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Daily news and analysis about the food tech revolution

Data Insights

P&P Optica Raises Fresh Funding for Hyperspectral Food Safety Inspection Tech

Canada’s P&P Optica (PPO) has raised an undisclosed amount of Series B funding for its food safety inspection technology, which uses hyperspectral imaging to gather quality metrics on the food inside of processing plants. 

The round was led by Ag Capital Canada, with new investor Synovus Family Office as well as existing investors Fulcrum Global Capital, Export Development Canada (EDC) and others.

Waterloo, Ontariro-based PPO says it will use the new funds to implement its system across more food processing plants in Canada and the U.S. The PPO Smart Imaging System uses hyperspectral imaging to “see” inside of foods like produce and meats. In doing so, the system is able to gather more precise information on overall food quality. For example, PPO’s tech can determine the fat-to-lean ratio for bacon and sausage, measure the tenderness of a steak, and even detect foreign matter like rubber, cardboard, or plastic. Wood, bone, and even certain types of metals can also be found in food items, and often not detectable by traditional x-ray machines.

While PPO’s physical imaging system itself is meant to be used inside the food processing plant, users can access data on food remotely, from a cloud-based dashboard. The company says that thanks to an AI element, the system can learn over time from what it sees and in doing so detect contaminants faster. 

ImpactVision is the other notable company with a hyperspectral imaging system for food producers. The company was recently acquired by Apeel, and its tech will be used to assess shelf life and quality of produce items. PPO’s system, on the other hand, is at this point more for meat products.

Being able to see inside food could potentially help companies catch safety issues before food leaves the plant, saving them from performing recalls and wasting food and money.

PPO says the new funding will be also go towards expanding the company’s analytics software, including the aforementioned AI tool.

InnerPlant Raises $5.65M to Turn Plants Into “Living Sensors” and Mitigate Crop Loss

Agtech company InnerPlant, which is changing plant DNA to create “living sensors” that mitigate crop loss, has raised $5.65 million in pre-seed and seed funding, according to an official announcement sent to The Spoon. The round was led by MS&AD Ventures, the investment arm of Japan’s MS&AD Insurance Group. Bee Partners, Up West, and TAU Ventures also participated in the round. 

InnerPlant created its technology platform to spot threats to plant growth — pests, nutrient deficiencies, water stress, etc. — quicker than is possible via traditional farming methods. To do that, the company recodes plant DNA to include a fluorescent safe-for-human-consumption protein that lights up the leaves of a plant when there is a problem. Essentially, it is turning the entire plant into a living signal that can “talk” to the farmer when there is a problem. Different colored lights indicate different issues.  

Since these signals are invisible to the human eye, farmers can use InnerPlant’s augmented reality system to photograph their fields and view potential problems via an iPhone or iPad. The signals can also be detected via a drone flying overhead or even a satellite.

This handy explainer video goes into more detail:

According to the company, it only takes tens of these sensor plants to protect an entire field. Once the signal plants send off a distress signal, a farmer can address the impacted area before it spreads to the whole crop. For example, if a harmful fungi breaks out in one area of a field, a farmer can get rid of only the impacted plants, instead of spraying the whole field with fungicide. Think of it as on-demand crop protection.  

InnerPlant says its entire concept is merely piggy-backing off the natural signals plants send to one another when they are in distress. Recoding the DNA to include the protein is “amplifying” these natural signals, so that farmers can spot problems faster. It also frees them from what InnerPlant founder and CEO Shely Aronov calls “the pesticide treadmill,” which is our increasing use of chemicals and pesticides that harm waterways, impact microbial diversity in soil, and are linked to some cancers.

It remains to be seen how consumers will feel about eating produce with recoded DNA, or how that message will get effectively communicated. And since InnerPlant is a relatively new company (it released its first product, the InnerTomato, in 2020), it is too soon to have much data on how effective these living plant sensors are compared to other modes of crop protection. 

The technology does, however, show us yet-another possibility for improving crop yields and mitigating loss in the food system at a time when the world’s population is growing. 

