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The Spoon

Daily news and analysis about the food tech revolution

Dispatches from Israel Food Tech

Dispatches from Israel Food Tech Ecosystem: Anat Natan, CEO and Cofounder of Anina

I talked to Anat Natan, the co-founder and CEO of Anina. Anina is an Israeli startup that takes imperfect food and transforms it into ready-made meals in pods. Food waste has significant economic and environmental implications, and it is estimated that the greenhouse gas emissions from food contribute to 7% of the overall greenhouse gasses emitted globally. We talked about the technology that powers Anina, operating in markets outside of Israel, and what she believes sets Israeli founders apart. 

J: Talk to me about the technology behind Anina. 

A: We create these laminates, these vegetable sheets, and we try to incorporate as much food waste as possible. The laminate is strong but flexible. We try to take the ugly produce, and we try to incorporate all this food waste in our production process because we care about all the factors of the produce outside of how it looks. A third of the produce in the US goes to waste due to aesthetic reasons. I think there’s a catch-22. As consumers, we want to be more and more sustainable, consume more sustainable brands, and support sustainable production. But on the other hand, we become, as consumers, more concerned about what’s perfect. 

After we create these laminates, we mold them, we fill them, and we close them. Our technology is protected IP, and this IP contains the process from fresh produce to the pod, including the laminate. We’re registering it in the US, the EU, Israel, and Singapore. 

J: Did you choose those markets because those will be your first entry points? 

A: Our go-to market is divided into two approaches. With the US, our brand will have partners to get to the market efficiently and reach customers in the right and creative way. With the rest of the world, we are going to use a B2B approach, which is a joint venture. We bring to the table what we know how to do, which is the production process and R&D. And everybody does what they know how to do best. The partners know the market, the consumers, and the supply chain. We start by creating pilots, and we’re going to conduct pilots in Israel, Spain, Andorra, and Singapore to understand the right way to approach the market. And after that, we will create a long-term collaboration with them. 

J: What type of consumer testing have you done so far? 

A: So much. We have conducted external research in Israel, Spain, in Italy (with Barilla) and very in-depth design thinking research. In the US, we have done a market analysis that organizes qualitative, quantitative, demographics, and surveys. Every time we ask the question, do you understand what it is? Do you know how to use it? We give the product to people to try at home and then answer surveys. Anina was established in June 2020, and I’ve been conducting research since August 2020 because I believe that innovation needs to go hand in hand with understanding how to approach the consumer. Obviously, they cannot imagine what they don’t have in front of them. But you have to evaluate what they think to make sure that you don’t bring an alien to them eventually. 

J: You mentioned a lot of different markets in the US, Europe, Israel, and Singapore. Have you noticed differences in the customers in each place? Maybe customers have different preferences, or it has to be given to them in a certain way? 

A: Yes and no at the same time. Our consumers are millennials and Gen-Z and they care about what they eat and care about investing in themselves. And then, when you look at it, the first difference between the countries is the culinary element. We have five different recipes. One of them has beetroot, spinach, and quinoa, and in Singapore, they told us how nobody eats beetroot. And then we spoke to a Russian lady. And she said, ‘that’s my favorite.’ You can talk about pasta. The Italians don’t want pasta in their meals because they know they do it better, but the rest of the world desires pasta.

The understanding of the culinary element is a very local element: What type of ingredients? What type of produce to use? What’s interesting? What’s weird? What’s familiar? So first, the culinary element. And yet, I will tell you that the differences we have expected to be bigger, but it appears that there are more similarities than what we have expected. When we showed them our recipes, there were only adjustments, mainly in the seasoning, not in the whole concept of the recipe. And I was actually curious about it, and I think there’s more similarity in that generation rather than Gen X because of social media. They’re more exposed to the same culinary element. And yet, there are differences.

The second one is about instructions on how to cook. For example, do you give a range of timing of cooking? Do you prefer words or icons? There’s a lot to how you communicate information. But what’s very amazing is that it doesn’t matter if it’s the US, the land of convenience. If it’s Singapore, which I think is the gate to innovation for tech in the Far East. Or if it’s Spain or Israel or Italy, which are very traditional countries when it comes to cooking. The acceptance of the product is unheard of, and everybody appreciates a good home-cooked mouthfeel experience with convenience.

