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Daily news and analysis about the food tech revolution

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Pitchbook: Food Tech Funding Dropped Almost 60% in 2023

The food tech sector navigated rough waters in 2023, as venture capital funding experienced a significant downturn for the second consecutive year. According to Pitchbook’s Q4 2023 report, food tech funding saw a steep drop of 59% in annual VC deal values, plummeting to $9.2 billion from $22.5 billion in 2022. This contraction is in step with an overall deceleration in venture investing due to a combination of macroeconomic challenges and sector-specific headwinds.

Alex Frederick, the report’s author, spoke with The Spoon about some of the factors driving the decline.

“We’re seeing high-interest rates and a closed IPO window continuing to constrain VC activity,” Frederick explains. “Additionally, annual food price inflation, although slowing to 2.2% this year, has cumulatively pushed food prices to record highs for consumers. This presents a significant challenge for innovative startup CPG products attempting to enter the market at a premium.”

According to Frederick, the deceleration is particularly pronounced in specific subsectors of food tech. “The whole e-commerce space, including online grocery and restaurant delivery, is down 67% in terms of dollars in just one year, and 87% since the peak in 2021,” Frederick said. “This major deceleration is largely due to an investor shift from growth to profitability and positive unit economics.”

Investment in technology for restaurants and retail has also faced a sharp decline, dropping 71-72% over the past year and 85% over the past two years. Similarly, the alternative protein space, once the darling of food tech, has seen a deceleration, with investors increasingly focusing on companies that can demonstrate a path to profitability.

I asked Frederick about picks and shovels type of investments, and he said while the numbers don’t necessarily show up in the aggregate funding, he is seeing some increased activity by companies who are building out inputs and production for alternative proteins, including a focus on alternatives to growth serum and building fermentation bioreactor infrastructure.

“There’s just more attention, a growth of stakeholders, and a focus on building out all of the inputs and infrastructure they would need to grow that industry.”

You can see my full interview with Alex below and can download an excerpt of the report on the Pitchbook website.

The Spoon Talks With Pitchbook About Q4 2023 Food Tech Investment Landscape

Is The US Power Grid Prepared For The Transition To Induction Cooking?

In case you haven’t heard, electricity demand is shooting through the roof.

After more than two decades of flattened usage due to more efficient lightbulbs, appliances, and factories, the growing adoption of EVs and the explosion in new data centers for compute-intensive applications such as AI over the last few years has resulted in skyrocketing demand for electricity, according to a new report in the New York Times. In fact, forecasters estimate that peak demand in the summer will grow by 38,000 megawatts nationwide in the next five years, which is akin to adding another California to an already overburdened grid.

Above: Electricity Demand Over Time and Forecasted Demand. Source: New York Times

The Times report does a good job highlighting how EVs and higher usage air conditioning in homes are two of the biggest culprits for reversing the trend, but largely omits any discussion of another potential big driver of electricity usage in the future: induction cooking.

And from the looks of it, induction could significantly impact the overall electricity usage of a family home. While it’s more energy efficient in general, a household switching from gas to electric induction cooking will use more electricity. How much? According to some sources, an hour of induction cooking will use between 1.4 kW and 2 kW per day. That compares with about 2.5 kW per day in charging for the typical EV.

So, not quite as much as EV, but still enough to translate to a significant draw on the grid once we’re talking tens of millions of induction stoves. All of which begs the question, will the grid be ready?

It’s something that’s definitely on the mind of some in the appliance world. One appliance executive recently told me that grid readiness is one of the microenvironment variables they are factoring in when evaluating their own induction cooktop strategy. Add to that various local restrictions around gas cooking (and pushback against said restrictions), and the calculation as to how much they push electric appliances gets somewhat nuanced depending on a given market’s grid readiness and regulatory environment.