InnerPlant says it is currently working on a new product, InnerSoy. Funds from the seed and pre-seed rounds will go towards developing other products in future. 

NPD: Shipments of Plant-Based Proteins to Restaurants Up 60 Percent Year Over Year

Shipments of plant-based proteins from foodservice distributors to commercial restaurants were up 60 percent year-over-year in April of 2021, according to new data released by NPD Group today. The stat is another data point illustrating the staying power and appeal of plant-based proteins.

NPD writes that plant-based beef nabbed the largest share of those protein shipments, with the number of pounds shipped increasing by 45 percent year-over-year in April. Plant-based chicken grew by 82 percent year-over-year in April, and plant-based fish is up 72 percent year-over-year. Plant-based chicken and fish are more nascent categories compared with plant-based beef, which would explain their relative dramatic jumps.      

“There has been a lot of public discussion about plant-based beef and meat substitutes, and whether or not plant-based is a fad or a trend,” says Tim Fires, president of NPD’s SupplyTrack said in a press announcement. “But the fact of the matter is, chefs and operators see the plant-based protein category as a flexible option for developing recipes and menu offerings that taste good, and their guests enjoy. Plant-based is now a staple in their repertoire.

Though NPD didn’t specify reasons for the increase in shipments, the two big drivers for this growth in plant-based protein are availability and price. Both Impossible Foods and Beyond Meat, the two biggest players in the beef analog space, have dramatically ramped up production in the past couple of years, which has helped bring prices down and closer to parity with animal meat.

But this increase in shipments of plant-based protein to restaurants is just part of an overall increase in interest and sales of plant-based meat. The Good Food Institute’s latest U.S. market research shows that the plant-based meat category grew by more than $430 million in sales from 2019 to 2020 and the category is now worth $1.4 billion.

Precision Nutrition Startup DayTwo Raises $37M

Precision medicine startup DayTwo announced over the weekend a $37 million fundraise for its app that provides users customized diet recommendations based on their gut bacteria. New investors participating include Poalim Capital Markets, La’maison Fund and Micron Ventures. They were joined by existing investors including the aMoon VC fund, 10D, and Cathay Innovation Ventures. To date, DayTwo has raised $85 million including this round.

The new funds will go towards Israel-based DayTwo’s technologies that help those with diabetic and metabolic diseases. In particular, the funds will go towards further enhancing the company’s first product, a platform that uses artificial intelligence, microbiome sequencing, and other clinical measures such as surveys to provide customized food prescriptions for users with these diseases. Doing so will help users manage their blood sugar levels, which is critical for those with diabetes. 

Speaking to the Times of Israel, Adi Lev, DayTwo’s deputy CEO for Research & Development, said that the new funds will allow the company to continue its research on the links between bacteria in our bodies and diseases. DayTwo will also continue to develop the algorithms that are an essential part of the company’s platform. 

Users access food recommendations and meal plans via the DayTwo app. In the U.S., they can also scan the barcodes on food to find out more about the item in question.

This kind of precision nutrition, as the name suggests, offers consumers more granular food recommendations and diet plans that are based on factors unique to each individual’s body. Instead of drawing on data from outside sources (e.g., a wearable fitness device), these programs and solutions gather data from inside the human body. Genopalate does this through DNA analysis, while Sun Genomics and Viome are a little more like DayTwo in that they focus on users’ microbiome.

DayTwo, however, is currently the only company of this pack with a specific emphasis on those with diabetes and metabolic diseases. Currently, the company’s platform has about 70,000 users across the U.S. and Israel. In the U.S., the DayTwo is working with large employers and health plans. In Israel, a collaboration with Clalit Health is underway and one with Maccabi Health Services is expected for the future. 

Survey: More than One-Third of US Online Grocery Shoppers to Keep E-Commerce Habit Post-Pandemic

One question looming over U.S. grocery retailers is how many of their customers who were pushed into online shopping last year will continue to do so after the pandemic recedes. Thanks to new data released from Coresight Research this week, we are starting to get an answer.

