Where Food and Technology Intersect: A Recipe for Problem Solving and Profit Making
As Silicon Valley disrupted the world with technology innovation beginning in the early ’70s, the greater Bay Area was spawning a parallel revolution in food innovation, creating a movement that would become California Cuisine.
According to Joyce Goldstein in her book Inside the California Food Revolution “California cuisine … grew rapidly. For the most part it was unfamiliar, innovative, and electrifying…” These same words certainly could describe the Moore’s Law progression of the microprocessor.
Fast forward to 2016.
Digital technology has nearly consumed our daily life alongside fears of global warming, hunger, drought, obesity, food allergies, GMOs and processed foods (to name a few). Can the technological ingenuity and culinary creativity for which California and Silicon Valley are known come together to begin solving some of these oppressive issues?
While there is no hard and fast answer to this question, there are some markers we can look at for clues.
Venture Capital Funding of Food Technology Start-ups
The influx of venture capital funding of food tech start-ups in recent years has skyrocketed, indicating there is profit potential in the food and technology space—and hopefully solutions to be found. According to an October 2015 article in Entrepreneur Magazine, “$2.06 billion [was] invested in the first half of 2015. That’s nearly as much as the $2.36 billion total for 2014, which was two and a half times the figure for 2013, according to AgFunder, a reporting and support service for entrepreneurs in the new food sector launched in 2013.” By the end of 2015, agtech investment volumes had a 94% increase over 2014, as reported by AgFunder.
Bitty Foods founder and CEO Megan Miller, whose company sells cricket flour–based products, notes an interesting difference between the pre-revenue idea-driven tech investment model and what she is seeing in the consumer packaged food space: “Investors want to see evidence of strong revenue. We are seeing a shift in valuations and the amount of investment per company but there is still a huge interest in investing in the future of food and food sustainability.”
Dining-on-demand services and sustainable food alternatives are two arenas that have received major venture capital funding and media attention.
Dining-on-Demand: It’s Not Just Takeout Anymore
Dining-on-demand services received a huge influx of investment in 2014 and continued to proliferate throughout 2015 as the offerings go far beyond delivery from local restaurants (Door Dash) and now offer pre-prepped meal kits (Blue Apron), ready-to-eat meals (Sprig) and even in-home chefs (Kitchit and Kitchen Surfing). This burgeoning, if not over-crowded, space continues to evolve during the first quarter of 2016 as evidenced by Uber, the ubiquitous driving app, entering the food delivery game in San Francisco, Chicago, Houston, Los Angeles and Toronto with their new venture UberEats. Meanwhile SpoonRocket, who delivers their own cooked meals, like Sprig, shut its doors.
One successful local example of pre-cooked meal offerings is Munchery, co-founded by Tri Tran and Conrad Chu. Though headquartered in San Francisco, the company now serves New York, Los Angeles and Seattle. They deliver cold prepared meals focused on health and great flavor prepped in their own kitchens. Tran explains, “Munchery’s mission is making real food accessible to everyone.” Because Munchery’s product is a pre-prepared meal and not a restaurant experience, they can control overhead costs by locating their kitchens in less expensive neighborhoods as well as offering chefs more desirable work hours. And of course digital technology enables the whole process to be user-friendly. “Many of our customers order for same-day delivery from the convenience of our mobile apps,” adds Tran.
This arena is seeing new entries all the time. The question is: Who will survive and become profitable and which ventures will become the inevitable victims of industry consolidation and belt tightening by investors? Tran thinks the winners will be “companies that address a broad spectrum of consumers’ diverse food preferences while still offering the best possible product.”
Sustainable Food Products: Pea Protein, Fake Meat and Crickets, Oh My!
Another food tech area receiving healthy investment is sustainable food alternatives such as plant-based protein sources. Impossible Foods of Redwood City is replicating the look, feel, taste and texture of cheese and meat, expecting their first product to launch this year. Beyond Meat of Manhattan Beach in Southern California already sells its meat substitutes in major grocery outlets.
Two crowd-sourced biotech labs in Sunnyvale and Oakland—Counter Culture and Bio Curious—are partnering to develop a non-dairy cheese they hope even dairy eaters will enjoy. They are attempting to create casein, a naturally occurring protein in cheese, out of yeast in hopes of replicating the true texture of dairy-based cheese using plant products.
Hampton Creek of San Francisco is using pea protein and other plant-based sources to create “mayonnaise” and cookie dough without eggs. They don’t use the descriptor “vegan” because they hope to attract any eater looking for great-tasting food; the fact that it’s healthy for our bodies and the environment is even better. Another company garnering perhaps an undue amount of press is Soylent—a liquid diet aimed at eliminating the need to cook or sit around the table to eat.
And, there is the protein-packed bug. One very visible entrant into this market is Bitty Foods based in San Francisco. Bitty harvests the crickets and turns them into flour and ultimately baked goods, baking mixes and a recently launched line of snack chips. They have celebrity chef Tyler Florence as their culinary advisor and an investor.
Who’s buying these cricket-based products? Somewhat surprisingly, Megan Miller, the CEO and founder, says, “Our primary consumers have turned out to be mainstream moms looking for healthy foods for their kids.” As she also stated at a recent panel on Future Foods, nearly 80% of the world consumes bugs in their diet. And a 2013 UN report stated that if edible insects become a part of the mainstream global diet, we could reduce greenhouse gases by 18% and lower the average cost of food globally by 33%. Crickets are a highly sustainable source of protein, healthy fats and micronutrients, requiring only a gallon of water to raise a pound of crickets while it takes 2,000 gallons of water for a pound of cow.
