
According to the UN’s Food and Agricultural Organization, 1.3 billion tons of food are wasted or lost
every year, costing the global economy more than $940 billion annually. The WWF claims that if we
can prevent wasted food from rotting in landfill and creating methane, we could reduce 11 percent of
all the greenhouse gas emissions that come from the food system.
Opportunities to stop waste exist across the entire supply chain, starting at farms and distribution
centers and extending to retailers and consumer homes. For both environmental and business
efficiency reasons, companies are setting ambitious waste reduction goals.
Leading natural foods distributor, UNFI, has committed to reducing 50 percent of food waste within
its distribution centers by 2025 and achieving zero waste to landfill by 2030. Yet, consumers will be
challenged to do their part to reduce waste as well – even during a pandemic. The Rabobank 2020
Food Waste Report showed that the COVID-19 pandemic derailed Australia’s consumer progress in
reducing food waste, leading to a spike in the amount of food Aussie households are throwing out,
reversing positive inroads to reducing food waste before the pandemic hit.
STARTUPS TO WATCH:
Uses a cold plasma technology treatment to protect food from common
pathogens that lead to waste. This pasteurization method is effective
without the use of heat and without any residue. Early commercial partners
that see seed coating and supply chain food safety potential through
NanoGuard’s disruptive technology include Bungee, Cargill and Monsanto.
Connects farmers to consumers by delivering discounted grocery items
that would otherwise go to waste. Recognized with the 2020 Rabobank
Award for Emerging Leadership in Innovation for addressing issues in the
food and agribusiness space in a novel way, Imperfect scaled nationally
in early 2020. The triple bottom line-focused online grocery leader
announced a $95M Series D fundraise following triple digit growth in
2020 with a revenue run rate of $500M+. The startup’s success during the
pandemic exemplifies the consumer-driven confluence of convenience
and sustainability.
2021 INNOVATION TRENDS 10II. IMPROVED RESOURCE MANAGEMENT
Sustainable Packaging
Progress in reducing single-use packaging also slowed due to pandemic concerns as
companies halted “bring your own cup” initiatives in the interest of public health. We
also see a greater need for recyclable options in retail and for direct-to-consumer
delivery options as more consumers continue to eat at home.
In December 2020, FoodBytes! Pitch member PepsiCo committed to 100 percent
recycled plastic beverage bottles for its Pepsi brand in nine EU Markets by 2022, which
it states will lower carbon emissions by 40 percent as compared to standard bottles.
The company’s efforts to help build a more sustainable and regenerative global food
system, as well as its leadership in improving planetary health, were recognized with
the Rabobank Award for Excellence in Food & Ag Leadership in 2020.
According to RaboResearch Associate Analyst for Supply Chains Xinnan Li, the circular
economy and collaboration with retail will be key to corporate success. In addition,
design innovations, alternative materials and cost-effective reusable business models
will be key areas of innovation in 2021.
STARTUPS TO WATCH:
Planeteer manufactures edible cutlery, reducing not only environmental
hazards, but also the carbon footprint of plastic production and incineration
(which is predicted to contribute almost 50 times the emissions of coal
power plants in the US between now and 2050). Planeteer is partnering
with five large dessert chains to roll out its cutlery into foodservice, as it
continues to expand its product offering.
Upcycles milk proteins into plastic and cotton-like fibers to be used as more
sustainable fabric and packaging. Interest in the technology is coming from
customers across the US, Europe and Japan, with large companies like Dole
looking into packaging film and Arla looking to repurpose cheese waste.
2021 INNOVATION TRENDS 113
The Next Frontier
of Nutrition
As consumer expectations for food and beverage products expand
beyond taste to include health benefits and enhanced performance,
technology will become a growing part of the product development
equation. The almost medicinal demands from consumers around
hot topics like gut health and immunity require new ingredients and
a better understanding of foods’ nutritional value.
