Foodtech startups that are bringing the food of the future from the lab to the plate

At the start of the year, BBVA Spark identified foodtech entrepreneurship (technology applied to food) as one of the industry trends that will shape 2023. And it wasn’t alone: other prestigious publications like Forbes also picked up on the potential that this area of innovation has to tackle major obstacles (like food shortages and deforestation) on the road to the 2030 Agenda.

With forecasts predicting that 2 billion people could face hunger by 2050 or figures suggesting that almost 90% of global deforestation is caused by agriculture and livestock farming, changing our food production model is now essential. Innovation, one of the main drivers of sustainable development, is working hand in hand with entrepreneurship to push things forward and lead the change.

One field in particular stands out among the many cutting-edge technologies applied to the agri-food sector is alternative food production. From plant-based options to synthetic meat, to underutilized protein sources such as insects, an increasing number of startups are offering solutions to put innovation directly into our mouths.

“Foodtech is a very broad field, but ultimately, we’re all seeking to make better food. Whether it’s more affordable or more sustainable, lasts longer, is nutritionally more balanced or helps address consumer issues”, says Santiago Aliaga, CEO of  Zyrcular Foods.

Innovations that spice up a growing sector

The global foodtech market has the potential to reach a value of 342.52 billion dollars by 2027. In Spain, investments in the foodtech sector totalled 268 million in 2022. The willingness of consumers who are increasingly more open to trying innovative food products if they have a positive impact on the environment and animal welfare represents a business opportunity for a large number of disruptive startups and solutions.

The sector spans multiple applications, with new consumption and distribution models based on mobile technology and more efficient supply chains driven by robotics and artificial intelligence (AI). But the solutions focused on improving food production are the ones that hold the most revolutionary potential.

Cell culture technology, for example, would make it possible to produce real meat in a lab using animal cells. Although it’s now only legal to sell in Singapore, the US FDA (Food and Drug Administration) completed the first pre-market consultation on a meat solution for human consumption produced using this technology at the end of 2022. The revenue forecast for this market is 60.27 billion dollars by 2030.

Another innovation in the biotech field that is radically transforming the way we produce food is precision fermentation, which uses microorganisms (yeasts, fungi, microalgae and bacteria), which are usually genetically modified, to produce proteins like the ones found in meat, fish, seafood, dairy products, eggs, etc. This is a sector that could hit a value of 37.35 billion dollars by 2030.

New technologies, the secret ingredient of these startups

Some 34% of Spanish foodtech startups are focused on food production and transformation, the category under which most of these companies fall. They include Biotech Foods, the first Spanish company producing cultured meat; and plant-based solutions that have carved a major niche in the market, like Heura Foods. “The plant-based category of meat analogues is still immature, and uses innovation as a growth driver”, explains Pep Sala, Iberia Country Manager at Heura Foods. “By leveraging science and technology, we are finding new ways to unlock consumer barriers, make the sector grow and redefine the food system.”

The company, which closed a €20 million round in 2022 and increased its turnover by 80% that same year, recently launched Good Rebel Tech, “a platform that will produce macro- and micronutrient-dense foods in a sustainable way”, highlights Sala. “Our mission is to accelerate the change towards a world where our daily eating habits have a positive impact on humans, the planet and animals.”

Other startups like Innomy Labs offer alternative proteins made from mushrooms, while companies like Entomo Agroindustrial and Insekt Label Biotech are studying the potential of insects. Zyrcular Foods, on the other hand, is a company that works on the production, sale and distribution of alternative proteins. The Catalan startup, which signed a sustainable funding agreement with BBVA, is currently working with plant proteins and mycoproteins (“fungus protein”) and supports research into promising technologies such as fermentation and cell culture.

Within the field of biomass fermentation is the proposal from MOA Foodtech, a Navarre-based startup and winner of the FoodTech Startup Forum 2022. The company harnesses food industry by-products to create new foods through a fermentation process that uses microorganisms to transform waste into highly nutritional protein ingredients.

“The current agri-food chain is unsustainable: 30% of greenhouse gases come from the agri-food industry and 70% of that carbon footprint is from producing ingredients. That’s why we wanted to look for 100% sustainable ingredients for supplying industries”, explains Susana Sánchez, co-founder of MOA Foodtech. Their challenge is now to reach an economy of scale. “Ultimately, what we want is to create low-cost ingredients so that they reach as many people as possible and have a greater impact,” she says. “One of the biggest bottlenecks in our sector is the lack of sufficiently large or affordable production facilities for the agri-food industry”.

Meanwhile, bioprinting (that is, the 3D printing of biological materials) is the sector on which startups like Cocuus are focusing its efforts. This company develops industrial solutions to produce ‘mimetic food’, food analogues of cell-based vegetable or animal protein using robotics and 2D/3D laser printing.

What sets it apart, explains Patxi Larumbe, the company’s sales director, is its production capacity at the industrial level. “Any technology that does in ten minutes what nature does in ten years is going to solve a problem. That’s where the potential to help with food crises or promote sustainability lies”, he explains. “Solutions like Cocuus can supplement or enhance the food sector; we want to do what farmers can’t”.

From lab to plate: a road not yet taken

Following a few years of boom, the alternative protein industry kicked off 2023 with a significant readjustment in value. “The sector was probably a bit inflated in terms of expectations”, notes Zyrcular Foods’ Santiago Aliaga. “The valuations of many companies took a downturn because there was a correction in the market, and while there is still investor energy it’s more selective, maximizing the principle of investing in solutions that are applicable to different companies, and not just one brand.”

In Spain, one of the challenges that hinders the growth of foodtech entrepreneurship is the lack of sector maturity, according to Patxi Larumbe, of Cocuus. “There are good ideas, but not many good entrepreneurs. To take a company forward, you not only have to know how to run an enzymatic fermentation process, but also how to relate to banks, investors, know a little something about marketing…”, he explains. “There’s a lot of ingenuity, but not a lot of experience.”

Regulation can also play a major role in boosting the sector, says Susana Sánchez of MOA Foodtech. “Food production requires exhaustive controls, but it’s true that regulation, particularly European regulation, always lags a little behind the innovations offered by startups and research centres”, she says.

Santiago Aliaga points out an initiative that could provide a definitive boost to the sector: the creation of a foodtech sandbox like the one that already exists in fintech. “Having a controlled space where the entire food industry can come together to perform industrial or semi-industrial tests would mitigate the economic risks of starting up in the sector”, he argues.

But one of the last frontiers of foodtech may be the end user’s mindset and buying habits. “Education plays a key role. Shoppers need to understand the role that food plays not only in their health, but also in the health of the planet”, says Pep Sala of Heura Foods. “We have to make an effort in communication and outreach, because the consumer doesn’t have enough information to make a decision”, adds Susana Sánchez. From the land to the table via innovation, our way of producing and understanding food is about to change for good.