In the world of alternative foods, such as cultivated meat and products made from precision fermentation, burgeoning technologies are often developed at a small scale. While great for innovation, in the long-term this won’t achieve what food is really there to do: feed the population.
Without being upscaled, new food tech may well change our understanding of how food can be produced, but it won’t change the food industry itself. For that, start-ups often benefit from the help of industry partners.
We spoke to Floor Buitelaar, co-founder and managing partner of strategy consultancy Bright Green Partners, about how corporate partners can help food tech start-ups scale up, and what these corporations can learn from the small and innovative companies they work with.
Why start-ups benefit from partners
Start-ups “cannot change the whole world by themselves,” Buitelaar told us. And partners can provide several key things.
Firstly, money. The investment into a start-up by a larger corporate partner gives them the resources to take their idea beyond a small lab to the point where it can be commercially viable.
Infrastructure is also an important element. Many young start-ups do not have the necessary infrastructure to expand their production to commercially viable levels. Large corporates, on the other hand, usually do.
Furthermore, large corporates provide integral strategic guidance, supply chain integration and access to the market.
While in the long-term, a start-up may be brought into the fold of a large corporate, if they’re using a new technology that’s not on the market yet, this process will not happen immediately.
It’s important to, at first, keep such start-ups separate from the inner workings of a corporate partner, because, Buitelaar told us, if a new technology was brought into such a large company it would likely ‘die because of bureaucracy.’ Conversely, keeping it isolated allows the corporate to ‘leverage the speed and the energy of the people in the start-up.’
Has upscaling become easier for start-ups?
According to Buitelaar, the industry around alternative foods has only really developed fully in the past five years. While previously some corporates would show an interest, there wasn’t a full value chain and not as many research institutes.
Now we have seen the development of the market. For example, there are a range of specialised companies on the market, such as Bright Green Partners, whose purpose is to help food tech companies upscale. There are, Buitelaar told us, many options beyond simply going to a big company.
What technologies will companies work together on?
There are a range of potential technologies and processes that collaboration could help companies use.
For example, a plant-based start-up might need the help of someone who knows about extrusion technology. Alternatively, they may need assistance on developing a breeding programme with the crops they use for plant-based meat, which will remove the off-taste in a protein ingredient so that the eventual product is more appealing to the consumer.
In the world of cultivated meat, Buitelaar suggested, mass-production of cell culture media could help companies to produce their product more efficiently.
Businesses from other areas could provide strong support for alternative meat companies. For example, in fermentation, large biotech fermentation companies can help start-ups in areas such as strain development and upscaling of biotech processes.
What are the key barriers for upscaling?
There are a wide range of barriers for alternative food companies to upscale. For example, there is a need for both new and retrofitted infrastructure. This is particularly true, according to Buitelaar, in precision and biomass fermentation and cultivated meat.
Complex novel food regulations can also hinder many of these companies in getting to market.
This is in turn hampering investment. Because novel food start-ups need a very long time, due to regulation, to get their products to market, investors are not as keen as they otherwise might be to put money into them. The ‘current political and financial environment’, Buitelaar told us, contributes to this problem. There is less VC money available, and a growing pushback against environmental policies.
“Bringing novel solutions into corporates is quite complex.”
Why corporates benefit from start-up partnerships
“Bringing novel solutions into corporates is quite complex,” Buitelaar told us. “They’re used to doing business as usual. That’s how they got successful.”
Start-ups, on the other hand, have a certain level of agility and dynamism, due to their smaller size and less convoluted structure, that larger companies do not.
“What they oftentimes try to get from start-ups or scale-ups is new ingredients, technologies or products that in the end they could bring back to their commercial entity, to the corporate itself, to bring into their portfolio.”
Even if they don’t directly use the start-up’s technology or processes, they learn a lot from such a collaboration. For example, start-ups are often tapped into trends in the market, and what other companies in the market are doing.
“It’s a relatively cheap way to get their hands on certain information.”