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2024 FoodTech Recap: the good, the bad, and what’s ahead

Published on December 19, 2024

As we are nearing the end of the year, it’s a good time to take a pause to think back on what happened over the past 12 months (and also to eat some chocolate).

1 – A bad year for FoodTech with some hints of hope for 2025

As I was thinking about what to put here, I looked back at previous years’ similar articles, only to be slightly discouraged by the fact that it will be the second year in a row that I’ll have to say it was a challenging year for FoodTech. However, to be on the “half-full glass” side of things, things have stopped getting worse. The ecosystem has reached a bottom in terms of funding and is now evolving on a low plateau of about $3 to $4 billion of investments each quarter. We’ll have a clearer view of the last quarter soon, but it shouldn’t be too bad.

The decrease in funding translated into a wave of bankruptcies and failures across most categories. This was predictable, and we should be at the end of this movement as funding stabilised.

My main worry for the future of FoodTech is the quite noticeable decline in the number of new “cool” startups. While hot new trends such as molecular farming or alternative cocoa/coffee are still developing, the overall pool of new startups bringing significant innovation to the market is decreasing, as is seed funding. Let’s hope that remains a short-term glitch due to a lack of funding and few visible M&A deals.

2 – A good year for DigitalFoodLab

We do not talk too much about DigitalFoodLab’s business in this newsletter, but for once, I wanted to share some news. In this challenging year for innovation and food, more than ever, I wanted to thank all our clients, partners and our great team. Among other successes, in 2024, we:

  • Completed more than 20 projects on topics such as the decarbonation of the food value chain and sugar alternatives.
  • Worked with clients in 10 countries, including clients in Europe, the US, Brazil, and, for the first time, meetings in Tokyo.
  • Have again raised our rate of repeat clients: 75% of all the clients we have worked with since we started DigitalFoodLab are still working with us.

FoodTech is a complex and global ecosystem, and these three achievements align with our vision that an innovation strategy can create results if it is open to all geographies, to the whole agrifood, and if it’s consistent over time.

3 – The theme of the year: healthy ageing & GLP-1

If the theme of 2023 was Artificial Intelligence, it feels like this year, most of our discussions touched on healthy ageing and the consequences of GLP-1.

While the full capabilities of these drugs are not yet known, they appear more and more as a silver bullet with a potential against multiple diseases. For now, their use to fight obesity is already visible. First, regarding our collective health, we may have passed “peaked obesity” in the US after decades of steady rise. Then, in the food industry, the users are simply eating less.

The consequences are not yet clear, but this leads to at least three routes:

  • Healthier food products, at least products with lower glycemic indexes and maybe less processing. This explains the growing appetite to find natural sugar alternatives.
  • GLP-1 companion foods or natural substitutes: the drugs have side effects and require new food to fight them. Also, there is a quest to identify some compounds that can either boost the impact of the drugs or become natural substitutes.
  • Services that support consumers alongside and after their weight-loss journey, integrating recommendations, supplements, etc.

We’ll take a break for a couple of weeks, and we’ll kick off 2025 with our predictions. In the meantime, let us know if you have any suggestions for them.

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  • Mapping of the AgTech ecosystem: startups, research regulators, and other leading companies.
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  • Analysis of the information to reveal the trends and a model to analyse eventual partners.
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  • 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).
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Use case: project for a CPG company on the healthy ageing ecosystem

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  • Education of the board through a couple of workshops to define the perimeter
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  • Deep dives on each of the priority categories.
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  • Creating a consensus on which categories to prioritise and how to address them.
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Use case: project for a global CPG company to develop a strategy on the healthy ageing ecosystem

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  • A clear, regular and evolutive tool to follow what is happening in terms of innovation on key topics.
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  • Shared view of the innovation ecosystem for the client with a view of the trends to prioritize.
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  • Kick-off to define the perimeter of the client, the goals of the scouting (partnerships) and the criteria on which startups should be evaluated.
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Results:

  • Different results from traditional M&A processes with a focus on the client’s innovation strategy.
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Use case: market due diligence on sugar alternatives

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