Many foodtech companies have had a tough time with decreased valuations or even bankruptcy. VC investments in foodtech and other sectors have been the lowest in many years creating a paradox where investors don't want to enter a company with low turnover but to increase turnover requires capital.
“Many of our portfolio companies have been forced to adjust their activities and cost structures to make their cash flow last longer. This has led to lower turnover and valuations. But in many cases also to more sustainable business models and new partnerships. Entrepreneurs are being forced to work smarter and towards profitability, making companies more resilient and better equipped when the market turns.” says Nicoya's CEO Christopher Slim in an interview with Impact Loop.
The need for change in the food system has not diminished just because of tough times. The challenges with greenhouse gas emissions, exceeding planetary boundaries, increasing lifestyle diseases, and pressure on society are as big as ever. There are enormous opportunities in the transformation of the food system.
"The food system is in as much need of change as ever but foodtech is an early-stage sector that requires smart capital and patience to get returns. It is clear that consumers want greener and healthier food, but don't want to compromise on taste, texture, and experience. The stagnation in category growth of plant-based that we've seen has partly been driven by not meeting consumer expectations and partly current price sensitivity of consumers.”
Together with consumer research and portfolio company InsightMe., Nicoya has taken a closer look at the demand for plant-based food, and the results were published in “The Food Frontrunner Report 2023”. The report concludes that the willingness to switch diets to greener alternatives continues to grow. By breaking down data on different behaviors, it was also found that plant-based substitutes for animal-based foods play an important role in this transition.
“As consumer purchasing power returns and the new generation of products are cleaner and tastier, we believe that plant-based will continue to grow. As investors, we remain interested in category-defining consumer brands and new smart ingredients and technologies with underlying, structural profitability. This allow for big gains when scaling - both financially and planetarily." ends Christopher Slim.
https://lnkd.in/dJEKGD2d