According to US Online Grocery Survey 2021: Post-Surge Prospects (subscription required), more than one-third of online grocery shoppers don’t plan on changing up their online grocery shopping habits once the pandemic ends. In addition to that, more than one-quarter of shoppers said they expect to buy groceries online more frequently than they did during the pandemic. Roughly 30 percent of survey respondents said that they’ll shop “slightly less frequently” or “much less frequently” post-pandemic, and 6.3 percent said they’ll stop buying groceries online altogether.

Demographically speaking, Coresight found that online grocery shoppers aged 30 – 44 are most likely to continue with grocery e-commerce, with roughly 63 percent saying they expect to continue online grocery shopping at the same or increased frequency after the pandemic. Coresight attributed this to this age group being familiar with digital channels and often having young families that drive up basket sizes and typically involves planning ahead for grocery purchases.

One interesting note from Coresight’s research is that home delivery was the default option for online grocery purchases. The survey found 56 percent of respondents who had bought groceries online over the previous 12 months had their orders delivered, whereas 43 percent chose curbside pickup. This data runs counter to what Bricks Meets Click/Mercatus have found in its surveys. In April Brick Meets Click reported that curbside pickup attracted the biggest share of monthly shoppers with 53 percent, compared to ship-to-home and delivery. The discrepancy could be because Coresight’s data looked back 12 months prior to April, during the thick of the pandemic, when lockdowns were keeping people across the country at home. Brick Meets Click’s data is more recent and comes at a time when vaccinations are rolling out in earnest.

Of those people who opted for delivery, Coresight found that 42.7 percent used same-day shipping service and more than one-quarter used faster two-hour delivery services. This actually makes a lot of sense when you consider that Coresight also found Amazon to be the most-shopped retailer, followed by Walmart in the second spot. Amazon offers free two-hour grocery to its Prime members and Walmart+ offers same-day delivery.

While this is just one survey, data points like this are important as grocery retailers decide where to invest their resources. Walmart and Albertsons, for instance are expanding their use of automated fulfillment, curbside pickup and delivery options to accommodate the growth in e-commerce. In order for those investments to be worth it, online grocery needs to remain popular with consumers.

Survey: Online Grocery Had $8.4B in Sales in April, Down 10 Percent from March

Some of the stats we’re watching closely as our nation slowly comes out of the pandemic are those for online grocery sales. Namely, will the e-commerce curbside pickup and delivery habits consumers were pushed into during lockdowns stay now that we can literally breathe easier back in stores?

Thankfully the Brick Meets Click/Mercatus Grocery Shopping Survey is keeping track, and according to the numbers released yesterday, U.S. online grocery sales were $8.4 billion in April. This is down 10 percent from March’s $9.3 billion, but up 16 percent from April 2020.

Brick Meets Click/Mercatus found that 67.8 million U.S. households bought groceries online in April, which is down 12 percent from a year ago. While there were fewer households, those that purchased groceries online bought more. Monthly active users placed an average of 2.73 online orders in April 2021, up a tick from 2.68 orders a year ago. Of these orders, 78 percent were for delivery and pickup, which were up 6 percent and 3 percent year-over-year, respectively. The ship-to-home category, however, dropped 9 percent year-over-year.

The survey also showed that more households are using two or more online grocery shopping methods (curbside pickup, delivery, ship-to-home), with 35 percent of monthly active users receiving orders through two or three different methods in April 2021, up nearly 3 percent year-over-year (and 20 percent from pre-pandemic August 2019).

“Online shopping has remained an attractive way to buy groceries for a sizable segment of the U.S.,” said David Bishop, partner, Brick Meets Click in the April survey press announcement. “Last year, retailers were in a race to meet the dramatic surge in demand. This year, it’s about executing a sound and sustainable strategy, with the imperative squarely on improving integration and implementation.”

The last part of Bishop’s statement is key. Grocery retailers have been investing heavily over the past year in systems to encourage and improve curbside pickup and delivery. Walmart is adding automated fulfillment and pickup kiosks, Albertsons is expanding the use of pickup lockers and testing delivery robots, while Amazon is expanding delivery inside your garage while you’re out. All of this investment, however, is predicated on the notion that people will continue to shop for groceries online after the pandemic recedes. It’s still too early to tell, but we’re eager to see what Brick Meets Click/Mercatus reveals throughout the year.

