Technology is not only dramatically reshaping how we grow, process and even deliver food, it has also spawned many companies who are building whole new businesses around what has become known as “farm and food tech.” The rapid rise of these ventures and the startling amount of investment they are now receiving (over $2 billion in the first half of this year alone according to one recent report) is moving the process of making and consuming food into new territory. But this rapid growth has also given rise to fears among some that a shakeout in the food tech space may be cooking.
One food tech founder who prefers the optimistic view is Jason Demant. His company – Bento – delivers freshly-prepared Asian food to a growing base of customers in San Francisco. “This is a massive, massive market,” says Demant, who points out that no one is claiming there are too many restaurants in any large city. “I think this space is very uncrowded right now and it’s a good time for companies to get into this space.”
Demant’s model is based around a delivery system that combines mobile technology with a fleet of drivers and delivery cars spread out around the city. He claims that Bento can deliver a “healthy and delicious,” pre-cooked meal to approximately half of San Francisco within 15 minutes of an order being placed.
Another food tech startup company in the meal delivery space is Thistle who, like Bento, believes there is a market demand for nutritious food. They deliver ready-to-eat raw meals using ingredients from local farms and cold-pressed juices, while allowing customers to manage delivery schedules and plan their healthy intake. They are currently serving a large portion of the Bay Area.
“Food as a category has been slow to incorporate new technology,” says Ashwin Cheriyan, Thistle’s co-founder and CEO. “We wanted to be among the first to build the next generation of consumer brands in the healthy food space.”
While Cheriyan believes that “there is room for many players to grow and thrive,” he does feel that “we will likely see some shakeout.”
One tech executive who is more certain that consolidation in his chosen field will be coming is Nikhil Arora of the organic food company Back to the Roots. “We absolutely believe that a shakeout is in the works,” says Arora. “What we have seen is more and more food that looks like it comes from a science-fiction movie than from a farm.”
Arora says his company is seeking to bring food back to its simplest ingredients by offering “ready-to-grow” and “ready-to-eat” product lines that include a “Mushroom Mini Farm” and “Organic Stoneground Flakes.” As he describes it, “We are also believers in slow tech – we grow mushrooms out of boxes, herbs out of cans, and make cereal out of just three ingredients.”
The movement of technology into farming is an important, emerging trend. One company – NoukaTech – has an ambitious plan to capitalize on that opportunity through a model that relies on drones and ground robotic sensors to deliver data analytics and decision making tools for agriculture.
“My interest is in bringing unique technology solutions that have a major impact on old line industry,” says Regina Gindin, NoukaTech’s co-founder. “There has been no significant innovation in data analytics and decision making tools in the specialty crop industry in the last three decades.”
Gindin believes that, unlike the consumer-driven food tech space, the venture investment community is just starting to pay attention to her sector which would place her at the beginning of an industry cycle and thus less likely to encounter a shakeout in the near future.
Another agriculture-focused startup is Tiny Farms, who is developing technology for the large scale production of insects to meet the growing demand for consumer products that are made from their protein. According to Daniel Imrie-Situnayake, Tiny Farms’co-founder, by making advances in the farming of insects, he hopes to have a major impact of the sustainability of our food system and nutrition.
While Imrie-Situnayake agrees with Gindin that his agriculture-based space “is just starting to take off,” he also foresees plenty of growth in his sector before anyone worries about a shakeout. “It has the potential to support a multi-billion dollar market,” he believes.
The food tech industry has also proven to be enormously capable of generating the kind of niche interest that can be more easily facilitated on the Internet. Claude Burns has built his new business (Noble Brewer) into a subscription craft beer service that provides homebrewers (amateur beer makers) an easier way to overcome regulatory obstacles so they can distribute their product to eager consumers.
“There’s a huge community of homebrewers who don’t have a platform to share their beer,” explains Burns. “If we can connect (homebrewers and craft beer fans) through technology, there’s amazing possibilities.”
Another example of the specialized nature of food tech can be found in Cozymeal, a platform for connecting users with professional chefs for cooking classes or private dining experiences. According to Cozymeal’s founder and CEO, Samad Nasserian, his company is growing fast (they are currently available in San Francisco and Los Angeles with plans to expand to other cities soon) and he believes that he can capitalize on consumer disenchantment with the experience of dining out.
“”I had been often frustrated by restaurant experiences where it’s loud and noisy inside, you hardly ever get to see the chef and how the food is prepared, and the quality of the food is only mediocre,” says Nasserian.
The seemingly explosive growth of the food tech sector in the past eighteen months is perhaps fueled by the focus on a subject that everyone can relate to and needs. “Food is the most personal thing there is,” says Arora of Back to the Roots. “It’s what we put into our bodies three times a day, yet we are so disconnected from it.” Whether there is a shakeout or not, if a growing number of farm and food tech startups have anything to say about it, that’s likely to change in a big way.