From kosher shellfish to ‘enabling’ ingredients: What is Israel looking for in food tech?

By Flora Southey

- Last updated on GMT

Which technology areas do members of Israel’s food tech ecosystem highlight as strong growth opportunities? GettyImages/LightfieldStudios
Which technology areas do members of Israel’s food tech ecosystem highlight as strong growth opportunities? GettyImages/LightfieldStudios

Related tags Israel Food tech Investment

In Israel, interest in food tech ranges from alternative proteins to food waste, vertical farming to delivery robots. Which areas have ecosystem majors pinpointed as particularly strong growth opportunities?

“It is no surprise to anyone that chief among humanity’s problems right now is a global climate disaster of enormous proportions,”​ Israel’s President Isaac Herzog addressed the OurCrowd Global Investor Summit in Jerusalem last week.

“That is why I have made work on climate change a top priority for my presidency…I believe that working with partners old and new, we can transform the Middle East into a net zero region, a global hub of sustainable solutions in food, water and health.”

Tomer Foltyn 2023_02_15 Ourcrowd Summit 019
President Isaac Herzog is making making work on climate change a 'top priority' in Israel. Image credit: Tomer Foltyn

Israel is a trailblazer in developing technology aimed at combatting the climate crisis. In food tech alone, the nation attracted more funding in alternative proteins last year than any other, with the exception for the US. More money has been invested in Israel’s food tech scene than the entire European content – an area 800 times the size.

It’s impossible to tackle climate change without addressing unsustainable food systems, suggested Noga Sela Shalev, CEO of northern Israeli food tech incubator Fresh Start. The incubator – one quarter of which is owned by OurCrowd – has invested in 10 companies over the last three years and aims to invest in 30 more over the next five.

“Agri-food is responsible for almost 30% of global greenhouse gas emissions. It has to do with waste, animal farming, distribution, production, all of these are huge contributors,” ​she told the OurCrowd summit. 

“If we want to treat global warming, there is no way to do that if we don’t treat – and disrupt – the food chain as we know it today.”

In the broad realm of food tech, Israel is particularly interested in a handful of technologies, ranging from alternative proteins, food waste, kitchen tech and vertical farming through to future food forms, delivery robots, and healthier food.

Which technology areas within these segments do members of Israel’s food tech ecosystem highlight as strong growth opportunities? FoodNavigator investigates.

Seafood, but make it kosher

Within the next-gen alternative proteins domain lies three dominant technologies: plant-based proteins, fermented proteins, and cultivated proteins.   

To date, these technologies have largely been leveraged to develop and meat and dairy alternatives. The seafood contingency remains small in comparison, but this is a category Dean Berger, Funds Associate at OurCrowd, sees opportunity for its for soon-to-launch FoodTech Fund (OC FoodTech).

The $30m (€28.14m) fund is approaching its first close of $10m in commitments, after which it will start investing. OurCrowd already has close to 40 food tech investments under its belt, but these were conducted under a deal-by-deal – as opposed to dedicated fund – format, Berger explained.

“We see a large upside in the alternative seafood area, especially for religious Jewish people,” ​he told FoodNavigator at the OurCrowd summit. Under Kosher rules, land animals must have cloven (split) hooves and ‘chew their cud’. Seafood must have fins and scales, meaning that shellfish is forbidden.

If shellfish, such as scallops, are cultivated from cells, does that make them kosher? “That’s yet to be seen,” ​said Berger, but he believes cell-based seafood will ‘follow the same pattern’ as cell-based meat.

scallops Kazuko Kimizuka
Will cultivated shellfish be deemed kosher? GettyImages/Kazuko Kimizuka

Earlier this year, Israel’s chief rabbi gave a kosher stamp of approach to Israeli-based Aleph Farms’ cultivated steak product because it originates from a lab and not the animal proper.

If cultivated seafood does follow suit, Berger predicts a ‘huge opportunity’ to feed the ‘mass market’ of people who wouldn’t otherwise consume shellfish, or eat meat and dairy in the same sitting.