As discussed in a RaboResearch “Post-Corona Musings” podcast,
sustainability and health will continue to increase as top drivers
of consumer purchasing behavior, alongside price, taste and
convenience. Consumers are more and more aware of the impact
food has on their health, and their expectations around what
food should be providing from a benefits perspective is setting an
increasingly higher bar.
2021 INNOVATION TRENDS 12III. THE NEXT FRONTIER OF NUTRITION
Re-evaluating Food as Medicine
As the list of desired benefits from food grows, the industry must leverage technology
to deliver – whether that means an entirely new ingredient or rethinking processing
to allow for better product capabilities. While we expect continued strong demand for
products that support gut health, we also predict a growing emergence of products
and technologies that offer aging support – as well as a range of wellness issues like
mood, immunity and energy.
The looming global issue of the aging population is forcing food formulators to think
more carefully about such issues as bone density, muscle waste and brain support. By
2050, one in six people in the world will be over age 65 (16 percent), up from one in
11 in 2019 (9 percent). There is a significant opportunity in the category for products
that address the health needs of this growing population, who will look to reduce their
medical bills by supplementing with foods that can deliver health benefits.
Beyond aging support, interest in immune fortification and nutrient-dense foods are
attracting consumer attention. According to research by FoodBytes! Pitch member
ADM, one of the top trends that will drive food this year is a “proactive approach to
nourishing the body and mind.”
STARTUPS TO WATCH:
Makes a plant-based power blend that slows down the digestion of carbohydrates, with its first
product geared toward white rice. In January 2020, the company received investment led by
Thai Union Group, an indicator that the world’s largest seafood company is looking at ways to
provide their consumers with more ways to manage their health through food. Alchemy plans to
use the funding to scale up production and expand into new markets, focusing on China.
Flagship product Encala focuses on plant-based fats and lipids to address nutrient
malabsorption in Cystic Fibrosis patients. The food tech category winner of FoodBytes! Pitch
2020, Envara has tested and validated Encala, most notably through a National Institutes of
Health sponsored clinical study. Both the team’s background and the company’s mission
converge food innovation, biotech and clinical nutrition.
2021 INNOVATION TRENDS 13III. THE NEXT FRONTIER OF NUTRITION
Beyond Plant-Based Protein
As demand for products with the “plant-based” label continues to grow, new
entrants are exploring solutions for harnessing total nutrition and benefits
from plants. While plant-based burgers led the way, consumers are now
seeking out the plant-based label across all kinds of products, opening up a
sizable opportunity in new aisles. The dialogue also is moving beyond protein,
and we predict that plant-based players will look to leverage other nutrient
properties of plants, like fiber. It is clear, however, that products must continue
to improve across taste, texture and performance metrics to continue to drive
consumer trial and retention.
STARTUPS TO WATCH:
Improves the functionality of plant-based cheese, with a vegan product that
truly melts on pizza. The company’s cheese is made from an allergen-friendly
blend of white beans, enabling customers to enjoy a healthy alternative to
dairy-based cheese. The team has collective experience across leading food
corporates and investors, including PepsiCo, Compass Group and P&G.
Creates a liquid egg replacement from lentils that has zero cholesterol, is
lower in fat and in calories, and free from antibiotics, enabling consumers to
get vitamin D and branched-chain amino acids, which benefit muscle growth.
Leveraging recent investment from Big Idea Ventures and VegInvest, Evo plans
to launch its liquid egg DTC in the Indian market this year.
Offers animal-free meat using proprietary 3D printing technology, meat digital
modeling, and advanced food formulations. FoodBytes! London 2019 winner
Redefine Meat produces the appearance, texture, and flavor of whole muscle meat.
2021 INNOVATION TRENDS 14III. THE NEXT FRONTIER OF NUTRITION
Biotech Meets Foods
Food biotechnology is not new, but consumer acceptance has increased and
there will likely be more applications as consumers demand products that are
more sustainable and healthier. Solutions gleaned from biotech, including
gene and genome editing, fermentation and cellular agriculture have
emerged as exciting (and investment-worthy) opportunities.