My own guess is that while we’re finally seeing induction making inroads in the US, the adoption isn’t moving at such a rate that it will make matters significantly worse than other factors, such as EV and data center growth. In fact, it’s because those other reasons have grabbed the attention of those responsible for forecasting and building out our electricity infrastructure that the industry will more than likely be ready for when we hit tens and even hundreds of millions of induction cooktops in homes.

The Food Tech News Show: Behold, The Humanoid Kitchen Robot is Here

This week, the Spoon crew got together to discuss some of the big stories of the week on a new weekly video news show we’re launching called The Food Tech News Show.

The stories Carlos Rodela and I discuss include:

You can watch the full show below, on YouTube, or listen to it on the Spoon podcast.

And, if you’d like to watch next week’s Food Tech News Show, join us on March 22nd at 1 Pacific on Streamyard, Twitter, or on our YouTube channel.

Cordless Kitchens? - FTNS

Watch The Figure 01 Robot Feed A Human, Sort The Dishes, And Stammer Like Us Meatbags

While much of the startup funding for food-centric robots has been for task-specific fast-automation from the likes of Picnic Robot and Chef Robotics, some of the more intriguing – and creepy – action is happening with humanoid robots.

The latest entry into the “watch a humanoid robot handle kitchen tasks” files is from Figure, which just showed off the latest capabilities of the Figure 01 robot by showing how it can identify food and sort through kitchen tasks.

What really stands out to me is the weirdly human voice of the robot, which includes very human-like pauses and slight stammers. As an example, in one exchange, a human interviewer asks Figure 01 to explain why it handed over an apple. Figure 01 responds with a quick “On it” and then goes on to explain, complete with an “uh” pause that makes you almost think there’s an actor behind the curtain spitting out the lines.

You can watch for yourself below. The exchange I am talking about happens 48 seconds into the video.

Figure Status Update - OpenAI Speech-to-Speech Reasoning

According to Figure, the latest release showcased in the video illustrates how it has put OpenAI’s large language models to work to provide high-level visual and language intelligence, while its neural networks are responsible for powering the almost human-like dexterity of the robot. The company has raised an eye-popping $754 million in funding.

Not Surprisingly, Starbucks Is Shutting Down Its NFT Program

Perhaps not all that surprising given the downturn in interest in Web3 and NFTs among big brands, Starbucks announced today that it’s shutting down its Web3 loyalty program Odyssey.

The Odyssey program allowed members to gain benefits through playing games and participating in activities called Journeys. When they completed Journeys, members earned points and received NFTs (called Journey Stamps) that gave them access to exclusive benefits. Members could also purchase limited edition NFTs, which provided them with additional Odyssey points and unique artwork.

According to an FAQ about the program’s transition, Starbucks says they will close the Odyssey beta on March 31, 2024, and users will have until March 25, 2024, to complete any remaining Journeys. The company says it will transition the Odyssey marketplace to the Nifty NFT marketplace, where users can buy, sell, and transfer Odyssey stamps. As part of the move, the company said they are also shutting down the Odyssey discord server on March 18.

The effort was shepherded by the former Starbucks chief digital officer Adam Brotman through his company Forum3. Like many Web3 startups in the past 12 months, Brotman and his cofounder Andy Sacks have made a hard pivot from Web3 to generative AI as their primary focus, with their new tagline being “Where AI Meets Digital Transformation.”

Some crypto sites have asked whether the program will return, and while Starbucks left the door open in its FAQ with a bland stay-tuned message – “While the Starbucks Odyssey Beta program is ending, we are excited for you to see what comes next and are grateful for your consistent engagement and feedback” – my guess is the company likely will de-emphasize things like tradeable NFTs even if it looks to use some form of underlying blockchain architecture in the future.

Keurig Unveils Plastic-Free Coffee Pods, Developed With A Little Help From The Maker of CoffeeB

If you can’t beat them, join them.

And if you’re Delica, that’s precisely what the Swiss-based company did. That’s because today, North American single-serve giant Keurig Dr. Pepper announced that they have developed a completely new single-serve coffee form factor, one that does away with the iconic (and environmentally damaging) plastic pod, by partnering up with Delica, maker of the CoffeeB fully compostable single-serve coffee ground form factor.

