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The Spoon

Daily news and analysis about the food tech revolution

Jennifer Marston

California Law to Ban Food Delivery Services From Adding Non-Partnered Restaurants

California Gov. Gavin Newsom signed a piece of legislation into law this week that hits at third-party delivery services listing non-partnered restaurants on their websites. At the tail-end of yesterday, the Los Angeles Times reported that the first law will require delivery services to sign formal contracts with restaurants before listing those businesses on their platforms.

The law is likely to raise at least some controversy. Under it, third-party delivery services would have to have formal agreements in place with all the restaurants listed on their platforms. Up to now, restaurant listings on third-party delivery sites have been something of a free for all, with delivery services adding restaurants whether or not they have ever made an agreement or even spoken. Restaurants don’t pay the commission fees on these orders. Instead, those get passed to the customer.

Delivery services argue that this practice helps local businesses attract more customers. Restaurants, meanwhile, have complained about inaccurate prices and menu items on those sites, while others have said they receive orders for pickup or delivery items they can’t actually fulfill because they don’t offer off-premises options.

California’s law comes at a time when most restaurants have been more or less forced to take their business off-premises to even stay alive through the upheaval caused by the pandemic. But at the same time, a bunch of other restaurant tech companies are offering alternatives to third-party delivery services. So a restaurant getting listed on Grubhub’s website could be undercutting the businesses own separate efforts to fulfill delivery orders (and retain direct relationships with customers).

Third-party delivery services rely on these non-partnered listings to increase their share of the market and look attractive to potential investors. Having to sign formal agreements with businesses will slow these companies’ ability to some restaurants, and outright halt them from getting others. That in turn would further undercut the still-unprofitable model on which the market is built.

Rhode Island introduced a similar ban earlier this year that is still pending. California’s is set to take effect on Jan. 1, 2021.  

Revol Greens Raises $68M to Build Out High-Tech Greenhouses in the U.S.

Revol Greens announced today it has closed a $68 million funding round for its network of high-tech greenhouses the company says will eventually supply 33 million pounds of greens annually to the U.S. The round was led by Equilibrium Capital. According to a press release sent to The Spoon, this brings Revol’s total funding to $215 million.

The Minnesota-based company says it will use the new investment to launch its third facility, which is a 20-acre farm in Texas that could expand to 80 acres in the future. 

Revol is part of a new wave of companies marrying greenhouse growing with technology systems that allow food producers to grow crops year-round, in totally controlled environments. Its system uses closed-loop hydroponics and, when necessary, supplements natural sunlight with LEDs. It also collects data on plant growth to ensure crops have the correct levels of water and nutrients they need to grow.

As they’re based in Minnesota, the folks behind Revol are no strangers to the kind of extreme weather that makes growing crops outdoors impossible for parts of the year. But extreme weather is also a consequence of climate change, whether it’s fire, drought, or insect outbreaks, and it is becoming more widespread. In traditional agriculture, that could mean an increase in pests, flooding or heavy downpours that threaten crop yields, and increases in carbon dioxide that decrease the quality of products. 

Revol is not alone in merging the greenhouse with high tech to provide an alternative to traditional agriculture. AppHarvest is currently building out a massive greenhouse facility in Appalachia. The company recently raised $28 million. Iron Ox, which raised $20 million earlier this month, is bringing robotics to the greenhouse, and a company called Lufa has taken the greenhouse concept to rooftops in cities.

Getting greens closer to cities is also one of Revol’s goals. “High-tech greenhouses give us the ability to return to regional food systems with farms that produce our food near our communities,” David Chen, CEO of Equilibrium, said in today’s press release. “Regionalism gives us resiliency, food security, and addresses the threat of climate change to our food system. Greenhouses are the tech disruptor in a 10,000year-old agriculture sector.”

Revol CEO Mark Schulze added that by the end of 2021, the company will be “the world’s largest indoor lettuce producer.” 

