A New Year means new opportunities, goals, and commitments.
But did you know that “New Year’s Resolutions” have a much higher probability of success if they start in December?
Hey guys and gals, Jason Bond here.
You might know me from Jason Bond Picks, Weekly Windfalls, and Smoke Signals. Forgive me for that factoid about New Year’s resolutions. As a trader, I’m kinda a probability nerd!
You may not know that I’ve moved more and more of my attention to Angel Investing over the past couple of years. I’m loving this new challenge.
Right now I’m considered the number one teacher of stock/options traders in the world, and I want to add angel investing to that title, too.
This is my first article for Angel Insights (and the second in our 6 Sectors series), and I’m so excited to share the information with you. Because this next Sector is very near and dear to my heart.
You remember my little factoid about New Year’s Resolutions? Well, my New Year’s Resolution started in August, and it was… dum dum dummmm…
Let me be clear, this was a radical change in my life. All my life, I have loved burgers, steaks, chicken, you name it. I’m a meat and potatoes guy, you know?
But I needed to stay sharp for trading and investing. I haven’t always been great to my body. So I made the switch, and, I gotta say, the benefits have been huge.
Which brings me to the second Startup Sector we know is going to dominate 2020 and the next decade…
Sector #2 – New Foods
The idea of new food products and services is nothing new. For over a century, people have been applying science to create new food products and agricultural systems.
Dippin’ Dots, anyone?
The New Foods sector was officially born in the new millennium as food modification reached a new level, thanks to advances in technology and shifts in consumer choices.
New Food, also known as “Innovative Foods,” is a category comprised of agri-food tech startups who’ve discovered unique products and ingredients that offer new alternatives to proteins, meats, sugars, and flavor enhancers (just to name a few).
But when I’m talking about “New Food,” I’m referring to a broader category including innovations within the ag and food space. We’re seeing new kinds of growing, harvesting, preparing, delivering, and consuming all across the board.
There have been a couple of well-known New Food unicorns in recent memory, like BeyondMeat, the Impossible Burger, and Ripple Ice Cream. The Impossible Burger, for instance, has pioneered an entire market that’s moving mainstream, with McDonald’s and Burger King menus now offering Impossible meat substitutes.
But we believe this space is just getting started, and here’s why. The driving force behind this new trend is the shifting demand of consumer habits. More people are demanding more of their food. They want healthy, flavorful, and convenient options that are made sustainably and without GMOs (genetically modified organisms).
Startups within the New Food category are sprouting up everywhere, increasing in number by 60% in 2018. The most successful foodie startups raised $516 million that year alone.
With New Foods hitting the mainstream, and consumer consciousness around health and sustainability increasing, we predict these trends will only accelerate over the next decade. Needless to say, some of last year’s largest deals went down in the New Food category, a sure sign of some serious profit to be made.
New Food & Beverage Products
New Food is all about creating unique products to meet consumer’s needs. And we’re seeing consumer demands changing at a faster pace now than ever. This is in part due to our expanding understanding of nutrition as a society. Protein-rich and vegan foods are in particularly high demand.
Since studies have exposed that meat is one of the chief culprits of cardiovascular disease, as well as being responsible for 15% of overall greenhouse gas emissions, replacement foods have rushed in to meet consumer demands.
As I briefly noted above, Impossible Foods has made quite a ruckus over the past year or so with their Impossible Burger. That phenomenon hit all of America seemingly overnight. Curious customers lined up in participating burger joints just to be in on the new thing. Beyond Meat has pulled off a similar stunt with their plant-based meat alternative, which boasts an impressive nutritional profile.
Other Innovative Food startups, like Miraculex and Sugarlogix, have created alternative sweetener options to address similar health crises.
For all the exciting startups that have already broken ground with unique food product, we truly believe that we’re just getting started. The thing we love about this category of startups is that they are addressing multiple consumer demands simultaneously: They offer healthier, more sustainable, and (often) tastier alternatives to traditional food products. They are satisfying both needs and wants, and they’re about to break out like you’ve never imagined.
Bring on the cricket powder.
And the market for unique and boutique food products doesn’t stop at fake meat and sugar. The alcohol industry has also caught wind of changing consumer demands, and it’s growth (13% since the 2015) has largely depended on the success of craft breweries and micro distilleries.
New Agricultural Systems
Now, I don’t mean to scare you, but according to the United Nations’ Food and Agriculture Organization, the earth’s population is predicted to jump up to 9B by the year 2050. That means that we need to increase food production by 70% in order to feed everyone. That’s… a lot.
