Food Entrepreneur - January 5, 2021 - 10

FOOD ENTREPRENEUR

Investment
trends
on tap
for 2021
Experts share predictions for deal making in the year ahead
BY MONICA WATROUS

I

n the year ahead, consumer trends
triggered by the coronavirus pandemic
are expected to continue, driving further
innovation in food production and distribution. Startups tackling key issues in the supply chain are capturing investor attention,
said Anne Greven, head of food and agribusiness innovation at Rabobank, New York.
" The pandemic fundamentally exposed the fragility of the food system, " Ms.
Greven said. " As a result, it really helped validate the need for real innovation and real
investment. Whether it was corporate direct
investment or special venture funds, we saw
a lot more money moving toward entrepreneurs who are really solving big problems in
the food system. "
Deal activity accelerated as the impact
of the initial outbreak stabilized. In 2020,
funding to food and beverage startups
increased 75% year-over-year to $5.6 billion,
said Jake Matthews, senior intelligence
analyst at CB Insights, New York.
" The COVID-19 pandemic has dramatically accelerated investment in the
food and beverage space, " Mr. Matthews
said. " Alternative protein companies have
been the biggest driver of these trends as
sustainability and supply chain resiliency
come into greater focus. "
Plant-based meat alternatives
gained traction during the pandemic as
40

Food Business News

widespread worker illness at meat processing plants led to temporary shortages
of beef, pork and poultry. Just over half of
US and European consumers have tried
plant-based meat since the onset of the
outbreak, and 63% of those became repeat

grocers will continue to increase their
focus on this category, and consumer
adoption of plant-based meats and other
alternative protein products will continue to grow, " he said. " 2021 will be a
breakthrough year for cultured meat and

Q3 '20 funding hits an all-time high
Quarterly global food and beverage deals and financing
Total funding in millions
146
$1,500
123 121
120 113 126
$1,000

118

105

108

113

122

# of deals
147 150
100

$500

50
$433 $550 $648 $780 $477 $727 $665 $446 $584 $1,381 $1,024 $1,452

$0

Q4 '17 Q1 '18

Q2

Q3

Q4

Q1 '19

Q2

Q3

Q4

Q1 '20

Q2

Q3

0

Source: CB Insights

users, according to a survey by UBS.
" The consumer's perception is that having a plant-based diet is healthier and better
for the environment, " Ms. Greven said. " I still
think there's space for good quality alternative proteins that appeal to the consumer. "
Mr. Matthews predicted grocery
retailers will expand their alternative
protein assortments in 2021.
" With the COVID-19 crisis highlighting the food system's vulnerabilities,

protein fermentation. We will see more
investment and greater commercialization of these alternative protein products
in the year to come. "
Bennett Cohen, partner at Piva
Capital, San Francisco, expects alternative
seafood will be the " next wave in the clean
meat movement, " reeling in investment in
2021 and beyond.
" Due to continued traction in plantbased meat alternatives for pork, chicken
January 5, 2021



Food Entrepreneur - January 5, 2021

Table of Contents for the Digital Edition of Food Entrepreneur - January 5, 2021

Food Entrepreneur - January 5, 2021 - 1
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