Longtime readers of The Spoon know that Delica launched the CoffeeB system in 2022, and it has been quickly gaining traction in Switzerland, France, and Germany with its fully compostable coffee pods balls. According to Keurig, they have entered into a long-term partnership with Delica that grants Keurig the exclusive rights to use and build upon Delica’s proprietary technology for consumers across the U.S., Canada, and Mexico.

Keurig's new K-Rounds and Alta Brewer Announcement Video.

Keurig’s new single-serve coffee grounds form factor is called the K-Round, which, like Delica’s, will use a plant-based compostable container. According to Keurig, the K-Round is not only a result of the collaboration with Delica, but also a multi-year research effort by Keurig Dr Pepper’s R&D team. In addition to Delica’s IP, the K-Round utilizes its internal IP to develop a product tailored for the North American market, which includes patents pending for both the brew system and the plastic-free pods.

One primary difference between the CoffeeB system and the new K-Rounds is that the K-Round is essentially a flat puck shape compared to the CoffeeB system’s ball shape. One reason for the different shapes is that they enable Keurig to utilize its BrewID technology, which scans information printed on the top of each K-Round to get information about the specific coffee type and optimize the brew.

“We’ve invented a different shape for them,” Becky Opdyke, senior vice president of Keurig Systems Marketing, told The Spoon. “And that’s because we’re going to be printing some coding on the top that will be read by the brewer so that it makes the coffee type that best matches the K-Round. There will be ones that are specifically sized for espresso versus a long coffee versus a cold brew, for example.”

Of course, the delivery of a new single-serve form factor requires a new coffee brewer, and on that front, Keurig also had plenty of news. Alongside announcing the new K-Round, the company introduced its new Alta coffee brewing system. According to Keurig, the Alta will enable a Keurig brewer to deliver espresso-style coffee extraction for the first time, including the ability to create crema. This new capability is directly tied to the new K-Round, which can withstand up to 250 psi of pressure.

Keurig also announced that the new Alta will be backward compatible with existing pods. While that might initially be a bummer for those who want to see an end to plastic pods, it’s actually critically important since consumers tend to take time to change consumption patterns. By providing a device that bridges generations of pods, Keurig is giving its new system and single-serve form factor its best chance of survival.

A year and a half ago, I asked if CoffeeB stood a chance against Keurig. As it turns out, they didn’t have to fight that battle since they decided to partner with the North American’s single-serve giant. Ultimately, this strategy means consumers (and the earth) will be the winners in the long run with more choices and less waste.

Keurig Takes Another Swing at Cold Beverages With the Launch of QuickChill Cold Coffee Technology

Perhaps the third time’s a charm?

That appears to be what Keurig is thinking, given the news of the single-serve coffee giant’s new technology and brewing system that allows it to deliver cold-brewed coffee drinks instantly.

The new system, QuickChill, will use advanced cooling technology to flash-chill fresh-brewed coffee. According to Keurig, QuickChill will chill hot-brewed coffee from a K-Pod in three minutes, pouring coffee into the glass at 60°F. That’s a vast difference between the company’s previous efforts at ice coffee with its K-Iced coffee line, which poured hot-brewed coffee on top of ice. Keurig says that the new technology will result in coffee that comes out of the machine three times colder than coffee brewed by its K-Iced line.

The new technology, which has an internal chilling mechanism that reduces the coffee’s temperature post-brew, will result in less diluted coffee once poured over ice, which, according to Keurig itself, didn’t always lead to coffee shop results.

“Historically, really, what you’re getting is just a hot brew over the top of ice, and it created a less flavorful, watered-down version of the beverage,” said Josh Hulett, Keurig’s SVP of product management, in a video (see below) about the new QuickChill technology.

The new QuickChill technology will be used in a new hot/cold brewing system from Keurig called the K-Brew + Chill brewer. It will be available starting this fall, and pricing has yet to be announced.

