Eggs, coffee, chocolate, and the culture wars: Foodtech in 2024

“A lot of foodtech founders in this dry capital environment are beating their heads against the wall with the conviction that the wall will break before their heads do,” observes Paul Shapiro at The Better Meat Co. “That said, deals are still getting done, and important technology is still being developed.”

In some cases, startups have found themselves swimming against the tide, with alt meat getting caught up in the culture wars (spoiler alert: JD Vance does not approve of “disgusting fake meat” and Ron DeSantis has been “fighting back against the global elite’s plan to force the world to eat meat grown in a petri dish”) while the leading player in livestock methane reduction has been battling a barrage of misinformation on social media.

In other cases, a confluence of factors has created far more favorable conditions for foodtech startups, however.

Notably, recurrent bouts of avian flu, fluctuating feed and energy costs, and regulatory changes have driven a surge of interest in egg alternatives, while soaring prices have sharply focused minds—and investors’ wallets—on finding replacements for two of the world’s most beloved foods: coffee and chocolate.

Interest in GLP-1 drugs, meanwhile, has kept proteins and sugar reduction in the spotlight and focused attention on fibers and the microbiome, with One Bio raising a sizable round to turn ag waste into “invisible” fibers that can be added to foods at high inclusion rates, and SuperGut tapping into interest in ingredients that naturally curb the appetite and feed the gut.

Advances in AI, in turn, are being deployed across the industry for everything from protein discovery and optimized cell culture media formulations to environmental monitoring, new product development and on-the-job training for food prep robots.

Uneasy though many food scientists may be about the prospect of Robert F. Kennedy Jr in charge of US food policy, meanwhile, his [potential] appointment to the cabinet may accelerate interest in alternatives to synthetic food additives, creating new opportunities for foodtech startups in everything from novel preservatives and food colors made in fermentation tanks to ‘invisible’ food-based coatings to extend shelf-life.

Tariffs and tighter controls on immigration in turn—while potentially disruptive for many US food companies—could also drive increased interest in startups developing labor-saving robotics in the food and ag space.

‘This is actually the best time to invest in this space’

As for the beleaguered alt protein field, Magi Richani at molecular farming co Alpine Bio, which is expressing dairy proteins in soybeans [disclosure: AgFunderNews’ parent company AgFunder is an investor] notes that investors got their fingers burned in the heady days of 2020-22 by throwing silly money at some foodtech companies. But the problems they are attempting to solve have not gone away, she points out.

“Unlike AI agents or dog-walking apps, transforming our food system is essential for our survival on this planet, and ultimately, the largest returns on investment will come from solving existential problems.”

 “What keeps me up at night is the overcorrection taking place in the food and agtech space. It’s true things were overhyped in 2021, and expectations needed recalibrating around time to market and growth. However, we’ve now swung too far in the opposite direction. This is actually the best time to invest in this space. The investors who are writing checks today are the ones who will reap the greatest rewards tomorrow.” Magi Richani, CEO, Alpine Bio

With this in mind, here are some of the highlights (and a few low lights😉) from 2024, plus some key foodtech areas to watch in 2025, from plant cell culture to in ovo sexing tech.

BIOMASS FERMENTATION

Despite the headwinds facing the foodtech space, Paul Shapiro at Sacramento-based startup The Better Meat Co—which makes mycoprotein via biomass fermentation—remains “convinced that the best way to satiate humanity’s demand for protein is to go big with microbial farming.”

Several biomass fermentation players have secured fresh funds in the past couple of years, from Enifer in Finland to ENOUGH Foods in the Netherlands; Infinite Roots and Nosh.bio in Germany; and Meati Foods in the US. These are complemented by players such as MyForest and Mush Foods, which are growing fungi via lower-cost solid-state fermentation techniques on trays without pricey bioreactors.

