Israeli foodtech leading the way in alternative protein innovation
Israeli foodtech leading the way in alternative protein innovation
Ahead of the final of Calcalist and Tnuva Ventures' 2023 FoodTech competition, we discussed industry trends with Anat Gross-Shon, CEO of the dairy division at Tnuva
In recent years, factors such as the climate crisis and conflicts between countries have affected the ongoing production and supply of food around the world and led to food insecurity. All this increases the relevance and importance of the foodtech industry, which can make a significant contribution to nutritional security.
According to the forecasts, in about a decade, the global market share of milk, chicken and meat alternatives will be about $140 billion, and meat alternatives are expected to make up about half of this market. In Israel, the market for animal protein alternatives is expected to be about 15% of the meat and chicken market in that period. By 2050, Israel's population is expected to grow significantly, a trend that requires us to act today to find sustainable solutions, and to take steps that will give us food security in the future as well.
This is the sixth year that Calcalist in collaboration with Tnuva Ventures, the investment arm of Tnuva in the field of foodtech, are looking for the next innovative move in the food industry through the annual FoodTech competition.
"The corona crisis, the war between Russia and Ukraine and the consequences of the climate crisis, have sharpened the understanding and need of countries to protect the food security of their residents, while maintaining local production and agriculture,” says Anat Gross-Shon, CEO of the Tnuva dairy division, in an interview with Calcalist. “Each country is currently required to define a clear strategy and policy in the field of food security, which will ensure the continuation of the basic needs of the residents in general and certainly against the background of extreme events.
"Our strategy at the Tnuva Group combines significant investments in optimizing production capabilities, R&D development and the supply chain based on traditional agriculture, alongside investments in advanced technologies and components and advanced production methods, with the aim of producing solutions to food security challenges, independent of other sources. The foodtech and agrotech industry has a fundamental role in developing advanced technologies to deal with these challenges in collaboration with the traditional food industry. Technological innovations concerning the development of plant protein, resistant crops and logistical efficiency driven by artificial intelligence, will be able to make a significant difference in ensuring food security in a changing climate and in future extreme cases.
"The field of protein alternatives is currently the leading solution in the market for increasing the stability of global food systems. Proteins from existing sources such as beans, soy, chickpeas and peas are gaining ground in the food industry, alongside innovative production methods for cultured animal components, based on biotech technologies, such as the use of mushrooms, yeast or functional proteins."
Gross-Shon points out that “in the last decade, Tnuva has invested approximately 250 million shekels in the development and establishment of production lines in the alternative protein field and invests tens of millions of shekels a year in strategic partnerships with innovative startups. It combines this alongside the development and production of animal products, the development and production of a wide variety of milk substitutes and recently also plant-based meat, alongside cultured meat and milk components. These are all products that are valuable to the consumer, tasty, nutritious, accessible and environmentally sustainable.”
The interview was held before the finals of Calcalist and Tnuva Ventures' 2023 FoodTech competition, which is looking for startups that can change the rules of the game in the food industry. This year's competition focused on the issue of food security and will culminate in the final event that will be held on November 2 at the Peres Center for Peace & Innovation and will open the Israeli Foodtech Week.
"In recent years, we have seen several foodtech companies that are trying to promote a transition to a low-meat diet using vegetable protein-based alternatives, for example Impossible foods and Beyond Meat - but sales haven’t really taken off. What can we expect to see from the next generation of foodtech companies?
"The companies Beyond and Impossible played a pioneering role in breaking through the glass ceiling of foodtech companies, both in the scope of raising resources, and in creating consumer awareness of alternatives based on plant protein. They created a revolution in the development of products that made a significant leap in the aspects of taste and texture. At the same time, the solutions based on alternative protein will not replace the traditional meat and dairy industry or local agriculture in its entirety. They will expand them in other directions, and will allow continued existence and feeding of the world's population in the future as well. The possible space for changes, innovations and developments is almost endless. Starting with meat, fish and even cultured milk that are made in laboratories, while saving enormous expensive resources like land, water and energy.
