It couldn’t be a better time to start a functional food business or launch an innovative new product.
Consumers are demanding healthy innovation and investors are keen to get a piece of the pie. The global market for functional foods and nutraceuticals expected to hit around £30bn within four years.
Consumers are hungry for convenient but healthy new foods
In 2016, extensive research by the Food Safety Agency revealed an interesting paradox: consumers want stricter regulation on ingredients yet are keen to see innovation in functional foods. They are also using nutraceuticals – products derived from ingredients that deliver additional health benefits – to support a healthy lifestyle.
Getting to five-a-day “with minimal effort” was a key theme, particularly amongst busy workers and parents. It came with a caveat that functional foods and nutraceuticals should supplement rather than substitute natural, whole foods. So current trends show clearly that the market wants to see healthy convenient foods and consumers are open to new ideas.
Food tech investment is increasing
The increased demand for innovation is also attracting food tech investors looking for products they can quickly bring to the market. Nuritas (an Ireland-based food tech start-up) has high profile investors including U2’s Bono and The Edge. Neil Foster, commercial manager at Nuritas states: “We found a lot of high net worth individuals looking at technology. They see food, health and saving the environment as cool things to use technology for.”
Niccolo Manzoni, an investor, says: “There’s never been a better time in history for a food tech entrepreneur to start a business.”
Some established food businesses are struggling to pivot
Some larger companies are proving ill-equipped to embrace the kind of innovation required for change. Start-ups, on the other hand, have a ‘clean slate’ when it comes to infrastructure and reputation. They can be more experimental in their approach. This is also opening the door to interesting collaborations.
Plant proteins are big business
According to Lux Research, alternative proteins may comprise as much as one-third of the protein market by 2024. They are, therefore, an area of huge interest, investment and experimentation.
America is leading the way with Impossible Foods and its Impossible Burgers (convincingly meaty-tasting plant protein) and Memphis Meats and its lab-grown chicken strips. These weren’t, however, exactly fast to the market as Impossible Foods took five years to develop their burger – in which time they also received $80m of investment.
Even the world’s largest meat processor, US-based Tyson, has invested in plant protein. CEO Tom Hayes said, “People want protein. Plant-based protein is growing most.”
In the UK, Marks and Spencer’s head of nutrition and science, Claire Hughes is of the same mind saying: “The time is right to move on with some of these [new protein] programmes.”