“Think of the opportunities for animal-free pork for Muslims as well. There are billions of people [who don’t currently consume pork globally], this is a new market to feed.”

‘Enabling technologies’ for alt protein 2.0

But food tech investment is not all about finding finished products for the end consumer. Investors have their eyes peeled for ‘enabling’ technologies or ingredients that will propel the alt protein category forward.

At Fresh Start, focus on alternative protein take a ‘very specific’ approach, Sela Shalev explained. “We’re looking at enabling technologies or enabling ingredients that can bring us to the next level. This has been a very crowded pace in the last few years, and we’re ready for the next generation in many ways.”

‘Enabling’ technologies could mean those that promote or advance the technologies currently on the market, or those that help move alternative protein products scalable and price parity stages. “Even taste and texture wise, we still see a lot of gaps,” ​revealed the Fresh Start CEO. “We still see a lot of gaps in nutrition.

“These are all whitespaces for us and we are looking for solutions that will not necessarily bring the best new product [alone], but will rather be the technology that will enable more and more products.”

burger Hinterhaus Productions
Consumers don’t want to compromise on taste, cooking behaviour, or texture in plant-based. GettyImages/Hinterhaus Productions

OurCrowd’s Berger also suggested industry is ready for the next generation in alternative protein innovation. Consumers don’t want to compromise on taste, cooking behaviour, or texture, he stressed. “That’s another important trend.”

Making food work for you (yes, you)

Another whitespace in food tech innovation, according to Fresh Start’s Sela Shalev, lies in functional food. The gold standard in this space is obviously personalised nutrition, she explained during a press briefing. “But we have a long way to go before we have all the information and data we need for [personalised nutrition].”

In the meantime, Fresh Start is looking for more ‘clustered solutions’. This means identifying ingredients with functional benefits, and ensuring these ingredients are ‘as accessible as possible’ to the mass market.

“We want to move away from medicines to food supplements and all the way to functional foods.”

Making food healthier is not all about incorporating functional ingredients, however. It’s also important that problem nutrients – those that when consumed in excess, have implications for public health – are reduced in mainstream food and beverage products.

Sugar reduction, for example, is a major focus for OurCrowd and Fresh Start. The investor already has sugar reduction-focused start-ups in its portfolio, and Berger suggested sugar reduction will remain a focus in OC FoodTech.

“Diabetes is a global pandemic. Here in Israel, the numbers are skyrocketing. It’s a disease we need to fight and sugar reduction is the way to solve it.”

In a similar vein to alternative protein products, consumers are unwilling to compromise on taste, suggested Berger, explaining OurCrowd’s motivation behind investing in sugar-reduction technology that maintains the taste, texture and mouthfeel of sugar.

The ‘right’ business model

Whatever the offering, the technology must work. But it’s not all about the tech, suggested OurCrowd’s Berger. “The business model is an important element. It needs to be B2B with the right partners.”

B2B partnerships in next gen alternative protein are perhaps best seen in the precision fermentation-derived dairy protein space, within which start-ups such as Perfect Day and Remilk have inked collaborations with major industry players. Most recently, Remilk supplied its precision fermentation-derived whey protein to General Mills for the development of a co-branded cream cheese product. “These types of collaborations are key to their success,” ​Berger told FoodNavigator.

cream cheese Sinan Kocaslan
Remilk is supplying precision fermentation-derived whey protein to General Mills to make a cream cheese product. GettyImages/Sinan Kocaslan

Commercial partnerships such as the Remilk/General Mills deal are now possible – at least in the US – because Remilk obtained self-affirmed GRAS status in accordance with the US FDA requirements in June last year.

OurCrowd believes companies like Remilk, which is now on the market, will ‘open the door’ to younger start-ups working in this space.

“These are the best years for new companies to be in this field. The technology has been there for a couple of years, but we are now at an inflexion point where we will start to see real products in the supermarket.”

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