With industry pioneer Quorn reporting lackluster sales and Sweden’s Mycorena filing for bankruptcy in July (although it has since been acquired) it’s easy to see why some commentators might question whether the market can sustain new capacity, says ENOUGH Foods CEO Jim Laird, who is ramping up capacity at a new plant in the Netherlands with funding from strategics including Cargill.

But the picture varies widely depending on where you sit, he argues. “I have peers in North American companies who are so down on this market right now, whereas I’ve got one customer who came to our site with 25 people… and is forecasting a billion-euro business within the decade. So they alone would take every gram that I can produce.”

PRECISION FERMENTATION

On the precision fermentation front—the well-publicized problems at ‘animal-free dairy’ industry pioneer Perfect Day notwithstanding—there are plenty of encouraging signs that economics will continue to improve with advances in strain engineering, novel microbial hosts and feedstocks, next-gen bioreactors, continuous and cell-free biomanufacturing, AI/ML to help optimize cell lines and bioprocesses, and even ultrafine bubbles.

New capacity that’s fit for purpose is also coming online in 2025, says Liberation Labs, which is building 600,000-liters of biomanufacturing capacity in Indiana that is tailored to the needs of the next generation of ingredients made via precision fermentation.

“We’re seeing smarter equipment designs, feedstock innovations, more efficient fermentation and DSP [downstream processing] protocols and new strain engineering methods that collectively will create a step-change in unit economics, enabling proteins from fermentation to become mainstream ingredients.” Stephan van Sint Fiet,CEO, Vivici  

Notably, several players in the space have also moved from talk to action via strategic partnerships with large food companies or players in industrial scale fermentation, with animal-free dairy startup New Culture partnering with Korean biomanufacturing giant CJ CheilJedang, and Triplebar Bio teaming up with FrieslandCampina Ingredients to develop a cost-effective approach to scaling up production of bioactive milk protein lactoferrin.

As for feedstocks, sugar is not the only game in town these days, says Calysta, which uses methane as the primary carbon source for its protein-packed bacteria, which it is initially targeting at the animal feed and petfood markets from a new industrial-scale gas fermentation facility in China.

LanzaTech, another specialist in gas fermentation, also announced a move into the food and feed arena this year with a new product set to reach commercial-scale production in 2028: LanzaTech Nutritional Protein.

PROTEIN DISCOVERY AND SYNTHESIS

One area that attracted significant amounts of funding this year is protein discovery and engineering, with Shiru raising $16 million to expand ProteinDiscovery.ai, which lets users search a database of 33 million+ molecules by protein sequence, functional use, and successful expression.

Cradle raised $73 million to support its AI-powered platform for protein engineering; and Tierra Biosciences raised $11.4m to expand its designer protein-to-order platform.

PLANT CELL CULTURE

Another area to watch in 2025 is plant cell culture, which has recently started to gain traction in food and nutraceuticals as climate change and volatile weather have challenged supply chains in everything from cocoa and coffee to high-value botanicals such as saffron and vanilla.

Rather than using sunlight, water, and soil to nurture fully-grown plants, plant cell culture companies grow plant cells in bioreactors in conditions optimized for the rapid production of high-value compounds and secondary metabolites.

“For us, it’s not just a theoretical exercise, we can produce hundreds of kilos in our labs. This is not something that we intend to develop in five years’ time; we know how to scale this process.” Yaky Yanay, CEO, Pluri

While it’s still early days, there have been some key developments this year, with Boston-based Ayana Bio signing a deal with biotech firm Wooree Green Science to develop saffron and other bioactives made via plant cell culture; Kokomodo emerging from stealth with plans to futureproof the cocoa supply chain; Pluri deploying the tech to grow coffee; ReaGenics using it to grow potato biomass with a whopping 31% protein (vs the typical 2%); and California Cultured—a startup producing flavanol-rich cocoa and other botanicals in plant cells—securing a significant investment from Sparkalis, the corporate venture arm of bakery ingredients and chocolate giant Puratos.