On top of that, the agriculture industry is facing rising costs to production, shortages in labor, land management inefficiencies, and food waste. Not to mention a newly agitated consumer base, demanding to know every detail of where their food comes from. Farmers of the world have a lot on weighing on their shoulders, to say the least.
Thankfully, we’ve seen a flux of Agtech startups popping up to offer solutions, worldwide. Startups like EarthSense, have worked to develop a robot that collects agricultural data using a variety of sensors. It tracks plants’ health, physiology, and stress responses, while converting field data into specific and actionable information about plant-traits.
And take a look at Verdical. It’s an indoor automated gardening system that allows customers to grow their own plants and herbs with just one touch of a button. This frees up restaurants and farm-to-table startups, by getting rid of the middle man and creating their own supply to sell directly to customers. Verdical allows urban spaces to become life-sustaining places to source their own local food.
A growing population and a less predictable climate make fertile ground for problem-solving, and that is the basis for all successful startups.
New Food Distribution Systems
We’re seeing the rise of subscription product services in nearly every industry. So of course, New Food is no exception. Successful startups like Blue Apron and Hello Fresh allow customers to order meal-kit boxes stocked with everything needed for dinner that night, on a subscription basis. Or if customers wanted to get a bit more personal with it, they could order grass-fed and finished beef products locally, from farm-to-table distributors like Oregon Valley Farms.
Or, consider the newer bridge-gapping restaurateurs, like Modern Market, Dog Haus, and Luna Grill, taking up the space between traditional fast-casual and casual-dining sectors. Fast casual 2.0 concepts have menus that are chef-driven, featuring signature dishes, while offering premium hospitality.
The focus is shifted on customer experience, offering higher-end beverages, often including alcoholic options. Food is made with a higher quality and often showcases farm-to-table local sourcing with healthy ingredients. A lot of these startups exhibit ambitions that stretch beyond growth and dollar signs, seeking to become staples of their community by way of inclusivity, collaboration, and long-term relationships with investors.
And there’s another level of innovation happening here as robotics and automation get involved in the food delivery/service process, like startup Makr Shakr, which has created a robotic/automated bartender. Since their debut in 2013, cruise liners and hotels all across the world have hired their very own machine mixologist, capable of mixing infinite varieties of drinks, utilizing up to 170 bottles of varying liquors, all stored in its overhead rack. Today, Makr Shakr units have made over a million drinks, sometimes making up to 800 in a single night.
Product Subscription Services Within New Food
That’s right, people don’t have to move a muscle to reap the benefits of personalized drink services. Subscription product services like Opn, are taking their place and branching out into the personalized libation market.
Opn implements its own intelligence system, allowing customers to learn about and customize their very own recipes, choosing from a 300-drink database. Customers are coached each step of the way, as they craft their shopping list with the exact ingredients needed for their favorite bevs. With just a few clicks, individuals can order exactly what they need and have it sent to their front door just in time for the next party. Opn can also assist in helping customers create social calendars, offering new tips on how to be the perfect host. Opn has certainly opened up new possibilities for a new kind of consumerism.
Johnny Walker launched their own line of personalized alcohol services, called My Edition. Along with the Diageo Futures and Vivanda Team, they developed taste profiling technologies to create one-of-a-kind, new and exclusive scotch whisky blends, based on individual customer preferences.
It’s an easy-to-use-software program where customers answer a variety of questions, which the My Edition machine learns and then crafts a customized blend. From there, individuals can personalize the glass bottle and add an engraved message or symbol of their choosing.
Not only does this expand their reach, engaging brand new customers, but it also retaining long-time customers, making them happy with a new product line. Additionally, they’re changing with the times and keeping their brand in the mouths of people, staying on the cutting edge of future business.
Another startup, Master of Malt, hailing from the United Kingdom, invites customers to personalize their own whiskey blends. Individuals have the option to either concoct their perfect bottle online or order their very own home blending kit. The home kit allows customers to make smaller batches, trying all of the ingredients first before purchasing a full bottle online, where they can personalize labels and messages.
New Foods is an unconventional bet for us. After all, so many hot startups have already emerged and found traction in this sector.
But we’re really just getting started here.
I’m inspired by the brilliance demonstrated by so many new startups implementing creative innovation and technology as business solutions to real problems. Even for needs as basic as food, the possibilities are quite endless.
The New Food industry doesn’t seem to be drying up any time soon. Now just might be the perfect time to take a look at some players looking to get in the game. The water seems just fine, it might just be your time to take the plunge.
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