🚰 Water – Foodtech in charts

Published on October 25, 2023

After this summer of droughts, water management has become a top-of-mind topic. In the past months, we’ve had again and again this question from clients: “Are there innovative solutions that could help to reduce water consumption along the food supply chain ?”. But beyond solutions, today, I wanted to share four graphs to show why investing more in water management solutions was becoming urgent.

First, why is there a need for water management?

The situation is already complicated today, with more than 75% of the world’s population in zones of water insecurity.

But, as for climate change as a whole, no matter what we do now, we can already predict that the situation will worsen in future years. Just look at the graph below that shows which areas will be concerned by water stress by 2040. It is striking how much land will be concerned by water stress (defined by the difference between what is required and what is available).

Most of these lands are today’s breadbasket. Solutions will be needed for them to be less reliant on irrigation and for other parts of the world to become more resilient in their food supply.

Then, why is water management a food problem?
Agriculture accounts for more than 70% of freshwater withdrawals. So agriculture is definitely where most actions should take place.

Combining both graphs gives us a clear view of where the situation will be most complicated for food production: South America’s Pacific coast, Southern Europe, a large part of Africa, the Middle East, North Eastern China, India and Australia. That’s quite a lot, notably as these are the areas where we expect the world’s population to grow the most in the next decades.

Finally, why should water consumption be considered a key feature of innovative products?

When discussing climate change, the discussion is often centred around greenhouse gas emissions. However, if CO2 and methane emissions are central, water should not be forgotten.

Below are two graphs that show that focusing on carbon (in CO2 equivalent) can be misleading in some instances. Indeed, producing some foods can be linked to relatively low carbon emissions but consuming vast amounts of water (such as nuts).

Looking at both graphs, it is obvious that marketing almond milk (or an almond-based cheese) as a “better for the planet” product could be perceived as a very poor choice for a company. In the short term, this could boost sales. But, it will appear shortly as a poor business decision when water will become even scarcer and when consumers will become more educated.

So, are we destined to eat only peas and eggs?

The graphs can lead to multiple conclusions. The first is that peas and eggs are very interesting products that we should focus more on. That’s what many new companies are trying to do with pea-based products by creating innovative products that taste better than those currently on the market.

Then, there is the need to find alternatives to the products at the top of both graphs, notably animal proteins that emit a lot of greenhouse gases and consume a lot of water. Here, we mainly talk about technologies such as precision fermentation (for cheese notably) and cellular agriculture (for meat and seafood products).

Finally, and most importantly for today’s focus, as I don’t envision a world without any traditional livestock agriculture, we need to identify solutions to better use freshwater on farms. In the past couple of years, we have seen a surge in the number of startups, investments and claims by large corporations. However, this innovation ecosystem is still very young and deserves more attention, notably in 3 areas: smart irrigation, new crops, and purification & recycling.

In conclusion, I’d like to point to the fact that only looking at the issue of sustainability through the lens of greenhouse gas emissions can be misleading. I think that step by step, we have collectively to learn to look at things with at least four criteria: greenhouse gas emissions, water usage, biodiversity and animal welfare (this last point is not directly linked to sustainability per se, but it is becoming something that consumers care strongly about and are ready to pay for).

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Use case: project for a global F&B company looking to map its AgTech innovation ecosystem and the best startups to partner with

What we did:

  • Mapping of the AgTech ecosystem: startups, research regulators, and other leading companies.
  • Discussion to select areas to focus on.
  • Analysis of the information to reveal the trends and a model to analyse eventual partners.
  • A workshop to validate the opportunities based on our recommendations.
  • Scouting of relevant partners followed by introductions.

Results:

  • Mapping the different categories of innovations in AgTech that should be considered now to create long-term benefits for the business.
  • Identification of key partners (an incubator and a couple of startups).

Use case: project for a CPG company on the healthy ageing ecosystem

What we did:

  • Education of the board through a couple of workshops to define the perimeter
  • Identification of key opportunities and threats created by long-term evolutions (technologies, business models, behavioural changes).
  • Deep dives on each of the priority categories.
  • Co-construction of a vision on how the company should address these challenges.
  • Identification of partners (startups, incubators, funds) to move forward.

Results:

  • Creating a consensus on which categories to prioritise and how to address them.
  • Implementation of an open innovation strategy through the development of partnerships.

Use case: project for a global CPG company to develop a strategy on the healthy ageing ecosystem

What we do (ongoing mission on a subscription model):

  • Kick-off where we present an overview of the AgriFoodTech ecosystem to select with the client the categories to cover and for each, the level of information required.
  • Monthly newsletter: each month we send a newsletter with the articles that we have gathered ranked by relevance, their summaries, and a layer of analysis.
  • Database: we set up a personalised database that will be filled month after month with the information gathered on the companies identified for the watch.
  • Workshops: twice a year with the client’s innovation team and other “innovation curious” team members, we present an overview of the evolutions, key trends and a dashboard of the topics followed by the watch.

Results:

  • A clear, regular and evolutive tool to follow what is happening in terms of innovation on key topics.
  • A forum (through the workshops) to discuss innovation trends and new opportunities.

Use case: opportunity screening for an ingredient company

What we did:

  • Kick-off to define the perimeter of the ecosystem studied.
  • Mapping of the different trends shaping the innovation ecosystem of the client.
  • Analysis of the trends on DigitalFoodLab’s trend curve and other relevant frameworks.
  • Workshop to discuss DigitalFoodLab’s recommendations on key trends to prioritise

Results:

  • Shared view of the innovation ecosystem for the client with a view of the trends to prioritize.
  • Clear document (personalised trend curve) that can be easily shared internaly to explain the company’s innovation choices and which can be then updated each year.

Use case: scouting for an agriculture coop

What we did:

  • Kick-off to define the perimeter of the client, the goals of the scouting (partnerships) and the criteria on which startups should be evaluated.
  • Set-up scouting: we selected the first batch of 20+ key startups following the criteria of the client.
  • On-going scouting: then we set up a quarterly scouting of about ten startups.
  • For each scouted startup, we created an ID card with key information such as the business and technological maturity, funding, and corporate partnerships. We also added an explanation of why we selected this startup.

Results:

  • An ongoing and evolutive scouting are matching the client's criteria and its capabilities in terms of deal flow.

Use case: working on an acquisition process for a CPG company

What we did:

  • Kick-off to define what the client is seeking, notably in terms of maturity.
  • Workshop with the client based on a mapping of the different innovation ecosystems adjacent to its activities to select some priorities and discuss inspiring examples of startup acquisition stories.
  • Identification of 20+ targets.
  • Workshop to select the most relevant to engage with.
  • DigitalFoodLab worked as a sparing partner during the acquisition process, notably to help design how the acquired startup could be integrated into the overall company’s strategy.

Results:

  • Different results from traditional M&A processes with a focus on the client’s innovation strategy.
  • Identification of a good match for an acquisition.

Use case: market due diligence on sugar alternatives

What we did:

  • Kick-off with the client to discuss its interest on this category, its expectations and existing level of information (notably on the target company).
  • Mapping of the ecosystem to analyse the different existing alternatives and technologies to compare them.
  • Interview (calls) with relevant startups made by our internal biotechnology expert.
  • Recommendation on whether to invest or not.

Results:

  • Clear view of the ecosystem and of the reasons to believe (or not) in each sub-category.
  • Enforceable recommendations based on facts and expertise.