J: So it’s not just about the product but about the experience and how the user sees it, what kind of instructions and images are used? 

A: The most important thing is the mouthfeel and the taste and flavor experience. We know how to control when and how the pod will break down during the cooking process since not all the ingredients get the same amount of time to cook. The pod from the outside is cooked the whole time, while the filling inside is cooked only part of the time.

What is the result? It’s multi-texture because when you cook different things at different times, it’s not that everything is soft. And then people do not understand that. But they say ‘Wow, it tastes like home cooking, it tastes like each ingredient got a different treatment of cooking.’ And this doesn’t exist in the food industry. 

J: Is this a prototype, or is this what you sell? 

A: This is what we sell now in Israel. We have already planned to do a joint venture with Strauss which is the second-biggest food company in Israel. 

J: Where can people buy this? 

A: Mainly online. 

J: I want to ask about is scaling. You have a very unique technology with the food as a laminate, and I imagine this packaging is also custom. How do you tackle the challenge of scaling up? 

A: We are supported by engineers. We have an advisory board that comes to support us so that we scale up in an efficient way. We already have the capacity to produce a few thousand units a month, and there’s a full plan for mass production. We have to do it as fast as possible to get to the most efficient objectives. 

J: What does the timeline look like for entering other countries? 

A: This year, we’re already doing the pilots in the countries I’ve told you about. 

J: How did this idea start? 

A: I met my other two co-founders, Meydan Levy and Esti Brantz. They are industrial designers from the Bezalel Academy of Arts and Design in Jerusalem.  They invented the product. They wanted to overcome the challenge of food waste and ugly produce, and they saw it as a phenomenon that only increases with time. With their knowledge, ability, and their artistic way of looking outside of the box, they brought a lot of techniques from other industries to produce all this starting with the laminate and eventually building the pod.

They came to the Kitchen Hub, which is where I met them. The Kitchen Hub creates new teams of founders, allocating technologies, products, innovation, and ideas, and then bringing the right CEO who invents the business.

J: I saw Anina last year in New York at the NY-Israel Foodtech Bridge conference. From your perspective, what was your experience of that conference? 

A:  I met a lot of interesting people that we are even today still thinking of how we can collaborate within the US market. I think the exposure to the US market was very interesting.

J: How would you say Israeli startup founders are different? 

A: There’s a thing in Israel about getting to the bottom line: it looks like being rude. And a lot of Israelis, if you live here, it feels like it’s rude, but we cut to the chase. You can be aggressive in your movement and still be a friend when you finish the meeting, and that’s something that doesn’t exist in the world. I think there are a lot of benefits to that.

Joy Chen is a contributor at the Spoon and has been writing about robotics and alternative proteins for the past year and a half. Although originally from the United States, she is currently studying at Tel Aviv University in Tel Aviv, Israel. 

Dispatches from Israel Food Tech Ecosystem: Roee Nir, CEO and Cofounder of Forsea

I had the opportunity to talk to Roee Nir, CEO and co-founder of Forsea. Forsea is producing cultivated seafood, starting with cultivated eel. Prior to Forsea, Nir headed the business development for a biopharmaceutical company in immunology. We chatted about the differences between cultivated meat and cultivated seafood, customer preferences, navigating the regulatory environment, the foodtech ecosystem in Israel, and how startups raise money in Israel. 

J: Why is eel your first product?

R: We start with eel because our strategy is to target highly priced fish with real market demand that is unmet and endangered species. The place that we go to look for the endangered species is the IUCN Red List and eel was answering these criteria quite significantly because eel has declined 90 to 95% in recent decades and the wholesale price is between 60 to $75 per kilo. Just to understand how big the market need is, Japan, for example, consumed about 160,000 metric tons in the year 2000. Now, they consume around 14. So, there is a big gap between the demand and the current supply and for us that was a no brainer to tackle this market.

J: How did you as a founder become passionate about this problem? 

R: We are in the center of a revolution. Looking at fish and seafood, the demand for them is expected to double by 2050. Already now, less than 7% of the fisheries are being fished at levels below sustainability. Aquaculture has its own environmental and food security issues. There is a great need to close the supply and demand gap.

J: Israel is very strong and cultivated meat, especially because there are a lot of people that don’t eat meat here. How do you see differences in the development of cultivated meat vs. cultivated seafood startups? 