The Food Waste Epidemic
Although dining-on-demand and alternative protein sources are receiving a great deal of media attention and venture capital, many other food tech categories are burgeoning and worthy of our attention. One such area is food waste.
According to the WorldFoodDayUSA.org website, 30–40% of the US food supply is wasted, equaling more than 20 pounds of food per person per month. EndFoodWaste.org and their social media campaign #UglyFruitAndVeg encourages consumers and corporations to eat the produce that might otherwise be thrown out. Imperfect Produce, an Emeryville, California start-up is delivering less than perfect but totally delicious produce direct to consumers’ doorsteps. After a Change.org petition backed by the #UglyFruitandVeg campaign encouraged Whole Foods to embrace ugly produce, Whole Foods is getting on the less-than-perfect produce bandwagon. In March 2016, they signed an agreement with Imperfect Produce to test out their ugly duckling fruits and veggies in select Northern California Whole Foods stores.
Start-ups are cropping up to fight the problem by leveraging the functionality on our smartphones. Silicon Valley and the San Jose Convention Center are tackling the problem with an online marketplace called Waste No Food that allows organizations with extra food to connect to potential recipients, such as a food bank, which can then obtain and use the food quickly, avoiding more wasted food products. Copia (formerly Feeding Forward), a San Francisco–based start-up, is also tackling food waste at the end of the cycle—picking up leftover food from companies and events and delivering it to homeless shelters and other nonprofits, enabling businesses to receive a tax write-off and a reduction in disposal costs for providing meals to communities in need. On the home front, FoodFully is developing an app to help consumers track what’s in their fridge and even suggest recipes to help them use up that food.
Keep an eye out for new ideas in the less glamorous but extremely vital middle of the food system between the farmer and the table. For example, a start-up based in Colorado called The Food Corridor is calling themselves the “AirBnB of commercial kitchen space,” pointing to so many food entrepreneurs who might succeed if only they had a commercial kitchen to use. They are creating a marketplace for the kitchen owners and users to facilitate this transaction. Ashley Colpart, CEO and founder of The Food Corridor, says “It’s really sexy to talk about the ‘seed’ (the farmer) and the “plate” (the chef) but where the real change is going to happen is in the middle of the food system.”
Food and Technology Forums and Conferences
Clearly the funding for food technology enterprises has experienced phenomenal growth, a strong indicator of exciting developments in the food tech sector. Another indicator of the strength of this sector is the events, conferences, forums and organizations cropping up to facilitate conversation, problem solving and collaboration. In 2015, we saw two new food tech conferences: BITE Silicon Valley, held at Levi’s Stadium in Santa Clara, and BonAppetech, held at the Innovation Hangar in San Francisco. It was also the second year of ReThink Food—a conference hosted at the Culinary Institute of America Greystone in Napa jointly run with the MIT Media Lab.
Conversations are popping up in unexpected places such as a Feast 2.0 panel at the Contemporary Jewish Museum in San Francisco looking at the future of food through the eyes of several food innovators. The University of California, in support of its Global Food Initiative, created The UC Food Observer—an online communication project whose purpose is to “educate, connect and call out important issues across the food system,” according to its editor, Rose Hayden-Smith. The Observer curates material from within and outside of the UC system as well creating their own, covering everything from farming to technology to policy and politics. With a strong social media presence, they just celebrated their first anniversary and have shared over 600 news reports and stories so far.
And on the other coast, two food and tech organizations—one a for-profit venture, the other a nonprofit—are focused on solutions to food insecurity worldwide. FoodTechConnect, founded by Danielle Gould, considers itself the platform for good food innovation and provides virtual and physical space for food and technology leaders to implement change, including facilitating productive food-focused hackathons. Food Tank, founded by Danielle Nierenberg in 2013, is a global community for safe, healthy, nourished eaters. The organization hosted a Food Tank Summit in January 2015 in partnership with The George Washington University (a second annual Summit is planned for April 20–21, 2016). And in June of 2016, both groups will team up with Edible Manhattan to sponsor a new tech-focused food gathering called Food Loves Tech. According to Brian Halweil, editor in chief of Edible Manhattan, “Food Loves Tech will allow the public to taste and touch, and see and smell, how technology is transforming our food chain. And to understand what it means for our future.”
When I talked to Ruth Reichl last year, she expressed both excitement and terror at what technological breakthroughs have wrought in the world of food. She cited the work of Hampton Creek as hopeful but the dinner-table-eliminating all-purpose drink Soylent as terrifying. She also expressed the hope that tech people and sustainability experts would dialog more regularly around how the two camps can work together to tackle worldwide food issues. Nierenberg echoed that sentiment, commenting that “We’re all still stuck in our own silos and that’s why it’s important to have these forums whether it’s online or in person.”
In the early ’70s, technology advancements and culinary creativity were on parallel paths. But in 2016, the two arenas have converged to create, in many cases, products and services to improve the quality of our daily lives and address some of the larger issues the worldwide food ecosystem faces due to population growth and global warming.
It will be interesting to see what the future brings. Stay tuned.