When you think of investments in food companies, it is not thought of as cutting edge, risky and experimental. It is thought of almost like commodity investments. There has been little change in the basic ways that food is produced for the last thousand years.
There has of course been changes in the intensity and process, but the reality is that meat still comes from animals, plants are grown from the land and dairy is produced from various cattle.
So it is surprising to hear that some of the world’s tech elite have started to heavily invest in food startups in the last 12 months.
This has included support from Bill Gates, Marc Benioff and Eduardo Saverin, to name just a few.
In fact Hampton Creek, one of the new crop of food startups, had over $90 million invested in it in 2014 alone.
So why are there all of these huge tech giants investing in food companies?
The answer quite simply is that it is one of the only industries today that is needed to grow aggressively over the next few decades.
This is because the world population is predicted to increase dramatically in the next 50 years to close to 9 billion people, a 1.8 billion increase in the number of people on earth today. People may want the latest phone or social media tool, but they need food, so supplying this is a must for both investors and society in general.
The reason that companies like Hampton Creek, Soylent and AgLocal have received so much funding is because they have shunned the traditional way of producing food, instead looking at cheaper, more environmentally friendly and less intensive practices.
One of the main byproducts of this is that they have rejected the idea that meat can only be made from animals and have instead looked at creating the same, if not better, flavours and textures through the use of plant proteins.
This has been done by companies such as Beyond Meat, who have been trying to perfect a burger made using no meat. Their initial experiment was described as tasting like ‘Rancid Polenta’ but after several changes has now been labelled ‘better than a turkey burger’, which is certainly an improvement.
This comes from breaking down what has made meat so popular in terms of taste and texture, then either recreate or enhance these elements to create the perfect replica.
It is different to the kind of lab grown meats that have been commonly mentioned in the past, simply because that utilizes meat cells to create more. This new type of company dispenses with the need for animals in the creation process at all. The reason for this is not necessarily the ethics behind the treatment of these animals (although this undoubtedly plays a part) but instead because around 30% of the World’s ice free landmass is covered by livestock and this huge number of animals produces over 14% of all greenhouse gases.
In addition to this, they also need feeding to create a decent amount of meat, for instance for every 1kg of useable beef it requires 10kg of feed. Simply taking the animal out of the equation means that the spaces used to create this feed can be used to create food direct for human consumption.
The tech community is justifiably excited about the prospect and have given their full backing to companies like these. To use a tired cliché, they have put their money where their mouth is.