We all have to eat but what we are eating matters more and more. No surprise then that a record $30bn+ of deal activity probably occurred in the agrifoodtech sector last year. With more than 2,700 deals announced in 2020, the total sum invested exceeded 2019’s figure by 30%, based on the latest recently released findings by AgFunder, a leading specialist venture capital business.
The term ‘agrifoodtech’ may smack somewhat of hype, but it can be best thought of as encompassing a wide array of initiatives spanning farm to fork. Investments made during 2020 in the former category (or the upstream segment of the market) surpassed those in the latter for the first time in seven years. This space comprises everything from crop science, genomics and the microbiome to farm robotics, sensing and the deployment of internet capabilities via indoor farming, aquaculture and insect production. Per AgFunder’s report, the number of innovative food start-ups have doubled in the last year.
We have been tracking the industry’s progress for some time, but it is interesting to consider what is spurring the recent acceleration in investment. Several trends seem to be at work: consumers say increasingly that they value personalisation over scale with an increasing emphasis on ‘fixing’ rather than just ‘feeding’ – better food with a lower carbon footprint. Kerry Group, a provider of innovative food solutions, recently coined the term the ‘&’ consumer. What this means is that consumers have multiple expectations that food businesses need to fulfil; they want food that tastes great and is healthy/ nutritious and trusted and local and has both purpose and sustainability.
Edmund Scanlon, Kerry’s Chief Executive spoke passionately about this topic when we caught up with him virtually last month. The business is responding in terms of its own offerings and it is notable that large fast-moving consumer groups such as Nestlé and Unilever are also increasingly emphasising the importance of the provenance and sustainability of their products. In the past week we have also met virtually with several leading salmon businesses. Two of the key consistent messages from these meetings were about raising the sustainability of fish production and promoting the health benefits of salmon as a protein source. As one Chief Executive put it to us, the company’s mission involves “moving closer to the customer.”
Originally Posted on March 5, 2021 – Season 3, Post 9: Food for thought
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Kerry Group. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Disclosure: Heptagon Capital
The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.
The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital’s prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital’s prior written consent.
Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
tel +44 20 7070 1800
fax +44 20 7070 1881
Partnership No: OC307355 Registered in England and Wales Authorised & Regulated by the Financial Conduct Authority
Disclosure: Interactive Brokers
Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Heptagon Capital and is being posted with permission from Heptagon Capital. The views expressed in this material are solely those of the author and/or Heptagon Capital and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.