QuickChill is Keurig’s third attempt at creating a platform that dispenses cold beverages. Keurig followers might remember the Keurig Kold, an attempt to compete with the Sodastream carbonated beverage appliance. After shuttering that effort, the company partnered with AB In-Bev a couple years later to create a pod-based home cocktail-making appliance with their Drinkworks joint venture. Drinkworks didn’t make it as far as Kold, shutting down soon after a newly announced new product line.

With QuickChill, however, the company looks to be sticking to what it knows: coffee. According to the company, this move attempts to tap into strong interest in cold-brew coffee, particularly among younger coffee drinkers.

“We’re really excited about this innovation launching because it is a breakthrough for us to be able to serve cold coffee to our consumers, especially to our younger consumers and Gen Z, forty-eight percent of whom had a cold coffee this past week,” said Becky Opdyke, Senior VP of Keurig systems marketing, in an interview with The Spoon. “We want to make sure we’re delivering for them at home as well.”

The news of QuickChill was part of a slew of announcements by Keurig today, including the launch of a completely new single-serve delivery form factor and a new-generation brewing system that takes advantage of the new compostable, plastic-free pod.

The Keurig QuickChill and K Brew BREW + CHILL announcement video from Keurig.

Announcing The Food AI Co-Lab, a New Collaboration Between The Spoon & Future Food Institute

If there was one thing we learned when we held the first-ever Food AI Summit last October, it is that pretty much every food company believes their business will fundamentally change due to artificial intelligence.

Whether it’s companies building farm equipment, managing food supply chains, launching new grocery shopping formats, or creating new quick-service restaurant chains, no one along the food value chain will remain untouched by the rapid pace of change brought on by AI. In other words, we are in a once-in-a-generational rethink of business as usual, a tectonic shift that demands company leaders continuously learn, strategize, and collaborate to make sure their companies survive and even thrive into the future.

Because of this, we realized that we wanted to find a way to bring together our community and others within the food system to talk about the different impacts AI is having across various parts of the food system more than once a year. While we loved the fact that the big ideas that were shared at the Food AI Summit have already resulted in new partnerships and collaborations, we wondered if we brought together folks more regularly – on a monthly basis or even more frequently – might have an even bigger impact.

Luckily for us, one of my favorite organizations – the Future Food Institute, led by one of the most consequential leaders in the future food space in Sara Roversi – had a similar idea. So when Sara approached me about joining forces for a collaborative new organization to do just that – I jumped at the chance.

So, alongside the FFI, I am super excited to announce today the launch of the Food AI Co-Lab!

What is the Food AI Co-Lab? It’s a collaboration that aims to be a meeting space and learning center for leaders who are building the future of food through artificial intelligence. We will explore different topics, engage with our community, and provide information such as industry surveys about what people are doing at the intersection of food and AI.

To kick things off, we will host monthly industry-focused meetings with thought leaders creating using AI across various parts of the food system. Soon, we will also announce in-person events in the US and Italy where the community can get together, network, learn together, and build their own collaborations.

If you’d like to join us on this journey, we encourage you to join our LinkedIn group and also register for our first virtual event, AI & The Future of Food, which will take place next Tuesday, March 19th. At that event, we’ll interview two thought leaders: Dr. Patrick Story, a professor of Philosophy at Cal Poly, San Luis Obispo, participating in a National Science Foundation-funded project analyzing the impact of automation and AI on the food system, and Kevin Brown, the CEO of Innit, a company building a platform that plugs into generative AI large language models to make them more food “fluent” and power AI-assisted food knowledge systems and services.

I hope to see you there, and I am excited to work with you to learn, collaborate, and build the future with the Food AI Co-Lab!

Bellwether Debuts Small-Format, Countertop Electric Coffee Roaster for $15 Thousand

Today Bellwether Coffee announced its latest electric, ventless coffee roasting machine, The Bellwether Shop Roaster. The new roaster, which is the company’s third-generation electric roasting machine, will retail starting at $14,900, about one-quarter of the price of its second-generation roasting appliance.