The company’s first greenhouse launched in 2018 in its hometown of Owatonna, Minn., followed by a second facility in Tehachapi, Calif., which Revol is in the midst of building out.

Yummy Corporation Raises $12M to Expand Its Ghost Kitchen Network

Indonesia-based cloud kitchen management company Yummy Corporation has raised a $12 million Series B round of funding, according to a report from TechCrunch. The round was led by SoftBank Ventures Asia and included participation from new investors AppWorks, Coca Cola Amatil X, Palm Drive Capital, Quest Ventures, and Vectr Ventures. Also participating were existing investors Intudo Ventures and Sovereign’s Capital.

Founded in 2019, Yummy operates a network of fully managed delivery-only kitchens across Jakarta. It rents space to existing food and bev brands, providing them kitchen infrastructure as well as the necessary staff to assist in fulfilling delivery and takeout orders.

The company says it will use the new funds to expand into other cities and further develop its tech platform. 

Which cities Yummy next heads to is yet to be announced, but if they’re anywhere in Southeast Asia, the company will face plenty of competition. Food delivery service GrabFood already operates over 50 ghost kitchens across countries in the region, including Indonesia. Delivery service Gojek also has ghost kitchens in Indonesia and other countries in Southeast Asia and India. 

Earlier this year, Euromonitor said the global ghost kitchen market could be worth $1 trillion by 2030. That may be an absurdly optimistic number, but there’s no denying the popularity of the ghost kitchen particularly since the pandemic forced most of the world into lockdown and turned the traditional restaurant model on its head. In the last few months alone, we’ve seen numerous sizable fundraising rounds from ghost kitchen companies all over the world as well as more networks of virtual restaurants come to market.

Yummy Corporation raised a $7.8 million Series A round in 2019. This new round brings the company’s total funding to $19.8 million.

 

Mosa Meat Raises $55M for Cell-Based Burgers

Mosa Meat, the Netherlands-based company known for creating the world’s first lab-grown hamburger, announced today it has raised $55 million as part of a larger Series B round. The round was led by Blue Horizon Ventures with participation from Bell Food Group, M Ventures, and others. 

Earlier this year, the company said it had achieved a more than 80x reduction in the cost of the growth medium it uses for its lab-grown meat. That’s one heck of a reduction, considering the Mosa Meat’s original hamburger cost $325,000. The company also opened a new pilot production plant.

Especially noteworthy is that in 2019, Mosa Meat successfully removed Fetal Bovine Serum (FBS), which is both expensive and ethically controversial, from its growth medium. According to a company blog post from July, removing FBS from the medium helped bring down overall costs, which in turn gets Mosa Meat closer to achieving price parity with traditional meat. Reaching that price parity will be crucial to selling the average consumer on the idea of eating burgers and other meats grown in a lab. Achieving the right texture and taste are also critical components for cell-based meat products.

The cell-based meat category has seen a huge uptick in investment over the last several months, and for more than just burgers. IntegriCulture, a company making lab-grown foie gras, raised $7.4 million in May and got a $2.2 million grant in August. BlueNalu raised $20 million in February for its cell-based seafood. Overall, the cell-based meat category has received more than $290 million in investment for 2020.

Mosa Meat says it will use its new funds to extend its current pilot production facility, expand its team, and develop an industrial-sized production line. It will also “introduce delicious cultivated beef to consumers,” though no specific date for that is set. For now, the company said it will work with European regulators to demonstrate the safety of cell-based meat and get regulatory approval to “serve consumers in Europe who are craving change.”

Zomato: India’s Food Delivery Nearing Pre-COVID Levels

The food delivery market in India has almost bounced back to pre-COVID levels. A recent blog post by Zomato stated that gross merchandise levels are roughly 85 percent of what they were pre-pandemic, up from 75 percent in August.

