It’s no secret that the food and beverage segment has been booming lately, and we were excited to see that confirmed by these trends from the Food + Tech Connect Startup Investment Report.
According to the report, the industry saw $1.08 billion in venture capital invested across ninety-nine deals in 2017. Let’s take a look at some of the trends that have attracted investors in this space:
Food is cool now.... even if it's hot
Creating or investing in food and beverage brands hasn’t always been the “it” thing to do, but that’s changed as consumers are paying more attention to what they’re putting in their bodies. What’s more, younger consumers in particular are now leaning into food choices as a method of self-expression—and making their preferences known through word-of-mouth, purchase behavior, and social media, especially the all-important Instagram feed. The category has essentially exploded, causing investors and celebrities to take notice and join in. Over 450 funds and investors existed in the space in 2017, and Expo West attracted a record number of attendees, with 85,000 coming through the doors to see what’s popping in the category.
Digitally-native brands are winning
Until Amazon’s acquisition of Whole Foods last year, the forecast on food’s future in e-commerce had been a bit hazy. Even now, only 2.8% of food and beverage sales are made through e-comm, and meal kit-based models have struggled for a variety of reasons, including high marketing costs, low user loyalty. Digitally-native food brands like Soylent and Daily Harvest seem to be succeeding by offering complete meals in convenient formats, like ready-to-drink or frozen meals—all while staying on track with consumers’ desire for better-for-you living. Solve a need, see the results.
Power to the plants
It’s impossible to ignore all of the innovative startups focusing on supplanting animal-based products with alternative nutrition sources like plants, nuts, and chickpeas. The whole idea is to create new foods that don’t sacrifice taste for their environmental and ethical habits. Brands like Ripple (milk made from peas—yes, peas) and Impossible Foods (insanely realistic plant-based burgers) are leading the way when it comes to this field… no pun intended.
For insights on consumer trends across the food and beverage industry, contact Women’s Marketing today.
Source: Food + Tech Connect Startup Investment Report; eMarketer and Accenture 2018; CBS Insights January 2018
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