R: Cultivated meat had some background from medical research related to tissue engineering and organ substitutes and so on. The challenge was taking it from that vertical into the right applications in the food. For fish, there was no research and every cultivated fish and seafood company is doing very basic research because the cells develop differently. Each of us is more or less targeting different markets at the beginning (tuna, scallops, shrimp, etc) which require their own modifications. There are some ancillary companies joining the ecosystem related to cell line development, scaffolding, growth factor developments, contract manufacturing, piloting, etc for cultivated meat.

J: So when the Kitchen came to you and approached you with the idea of this startup, and they already had the technology, what was that technology based on? 

R: We are a completely different company than any other cultivated company. Almost all cultivated meat companies do more or less the same thing, they will go to a certain source of stem cells and use a technique called directed differentiation to grow the cells. Then the cells have to communicate which they do by using a scaffold where the cells are seated on the scaffold pre-maturation. This is used as a building block of the tissue.

What my co-founder Iftach Nachman discovered is a technique to take important stem cells which are cells that have the potential to differentiate to any type of cell. And these are usually being created only when you have a fertilized egg. So you have a fertilized egg that doubles to two to four to eight, and so on. These cells upload but they have the potential to differentiate to any type of a cell. He found a technique to take these cells and to aggregate them into a special form called an organoid and give these stem cells the feeling that they are in the early stage of their own development. What happens is that these cells start to grow as if they weren’t each. They grow into many tissues that are naturally composed of edible pieces. 

So we barely use growth factors. We do use some growth factor to direct this organoid tissue to have the composition that we want, but it’s a very minimal usage compared to the directed differentiation methodology. Then these many tissues of this organ start to develop autonomously up to less than a millimeter before we start building tissue from it. 

And by this method, we are tackling the largest challenges of the cultivated meat space. We eliminate the scaffolding stage because each one of these organoids is its own connective tissue. They communicate together and we don’t need to synthetically put them on a scaffold. We also simplify the production process so we are much more scalable. These advantages allow us to bring our product to plate faster and reach price parity faster. Also, the tissue is more natural in the way that we manufacture the cut.

J: When do you expect that consumers will be able to try your seafood? 

R: We are in the R&D phase and are planning to launch the first product to market at the end of 2025. 

J: When a new product enters the market here in Israel, especially food tech, what kind of adjustments do you have to make toward customer preferences? 

R: The final product that we launch will probably be more suitable for the Asian territories. As a company for our product of eel, we would want to do the market adaptations in Japan, not in Israel. I think that overall most companies are going to try Israel or Singapore as a test country but we are all aiming at selling globally. Because our industry is an industry that requires a lot of CapEx and we need markets that justify such an investment. Our vision is that our first launch would be in Asia.

J: With this product, what kind of regulation or intellectual property protection challenges do you have to navigate? 

R: The first wave of companies has to face two aspects. One is regulation, and the other is market education. The way is being paved by them for us. Any company that is getting the approval, it’s a very big advancement. I’m quite confident that our process will go through there quite smoothly as any cultivated meat company. From an IP perspective, everything that we do is completely innovative. We are submitting a few provisionals these days, based on the research that we generated in our lab. But really everything that we do is very innovative and this is how we protect ourselves. 

J: There are probably a lot of challenges as a first mover entering the market, especially around customer reception. What are the other challenges associated with developing not just a technology, but also a business that has to have customers? 

R: First, every consumer research that has been done says that the most important thing in the product is taste. So it’s on us to deliver a product that is high quality. From a market perspective, we, as a company, do not plan to be the ones that are marketing the product. For example, now we are looking for strong partners in the different territories that we target to partner with to make the right market adaptations to the target market. And also such companies which are seafood manufacturers and seafood traders that already have their own relationships with the restaurants and the retail stores. They will be the ones that will take the path of introducing the product into the market. That’s our strategy. Specifically with the eel, more than 80% of it is being sold in restaurants and that’s also our strategy: to start with the restaurants and then expand to the stores. 

J: Are there any other food tech companies from Israel or from other places that you really admire for their innovation or their business strategy? 

R: I think that Aleph is doing amazing work. I love their strategy. I love their technology and I think that it’s very well managed. I love the technology of Imagindairy also, they have very deep technology for the milk space. Also mushfoods, it’s a hamburger that’s 50/50. 