According to Zomato, major cities like Delhi and Mumbai are nearing full recovery, while others “have recovered completely and have exceeded pre-COVID levels.” Affluent parts of cities are driving the recovery, which makes sense given the cost of using third-party delivery services. Zomato said more high-end restaurants have also gone online, which accounts for some of the growth as well. “Overall spends on such premium restaurants have grown by over 25% over pre-COVID levels,” the company said.

Other influential factors include more at-home delivery orders for celebrations and more group orders, since everyone’s stuck at home with their families.

Of course, the caveat here is that Zomato has quite a bit of skin in this game, it being one of India’s leading food delivery services. So while the stats from this recent blog post only include Zomato’s customer base, they’re likely a fairly accurate gauge of the entire India food delivery market. (Swiggy is the only other major delivery player in India right now.)

Zomato this year also expanded its services to include groceries and household goods (a move that other third-party delivery services like DoorDash have done in other parts of the world.) The company also raised $162 million earlier this month and said it is preparing for an IPO in 2021.

Right now, Zomato’s main competitor for all this growth is Proses-backed Swiggy, which has raised $1.6 billion in funding to-date. Everything could change, though, depending on how successful Amazon is at scaling its newly launched food delivery business across the country. Neither Zomato nor Swiggy is profitable yet. Amazon, meanwhile, already has a presence in India through its Amazon Fresh and Amazon PrimeNow platforms. 

Agtech Platform Silo Raises $9M to Fight Food Waste in the Supply Chain

San Francisco-based Silo Technologies announced today it has raised $9 million for its cloud-based platform aimed at cutting down on food waste in the U.S. food supply chain. The round was led by Andreessen Horowitz with participation from existing investors Capital and Haystack Ventures.

Silo (not to be confused with smart-storage maker Silo) wants to minimize food waste in the supply chain by automating operations within it, including buying and selling food, forecasting supply and demand, and managing relationships between the different players in the chain. The software, which is available to food growers, buyers, distributors, and sellers, also digitizes tasks like accounting, inventory management, and reporting, making them quicker and more accurate tasks.

The company said in today’s press release that while food waste happens across the food system, it’s “particularly heavy in production and distribution.” Examples of this include products that spoil in production process because of inadequate storage and transport and projects that are rejected by buyers. While food loss of this kind is less widespread in the U.S. compared to developing nations, it nonetheless happens with plenty of regularity. 

Given that it’s a global, multibillion problem, food waste in general has seen plenty of new investments and developments of late as the issue becomes more urgent for companies, governments, and consumers alike. Clean Crop Technologies nabbed $2.75 million in June of this year, while major CPGs including Walmart and Tesco recently joined the Consumer Goods Forum’s Food Waste Coalition. And as we outline in a recent Spoon Plus report, a sizable number of companies are coming to market with products and appliances that fight food waste in the consumer home. 

Silo says it will use the new funds to expand nationwide, opening offices in both Los Angeles and New York City. It will also build out its engineering staff and develop tools to better streamline logistics and financial tasks in the food supply chain. 

NPD: Restaurant Digital Orders Declined in August

Digital orders at restaurants dropped 17 percent in August, down from 20 percent in April of this year, according to NPD CREST’s latest monthly update.

While that’s not an enormous drop, it does suggest many people still prefer eating at restaurants to ordering ahead and picking the food up or having it delivered.

The slight downturn in digital sales coincides with the fact that in many cities, some form of dine-in service has been available for a few months now. “As the summer progressed and mandated restrictions were lifted, an increasing number of consumers became more comfortable dining out based on the safety protocols restaurants put in place,” says author and NPD food industry advisor David Portalatin.

Along those lines, NPD notes that on-premises service, whether in the dining room or with outdoor seating, have “improved every month since April” and that August trends reflect a restaurant industry operating with far fewer restrictions than were in place at the height of the pandemic.

Not that it hasn’t been a tough road for most restaurants over the last six months. Dine-in service may be available, but it’s with capacity restrictions almost everywhere. Meanwhile, many restaurant owners still struggle to pay rent, and there are questions around the fate of dine-in service once the weather grows cold enough to make outdoor dining an unlikely choice for many consumers (though creative solutions to this problem are emerging).