That said, the numbers don’t add up if you rely on huge steel bioreactors, says California Cultured CEO Alan Perlstein. “We see the future in lower-cost plastic-based systems; that’s really going to be the only way that a lot of this stuff is truly going to scale and get to these commodity prices.” 

But don’t plastics have to be ditched and replaced with every batch? Not necessarily, says Perlstein. “Many of these plastic systems can be used multiple times before they need to be discarded. There’s also some newer configurations that could be used on a semi-permanent basis. Once we started experimenting with these, we were sort of blown away.”

CULTIVATED MEAT

While funding for many agrifoodtech segments has fallen sharply since early 2022 as generalists have fled the sector, private capital going into cultivated meat has almost dried up. AgFunder data shows that funding peaked at $989 million in 2021, dipped to $807 million in 2022 and then fell 78% to just $177 million in 2023.  

And worryingly for startups in the space, there is little evidence that things have picked up in 2024, with just two notable rounds this year (Mosa Meat’s $43 million raise in April and Ever After Foods’ $10 million raise in June).

Against this backdrop, firms have been slashing headcount, consolidating, and in some cases, calling it quits (click here and here). Others have become embroiled in battles with co-manufacturers over allegedly unpaid bills.

Indeed, without a “massive infusion” of capital from governments that see strategic value in making ‘real’ meat without animals, the cultivated meat industry will struggle, Robert Jones, VP global public affairs at Dutch startup Mosa Meat, told delegates at the Future Food-Tech innovation summit in London in October.

“There’s a valley of death we’re not going to cross as an industry without a massive infusion of public investment.” Robert Jones, Mosa Meat

So who still has money to spend? The three best-funded startups in the space are UPSIDE Foods ($608m), GOOD Meat ($270m), and Believer Meats ($388m). To conserve cash, UPSIDE has paused plans to build a large-scale facility in Chicago and is instead focusing on expanding its smaller ‘EPIC’ site in California, while GOOD Meat is “not attempting to raise money for a large-scale cultivated meat facility right now” and is instead focusing on process development and more efficient cell lines. 

Believer Meats, which is building what it claims is the world’s largest cultivated meat facility in North Carolina, told reporters in May that the site would be operational at the end of this year, but has not yet secured regulatory approvals to sell cultivated meat products in the US.

That said, it’s not all doom and gloom, with US-based Mission Barns unveiling proprietary bioreactors it claims can dramatically improve the efficiency of the production process;  Israel-based Ever After Foods outlining what it claims is a more efficient approach to scaling up using lower-cost packed bed vessels; and Australia-based Vow securing the green light from regulators in Singapore and Hong Kong to launch high-end delicacies from a subspecies of Japanese quail.

As for the economics of large-scale production, Israeli startup SuperMeat recently issued a report claiming to “offer a glimpse into a future where cultivated meat can be produced at scale;” Believer Meats released a high-profile peer-reviewed economic analysis showing “cost-effective continuous manufacturing of cultivated chicken using an animal-free medium;” and Prolific Machines unveiled a novel way to control cells used in biomanufacturing by deploying light instead of pricey growth factors and other signaling molecules.

Dr. Elliot Swartz, principal scientist, cultivated meat, at nonprofit The Good Food Institute (GFI), says he is encouraged to see more cultivated meat companies “share empirical data and information about their processes and scale-up strategy. My hope is that more companies will be inspired to share their own scaling strategies, which will allow the field to evaluate tradeoffs and hone in on the most tractable paths forward.”

With all that said, added Tufts University Center for Cellular Agriculture (TUCCA) director Dr. David Kaplan in July, “the one thing I will say though, is that I don’t think stir tank reactors that have been used in pharma are going to work here. They’re just too expensive.”