OneThird Raises €1.5M for Its Food-Waste-Fighting Tech

Netherlands-based food tech company OneThird announced today it has raised €1.5 million ($1.8 million USD) for its shelf-life-prediction technology that helps growers, retailers, and distributors cut down on food waste. SHIFT Invest and Oost NL participated in the round, according to a press release sent to The Spoon.

The new funds will partly go towards further developing OneThird’s tech, which it calls a “fresh produce quality prediction platform.” The platform consists of a handheld scanner, near-infrared sensors, artificial intelligence, and data analytics used in combination to “look inside” the produce and determine its remaining shelf life.

“Our unique prediction technology allows quality inspectors throughout the food supply chain to get immediate feedback about shelf life and other quality parameters of fresh produce and take better decisions,” Marco Snikkers, founder of OneThird, said in today’s press release. 

OneThird says that its technology can work in multiple stages of the supply chain. Growers, for example, can use the platform to determine where they should ship different batches of produce. Distributors can use it to make routing decisions, while retailers can train their staff to assess the freshness of produce in the store.

The point of all this, of course, is to cut down on food waste. As underscored by the OneThird company name, a third of all the world’s food goes to waste each year, with $408 billion spent in the U.S. alone to grow, process, transport, and store food that is never consumed. The waste has a number of consequences, from environmental degradation to people going hungry to lost money for retailers, distributors, and growers.

OneThird joins a growing list of companies bringing a variety of food-waste-fighting solutions to market, from Hazel’s packaging inserts to food redistribution companies like Too Good to Go to Apeel’s edible coating.

OneThird will also use its new funds to expand retail pilots of its platform and build out its technical team by acquiring AI specialist firm Impact Analytics.

Survey: Online Grocery Sales Back up to $9.3B in March, Pickup Remains Dominant

Online grocery sales were back up in March, following a drop in February, according to new data released today by Brick Meets Click/Mercatus. Grocery e-commerce in the U.S. hit $9.3 billion in sales (the same as January), with more than 69 million households placing an average of 2.8 orders in March.

Brick Meets Click also highlighted the continued dominance of curbside pickup as the main preference for online grocery shoppers. From the Brick Meets Click press announcement:

“Over the last 12 months, consumers’ dramatic shift to online grocery shopping has solidified, with curbside pickup attracting the largest share of monthly shoppers at 53% compared to ship-to-home and delivery,” said Sylvain Perrier, president and CEO, Mercatus. “In fact, pickup continues to have stronger consumer demand across all market types compared to delivery. Those brick-and-mortar chains that have invested in optimizing pickup services likely will continue to benefit from the high repeat intent rate as indicated in the data.”

The dominance of curbside pickup can be partly attributed to the fact that big retailers have invested so much in it. From expanded drive-up options to smart lockers to automated curbside pickup kiosks, retailers have increased the availability and convenience of curbside options.

One area of online grocery shopping that saw a drop from the same time last year was the ship-to-home category, which lost 27 percent of its monthly users. In addition to local retailer pickup and delivery options becoming more robust, the first wave of the pandemic last year saw a lot of panic buying and inventory outages. As such, people turned to whatever outlet they could find to get food delivered to their homes including CSAs and online meat providers.

Of course, the question we’ve been asking for a few months now is what does the future look like for online grocery? More people are fully vaccinated and able to return to a (relatively) normal life outside of their homes. Have their pandemic-induced behaviors changed for good when it comes to grocery shopping? Or do they miss roaming the aisles. The real numbers to watch will probably be the stats from May when the two week wait times after being vaccinated really start to kick in.

eMarketer: In-Store Mobile Payment Use to Hit 101 Million in the U.S. This Year

More than 101 million Americans over the age of 14 will use in-store mobile payment apps to make purchases this year, up from 92.3 million last year, according to recent research from eMarketer (tip of the hat to TechCrunch).