“The consumer today expects products that are more nutritious, more accessible, and have better sensory properties than before, therefore the growth of some companies in the field has slowed down significantly. The role of the entire food industry and foodtech companies is to continuously develop better solutions in terms of taste and texture, nutrients and price.
“Regarding prices, it is necessary to break the barrier of high production costs and produce three types of alternative products: meat and chicken substitutes that mimic the properties of the original product, animal protein that is a tasty, nutritious and accessible to consumers, and hybrid products that combine animal protein and plant protein, which may reduce dependence in animal protein and the environmental effects, and this without compromising on the taste and nutritional values.
“The next generation of foodtech will provide an answer to the challenges of the cultured meat industry, which is currently facing two significant challenges: production on significant scales and cost reduction, alongside the challenge of regulation. We are also working to develop cultured meat through 'Ever After Foods', which is a partnership between Tnuva and the biotech company Pluri, for the production of cultured meat components, in which we invested $7.5 million about a year and a half ago. In addition, Tnuva invested in Remilk, which develops milk components through precise fermentation, according to a company value of $30 million. In January 2022, Remilk raised $120 million according to a value of $325 million before the investment.
“Regulation plays a significant role in the further progress of the foodtech industry. Israeli foodtech is one of the most advanced in the world, but it cannot be produced commercially before there is regulatory approval, and because of this, the ability of regulation to catch up with the pace of development of technology has a critical role in promoting the foodtech industry. This requires resources and focus at the national level, but I believe that the foodtech industry is an asset that must be nurtured."
Israel has already played a significant role in the past in promoting food security with developments to optimize agricultural activity such as drippers. What are the most significant trends in the context of foodtech and food safety that Israeli companies are involved in today?
"Breakthrough technologies in the field of cultured meat in particular and cellular agriculture in general have placed the Israeli foodtech industry in a leading position. In recent years, 40% of global investments in the field have been directed to Israeli companies, and Israel ranks second in investments in the field of protein alternatives in the world after the United States. The developed biotech industry in Israel will lead to further technological breakthroughs also in areas such as precise fermentation and in the development of additional significant proteins required for the food industry.
"We see how Tnuva's leadership of the Cultured Meat Consortium, which consists of 14 companies and 10 academic laboratories, among others, members of the Aleph Farms, SuperMeat, Seevix, Kol Biotech, the Hebrew University and Tel Aviv University, is helping to create breakthroughs in the field. The collaboration between leading companies in the development of cultured meat, and leading food producers who bring the knowledge and ability to convert production technologies to an industrial scale, alongside working with research bodies and researchers in academia, is essential to creating a breakthrough in the field and making the products accessible to the general public."
In recent years, the demand for functional food, which provides an answer to various physical needs, has been increasing. Does the food tech industry work to develop functional food products that are designed to strengthen the immune system or those that support disease prevention?
"The food industry has a heavy responsibility towards what the consumer eats, and functional products are part of the solutions that are supposed to improve and assist in a more beneficial diet that allows for a better life. Functional food combines healthy and nutritious components, also promotes personalized nutrition, the consumption of nutritional supplements based on the unique genetic structure of the consumer, their metabolism and their lifestyle. According to estimates, the global personalized nutrition market will reach more than $35 billion by 2030, due to increasing awareness of the benefits of personalized nutrition such as weight management, reducing the risk of developing chronic diseases, improving athletic performance, reducing inflammation and more.
"In recent years, we have seen many products enriched with vitamins and protein, which allow the consumer to get a large part of the components of their daily diet through the foods. In recent years, we have witnessed a significant expansion of fortified foods, including plant botanicals such as curcumin, ginseng, ginger, and more. I believe that the natural way to consume these is through food.
"Today Tnuva already offers customized products for a variety of populations: meat reducers and vegans who consume 'alternative' products, exercisers who consume GO's protein products and more. This year, we launched 'Gold' yogurt products intended for the elderly, which were developed in collaboration with experts in the nutrition of the elderly, which includes nutritionists, an exercise physiologist, a sports dietitian, and doctors, and it contains, among other things, nutritional components that help preserve muscle and bone mass. The products contain high-level protein, calcium, magnesium, Vitamin D, and dietary fiber, which contribute to the absorption of calcium.