According to the company, the Shop Roaster will be able to roast 3.3 pounds of coffee in about 15-20 minutes, meaning a throughput of up to 13 pounds of coffee per hour. As part of its new product lineup Bellwether will also offer a continuous roasting upgrade to the Shop Roaster for $5,000 extra ($19,900 for upgrade and the Shop Roaster). The continuous roasting upgrade will enable the auto-loading of green, unroasted beans into the coffee roaster, enabling up to 13 continuous roasts or 44 pounds of coffee before refilling the base with unroasted coffee beans.

We’ve been following Bellwether since the early days here at the Spoon when they were one of the early roasting infrastructure players pushing the industry towards electrification and decentralized roasting. While some of the bigger players in roasting, like Probat, have started to offer electric roasters, Whiel some players like Carbine have gone out of business, Bellwether continues to push the envelope on size and could attract even more coffee shops and retailers to experiment with roasting their own beans.

Florida Bill Banning Cultivated Meat On Its Way to DeSantis’ Desk

Selling cultivated meat in Florida is about to become a second-degree misdemeanor.

That’s because this week, the Florida legislature voted to pass a bill restricting the commercial sale of meat grown using cellular agriculture. The bill (SB 1084), which passed with a vote count of 86 Yays to 27 Nays, now heads to the desk of Florida Governor Ron DeSantis to be signed into law. This was just days after the companion bill passed in the Florida Senate on February 29th.

The bill, which bans commercial distribution of cultivated meat but allows for continued research, is backed mainly by the conventional meat industry, which found willing and happy fellow travelers on this legislative journey in the form of culture-warrior politicians like Jacksonville Republican congressman and cattle rancher Dean Black.

“I think they can make it on the Moon and export it on Mars, and it’s fine to have Martian meat as well,” Black said. “If you go to the Moon, if you go to Mars, you should be allowed to get it there. But you sure as heck shouldn’t be able to get it anywhere in this country, and sure as heck not here in Florida.”

Black’s weird Florida-man-ish quote about Martian meat, which sounds like something out of a Carl Hiassen novel, refers to the exception allowed in the bill for continued research on cultivated meat because NASA and others are researching cultivated meat as a method for astronauts on long-term space missions.

The Florida ban, the first in the US, follows a similar ban in Italy passed last year. The Italian ban was championed by a far-right Italian agriculture minister in Francesco Lollobrigida, who said that the move would help protect jobs and Italian consumers from the invasion of what he described as “synthetic” food.

“We are safeguarding our food, our system of nutrition, by maintaining the relationship between food, land and human labour that we have enjoyed for millennia,” Lollobrigida said.

In both cases, the cattle lobby in each country was the driving force pushing for bans.

In the US, the Florida bill is similar to other legislation making its way through state legislatures in Arizona, Tennesee, and West Virginia. All of it concerns an industry that, at least to this point, is commercially non-existent, with the exception of sales at a couple of high-end restaurants.

While the impact is small today, those building these products are worried about the impact of these laws on cultivated meat as the industry matures.

“I’ve got more than enough challenges,” Wild Type CEO Justin Kolbeck said. “I don’t also need Florida to ban it to make the market smaller.”

After Hitting Ten Thousand Users, Mill Unveils Second-Generation Hi-Tech Food Waste Bin

Last week, Mill unveiled its second-generation appliance, one year after introducing its high-tech food waste bin (don’t call it a composter!). The news comes as the company reaches ten thousand customers and claims it has helped divert one million pounds of food waste from landfills.

Both the first and second generation Mill turn food waste into inputs for chicken feed called grounds. The significant difference between the two machines is that the second-generation Mill will do it faster and more quietly.