The research firm said this milestone follows 29 percent year-over-year growth for mobile payments in 2020, and that usage is on track to surpass half of all smartphone users by 2025. Additionally, eMarketer predicts that the average annual spend per user will grow 23.6 percent to $2,439.68 this year, and will break $3,000 by 2023.

EMarketer attributes this growth in point-of-sale mobile payment adoption to the pandemic, as consumers sought out contactless retail experiences. This desire to minimize the number of touchpoints when paying for stuff translated into an acceleration of user and transaction value growth.

EMarketer forecasting analyst, Osar Orozco at Insider Intelligence said that the greatest increase in new users were Gen Z and millennials. “We project that there will be around 6.5 million new mobile wallet users per year from 2021 to 2025, of which more than 4 million will be Gen Zers. Millennials will continue accounting for around four in 10 mobile wallet users, although that share will shrink,” Orozco said in an eMarketer blog post.

Among the mobile payment systems, Apple Pay is tops with 43.9 million users in 2021. EMarketer says that Apply Pay will add 14.4 million users between 2020 and 2025. Starbucks is in the number 2 spot followed by Google Pay.

All of this tracks with what we’ve seen from the foodtech world over the past year. Big retailers like Walmart and Amazon’s physical stores have been upgrading their contactless payment options. The Apple Clips feature makes mobile payments easier by not requiring a full app download for every different store you want to buy from. A number of third-party companies were quick to bring contactless payment options to restaurants throughout last year. And even vending machines fast-tracked adoption of contactless payment methods.

Despite all that progress, eMarketer says that there are two factors that still hamper even wider adoption of mobile payment systems. First, setting up mobile payments remains complicated for many users, and many smaller businesses can’t afford the hardware and software necessary to enable mobile payments.

Datassential: 10% of U.S. Restaurants Have Closed Permanently

A total of 10.2 percent of all U.S. restaurants have permanently closed since the start of the pandemic, according to new research from food industry intelligence firm Datassential.

The report finds that of the 778,807 restaurants of all types in the U.S. that were open at the start of the COVID-19 pandemic, 79,438 have closed for good as of today. (The figure includes restaurants launched during the pandemic.)

Food trucks have suffered the most of any category, with 22.5 percent of them permanently shuttered. Chains with less than 501 units have also seen high rates of permanent closures, and the report finds that chains with between 51 and 100 units have see the highest closure rate (16.2 percent).

Unsurprisingly, larger QSR chains have come out of the last year with the fewest closures: 9.8 percent. Because these businesses were already set up to cater to off-premises orders like takeout and drive-thru, they were inherently better able to weather the figurative storm that shuttered dining rooms in 2020 and forced an industry-wide shift to off-premises formats. As well, large QSR brands like Chipotle or McDonald’s had the money to further invest in digital ordering tools and new(ish) formats like delivery. 

These companies are also the ones currently leading a quasi-reinvention of the fast food format. Burger King, Shake Shack, the aforementioned brands, and many others have in recent months released designs for new store formats that emphasize more drive-thru lanes, less dining room space, and more ways to automate the order and pickup process. (Conveyor belts!)

Meanwhile, the Small Business Administration will start taking applications next month for grants from the $28.6 billion Restaurant Revitalization Fund. Restaurants, bars, and other foodservice establishments that are not publicly traded and have fewer than 20 locations are eligible to apply.

GFI: $3.1 Billion Invested in Alternative Proteins in 2020, Tripling the Money Raised in 2019

While 2020 was a tumultuous year we’d all rather forget, it was actually a banner year for investment in alternative protein. According to new data released today by The Good Food Institute (GFI), there was $3.1 billion in disclosed investments in the alternative protein space in 2020. That figure is more than three times the amount raised by the sector in 2019.

GFI used PitchBook‘s data, and includes investments in startups working on plant-based meat, egg and dairy; cell-cultured meat; and fermented protein. Alternative protein is relatively new in the food-tech world, and investment in the space is definitely a steep hockey stick shape. The $3.1 billion raised in 2020 is more than half of the $6 billion alt protein companies raised between 2010 and 2020.

