From urban agriculture to plant-based burgers and DNA-based diets, the global food industry is on the precipice of radical change. Fuelled by fast-changing consumer desires and shaped by rapid advances in food technology and digital platforms, the food industry will be close to unrecognisable in the next 10 years. This exciting evolution is attracting serious funding and investment – not to mention some of the most disruptive thinkers and innovators around the globe. According to PitchBook, 2018 set a decade-high record for VC investment in the sector, with food startups such as unicorn DoorDash and Instacart valued at $4.4 billion.
And let’s just remember here, we’re dealing with a very attentive and loyal market. There is arguably no bigger (or more critical) industry on our planet than food and agriculture, with a hungry (pardon the pun) customer base of over 7 billion. Notably, the World Bank estimates that food and agriculture comprise about 10% of the global GDP – which, when crunching the numbers, means that food and agriculture would be valued at about $8 trillion globally (based on the projected global GDP of $88 trillion for 2019).
There’s no doubting the value and potential of this industry, but what about the challenges that innovators face? As the food production sector shifts in close tandem with evolving consumer desires, the food production system must transform quickly to meet new needs.
Let’s take a closer look at the 6 factors shaping the evolution of food production today:
Global population growth is booming
Population growth is skyrocketing. Added to this, the worldwide shift from rural to urban life will sharply increase demands for food-stocks and shorter, more efficient supply chains. Today, experts around the world agree that our current food system is broken and cannot meet the growing demand. Indeed, producing enough food for the world’s growing population has an increasingly negative impact on the environment, while human health is compromised by poor nutrition in both affluent and poor contexts.
With its rapidly growing population and high levels of poverty, Africa is particularly vulnerable to these challenges. However, given that it boasts more than 65% of the world’s uncultivated arable land, Africa also has enormous potential – not only to feed itself and eliminate hunger and food insecurity, but also to be a major player in global agriculture and food provision.
Digital is optimising outputs
Early case studies and experiments have shown that by applying new technology and digital processes to the production efficiency challenge, great progress can be made quickly. According to research from Accenture, population and per capita income growth mean world demand for staple crop products will grow by 60 % from 2010 to 2050.
Having recognised the need for change, many food producers are already working with new partners and platforms, and harnessing innovative methods to better manage resources. For example, precision agriculture employs digital solutions to improve monitoring and optimise inputs, boosting profitability in some cases by $55 to $110 per acre.
Unleashing the food robots
Unsurprisingly, there is a great deal of buzz and excitement around what drones and robotics can do for production – while also reducing energy intensity. According to reports, smart agriculture solutions can boost yields by up to 30% – and potentially generate a whopping $2 billion in additional revenue to companies. Then there’s the idea of ‘service robots’ and restaurant digitization. By merging the convenience of ordering online, the growing personalisation of meals, and the speed of getting food at a counter, service robots and e-restaurants are transforming consumer expectations. For example, CafeX’s robot arm is trained to prepare the most sumptuous cappuccino, while this sophisticated burger flipper robot is a grilling expert.
Dramatically reducing food waste
Experts agree that there is huge potential to make food production more efficient by reducing waste. Today, one-third of global food production (2.9 trillion pounds of food) is reportedly lost in the agricultural chain. In the United States alone, 31 to 40% of post-harvest food supply is lost or wasted, at a cost of $160 billion annually, according to Accenture.
Looking ahead, as more food producers embrace circular, sustainable business models such as food sharing platforms and upcycling, we can expect major gains to be made in reducing food waste while also boosting efficiencies.
A world hungry for protein
By 2050, global protein demand will increase by 80% over today’s levels, and experts are warning that ‘traditional’ advancements won’t be able to fulfil this ballooning protein demand (egg and whey protein smoothies, anyone?). It is more likely that the food base will have to change radically (genetically, biologically or through an expanded set of ingredients). Either way, this is an area of major growth and potential for savvy investors, innovators, and forward-thinking food manufacturers. Coupled with the globe’s growing appetite for protein, is a marked increase in demand for tasty meal replacement options. Indeed, innovation in this space is rocketing, with roughly 17% of US consumers reportedly using meal replacement beverages in the past year.
Food and nutrition security a big focus
Since its outbreak at the end of 2019, coronavirus has quickly spread across China and to at least 25 other countries, causing the deaths of more than 1000 people. While China has imposed controls on movement within its borders and at international boundaries to contain the disease, we could potentially see serious hiccups in food and nutrition security.
Pandemics like Ebola and SARS previously had negative impacts on food and nutrition security, particularly for women, children and the elderly – the most vulnerable in any population. And now, with media outlets reporting that the poultry industry in China is under stress due to a lack of adequate feed supply and interruptions in the timely marketing of its products, we could see this strain spread to other industries, creating a food supply hiccup and a threat to food and nutrition security for many.
So, whether you are a health-conscious consumer looking for cleaner, more sustainable ways of eating, a tech startup looking to ride the next wave of global innovation, or an initiative for food security, the radically changing global food industry is one to keep a close and (hungry) eye on.
Image credit: Blake Thomas