According to the company, one primary area of feedback from users of the first-gen Mill was that the appliance processed food too slowly. When the company returned to the drawing board to build the second-generation device, it redesigned the food chopping blades from horizontally mounted to two vertically mounted blades, according to an interview Mill CEO Matt Rogers gave Fast Company.

Video Credit: Mill

Another upgrade speeding the break down of food faster is a change to how the food waste is heated. While the first-gen Mill was heated only from the bottom, the new Mill’s heating element is connected to the entire bin interior, resulting in faster overall food breakdown.

Finally, unlike the first Mill, this new one comes with a purchase option from the get-go. Spoon readers will remember that the company started opening the doors to purchase the first-gen appliance a few months ago after hearing feedback from many of its customers that they’d prefer to own the appliance, especially those that used the Mill to process food waste for use in their garden rather than sending it back to Mill to use for chicken feed.

According to Mill, the new appliance will sell for $999. For those who still want to rent the appliance, the monthly service (without grounds pickup) will be $29.99, $49.99 with grounds pickup. For those who purchase the Mill and want grounds pickup for the Mill chicken-feed service, that’ll cost an additional $10 monthly.

Stepping back, my guess is the biggest challenge Mill will face is its high price point. Consumers looking for high-tech help processing their food waste into compost can find options like the Vitamix Food-Cycler or the Lomi for less than half the price. I worry that just like June and those bringing new approaches to cooking, products hovering around the thousand-buck mark are too expensive for most customers to roll the dice on what is essentially a new product category. While rental lowers the cost, Mill learned that most customers prefer to own their kitchen appliances, which is why they opened up the purchase option.

We’ll keep an eye on the Mill and how they perform with their second-gen appliance.

Ralph Newhouse Tells The Story of Chefman and Chef iQ (and Drops Some News About Upcoming Products)

Around 2009, Ralph Newhouse’s company hunted down excess inventory of small electrics and would re-sell them into the secondary market. However, it wasn’t long before Newhouse realized he wanted to make his own appliances, and that’s when the Chefman we know today was born.

That was just the beginning of Newhouse’s journey into creating his own products. As he and Chefman started to see how new connected products made their way into the market over the past decade, he knew he could take his learnings from Chefman and create a new brand delivering more tech-forward connected products. That thinking led to the creation of Chef iQ, a startup within a startup focused on the smart kitchen.

According to Newhouse, he saw an opportunity to take the company’s know-how for making affordable cooking appliances and create products for consumers with tech-forward features that didn’t break the bank.

“We looked at the smart hardware and the ecosystem that was developing, we felt a lot of brands were kind of missing the mark,” Newhouse told The Spoon. “There were brands out there that were creating very expensive hardware, and it was difficult to make the value case to the consumer on why they needed something with the smarts at these elevated price points. We knew that if we took our expertise at the supply chain and married it with our infrastructure and the team we had over here, perhaps we could build something that had technology underpinning the experience but that the consumer wouldn’t have to pay for.”

Newhouse also tells the story about visiting China years ago and running into some employees from smart oven maker June. After they told him excitedly about the forthcoming launch of a new June Oven, he started to think about how expensive to build these complex connected products. Soon, he started to think maybe he and his company could bring some of these same features at a more affordable price point.

Those early thoughts led to the development of a new product the company will introduce at the Housewares Show (aka the Inspired Home Show) in March: the company’s first smart oven. According to Newhouse, the new Chef iQ smart countertop oven will feature air fry capability, soft door close, a newly developed DC brushless motor, and a touch display. The new oven, which will be connected through the Chef iQ app, will sell for an MSRP of $299.

Looking forward, Newhouse sees many other new products on the horizon, including the rollout of a built-in oven from Chef iQ in 2026.

“It’s something, by the way, I’m super stoked about,” said Newhouse. “It completes the ultimate vision. We look at that industry as ripe for disruption. We think a lot of brands are kind of scared to compete in that space because it’s just really never really been done before.”

You can hear the entire conversation from Newhouse by clicking play below, over on Libsyn, or through Apple Podcasts or the usual podcast spaces.