GFI broke down the data further, finding:

  • Plant-based meat, egg and dairy companies received $2.1 billion in investments in 2020, up from $667 million raised in 2019. The $2.1 billion in 2020 included the $700 million figure Impossible Foods raised, as well as LIVEKINDLY‘s $335 million in VC financing and Oatly‘s $200 million private equity financing.
  • Cultivated (a.k.a. cell-based) protein companies raised more than $360 million in 2020. This included the sector’s first two Series B rounds: Memphis Meat‘s $186 million raise and Mosa Meat‘s $75 million. GFI also included cell-based dairy companies such as Turtle Tree Labs and BIOMILQ.
  • Fermentation, the third pillar of alternative protein, pulled in $590 million in funding in 2020. This included Perfect Day‘s $300 million raise and Nature’s Fynd‘s $45 million debt round.

That the alt protein space was able to raise so much money in 2020 isn’t that surprising. First, there are just a ton of startups working in the space, so there is more opportunity for investment. And in areas like cultivated and fermented protein in particular, that technology is maturing, achieving more yield at lower costs.

GFI also noted that larger, existential factors helped drive investment in alternative protein. The pandemic highlighted issues with zoonotic disease transmission as well as ethical complications surrounding the production of animal-based meat. These pandemic-related issues along with problems with the animal meat supply chain helped drive a surge in plant-based food sales in 2020.

While 2020’s investment figures were impressive, I’m actually curious how this year will turn out. As we noted in our Future Food newsletter this week, there has been a raft of investment just in the cultured meat space since January. Will 2021 be another record breaking year for the alt protein space? Check back in next March to find out.

Survey: Online Grocery Sales Drop 14 Percent in February to $8B

Online grocery sales fell to $8 billion in February, dropping 14 percent from January’s $9.3 billion, according to new data released today from the latest Brick Meets Click/Mercatus Grocery Shopping Survey.

Brick Meets Click said the biggest factor in February’s decline was that fewer households bought groceries online. Monthly active users fell to 60.1 million in February, a 12 percent decrease from the 69.7 million in January. A lot of that drop off came from people over 60 years old, which could be a result of increased vaccinations in that age group. As more people get vaccinated, there will be more confidence in going out and into stores in-person.

In addition to fewer households placing orders, there were also just fewer orders in general. Online grocery shoppers averaged 2.7 orders in February, down 6 percent compared with 2.8 orders in January. However, Brick Meets Click said that most of this decline was in the ship-to-home segment. The combined delivery and pickup segment was only down 4 percent from January to February.

One bit of good news is that there was a four percent increase in average order value in February. Online grocery shopping households spent an average of $82 in February on orders received via delivery or pickup (that’s 55 percent more than orders placed for ship-to-home service).

Speaking of delivery and pickup, that segment nabbed $6.1 billion in February, gobbling up more than three-quarters of the total online grocery market for the month. Within that, curbside pickup accounted for nearly half of all online grocery sales in February.

Brick Meets Click’s latest data comes on the heels of a blockbuster quarter for online grocery related funding. Grocery-related startups around the world have been pulling in millions for faster delivery, e-commerce transition and market expansion. Is all this new money for naught as vaccines continue to roll out, freeing up people to leave their homes to shop in-person?

Not necessarily. Industry analysts have been expecting this type of market correction since last year. However, online grocery is projected to grow and eventually reach $250 billion, taking up 21.5 percent of total grocery sales by 2025.

The more immediate question for investors and even retailers pouring money into e-commerce solutions is whether to focus on delivery or curbside pickup. The data from February shows a preference for pickup, but we’ve seen retailers like Walmart and Albertsons devote more resources to both automated curbside pickup and faster delivery.

Brick Meets Click’s data for the next few months will certainly be fascinating to watch, not just from an industry perspective, but also a sociological one. After a year of lockdowns, what new grocery shopping habits will remain permanent, and what will that mean for innovation at retail overall?