Letter from Davos: A FoodTech basket to eat the world

The double challenge of food scarcity and the environment will not be put to rest by nibbling around the edges of the problem. We need to attack this crisis on all fronts, and swallow it whole.

At my meetings in Davos this week two issues dominate: the rapid acceleration of climate change and the threat of global inflation-starvation exacerbated by Russia’s invasion of Ukraine.

A large part of the solution to both these urgent problems lies in the development of alternative proteins.

A transition away from animal protein “has the potential to deliver 14 to 20 percent of the emissions mitigation the world needs until 2050 to stay below 1.5°C,” according to the Good Food Institute. The adoption of alternative proteins has the potential to “dramatically slow climate change,” McKinsey reports.

Food production “contributes around 37 percent of global greenhouse gas emissions,” according to a global study by the University of Illinois, most of it related to the production of animal-based foods.

Russia’s blockade of this year’s huge Ukrainian harvests of wheat, sunflower oil and other commodities has exposed the vulnerability of developing countries unable to produce the food they need to sustain fast-growing populations, and the danger of relying on imported fertilizer to grow domestic crops.

The resulting food shortages and inflation threaten global security and means millions may go hungry, leading to famine, destabilization and mass migration, David Beasley, Executive Director of the UN World Food Programme, told the World Economic Forum here in Davos this week.

“We have a global catastrophe on our hands,” Beasley said, urging business leaders to step up and address the current food crisis. “We need their engagement, their ingenuity, their creativity. That is what the world needs at a time like this.”

This is the moment for FoodTech to eat the world – and get the world eating.

The double challenge of food scarcity and the environment will not be put to rest by nibbling around the edges of the problem. We need to attack this crisis on all fronts, and swallow it whole. We need to find new ways to produce fish, meat, seafood, eggs, milk and other proteins. We need to replace animal proteins with alternatives produced from plants, lab-grown cells, insects and other sources. We need to replace animal feed with carbon-zero alternatives, and we need to recycle waste more efficiently.

We must also reinforce the global food chain against shocks like Russian expansionism and aggression.

As investors, we need to take a systematic approach, spreading our investments across the entire basket of FoodTech companies.

OurCrowd was fortunate that our first private investment in this sector was in Beyond Meat before its IPO, where our investors did very well when we exited. Despite the recent fall in the public stock price, in line with other public companies, we remain confident in the fundamentals of the company.

Our success with Beyond Meat led us to realize that we wanted to become more involved. We quickly learned that we should take a broad portfolio approach and diversify because, as with all startups, there will be winners and losers. We are now backing a range of food producers and startups developing new science that will help alternative proteins to gain commercial traction. These include:

• ProFuse Technology: A startup nurtured at OurCrowd’s Fresh Start FoodTech incubator in northern Israel, building on years of research at the Weizmann Institute of Science. ProFuse has created the technology to produce lab-grown meat at scale by developing the muscle tissue of cultivated meat quicker, increasing yields and improving the nutritional value of the final product. “There is no silver bullet that will singularly transform the economics of cell-cultured/cultivated meat,” notes Elaine Watson, Editor of FoodNavigator. “But technology developed by Israeli startup ProFuse Technology that dramatically speeds up the muscle fiber production process and enhances production capacity – albeit in a laboratory setting – is generating excitement in a nascent industry that must increase yields and cut costs if it is to achieve commercial viability.”
• BlueNalu: A San Diego-based company that is pioneering the category of?Cellular Aquaculture?in which living cells are isolated from fish tissue, placed into culture media for proliferation, grown and cultured into muscle tissues using bioreactors, and then assembled into great-tasting fresh and frozen seafood products.
• Mermade: An Israeli startup producing seafood that uses algae to slash the price of the nutrient-rich slurry, or growth medium, in which cells are grown. This could be a game changer because growth media have made alternative proteins prohibitively expensive. Mermade believes it can cut the costs by a factor of 10,000.
• The EVERY Company: A California-based startup that produces egg protein for use in shakes, food and cooking – without a single chicken. The company uses a fermentation process developed with brewery giant AB InBev, whose venture arm is among the investors.
• ReMilk: An Israeli startup developing cultured milk and dairy proteins using a yeast-based fermentation process. The company plans to build the world’s largest facility for the production of cow-free milk in Denmark. “Remilk is committed to reinventing the dairy industry in a kind, sustainable way. Eliminating the need for animals is the only way to supply our world’s growing demand without destroying the process,” CEO Aviv Wolff told The Spoon.
• Ripple: A California-based company with fast-growing sales of milks, protein shakes, and ice cream based on peas that contain more protein with less fat and sugar than other plant-based substitutes. Ripple’s new milk for kids, filled with DHA Omega-3s and other good things, is flying off the shelves in supermarkets throughout the US.

• Plantish: An Israeli startup developing the world's first plant-based whole-cut salmon fillet. The company’s breakthrough additive manufacturing platform uses 3D printing to create whole-cut fillets at low cost and massive scale. Investors include Nusseir Yassin, creator of Nas Daily and Nas Academy.
• Maolac: An Israeli startup that identifies and separates proteins from bovine colostrum – the first milk produced by mammals for newborns, millions of gallons of which is dumped each year – to create protein-rich complexes and superfood ingredients.
• ?nsect: A French company reinventing the food chain with high-quality ingredients made from insects for animal feed and fertilizer, using 98% less land and 50% fewer resources than conventional protein sources.

We also operate the Fresh Start FoodTech incubator in northern Israel with our partners Finistere Ventures, Tempo and Tnuva, and the Sprout AgriTech and FoodTech accelerator together with Finistere Ventures and Fonterra, New Zealand’s largest dairy.

In addition to our investments in startups developing alternative proteins, OurCrowd also invests in companies developing technology to make all stages of the food supply chain more efficient, including Sufresca, whose natural, edible, odorless coatings extend the freshness and shelf life of fruits and vegetables; CropX, which uses cloud-connected sensors to reduce water and fertilizer use; Trellis, which uses AI to give food and beverage producers more accurate weather and water predictions to optimize yields and productivity; and Plenty, which increases yields and cuts water use, fertilizer, pesticides and emissions through the use of indoor vertical farms located closer to the consumer, where Walmart recently became an investor.

As we face the double challenge of climate change and food scarcity, we cannot afford to be day traders in the future of our planet. These are the great issues of our generation. They cannot be solved by a cursory foray into short-term solutions.

Venture investors must adopt a fundamental, systematic, long-term approach to the entire FoodTech basket. We expect our portfolio to grow and we invite entrepreneurs and investors to join this urgent search for to feed our future and keep our planet alive.

About ‘Investors on the Frontlines’

I’m the CEO and Founder of?OurCrowd, the global equity investment platform that gives individual accredited investors access to pre-IPO startup deals alongside top-tier VCs. If you are an investor, private family office or financial advisor, subscribe?here?for my biweekly commentary or follow me on?Twitter. I welcome your comments in the response section below.