“[Large meat and CPG companies] know that in the next couple of years, they can invest in organic and grass-fed and regenerative and free-range and they can charge more for these products and make a return. But they also know that these solutions are only so scalable; they take more land and the animals grow more slowly and they’re more expensive to feed. They’re not as efficient. At some point, they are going to have to ask: what’s next?” Jeff Tripician, CEO, Meatable

IN OVO SEXING

Moving on to the egg industry, it’s been a big year for in ovo sexing: tech enabling firms to determine the sex of chickens before they hatch, ending the gruesome practice of culling male chicks (via suffocation or grinding) the moment they are born because the males are of no use to the food industry.

They can’t lay eggs, and there’s no market for their meat, as the breeds of chicken used in the egg and meat industries are different.

While Europe is driving in ovo sexing technology, with nonprofit Innovate Animal Ag estimating market penetration of 20% in the EU in April 2024, the US has begun to pay attention, with three players—NestFresh, Kipster, and Egg Innovations— all planning to introduce eggs from chickens sexed via this tech in 2025.

“The path to commercialization in the US starts at the high end of the market where consumers have shown they are willing to pay a price for higher quality, higher welfare organic or pasture-raised eggs.” Robert Yaman, founder and CEO, Innovate Animal Ag

EGG REPLACEMENT

Persistent volatility driven by recurrent bouts of avian flu, fluctuating feed and energy costs, regulatory changes, and a global pandemic, have wreaked havoc in the egg market, prompting a surge of interest in alternatives this year, from duckweed protein (Plantible) to bioidentical egg proteins made by microbes instead of chickens (Onego Bio), to potatoes genetically engineered to express ovalbumin (PoLoPo).

“Reduction or replacement of eggs remains a very hot topic in the food industry and there’s a huge drive to remove eggs that has nothing to do with sustainability. There’s also more demand for allergen-friendly products.” Tony Martens Fekini, cofounder, Plantible

Expect more interest in this space in 2025…

COFFEE AND CHOCOLATE… MINUS THE BEANS

Looking at cocoa and coffee prices over the last few years, there’s a fair bit of volatility. But if you normalize the curve, they’re just going in one direction ​(spoiler alert: it’s up), prompting a flurry of interest in startups exploring alternatives.

Some are looking to plant cell culture to grow cocoa or coffee in a bioreactor from plant cells (California Cultured, Kokomodo, Celleste Bio, Pluri, STEM).

Others—Atomo, Voyage Foods, Win-Win, The Kawa Project, Nukoko, Planet A Foods, Foreverland—are seeking to replicate coffee and cocoa using everything from carob and barley to grape seeds.

Both approaches are generating interest from strategics, with Voyage Foods striking a deal with Cargill, which will become its exclusive global B2B distributor for nut-free spreads and cocoa-free chocolate; and California Cultured securing a significant investment from Sparkalis, the corporate venture arm of bakery ingredients and chocolate giant Puratos.

“If we see the continuing degradation of some of these tropical environments, it’s almost guaranteed that the price of these ingredients is going to skyrocket. So in essence, we’re trying to build this basic platform that can eventually produce almost any type of rare or valuable plant based compound.” Alan Perlstein, CEO, California Cultured

Amatera, a French startup developing coffee varieties with the resilience and yields of Robusta and the taste of Arabica, has also attracted the attention of strategic investors, closing a $1.6 million pre-seed round led by PINC, the venture arm of food and beverage co Paulig earlier this year.

Expect more innovation in this sphere in 2025…

PLANT-BASED MEAT  

It’s been a bumpy year for plant-based meat, with lackluster figures in the refrigerated case in US retail, but a better (although still weak) performance in frozen, while the GFI reports more positive news in some European markets, with sales of alt meat up in Germany, France and Italy, but down in the UK, Spain, and The Netherlands.

Beyond Meat returned to growth in the third quarter, posting a 7.6% year-over-year rise in net sales to $81 million driven by lower trade discounts and targeted price increases, although volumes were down 7.1% year-over-year.

