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Macroeconomics

03 May 2019

TECH FOOD 

According to AgFunder, an online AgriFood platform, global investment in food technology more than tripled between 2012 and 2017.

It continues to grow and main recipients are precision farming, advances in alternative proteins and digital food technologies. Some call it Agriculture 4.0. These new farming techniques and means of food production are becoming more tangible every day. Take the example of Beyond Meat. The unicorn launched on Wall Street yesterday saw its share price jump by over 160%. Not bad for a company reporting a negative EBITDA of USD 25 million according to Bloomberg. As the name of the company suggests, this is NOT a tech company active in cloud computinge. Beyond Meat produces vegan meat. According to research articles, the demand for such meat doubles every year. Consumers often have strong beliefs about this. Knowing that livestock is responsible for around 15% of global greenhouse gas emissions, eating vegan meat makes a lot of sense. The fact that animal cruelty could become a thing of the past is an additional bonus.

Beyond Meat is not alone. Impossible Meat is not yet quoted on the stock exchange, and then there is labgrown meat. Look at Finless Foods for example. The company produces sustainable seafood without harvesting live fish from the oceans. It’s all about cellular biology. Whilst consumer knowledge and acceptance of these products is still low, the cost of alternative proteins has reduced significantly and evidence suggests that large scale production of tech food is possible in the medium term. Beyond Meat shows this is no longer a thing for the next decade. Population growth and thus the increased need for proteins but also the rapidly rising conviction for sustainable and more ethical food production make for a solid base for future development of this sector.

The main thing standing in the way is regulation. Countries are very strict when it comes to food imports and related regulations. Looking ahead, new regulations will need to strike a balance between achieving food safety goals and ensuring consumers are well-informed about what they are buying.