Some states are just now about to increase their capacity numbers inside restaurants, while others are on the cusp of reopening indoor dining for the first time since shutdowns began. At the same time, reports of rising COVID-19 cases are multiplying. How the pandemic’s trajectory travels for the next few months will most certainly impact what on-premises dining sales look like with NPD CREST’s next report. If extreme measures have to be taken again, digital orders could experience another surge.

What’s the Difference Between Food Waste and Food Loss?

With food waste now an important dialogue in the food industry, and a growing area for tech innovation, it’s a good time to lay out the differences between “food waste” and “food loss.”

One third of the world’s food — roughly 1.3 billion tons — goes to waste each year, but across the globe, it is lost or wasted in different ways, at at different points across the food supply chain. That’s where it’s useful to know the difference between “loss” and “waste.”

According to Think.Eat.Save, a partnership between the United Nation’s Environment Program (UNEP) and Food and Agricultural Organization (FAO), food loss refers to food that spoils early on in the supply chain, before it ever lands in on grocery store shelves. Think post-harvest, processing, and distribution stages.

Reasons for this food loss can include poor crop harvest, animal deaths, spillage, transportation issues, and insufficient storage. For example, access to reliable and consistent refrigeration is a major issue for many developing countries, and a huge contributor to lost food.

Food waste, on the other hand, refers to food that is ready and edible for consumption but gets discarded before that happens. It usually, though not exclusively, happens further down the supply chain, at consumer-facing stages like restaurants, grocery stores, and in consumers’ homes.

At these consumer-facing levels, food waste can be anything from grocery stores chucking unsold inventory to restaurants throwing out unused inventory and the average person losing items in the back of their home fridge. The bulk of the world’s food waste happens in Europe and North America right now. The good news, as we outlined in a recent Spoon Plus report, is that curbing consumer food waste is a much higher priority topic in 2020 than it was even a few years ago, and tech companies, food businesses, and many others are working to educate more consumers on their food waste habits.

Both food waste and food loss have economic, environmental, and human consequences. And while there is some overlap between the two, food waste and food loss have to be curbed with different solutions — hence the importance of understanding the difference between the two.

For example, introducing smarter fridge appliances or storage systems might help a family in the U.S. curb their food waste and save money, but doing so won’t suddenly improve the disorganized and fragmented food production system in, say, parts of Central Asia. That has to be dealt with by providing more up-to-date equipment and storage techniques and processes, and while the private sector can help, at least some government involvement is needed in order to enact widespread change.

Even so, there is plenty of activity in the private sector from companies fighting both food loss and food waste. In Nigeria, for instance, a company called ColdHubs makes solar-powered “walk-in” cold rooms food producers can use to store their food. Golden Harvest, a business group in Bangladesh, has partnered with USAID to develop the country’s first cold chain network and keep meat, fish, and produce from going bad in the earlier stages of the supply chain.

Over on the food waste side, a number of startups and major corporations in the food industry are working to help North American and European businesses and consumers curb food waste. That includes everything from Samsung and LG’s smart fridges that track food inventory to Winnow’s smart scales that track food waste in commercial kitchens.

Neither food loss nor food waste are simple problems to fix. Technology could — and already does areas — play a central role here in creating more efficient supply chains, equipping stakeholders with better tools, and educating consumers on better ways to manage the way they eat.

Produce Grower Houweling’s Group Partners With Apeel to Ditch Plastic-Wrapped Cucumbers

Greenhouse vegetable grower Houweling’s Group announced this week it has partnered with Apeel to launch its plastic-free cucumbers at select Walmart locations, according to a press release sent to The Spoon.

Cucumbers very often land on grocery store shelves shrink-wrapped in plastic. This is done to protect the skin, which on a variety like an English cucumber, is especially thin. The plastic wrapping also extends the shelf life of the cucumber once it’s in your fridge.