CRISPR applications in food and agriculture saw exciting developments
during 2020, such as the birth of Cosmo at UC-Davis, pigs that are “pandemic
proof,” and the increasing interest in crop editing, evidenced by corporate
partnerships. With the pending regulatory oversight of gene editing in
animals moving from the FDA to US Department of Agriculture, more lenient
rules are anticipated. The benefits of CRISPR applications are exciting –
improved yields, enhanced resistance to disease and elongated shelf life.
Another biotech application that should result in broader commercialization
is fermentation processes. Particularly within the alternative protein and
dairy sectors, fermentation has been touted as a solution for existing
product issues like processing and texture. Fermentation will be able to
efficiently deliver more high protein foods at scale – for both human and
animal consumption. As early success indicates, mycelium-based products
are enjoying success in the market as taste enhancers and sweeteners, as is
evidenced by industry-leading FoodBytes! startup alum and Rabobank client
MycoTechnology. The next wave will likely move to take on animal protein
imitation cuts that deliver on clean label demand with short ingredient lists
and the ability to mimic animal protein textures.
Cellular agriculture represents yet another biotech application that
experienced significant progress to broad commercialization during 2020.
The regulatory approval Singapore granted in December 2020 for the
commercial sale of JUST’s cellular chicken nuggets was an important signal
for cellular agriculture as a whole. While challenges remain around achieving
scale, solution-based companies are emerging to help with issues like growth
serum and scaffolding. Hybrid products (plant-based protein and cultivated
fat) will likely lead the way for cellular products in the near term. Other
emerging products like cellular breast milk and dairy products will also gain
steam in 2021.
2021 INNOVATION TRENDS 15III. THE NEXT FRONTIER OF NUTRITION
Biotech Meets Foods
STARTUPS TO WATCH:
Operates a biotech platform producing natural food colorants through a unique fermentation
process. The company’s natural colorants enable food manufacturers to produce clean label
products while maintaining desirable attributes for the consumer.
Creates functional ingredients from spirulina microalgae as a replacement for petroleum and
animal compounds for healthier, more sustainable food. Spira’s two main products are a blue
colorant and a protein compound derived through CRISPR genetic engineering to enhance the
natural attributes of spirulina.
Develops revolutionary enzyme immobilization technologies. Its platform improves the activity,
stability, and delivery of any enzyme in order to provide more nutritious ingredients, cheaper
medicines, and greater food security. After a successful collaboration with Zymtronix through
FoodBytes! Pilot in 2019, corporate member Tate & Lyle made an investment in its cutting edge
enzyme immobilization platform, which enabled the startup to scale its production.
Develops lab-grown pork made using cell culture techniques, enabling people access to eco-
friendly, healthy and animal-friendly meat products. The company gained significant media attention
after it revealed its lab-grown pork belly in July 2020.
Aims to provide its clients a platform for scaling up cellular agriculture through its novel cell
coating and continuous culturing system. According to the company, cells are currently grown
in batches, which places a limit on the number of cells that can be created. Cellular Revolution’s
continuous technology will enable its clients to scale to the level required for commercialization. A
spin-out from Newcastle University with strong academic and scientific roots, the company is now
focusing on further product development and commercialization.
2021 INNOVATION TRENDS 16What’s Shaping the FoodBytes! Perspective
Rabobank built the FoodBytes! innovation platform as an engine for ongoing
collaboration between large food and agriculture companies, startups and
investors working towards a more sustainable food system.
FoodBytes! is taking a two-pronged approach to industry change:
discovering and supporting startup innovation; and helping large food and
agriculture companies embed and drive innovation across their organizations
through connections to startups. In today’s virtual world, the FoodBytes!
network is able to tap into global solutions and bring them to different
regions to support our clients and advance the industry.
For more information,
visit foodbytesworld.com
Disclaimer: Rabobank has not conducted due diligence examinations and
Rabobank is not promoting investment in any of the companies mentioned by
including them in this trend report.
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