“I’m very bullish on Germany. I think it’s a terrific plant-based market. It’s one of the top in the world and so I think you’ll see us be aggressive there.” Ethan Brown, CEO, Beyond Meat

The elephant in the room at the loss-making firm, however, is its colossal $1.1 billion debt, thanks to a $1 billion+ offering of convertible notes made in March 2021 (when Beyond Meat’s prospects looked far rosier) that will mature in early 2027.

The plan is to add additional liquidity to the balance sheet through an ‘at the market’ program (selling shares on the open market over time, instead of all at once), while the firm will “pursue further balance sheet restructuring in 2025,” CEO Ethan Brown told analysts last month.

As for achieving profitability, he said, “I can’t say when, and don’t imply it’s going to be anytime soon. But that is where we’re headed.”

Rival Impossible Foods, which is not yet profitable either, has had a bumpy year with positive news on the regulatory and IP front offset by a costly recall.

SUGAR REDUCTION

Sugar reduction and replacement remained a hot topic in 2024.

Blue Tree Technologies—an Israeli startup using a patented process to selectively remove sugars from juice, milk, and beer—scaled its solution with Israeli juice manufacturer Priniv; US-based Elo Life Systems  closed a $20.5 million round to accelerate the development of a new natural high-intensity sweetener; and Ingredion invested in Israeli startup Better Juice Co, which has developed enzymatic technology that converts up to 80% of the sugars in fruit juice into dietary fibers and non-digestible sugars.

“Every food and beverage company is trying to reduce sugar, and they want ingredients from plants, so the two main questions we get are how much can we get and when can we get it?” Todd Rands, CEO, Elo Life Systems

Elsewhere, Incredo, an Israeli startup behind patented technology that makes sugar taste sweeter, struck a deal with Miami-based sugar refiner Sucro; and Roquette—a leading player in starches and starch-based sweeteners—signed an agreement with US-based Bonumose to enhance the scalability of low-cal sweetener tagatose.

There was also good news on the regulatory front for Bonumose, which secured a preliminary victory in its battle with the FDA over the labeling of tagatose, which it argues should not count as ‘added sugar’ on US food labels as it is both low-glycemic and tooth-friendly.

Elsewhere Israeli startup ReSugar saw further traction for ReSugar Synergy, a combination of inulin, fructose, and natural flavors that amplifies the sweetness of sugar via a phenomenon called positive allosteric modulation and enables sugar reductions of 50%.

INSECT AGRICULTURE

Finally, it’s been an interesting year for the insect ag sector, with large raises for Entosystem, Protix, Tebrio and FreezeM suggesting a certain level of confidence on the part of investors, offset by less encouraging news at cricket farmer Aspire, which laid off two thirds of its staff, and mealworm specialist Ÿnsect, which was forced to file a safeguard plan with a commercial court in France in order to stay afloat.

Elsewhere, Loopworm, FlyBlast, and Future Fields continued to build platforms using insects as mini bioreactors to produce recombinant proteins.

“People look at some of the companies in the insect ag space and say, ‘Where did all the money go?’ But the pioneers in the space really blazed the trail, particularly on the regulatory side. [The second wave of companies such as Oberland] can build on their learnings and scale up for orders of magnitude less.” Dr. Greg Wanger, founder, Oberland Agriscience

Funding rounds in insect agriculture, 2024 (US dollars):

• Entosystem (black soldier flies, Canada): $42 million
• Protix (black soldier flies, Netherlands): $40 million
• Tebrio (mealworms, Spain): $32.6 million
• FreezeM (black soldier fly neonates for breeding, Israel): $14.2 million
• Oberland Agriscience (black soldier flies, Canada): undisclosed
• Nasekomo (insect ag franchisor, black soldier fly neonate supplier, Bulgaria): $8.7 million
• Entocycle (enabling tech for insect ag, UK): $2.6 million
• Aspire (cricket farming, Canada): undisclosed

Source: Preliminary AgFunder data [disclosure: AgFunder is the parent company of AgFunderNews)