As we embark on a new year, it’s time not only to take stock but to look ahead at what we should expect in FoodTech in 2024. And while it’s always a bit risky to make predictions, there are clear developments shaping where this industry is headed – with implications for investors, founders, and consumers.
Knowing what to ignore can be just as crucial as what to focus on, and in many ways 2024 will be about clearing the noise. For a quick take on the [many] opportunities to watch, challenges to overcome, and trends to ignore, Nurit Ben sat down with Founding General Partner Nadav Berger, FoodSparks® Managing Director Yoni Glickman, and CTO Dr. Gali Artzi.
What do you see as the biggest spaces of opportunity in FoodTech in 2024?
Yoni Glickman The biggest opportunities will be found in technologies that can create profitable revenues in the short to medium time scale. Companies who focus on building sustainable, profitable businesses with recurring revenue models and solid unit economics. Among them are those that can produce existing products in the food chain in a more cost effective and resilient manner, including solid-state fermentation and highly intensive greenhouses. Plus, AI that can dramatically accelerate product development, reformulation, and marketing.
Nadav Berger I expect 2024 will see the relatively conservative food industry speed up its adoption of technologies from two other domains: data/AI and biotech, continuing to fuel a substantial shift. By further adopting biotech we can produce our food at scale in ways we’ve never seen before. With AI, we can process and make decisions rapidly, in real time and based on enormous data. Imagine consumer insights based on personalized data, compared to the old slow and expensive focus groups. Imagine personalized nutrition recommendations based on our ability to evaluate millions of people’s DNA, biomarkers, and microbiomes. Bottom line – it means serving consumers better, increasing efficiency and profitability, and lowering the failure rate across processes in the food industry.
Gali Artzi Of course we can’t look at 2024 without talking about AI, but we have to get clear on what that means beyond the buzzword. A key area will be AI-powered decision-making, with a focus on sustainability and efficiency. That includes intelligent tools suggesting the most sustainable suppliers, predicting demand to minimize waste, and tracking food origins for ultimate transparency. This data-driven approach promises to revolutionize the food industry, creating a win-win for businesses and consumers alike.
Another key space to watch is personalized nutrition, gearing towards a tailor-made future. At-home testing empowers people to understand their unique nutritional needs and potential deficiencies, acting as a personal “food whisperer.” It’s an approach that transcends dietary restrictions like gluten-free or vegan, delving deeper into individual biochemistries and metabolic pathways. Technological advancements, from 3D food printing to robotic chefs, are enabling manufacturers to tailor food to individual health profiles and preferences. New research is paving the way for even more granular insights, tailoring food not just to needs but also to individual genetic susceptibilities and environmental factors. And it’s about health and the bottom line: the shift towards bespoke nutrition doesn’t just promote healthier lifestyles, but also drives sales as consumers embrace targeted food choices.
What about the noise – what should we be ignoring in 2024?
Yoni Glickman 2024 will be a year that stress tests many FoodTech startups who successfully raised capital in 2021-22. This will inevitably lead to more high-profile bankruptcies, and we need to understand the core reasons behind them: whether it’s bad management, failed tech, or lack of product/market fit – instead of jumping to conclusions about the whole asset class. The more resilient companies with a faster path to profitable revenues will survive and thrive.
Gali Artzi Specifically, we need to look beyond overhyped technologies without proven ROI. Some technologies, like AI-powered personalized meal planning, have limited impact and unclear cost-benefit analyses and might face challenges in proving their practical and financial value. If the AI platform primarily relies on basic dietary guidelines and generic recipe recommendations, its actual impact on user health and behavior might be minimal. Plus, the cost of developing and maintaining such technology, coupled with limited demonstrable improvements in user health outcomes, could quickly outweigh perceived benefits.
We should also be looking past niche food products with limited appeal. Yes, catering to specific dietary needs is important, but focusing on niche trends with small target markets (like insect protein bars for extreme athletes) might not yield significant returns in the short term.
Nadav Berger In line with our strategy from day one, it’s also key to ignore the “more of the same” solutions. A new flavor and size! Get your produce faster! Those aren’t truly sustainable solutions to real problems. We must focus on those which really move the needle with their impact on people and planet.
What are the biggest challenges you foresee?
Yoni Glickman I expect a couple of specific obstacles to present challenges this year. Regulatory bodies are not moving at the necessary pace – from product labelling to clearer regulatory pathways for new ingredients. Progress in that space needs to move faster to make sustainable solutions a reality. Plus, FoodTech is coming up against strong political pushback driven by lobbies, particularly in the alternative protein space. Our industry should find a way to work collaboratively to positively raise and solve these questions with both governments and regulators.
Nadav Berger The broader challenge we still face is the need for a wake-up call. Other areas of tech don’t have to contend with scaling at the level of FoodTech. In food, you have to prove that you can take a technology and produce at scale, in a safe and affordable way, to reach the masses. Only by achieving that can you make an impact and/or exit. Both founders and investors need to understand that from day one.
Which players will be most crucial in this stage of FoodTech?
Yoni Glickman Visionary food corporates now have a huge opportunity to tap into innovative technologies. While many are struggling with underlying market conditions, those with a clear vision for what their company should look like in 5-10 years have a massive opportunity to accelerate this vision by collaborating with relevant FoodTech startups.
Nadav Berger I’m also watching the smart philanthropists – those who’ve started to shift focus to the impact that our food systems have on people and planet, with massive investments. They help prove what we know: that you can make a real impact while also creating significant returns.
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