food industry

How Entrepreneurs are Shaping the Future of the Food Industry

Did you know that consumer demand for alternative foods, including meat substitutes and plant-based ingredients, increased by 17 percent in 2018?

While we often hear about big-name companies launching new products to appeal to changing consumer tastes (hello, Burger King), there is also an army of innovative startups that are more quietly working alongside existing food companies to help them develop enhanced offerings.

Even food giants, such as Chipotle, Chobani, Land O’Lakes and Pepsi Co., have shown an increased appetite to collaborate with startups in recent years. To advance innovations and help startups grow their business, they’ve engaged in direct relationships, or established venture funds or accelerator programs with funding reaching tens of millions of dollars.

Below, we examine more closely consumer trends within the food industry and how entrepreneurial minds are driving these trends through innovation.

Related: How to Leverage a Farmers Market to Break Through in the Food Industry

Demand for plant-based protein

Plant-based protein is becoming increasingly popular among both vegetarian and non-vegetarian consumers. Its demand in the U.S. surged by 20 percent last year, as consumers now perceive plant-based proteins as a better alternative and a valuable addition to their diet.

One of the many startups working toward a meatless future is Nutriati, a company producing plant-based proteins and gluten-free flour ingredients. The company’s processing capabilities guarantee a premium taste, texture and nutritional profiles that were previously unimaginable.

Partnering with PLT Health Solutions, a corporation supporting many small ingredient innovators, the company is now working to introduce its first two flagship products to the market: a protein concentrate derived from chickpeas and a high protein, gluten-free chickpea flour.

Healthier sweeteners on the rise

With the average American consuming 126.4 grams of sugar a day, obesity, diabetes and other health risks have become a serious concern. One of the major challenges that entrepreneurs face in addressing this issue is lowering sugar content in foods without compromising the taste.

Nutrition Innovation has stood up to the challenge. The company has developed a low-glycemic natural cane sugar product through a patent-protected process that retains the antioxidants and minerals naturally present in cane sugar, such as magnesium and calcium.

The company claims its product reduces sugar intake by up to 70 percent. Thanks to this innovative approach, Nutrition Innovation raised $5 million from investors, and established partnerships with food and beverage companies across the world.

Reducing fat in foods without losing the taste

Another obvious health concern is associated with fat consumption, as fast food chains are often the popular choice for many consumers.

Enter Epogee, a startup that has created an ingredient that has basically the same taste, texture and fat ratio as cocoa, yet has only 30 percent to 40 percent of its calories. The company uses natural oils to produce a fat substitute using the firm’s patented technologies to transform the elements that make fat: glycerol and fatty acids.

The extraordinary success has garnered the attention of Blommer Chocolate Company, the largest cocoa processor and ingredient chocolate supplier in North America. The startup also recently earned an $8.3 million investment from HG Ventures.

Sustainability and ethics

Responsible consumption, a trend causing an avalanche among millennials and Gen Z on social media, has made consumers more aware of the origin and contents of the foods they purchase. With growing concern over climate change and sustainability of our lifestyles, consumers are incredibly curious about how products arrived on their plate: they want to know the whole story.

Thus, companies that are able to demonstrate sustainable, cruelty-free and ethical production have a strategic advantage over those that do not. Some food startups are even going far beyond alternative proteins.

For instance, WEEDit, a spot sprayer technology, was built to identify weeds and apply herbicide only where needed. Beneficially contributing to the ecosystem, the targeted approach only sprays 18 percent of a farmer’s crop area, reducing chemical use drastically.

For corporations, this can bring immense cost savings. For consumers, it appeals to their eco-friendly conscience.

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New ingredient categories

Eco-friendly food startups are constantly working to develop new ingredients. Trends in this area include the discovery of new probiotics and prebiotics intended to help consumers combat dangerous pathogens, digest our food and absorb nutrients more effectively. Ingredients that help to preserve food are also an interesting area of innovation.

Chinova Bioworks claims it has created the first entirely natural preservative that is both highly effective and versatile, used by leading food companies.

What does this all mean for you?

Whether plant-based proteins, innovative ingredients, healthy-eating hacks, lean manufacturing pipelines or ethics as a frontrunner, the food industry is undergoing changes that satisfy both consumers and the planet; and a brand-new breed of food startups are driving these trends through innovation.

So, if you’re trying to break through in the food industry, use consumer trends to drive your innovation. When it comes to product development, you’ll appeal broadly to consumer tastes by keeping the above trends in mind.

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