Sustainable Food Innovation – New Perspectives from Cleantech Forum Asia

Recently,  at Cleantech Forum Asia we ran two panels in the agriculture and food sector; one focused on alternative proteins and the other taking a detailed look at digital tools in Aquaculture.

Singapore is driving innovation not just in the region, but globally

Singapore, which served as a great location for these sessions, is taking a ‘whole government’ approach to promoting food innovation. With ambitious targets to be 30% self-sufficient by 2030, up from 5% today, it is not just one government department promoting food. For start-ups, it offers a great platform to engage with government early, whereas it may be much harder to work with, for example, the FDA in the US.

Here are a few things I took away from those sessions, and conversations over the course of two days at Forum in-between rounds of Impossible Foods sliders.


Cultivated (cell-based) meat might be commercial sooner than I thought

Image of impossible Sliders at Cleantech Forum Aia
Impossible Sliders were on the menu at Cleantech Forum Asia.

Although it might not take the form you would expect. Plant-based products are everywhere. Producers of red and white cultivated meats have been trying to reduce production costs, but now we are seeing the fastest growth in seafood products. Dr. Sandhya Sriram, of Shiok Meats, has many years working on mammalian red and white meat stem cell research, and so understands the challenges in developing them as food products. Shiok Meats’ home-market of South-East Asia has a preference for seafood, making shrimp ($40 billion market, with $20 billion in Asia), crab, and lobster, obvious targets. Finally, Sandhya noted people will eat seafood regardless of shape, form, or size. The recent news that Wild Type signed terms for a $12.5 million Series A to explore cultivated salmon is good evidence cultivated fish is coming.

Unit economics for alternative proteins are improving

In 2013, it cost Mosa Meat $300,000 to make one-piece of hamburger. Shiok Meats are at $5000/kg right now and expect to be at $50/kg for a shrimp product by the end of 2020. 85% of the cost is the growth medium which the meat is grown in. The costs are high as the only growth medium available is from the pharmaceutical industry, is medical grade, and therefore expensive. To reach $50/kg, the focus is to develop a cheaper food grade growth medium to reduce the per unit cost.

For the food industry, it’s rare to see an entirely new product category come to market

This is what is exciting about the alternative meat space. There is an ecosystem of industry players looking to help this market grow, from flavour, ingredient, texture, to end-product meat companies. Several industry collaborations such as the Future Food Initiative are underway. However, there are still questions around demand, what will it look like and what will the products look like? The production ramp is ready, what incumbents need is product-market fit.

It will not be all about the killer consumer product

New alternative protein developers are innovating on business model. It is still unclear whether a B2C or B2B model will work better to drive the cost of production down and scale effectively. For cultivated meat providers, the problem with producing a meat that is recognized by the consumer as food may push them into B2B sales as an ingredient or flavouring product, such as shrimp paste or pork flavouring, which is used widely in Southeast Asian cuisine.

We have barely scratched the surface of protein sources

Apart from clean meat, there are only a handful of non-animal protein sources that are being used in products, consisting primarily of soy, pea, and wheat. While new sources are such as algae, fungi, jackfruit, chickpea, are being used, there are 10,000 non-animal sources of protein that are yet to be explored.

We might see a commodity swap in agriculture

The agricultural supply chain will adapt quickly. Protein-rich plants being grown to feed livestock will be redirected toward plant-based foods for human consumption. We are also likely to see a lot more peas being grown to support the industry as the taste and texture are easier to use. Impossible Foods nows uses pea protein instead of soy as its major ingredient, and pea developers such as Puris and Ingredion are expanding thei production capacity with investments in Canada, US, and Southeast Asia. Further, Equinom, a startup partnered with Ingredion, has developed pea plants with over 50% protein content compared with the more typical 35-40% in soy.


The aquaculture industry still relies on pen and paper

Any industry where data collection, monitoring, contracting, or any other business activity is done on paper or Microsoft Excel is the perfect target for digitization. Industry incumbents have often tried to solve this problem before with internally built solutions, but often they are not well thought out or executed or are simply not adopted by farmers.

In aquaculture, it’s who you know

Customer acquisition is tough. The aquaculture market is heavily relationship based, and to sell anything to aquaculture farmers it can’t be done in a single farm visit. There is often a lack of knowledge about what solutions are available. Finally, where a farmer does show interest in adopting a piece of technology, they try to minimize risk by asking for the first six months or the first harvest cycle, for free. This makes relationship building critical in new markets.

Working with healthcare and feed service providers is a successful business model

In a market that relies on relationships, working through existing service providers is key. Licensing access to a start-up’s database to feed companies in order to provide that as service to their farms has been a successful market penetration strategy. Working with corporate partners has also given aquaculture start-ups a much better understanding of what products they should be developing to suit the market. For example, selling a cloud-based software solution is not nearly as attractive to the farmer as a water quality monitoring hardware that also happens to have clever software capabilities.

Why should I invest in a technology for shrimp farmers?

The unit economics of shrimp farming are very attractive when the operation is run well. Shrimp sell for $5-$7/kg, whereas operation costs are $3-$3.5/kg. This means ROI can be less than a year. The size of the opportunity, and the increasing demand globally for the product, are all you need to know.

Look out for…

Service provider marketplaces. Farmers that have relied on the same contacts for years are looking to get in touch with a broader array of service providers, input sellers, and customers.

Insurance companies playing a part in the industry. Currently, it is too risky to insure smallholder farmers. Once good data can reduce the risk of crop losses and improve management practices it will reduce the number of bankruptcies that are prevalent in the small holder shrimp farming communities in Southeast Asia.

Want to continue the agtech conversation? Join us for Cleantech Forum San Francisco on 27-29 January. We’ll be looking at foodwaste and the supply chain developments that are working to solve the problem.