For today’s insight, we assess DigitalFoodLab’s predictions for 2024 to see how well they fared (the original set of predictions is here for reference).
1️⃣ We predicted that investments would keep declining, at least for the first half of the year. However, we expected a rebound in the US by the end of the year.
We’ll have a look at the state of investments in 2024 in a couple of weeks, but indeed, it seems that investments have not done well last year. Also, we observed a bounce back, primarily due to larger deals in the US and Asia.
As predicted last year, the decrease has been eased out by increased funding in AI and sustainability. However, we were a bit too optimistic when expecting that the strong appetite for early-stage companies observed in 2023 would continue. If we look at where the money went in 2024, the opposite happened: a decline in innovation, a lower appetite for exciting new ventures, and a preference for established models, notably in food delivery.
2️⃣ We predicted that many well-known startups would shut down. Failures, or quasi-failures of companies such as Ynsect, have punctuated the year and have outshined the first signs that things are doing better.
3️⃣ We predicted that while plant-based would bounce back, there would be a growing distrust for more advanced technologies.
As a category, plant-based is indeed bouncing back, even if only slowly. There are multiple signs that sales are increasing again in multiple markets as inflation is easing out.
However, as predicted, companies with more “advanced” technologies to create alternatives to meat and dairy products, such as cellular agriculture and precision fermentation, are not doing well. There is a growing doubt about their ability to scale and deliver value. Even if there is a rising hype around applications on sugar or cacao alternatives, this can’t outweigh the whole alternative ingredient ecosystem.
4️⃣ 🍫 We predicted a growing divergence between a focus on health-oriented food products (boosted by GLP-1 drugs) led by established companies and on the other a wave of indulgent food products launched by startups.
With less innovations being released, it is maybe a bit hard to evaluate. However, we indeed observed a focus of new brands launched by entrepreneurs being focused on indulgence instead of health.
On the other side, we indeed saw a growing number of GLP-1 companion foods being launched, mostly by large companies, notably by the end of the year.
5️⃣ 🤖 We predicted that while Artificial Intelligence (AI) would be a key topic, we were not expecting many tangible applications beyond marketing.
We were quite right here. Even if AI is getting mentioned in many announcements, we still have a hard time to measure its real impact in the agrifood value chain. There is a widening gap between where AI can be useful (protein discovery for example) and where the people we talk with would like to see it (in product development).
In a word, that was quite a good set in terms of predictions. If we consider this the other way around, there is maybe a trend that we have not seen and which was quite noticeable in this complicated context: the rising level of involvement of established companies. While funding decreased, we observed more and more meaningful partnerships helping startups to scale up their solutions.
Next week, we’ll come back with our predictions for 2025. If you have any suggestions, please send them directly here!
