Tuesday, December 22, 2020

"Food Chain Market Map and Predictions"

 From AgFunder News, December 16:


(Enlarge full size at Culterra's Google Drive)

Editor’s note: Seana Day and Brita Rosenheim are partners at Culterra Capital and venture partners at Better Food Ventures, each with 20-plus years of investment, M&A, and strategy experience in agrifoodtech. Their analyses on the agrifoodtech sector are regularly used by participants in the space to understand the quickly evolving landscape. The views expressed in this guest article do not necessarily represent those of AFN. 

We have been covering the foodtech and agtech sectors for the past decade, yet the Covid-19 pandemic thrust the food supply chain into the spotlight like we never could have anticipated. 

As we saw scores of pandemic-driven shortages on the shelf supply disruptions, and dislocations in production and distribution, we were left with a complicated question: What does it really take to get data flowing from the farm to your plate?

It was that question that launched our odyssey into food supply chain tech. 

The food supply chain differs in some respects from our traditional understanding of foodtech and agtech because it encompasses industries with relatively well-established players and technologies. 

Many of these are horizontal software and logistics companies with multi-industry offerings. Due to this, as well as the highly-regulated and labor-intensive nature of the supply chain, it has been a more difficult industry for nimble startups to penetrate. 

So while we’ve seen the lion’s share of investment in recent years flowing into the end-points of agtech and foodtech, we believe there is still a tremendous, untapped opportunity for vertical-specific tech companies which are focused on serving the unique needs of the food supply chain.

It is with this sense of urgency and optimism that we bring you Culterra Capital’s inaugural 2021 Food Supply Chain Tech Landscape (available to download in high resolution here.)

Delivering the goods

For the purposes of this analysis we have highlighted a handful of predictions for the year to come, as well as emerging themes and key innovation trends that we believe will impact the four supply chain pillars — supply; production; logistics and distribution; demand — in 2021 and beyond.

While we cover a number of digitalization-driven opportunities for food system participants, we will reserve deeper dives into sector-specific areas — and practical adoption obstacles — for later reports. 

A little about us: Culterra Capital is an advisory firm focused exclusively on tech-driven innovation across the food system. This Food Supply Chain Tech Industry Landscape and analysis are intended to help operators, entrepreneurs, and investors in the food system to understand the quickly evolving themes and trends impacting the food supply chain. You can find our earlier 2020 Farm Tech and Food Tech Industry Landscapes and analyses at Culterra Capital.

Digitalization will remain a food supply chain catalyst for the next decade

It is well understood across the food industry that modernization, including investment in data infrastructure, is an essential first step towards digitalization. 

It’s a first step that many participants still need to take – which is why food and ag still represents the lowest penetration of digitalization relative to every other sector of the global economy.

Digitalization is the key enabler for new business model innovation across food and ag. For farmers and ranchers, it creates the foundation to access new markets, to decommoditize or differentiate their products based on quality and sustainability, to employ new B2B or B2B2C models, or to explore new revenue streams like carbon sequestration. 

For example, new carbon marketplaces are popping up almost weekly. But how can carbon credit buyers be confident with the reporting and verification if the infrastructure is not yet in place to reliably track that grain, beef, or hog through the value chain?

With expanded supply chain digitalization, retailers, consumer packaged goods companies (CPGs), and foodservice companies will increasingly be able to leverage real-time demand data. This will help drive real-time planning and visibility, optimized inventory replenishment and ordering, agile omnichannel execution, reduced waste, and better customer experiences....