Apeel, which raised $250 million in May of this year, is in the business of extending produce shelf life without the need for extra packaging materials. The company makes an edible “peel” that can provide the protection and shelf-life extension of plastic. It does this with a foodsafe powder derived from plant oils. When applied to produce, it creates a barrier that keeps water and oxygen out. Apeel has developed different proprietary coatings for different produce types, including apples, avocados, and, now, cucumbers. 

Apeel is one of several companies working to make produce last longer. It’s most notable counterparts right now are Stix Fresh, which makes a sticker that can extend produce shelf life by two weeks when placed on the fruit or vegetable, and Hazel Technologies, whose packaging inserts for bulk fruit and vegetable boxes slow ripening. Apeel’s most obviously parallel competitor is Sufresca, a company that also makes an edible coating for produce.

The partnership with Houweling’s Group marks the first time Apeel has used its coating technology to not just extend the life of produce but also do away with extra packaging. Houweling’s said in this week’s press release that every 500,000 cases of English cucumbers shipped with Apeel’s coating eliminates the equivalent of 820,000 single-use plastic water bottles from the supply chain. 

Ordrslip Adds Postmates Integration to Its Mobile App Software for Restaurants

Restaurant tech company Ordrslip announced today it has partnered with Postmates to add delivery integration into its mobile app software, according to a company press release sent to The Spoon. Per today’s announcement, Ordrslip’s software lets restaurant customers “create custom-looking whitelabel mobile ordering applications via Ordrslip.”

It’s no secret that, since the pandemic pushed the restaurant industry to off-premises formats, usage of mobile apps for ordering and payments is on the rise. It’s also pretty commonly known at this point that sophisticated apps a la Starbucks are far too expensive and resource-consuming for most independent restaurants and chains to create themselves. Hence the growing selection of tools (see below) various third parties offer to get restaurants the digital properties they need without decimating their already decimated margins.

The Ordrslip approach is this: Ordrslip creates a branded mobile app for the restaurant with all the features needed to fulfill pickup and delivery items, including order-ahead capabilities, payments, iOS and Android compatibility, POS integration (only with Square and Clover for now), and order tracking. You can read the full list of features here. The app looks and functions as if it belongs to the restaurant but is powered by Ordrslip’s softare in the background. As of today, there is the option to add Postmates integration in order to fulfill the last-mile delivery end of the operation.

The promise is that by using Ordrslip with the new Postmates integration, restaurant customers can bypass the controversial per-transaction commission fees they normally get charged by third-party delivery services. Ordrslip pricing is $100/month per location or $1100/year per location, with one-time setup fees of $1,000 and $750, respectively. (The setup fee applies to all locations a restaurant might operate.)  

On the one hand, those are high numbers for already struggling restaurants, which would have to be doing enough delivery to surpass $100/month in commission fees per transaction. On the other, there’s a pandemic happening and folks are staying at home and ordering more delivery. In other words, $100 in commission fees to Grubhub Et al is probably on the low end these days, though restaurants still have to pay some commission to Postmates for delivering the order.

Ordrslip is one of a growing number of companies offering restaurants workarounds to 30 percent commission fees on delivery orders. POS platform Toast, ChowNow, and many others have various tools in the market that let restaurants process orders and payments through a separate platform so they only need to use the delivery service for actual deliveries. Another company, ShiftPixy, bypasses delivery services altogether and provides the drivers itself. And even the delivery services themselves are participating in this trend. Uber Eats is piloting a tool that lets restaurants process orders through their own platforms, though Uber Eats retains the customer data.

Uber Eats also just announced its plans to buy Postmates for $2.65 billion, a deal that is expected to close in the first quarter of 2021. That deal is unlikely at this point to affect a partnership like the one Ordrslip announced today.

