The Future of Food
The world in which we’re currently living has never before seen consumer behavior change so quickly. We expect to continue to see these seismic changes over the next decade. At M13, we invest in companies that are building defensible businesses around emerging consumer behaviors in the essential areas of consumer’s daily lives: food, healthcare, entertainment, and financial services.
For our 2020 Summer Series “Future Perfect” conversations, we’ve brought together founding leaders who have shaped and are shaping current and future generations of great businesses. Together, we seek to further understand how today’s health and economic crises resulting are accelerating behaviors and white spaces for new necessities, innovations, and investments.
Below is our conversation on The Future of Food and how rapid industry progression has surfaced issues around sustainability, access, conscious consumerism, and more. This conversation is moderated by Gautam Gupta, Partner at M13 and Co-founder of NatureBox, and includes the following panelists, all of whom are innovation pioneers in the food industry:
Rachel Drori, Founder and CEO of M13 portfolio company Daily Harvest, a subscription-based delivery platform of farm-fresh and organic fruits and vegetables made into delicious nourishing smoothies, soups, lattes, ice cream and more.
Nick Green, Co-founder and CEO of M13 portfolio company Thrive Market, an online membership-based market with more than half a million members who support healthier eating habits and seek to build a better world in the process.
Seth Goldman, Co-founder of Eat The Change and PLNT Burger. Eat The Change is a platform built to inform and empower consumers to make dietary choices consistent with their concerns around climate change. PLNT Burger is a fast-casual restaurant dedicated to crafting and redefining some of America’s favorite foods without sacrificing flavor or using animal products.
Is there a ceiling to plant-based or organic? What is next?
- Over the last decade, there has been an increased focus on adopting plant-based eating habits and organic farming practices, both for the health of the consumer and the planet.
- As more people learn the benefits of healthy and organic consumption, these trends will reach critical mass. But there is still a huge opportunity in the market: organic represents 1% of our farmland and 4% of food sales in the US but at least 20% of people buy organic as part of their routine.
- The way to meet demand and make organic food more accessible is to increase that demand; invest in transitional organics, unprocessed food, and regenerative farming. There’s still a lot of work to do, and innovators, brands, and retailers will need to increase focus on making it more accessible and affordable.
How has COVID-19 has impacted the food industry?
- Now that school, work, home, and life have blended, consumers need solutions that fit a new lifestyle. Brands with technology and delivery infrastructure are going to win. COVID-19 has created an environment that’s ripe for online food and grocery delivery companies.
- As with any recession, consumers will focus most on convenience, value, and affordability. But COVID has been a moment where people are gaining perspective about what’s really important, resulting in an acceleration of conscious consumerism.
- Restaurants are suffering from a broken business model. Regardless of how business is performing or whether they are even able to operate, most restaurants exist on a fixed rent model. Dynamic rent models, where owners pay a percentage based on sales, will soon be required in order for restaurants to successfully operate.
“COVID has been this moment where people are taking stock, getting perspective, thinking about what's really important. We're going to see an acceleration of conscious consumerism. We need that when we're facing existential planetary issues.” - Nick Green
Given the macro environment ahead, how should we think about access?
- Besides affordability, physical access to healthy options is one of the biggest challenges. Over half of American families are not within driving distance of a health food retailer. Healthy, affordable options that can be delivered to one’s door is a must for bridging this gap.
- Accessibility is another issue; if someone must be placed on a diet to manage their health issues, knowing how to find products that actually fit their needs can be challenging. Technology has the ability to solve this problem. Brands that are building platforms purposefully built for healthy living have an incredible ability to provide the education and ease of access specialized diets require.
“Having the food there and having it at an affordable price isn't enough. We also need education, inspiration, and ways to connect with the community from the community.” - Seth Goldman
How will the world of tech interface with food?
- Transparency is key. GMO labeling laws in the US don’t apply to products made using synthetic biology. Overall, there is a general lack of public information about synthetic processes, what supply chains look like, especially as they scale. This makes it difficult for customers to make informed choices and leaves a lot of questions about environmental and economic sustainability.
- Yet there are brands that are applying technology in a transparent authentic way. Beyond Meat’s products are non-GMO certified and made with simple, clear ingredients.
- There’s a role for technology when it can be done in a way that is safe for the consumer and better for the environment.
“Studies point to the fact that the closer foods are to their natural state, the healthier they are for us, and the better we can metabolize them. It's really important that we use technology for that transparency.” - Rachel Drori