Challenges in Food Technology Innovation Projects

I was deeply disappointed to see the news that meati™, a mycelium protein company, is preparing to sell its business for $4 million in a “fire sale” process, which is a substantial discount to the roughly $450 million it raised. I first encountered Meati over 5 years ago when I got to taste its breaded chicken sandwich with Tyler Huggins, the company's co-founder, which I thought was the best future protein that I had eaten at that time. I was not the only one who thought that Meati was a premium product in the future protein sector as the company gained market traction with consumers at Whole Foods and other retailers. The reason that Meati ended in a fire sale, which is a similar story to other FoodTech companies, is that they raised too much capital at too high a valuation and failed to execute on their business plan. Although Meati had initial success with its products, it seems that its eyes were bigger than its customers’ stomachs, leading it to overbuild its production capabilities far in excess of product demand. In assessing the Meati situation, there are two key business-model questions that need to be discussed: 1)     Should companies pursue B-to-C or B-to-B business models? This is a tough question and the answer will differ for each company. However, I think many companies underestimate how challenging it is to take a new product to market, likely because of the initial success achieved by Beyond Meat and Impossible Foods following their launches at grocery stores at the beginning of this decade. 2)     Should companies build their own production capabilities or outsource production to a CMO or CDMO? Many companies believe that there is value to proprietary production, rather than outsourcing, due to cost or complexity. However, today, capital efficiency seems to be paramount, and figuring how to achieve commercial scale using less capital is essential. While many of Meati’s issues can be linked to its overbuild and/or B-to-C strategy, the company also had bad luck in late February, when its lender swept away two-thirds of its cash reserves due to a technical default relating to a breach of financial covenants. This should be a teachable moment for many entrepreneurs who treat debt, typically venture debt, as “free” money. However, the reality is that for companies which are not cash-flow positive, taking on debt can be very dangerous, unless they are 100% sure that their investors will pay off the debt, either when the debt needs to be refinanced or if a default occurs. Meati will not be the last FoodTech company that goes bankrupt in the near term, but hopefully, other companies can learn from its experience and not make the same mistakes. https://lnkd.in/gb7zbFZt #foodtech; #mycelium; #alternativeproteins EcoTech Capital Cy Obert

📛 "They" say it's not environmentally friendly to produce novel foods by powering fermenters and feeding cells large amounts of feedstock. As ecosystem builders, we aim to find solutions to these multi-faceted challenges. For example, we envision newer facilities being LEED-certified and powered by renewable sources. 🤱 But, feedstock sourcing is more complex. We need approaches to ensure a sustainable food value chain that is (more) independent of traditional agriculture. Sourcing nutrients for animal, microbial, or algal cells involves navigating challenges related to agricultural, chemical, and mining supply chains. ___ Given the critiques that these novel technologies are not as sustainable as they could be, a recent article by Lutz Grossmann (2024) provides key insights into ways to source more environmentally friendly feedstocks for the next generation of cell ag initiatives ⤵ 🌾 Lignocellulosic substrates: Derived from forest, agricultural, and industrial residues, these materials can release fermentable sugars through pre-treatment and hydrolysis, reducing reliance on food crops and decreasing land use. 💨 Gaseous chemoautotrophic feedstocks: Chemoautotrophic bacteria can grow independently of agricultural inputs by utilizing gases such as hydrogen and methane. This approach leverages green hydrogen, produced via electrolysis using renewable energy, to minimize emissions. 🔄 Phosphate recycling: #Phosphorus is a critical nutrient but finite in supply. Recycling phosphate from waste streams, such as spent media, through methods like chemical precipitation, adsorption, and biological uptake, can provide a sustainable source of this essential element. 💚 ...and tons of methods to produce "greener" #ammonia via biological nitrogen fixation (using bacteria and archaea to make it), electrochemical ammonia synthesis *(via employing electrocatalysts), and bioelectrocatalytic nitrogen fixation (utilizing nitrogenase enzymes driven by electricity). ____ ⚠ In addition to managing feedstock variability, infrastructure modifications, and contaminants, scaling greener feedstocks will face multiple challenges that require tech breakthroughs, regulatory support, and economies of scale due to: 💰 High costs: Significant initial investments and ongoing expenses challenge economic viability. ⚡ Energy demand: Some feedstocks require substantial energy, especially for green hydrogen production and electrochemical synthesis. 🔧 Tech maturity: Many greener technologies are still in early development and not ready for large-scale use. What are some other ways to reduce #OPEX and #sustainability challenges for the next generation of cellular agriculture initiatives? Who is working in these spaces? Image credit: Grossmann (2024)

Are you tired of scouring the internet for recipe ideas? You're not alone. The rise of LLM-driven recipe generators highlights the scale of this common problem. AI has the potential to transform the way we plan and prepare meals by supporting every microdecision along the way. However, there are several key challenges to consider. First, food safety is paramount. Building a safe AI tool requires a strong knowledge base, with data on food safety and allergens. Second, flavor intelligence is critical to avoid weird or non-existent flavor combinations. Third, consumer intelligence is necessary to understand customer habits and take personalization to the next level. Finally, operational excellence is key to provide a magical experience for the customer by dealing with out-of-stock items, freshness, and price sensitivity. AI can revolutionize the way we plan and prepare meals, but we must address these challenges to do it right.