Foodtech Perspectives in Silicon Valley: Learning and Opportunities

It is a fact that the foodtech ecosystem is going through a difficult time globally. The United States is a benchmark in this area and, to understand what the future of the sector is, it is important to analyze what the trends are, to understand the State of health of foodtech in the United States and where it's going. Juan Requena, Venture Analyst at KM ZERO, has been responsible for carrying out research in the field, taking advantage of his time in the Standford Graduate School of Business to work on an intensive program on entrepreneurship. He then tells us about his experience during the three months in which he has been immersed in the world's leading entrepreneurship ecosystem and the lessons he has brought with him to apply to the KM ZERO community.

Bay Area (referring to San Francisco Bay) is home to Silicon Valley and, in addition, it is a perfect location for researching issues related to food, both because of consumer trends that emerge from California and expand all over the world, such as strong ecosystem Foodtech which has both startups and investors recognized worldwide. But what lessons has this experience taught us?

Distributors such as Whole Foods (part of Amazon and a leader in healthy and sustainable consumption), Wal-Mart and Costco (whose model is based on offering low prices while maintaining quality) are the Origin of the main trends in food consumption. Business models that have marked an era and that have opened the door to new formulas such as Erewhon, which combines restaurant and supermarket and which seems to represent the latest trend in American food retail.

And what are these striking trends?

• Los “hyperfresh” and ready-to-eat products represent a consolidated reality in the United States that will begin to grow little by little in our country.
• The growth of concern about Healthy food to consume quickly in the office or at home.

Undoubtedly, two clear entrepreneurial opportunities in Spain, which we will have to work on soon.

As for the Foodtech ecosystem in Silicon Valley, Juan Requena was able to connect with some of its most important agents, such as MIXED, the foodtech innovation hub founded by Givaudan and led by Scott May, which specializes in the development of Foodtech B2B startups. He was also able to meet with investors such as AGFunder, Unovis, the former Partner of Google Ventures, and with the world's leading Venture Capital fund Sequoia Capital.

Undoubtedly, the Foodtech sector is facing difficulties in receiving investment, since its great exits (such as Beyond Meat, Oatly or Just Egg) have suffered large declines in the stock market, together with the fact that most exits in this sector tend to be sold to large established companies (such as Nestlé, General Mills, Unilever), which are usually not as profitable as one might expect.

Silicon Valley's main agents are entrepreneurs capable of solving real problems through innovation and entrepreneurship. Juan Requena also met with many of them and observed what were the main problems they needed to solve.

• Focus on the protein transition, to make the food system more sustainable, while maintaining quality and price. Companies with quality products such as Tindle, Konscious and Karana, apply artificial intelligence to achieve a flavor and price competitive with traditional products.

• Improve consumer decision-making when it comes to feeding. Juan found multiple entrepreneurs who, based on technology, want to make people's lives easier, in the field of food. Here we were able to observe both efforts to help athletes to take food data more easily, as well as Eating Analytics, how to help people choose what to eat in restaurants, with, for example Pikky AI.

A clear opportunity emerges as follows: technologies that make people's lives easier will represent a good business opportunity. In addition, those businesses with large amounts of data on people's food consumption may have a great opportunity in the age of AI.

‍