OmniPork Parent, Green Monday Raises $70M to Expand Its Plant-Based Food Enterprise

Plant-based food company Green Monday Holdings has raised $70 million in new funding led by TPG’s The Rise Fund and Swire Pacific, according to a press release sent to The Spoon. The round also includes participation from CPT Capital, Jefferies Group, Sino Group’s NG Family Trust, artist Wang Leehom, and Room to Read founder John Wood. Existing investors, including Lee Kum Kee Health Products Group’s Happiness Capital and individual investorsJames Cameron, Mary McCartney, and Susan Rockefeller, also participated.

The Hong Kong-based Green Monday enterprise has multiple branches. It operates OmniFoods, which makes plant-based meat alternative OmniPork, as well as Green Common, a retailer and restaurant for plant-based foods. The Green Monday Foundation, meanwhile, is a charitable organization that aims to raise awareness about the importance of living more sustainable lifestyles. The enterprise as a whole reaches multiple countries, including Japan, China, the U.S., the U.K., and Thailand. 

OmniFoods debuted OmniPork on mainland China a little less than one year ago. Since then, the company has expanded across that market, landing in both retailers and QSR chains like Taco Bell and Starbucks. 

This new funding round comes at a time when both investment and interest in plant-based meat is up worldwide. In a recent report, investor network FAIRR said that while the U.S. is still the largest market for alternative proteins, China, along with the rest of the Asia-Pacific region, is catching up. 

Not surprisingly, that means Green Monday is not the only company expanding its alt-protein business in that region. Beyond Meat just announced it will build production facilities in China. Starfield, which recently raised $10 million and launched in 20 restaurant chains across China, is another established player to contend with.

Green Monday said this funding round is the largest of its kind to date in Asia. It will use this new capital to expand research and development as well as its retail networks, and boost its production, distribution, and supply chain capabilities. It plans to increase global operations to over 20 markets across Asia, EMEA and North America, as well as open Green Common flagship stores in China and Singapore.

Tastewise Launches Its AI-Powered Food Prediction in the UK

Tastewise, which uses AI to predict consumer food trends, announced today it has launched its platform in the UK and added more localized data to help restaurants and food producers in that region better anticipate consumer eating habits. According to a press release sent to The Spoon, Tastewise has integrated data from 183,000 restaurants and delivery menus, over 2.8 billion social interactions, and 1.2 million online recipes from the UK into its platform.

The Tastewise platform, which launched in February of 2019, helps CPG companies better predict food trends through artificial intelligence (AI). It analyzes consumer touchpoints (think Instagram photos and online recipes) to find not just what foods consumers are eating right now but also their deeper motivations for choosing those foods. When we spoke about a year ago, Tastewise CEO Alon Chen used the example of sauerkraut to illustrate the point: 

“Right now, according to [Chen], it’s a popular food, but the trend is less about raw cabbage and more about the process behind it, which is fermentation . . . Food companies analyzing data via the Tastewise platform can see such data and consider how they might implement fermentation into their offerings.”

Tastewise counts Nestlé, PepsiCo, General Mills, Dole, and other major CPGs among its customers. With today’s launch, UK-based food businesses will also be able to utilize the platform to get more real-time insights into consumer food behavior, which is a must in these pandemic-stricken days, according to Tastewise: “The pandemic has made it clear that it’s imperative to have your finger on today’s pulse each time a decision is made,” Chen said in today’s press release.

Speaking of which: along with the news of its UK launch, Tastewise also released a new report on UK consumer food trends during the pandemic so far. Among them:

  • Sustainable foods are rising 52 percent in popularity year over year, though health and fitness are motivating this trend, not environmental concerns.
  • UK demand for meal kits is up 200 percent.
  • CBD is fading in popularity.

Tastewise is not a sensory platform a la Spoonshot or Climax Foods. However, it is similar in that it leverages AI to help companies bring in-demand products faster by sinking less money into traditional R&D. And given the upheaval the pandemic has caused across the food system, both CPGs and foodservice companies will be leveraging more AI in the future to keep costs down by offering their customers the most relevant items possible.