Although investing in food Technology, like the rest of the venture capital industry, is slowing down, but the industry has recently achieved some milestones that suggest the sector and government are coming together.
In fact, some investors feel 2023 will be the year of significant breakthroughs for alternative seafood companies and products.
More than $178 million will be invested in alternative seafood in the first half of 2022, with a market value expected to reach $1.6 billion over the next decade. One of his biggest investments in the space is Wildtype, where he raised $100 million in a Series B round to procure “sushi-grade” farmed salmon.
If this momentum is sustained over the past six months, funding to the sector would be more than $306 million invested over the course of 2021, despite last year’s slowdown.
Christian Lim, Managing Partner of Blue Ocean at SWEN Capital Partners, said: “We see the alternative seafood industry reaching key technological and economic milestones earlier than the alternative meat industry, which points to the potential for continued acceleration,” he said. I was.
Many companies say they are on board because of the sustainability factor, and even with the initial approval of Upside Foods from the FDA for the poultry production process, these alternative foods have been traditionally sold. The focus is on approximating the scalability and cost of meat.
Kate Danaher, Managing Director of S2G Ventures, said: “Now we need to think about building brands, labeling, educating consumers, scaling production, developing and improving supply chains, and the inputs that support a scalable industry.”
Every startup journey is very different, but one pattern we’ve identified is an iterative approach to go-to-market strategy, product development, and regulatory approach. Friederike Grosse-Holz, Director, Blue Horizon
And like other plant-based farmed food companies, alternative seafood companies must figure out the best way to get people to not only try their products, but to ask for them right away.
Heading into 2023, investors are optimistic about gaining traction, saying regulation will help further advance alternative seafood. Read what active investors think about alternative seafood, where they’re seeing growth, what they’re eyeing, and more.
we talked:
Kate Danaher, Managing Director, Marine & Seafood, S2G Ventures
What will it take for the alternative seafood industry to win its first unicorn? Do you think 2023 will be the year? Which companies do you think are closer to achieving this milestone?
I don’t expect the first alternative seafood unicorn to occur in 2023. The first goal we all focus on is repeat production at a viable price.
Cultured protein companies have made great strides in developing their own products, but the major hurdle is getting products of consistent quality and cost to market.
To date, we’ve seen significant money flowing in to support the first wave of cultured protein products, including seafood. You need to demonstrate a quality product with margins that fit a viable business model at scale.
In the U.S., there has been some progress toward approval of a process to produce alternative proteins. do you want?
A number of constituents, such as industry associations, consumer groups and regulatory bodies, will need to be “convinced” to mitigate the headwinds that cultured proteins are likely to encounter in reaching the market.
Startup founders can support industry growth, commercialization and acceptance by building bridges with industry groups and demonstrating that farmed seafood can complement wild farmed seafood.
In addition, we need to provide transparency into our production processes in order to win over consumer groups and join associations such as AMPS and the Good Food Institute, which are doing important regulatory work on behalf of the industry.
Depending on who you ask, mainstream production of alternative proteins such as beef, chicken and pork is still years away. do you want?
We believe that within the next 12 months, alternative protein products, both farmed seafood and other animal proteins, will be available for purchase in the United States. will be We expect these products to become as widely available as animal protein once capacity constraints are lifted and costs come down.
Given that the U.S. Department of Agriculture and FDA share jurisdiction over animal proteins, while the FDA has sole jurisdiction over alternative proteins, the speed to market for seafood is increasing. One area where we may have an advantage is related to regulation.
Additionally, seafood is more expensive compared to other animal proteins and has a simpler muscle structure, making it easier to grow products that more easily replicate wild and farmed species.
Many alternative seafood startups are also looking to solve the climate crisis, but the industry has its own set of challenges, including cost and consumer appeal. What is important in helping companies produce sustainable products at scale?
Aquaculture technology exists and continues to improve with each iteration. Now we need to think about brand building, labeling, consumer education, production scale-up, supply chain development and improvement, and the inputs that support a scalable industry.
If these products are more affordable and meet consumer expectations, they can have a massive impact. We can impact animals by reducing wild catches, humans by providing seafood products free of toxins and microplastics, and the environment by reducing waste.
Additionally, consumer education is key. This includes, in part, raising awareness of the true cost of food beyond what you would pay at the grocery store. It’s factored into purchasing decisions, but there’s still a lot of work to be done in that regard.
What does the future look like for investments in this space? Which areas are you looking at as future growth indicators?
The good news is that cellular seafood products have reached a stage where they are ready to be marketed from a regulatory, taste, and performance standpoint.
Cellular seafood companies are making amazing progress in lowering prices and are nearing the stage where they will have the growth capital ready to expand their business. I expect more innovation and investment in advancing consumer experience and 3D construction.
What does it take to attract more institutional investors for late-stage funding to help scale the market?
I fully expect cellular seafood companies to sell out in the future due to demand from the large early adopter consumer segment. It is the infrastructure and enterprises that build adjacent inputs.
There are strong indications that FDA approval is imminent, which will have a significant impact on institutional and later-stage investors. Once this is done, it’s going to be who will gain traction in the market and produce products at price points that make a compelling business case.
Friederike Grosse-Holz, Director, Blue Horizon
What will it take for the alternative seafood industry to win its first unicorn? Do you think 2023 will be the year? Which companies do you think are closer to achieving this milestone?
We want clean labels and healthy nutritional content on par with seafood, including protein and omega-3 fatty acids.