"We also invest through the Fresh Start incubator in Kiryat Shmona, in startups that offer solutions of supplements and enrichments for different populations. In the future, we will be able to develop personalized meals and nutritional counseling offers to help consumers achieve their nutritional goals."
How will the food industry look and what will be the place of foodtech in a decade?
“In a decade, the food industry will be based on technological progress and changing consumer preferences. Technological food innovations will redefine our relationship with food. The future food industry will likely combine sustainability, customization and high efficiency, and food technology (foodtech) will be the link that connects these elements.
"There are three major trends in the field of foodtech that it is appropriate to focus on and invest in in the coming decade: the field of protein alternatives. The significant jump made by the producers of the alternative products happened as a result of a combination of advanced production technologies and the use of innovative components that contributed to the transition of consumers (who are not vegan) to the consumption of the category; Functional food and 'personalized nutrition', which is a growing trend in the world, where artificial intelligence and machine learning will help adapt nutrition plans to individual health needs. It will be possible to scan a QR code on food packaging to know how its nutritional content aligns with the consumer's personal health goals. Transparency will increase, which will make it easier for consumers to choose sustainable products. A third trend is a sustainable food industry. At Tnuva we are constantly examining technologies that optimize production and reduce waste, such as precision agriculture, data analysis, as well as smart packaging that allows for a longer shelf life, better preservation and improved safety of food products.
"I believe that sustainability will be a central principle that will guide production methods and the way the food industry operates in the future. The emphasis will be less on processed food and more on agriculture, only that the concept of agriculture will undergo a transformation and countless startup companies in the field of agrotech will be at its disposal, which will make it more efficient and sustainable. Automation and digitization will redefine the supply chain, making it more efficient and flexible. Through data analysis, food technology will be able to predict consumer behaviors, crop yields and market trends, enabling better decisions for businesses and policy makers.
"Food technology will change the way we grow, distribute, purchase and consume food, and will help maintain public food security and local agriculture and production. This will make the industry more efficient and personalized, and will affect the entire chain, from the farmer, through the manufacturer to the consumer."
How is Tnuva preparing to integrate developments of the foodtech industry in its products in the various categories?
"Foodtech companies and established corporations will have to develop models of close partnership, so that together they can ensure real growth and consumer accessibility. The trick is to meet in the right place and find the right business model. We are constantly looking for growing foodtech companies, to bring this potential to the limit in Israel and around the world.
"Tnuva has been the pioneer of alternative protein for about 20 years. We have at our disposal a foodtech platform that combines knowledge, experience and experts in every field, one of the world's leading supply chains, and a unique R&D center. We work with startups that allow us to get to know the most advanced technologies in the field, and they receive an extensive beta site and cooperation with our R&D Center, which is one of the most advanced in its field in the world.
"As the largest food company in Israel, Tnuva manages a corporate responsibility policy (ESG) to improve the quality of the environment, to reduce food waste, to recycle, to purify wastewater and create a circular economy. We market about 4 million products every day, therefore we work to find solutions to preserve the environment, save energy and recycle food packaging, while reducing the plastic in the packaging and using recycled materials.
"Tnuva has dozens of production and logistics sites throughout the country and protecting the environment and sustainability creates quite a few infrastructural and technological challenges. We implement practical steps to minimize our carbon footprint, minimize the use of natural resources and other environmental impact indicators. We have set a goal of zero emissions in 2050 and we are talking about dozens of sites, which need to be adjusted according to the size and type of the site. We also operate in the field of renewable energy in collaboration with startups, and already a decade ago we installed solar panels at ten of our production points and are looking at expanding renewable energy sources for other sites in the group.
"We recently embarked on a sustainability drive in the field of packaging to remove the hard plastic caps from most of the yellow 'Emek' and 'Tal Hamek' cheese packages, which will save approximately 186 tons of plastic per year. The hard lids are replaced by environmentally friendly laminate lids, which allow easy and convenient opening and reclosing.
"We have the tools to navigate these challenges through technological food innovations such as alternative proteins, plant-based substitutes, cultured meat, functional components, energy efficient methods and more. By adopting these solutions, we can look forward to a safer and more sustainable global food supply, well into the future."