Rethinking the global food system: S2G Ventures highlights trends impacting the future of food
In its second annual report on the future of food published today, S2G Ventures explores how the food system in 2023 is adopting more sustainable practices and leveraging new technology to improve plant-based and alternative protein offerings, including using AI to identify and develop healthier novel ingredients and other technology to scale cell cultivation.
Adoption of automation, increased digitization and AI along with other technological advancements at the farm level also is essential for meeting consumer demand and overcoming labor challenges, the report argues.
Responding to plant-based protein criticism with novel ingredients
Today, consumers have become much more critical of plant-based proteins, their ingredient lists, and their "questionable nutritional content," S2G Ventures said. Two-thirds of consumers "choose foods made from clean ingredients" with many people defining clean as "not artificial or synthetic," according to International Food Information Council data shared in the report. Similarly, fewer consumers believe plant-based products have an environmental benefit, dropping 7% over the first three quarters, according to Brightfield Group data.
To address these challenges, "it is time for another evolution in alternative protein,” said S2G Ventures. This will include delivering “texture and the sensory experience while improving nutrition, removing undesirable additives and ingredients, and reducing costs," S2G Ventures said. Additionally, alternative proteins need to provide a “compelling ‘better-for-you and the planet’ argument,” the company said.
“Alternative proteins are still in the iPod phase – not yet the iPhone phase. There [is] still tremendous progress to be had in this sector through the introduction of novel ingredients,” said Sanjeev Krishnan, managing director of S2G Ventures.
The next evolution of plant-based protein also will include developing novel ingredients, leveraging AI platforms in the process, S2G Ventures said.
For instance, Mars entered a multi-year collaboration with AI food research company PIPA to find novel plant-based ingredients, while ICL Food Specialties has teamed up with AI food tech company Protera Biosciences to create protein ingredients with specific functionality for food manufacturers, the company shared.
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Cultivated meats, seafoods set to expand
As the plant-based protein market is responding to its own challenges, the global demand for its animal-based counterparts is set to increase in the future, which brings with it its own environmental challenges. The World Economic Forum projected that the global demand for meat will double in 2050, just as the seafood market is to do the same, according to research shared in Nature Communications.
One way food technology and companies are responding to this demand is by creating lab-grown meats and seafoods, which "are biologically identical to animal products," S2G Ventures said. Cells are extracted from animals and then fed amino acids, fats, sugars, and vitamins to mature and multiply in tanks, the company explained.
And companies are trying to tackle different aspects of animal-based protein. For instance, Matrix F.T. creates 3-D nanofibers, microcarriers, and scaffolds that arrange cells to imitate the composition of animal meats. On the seafood side, "the muscle structure for seafood products is more clear-cut than other animal proteins," which makes it more "straightforward to grow," S2G Ventures noted.
However, cell-grown meat and seafood companies are facing several challenges, including access to capital and scalability challenges, S2G Ventures said.
While the first wave of cultivated protein companies received funding, these "companies will have to demonstrate a consistent, quality product and scale production through a viable business model to achieve a step up in valuations," the company added.
Most brands will launch in restaurants first to get consumers used to their products while focusing on marketing and educational campaigns.
“The technology for protein cultivation is ready for commercialization, and it continues to improve. To bring a product to market, companies need to focus on reducing the cost of production, brand-building, labeling, consumer education, and improving supply chain and inputs to support a scalable industry," said Larsen Mettler, managing director at S2G Ventures.
Farming goes digital to support ESG
Technological advancements also are crucial for agricultural producers to overcome labor challenges, impacting productivity and revenue, with many farmers increasingly leaning on automation and digitization, S2G Ventures said.
Farmers are leveraging automation through agricultural robots that combine AI, chemistry, computer vision, navigation, and robotics to collect and process data on farming, S2G Ventures explained. Weeding robots are being deployed on farms, but "soft automation" and "harvesting whole foods" have been challenging. Farmers also are using "increased production and adoption of smaller, cheaper machines with minimal soil impact that can continuously run up and down the field collecting data," the company noted.
Technology is also becoming an important part of tracking ESG goals. For instance, as the global demand for animal-based proteins, seafood companies will have to use data to find ways to lessen their environmental impact, including overfishing in some cases, while meat producers will have to address resource depletion, land degradation, and greenhouse-gas emissions.
With the increased availability of data and analytics into sustainable practices, companies are looking to "support better financial and environmental outcomes for farmers," while consumer demands for environmentally friendly products and supply chain improvements are boosting investment in digitization, S2G Ventures said.
"Measurement and analytical tools are becoming more integrated and better equipped to quantify the cross-value chain benefits of climate-smart agriculture. As digital technologies scale to more farms, they will provide new insights and opportunities to optimize environmental and economic outcomes for all stakeholders," said Cristina Rohr, managing director at S2G Ventures.
Supply chains optimize with the help of AI, IoT, and ML
Optimization technology can also help reduce costs, emissions, and risks of today's global supply chain, S2G Ventures said. Cognitive computing software can optimize demand planning, load planning, inbound and outing logistics, and price optimization. IoT technology can improve port efficiencies, while programs to run digital twins can provide opportunities for companies to optimize.
However, not only is the global supply chain complex, but it also is facing several changes from the war in Ukraine to trade restrictions, creating an opportunity for local agriculture product models in a forms like cellular agriculture, controlled environment agriculture, and land-based aquaculture systems. These systems use automation, data science, and resource recycling to optimize the use of resources, but they "are currently cost-sensitive and energy-intensive, [though] great strides have been made in the last few years to improve," S2G Ventures said.
“Increased data collection across the supply chain, paired with advances in AI and ML, are enabling optimization solutions that will substantially lessen the environmental externalities of transportation while creating efficiencies and cost savings," said Kate Danaher, managing director at S2G Ventures.