7 Questions with Anterra Capital about Food Technology and Consumer Driven Trends
Dutch venture capital firm Anterra Capital is backed by food and agriculture banking group Rabobank and Fidelity Worldwide Investments, the US asset manager, in its mission to transform the safety, security and sustainability of global food. With investments more commonly focused on the agriculture production-focused technologies, the firm has invested into a food technology company called Food Freshness Technology, aiming to extend the shelf life of produce.
AgFunderNews recently had the opportunity to speak to Maarten Goossens, principal at Anterra Capital, about the firm’s food technology thesis, ahead of the Future Food Tech event in London in November, where he is due to speak.
What major consumer trends are you hoping to tap into with your investments in food technology?
The fundamental drivers of demand, and the supply constraints faced by the food value chain, underline our belief in investing in the sector — population growth, emerging middle class pushing against supply constraint by urbanization, depleting aquifers, climate change, and soil degradation. But aside from these supply and demand drivers, we see significant consumer-driven trends supporting our key areas of interest:
1. Consumers can easily access more information about the food they eat and are concurrently paying more attention to the nutrition level of their diet — rather than a minority of people paying attention just to the calories in their diet.
2. Consumers are often shocked as they learn more about our environmentally challenged industrial food system with all consumers seeking a safe food solution and some also prepared to invest in a more sustainable solution.
3. Some consumers are in the luxurious position of seeking higher quality food potentially at premium prices. These trends are prevalent in the developed world, but we’re also seeing an emerging middle class in developing countries paying attention to the same. All people ultimately desire and deserve the same; reasonably priced and readily available food that’s produced and delivered in a safe and sustainable manner.
What really excites you about the fresh food preservation side of food technology?
At the highest level, we waste 30 percent – 40 percent of the food we produce, with most if this waste happening early in the chain in developing countries, while unfortunately in “developed” countries, most of the waste occurs at retail or in our homes. To me, that doesn’t sound like an adequately developed solution. Therefore decreasing waste is both a critical aspect to solving our food problems and presents a suite of attractive investment opportunities.
Even if you don’t believe that the world is facing a food challenge, it is difficult to deny that the greatest food demand pressure — emerging middle class and highest population growth — are in regions where there is the lowest available land and water per capita. We believe innovations that extend shelf life, decrease waste, and facilitate trade are supported by strong macroeconomic fundamentals and will play an important role in the future.
What is the competitive landscape like for technologies in this segment?
To date, big corporates have been innovating with concepts like processed food that deliver unimaginably long shelf lives. Packaging and chemicals companies are also strategically exploring ways to delivering shelf life extension solutions. Nevertheless, there’s significant room for smaller companies to innovate in this space at a faster rate than large corporates have been able to deliver. We’re looking at opportunities like natural post-harvest solutions for the suppression of bacterial growth, active and intelligent packaging and IoT track-and-trace solutions for improved supply chain intelligence. Finding great solutions that work is the problem, not the competition.
Are there any regulatory concerns about food preservation technologies?
The concerns that authorities have naturally begin with the existing weaknesses in the value chain which lead to over half a billion foodborne diseases and 350,000 deaths every year. Clearly all potential solutions are welcome, but any new technology must also be established as a safe solution. This explains why food safety is high on every government’s agenda and warrants that the industry is closely monitored by bodies like EFSA and FDA.
Who are you hoping to meet and what are you hoping to learn more about at the Future Food Tech event?
I’m banking on finding our next great investment at which point in time drinks at the bar will be on Anterra.
How much of your fund is invested into consumer-facing technologies, vs food production/farmer-facing technologies?
Except for Food Freshness Technology, which extends the shelf life of fresh produce straight after harvest all the way down to your fruit bowl, our other portfolio companies are presently focused more upstream in the value chain. This is less a strategic decision and more a reflection of where we have found the best investment opportunities.
What fund are you currently investing out of, how big is it and who are your investors?
Anterra Capital is backed by Fidelity and Rabobank and our fund is solely focused on innovative F&A tech companies that aim to transform the food industry. We don’t disclose the size of the fund, but we invest up to €15 million per portfolio company.