J: It sounds like the startup ecosystem here within food tech is very well connected. Would you say that the ecosystem here is generally a very close-knit and supportive community? 

R: First of all, in cultivated meat, no one needs to speak now on competition. Even the ones that are very soon going to launch their products, the market is still big and everyone is still starting. Everyone should collaborate in order to help us all bring this industry up, as long as it doesn’t interfere with the IP of others. 

As part of the larger ecosystem in Israel, we all collaborate. We are Israelis and we are very communicative within ourselves. We like to meet, we like to share ideas, and we love that this is a very central industry that is erupting from Israel. We also share investors. Sharing investors is a very connective thing.

J: And you talked about investors, so what is it like raising money here? 

R: So many of us, certainly all the companies from the Kitchen, have received Israeli Innovation Authority funding. We had to go through a very rigorous application and many meetings and once we were approved to be financed by the Israeli Innovation Authority and by the Kitchen, we were given 3 million shekels ($900,000). And it’s a very smart thing to do from the government’s point of view because it’s their way of incentivizing innovation. Then you have to start raising and from the earlier stages you can probably target angels as well. But most of my investors are Vc’s and only one angel. My preference is either VC’s or CVC’s, professional investors that not only know the business but support additional fundraising in the next stages, networking, etc. There are less investors in Israel than US or Europe so more investors are American or European. But there are also Israeli VC’s that have started to be more interested. 

J: You mention corporate venture capital, is that very common here? 

R: It is a source of funding. Of course, VC’s are more active, and naturally, there are much less CVC’s and their process is much longer and they are more conservative. For the relevant companies, it’s there. There are less investors in Israel than US or Europe, so more investors are from US or Europe.

Joy Chen is a contributor at the Spoon and has been writing about robotics and alternative proteins for the past year and a half. Although originally from the United States, she is currently studying at Tel Aviv University in Tel Aviv, Israel. 

Dispatches from Israel Food Tech Ecosystem: Amir Zaidman, The Kitchen

Last month, I visited the Kitchen Hub at their office in Ashdod, Israel and sat down with Amir Zaidman, Co-Founder and Chief Business Officer of the Kitchen. Prior to co-founding the Kitchen, he spent 10-14 years in business development in medical technology working on both the startup and investing sides. 

We chatted about what the Kitchen does, what sets Israeli startup founders apart, what the ecosystem needs, how precision fermentation is the new software, and what it’ll be like for Israeli customers to try the first cultivated meat product. 

J: Let’s talk about what the Kitchen is and what it does. 

A: First and foremost, we have capital we invest in startups like a seed or pre-seed stage venture capital. We have more money than a typical seed stage venture capital would invest because we are also getting money from the government to invest in those startups. While a typical seed stage fund would not invest $200-0.5M, we can invest closer to $1M in a company. Those companies become portfolio companies and they have access to the facility but it’s also the very close support that the team in the Kitchen is giving the teams in the companies. At least for the first 2-3 years after we invest in them, it’s a very intense relationship. 

J: Would you say the Kitchen is like a venture studio? 

A: Not exactly. For us, venture studio is when we start with a blank page. Then we brainstorm and figure out what we want to do based on needs from the industry, global trends, and where the industry is going. We start scouting for the enabling technologies, science, intellectual property that might be relevant for the project. When we find that, we go into negotiations with universities or research institutes and we go into a licensing agreement to own the license for that technology. Then we go recruit the team and give them equity into the new company that we created that holds the license for the technology. The venture studio model for us is starting from nothing and bringing all of those building blocks together. 

The third thing the Kitchen does is activity in the foodtech community in Israel. 

J: Let’s dive into your role here, I understand there’s two main components so can you elaborate on what those are?

A: I take part in this venture studio model by thinking about our new directions and what we need to do. The most significant part is making deals with universities and entrepreneurs for the terms under which they’ll come into the Kitchen. It depends on whether or not it’s a venture studio or a regular investment. But if it’s a regular investment, it’s very much in line with a typical VC investment model. And if it’s on the other side, then it’s more complicated with the licensing agreement and everything that has to do with that. 

The second thing, which is the part of my job that keeps me most busy, is working with the CEOs of the startups on their business development activities, around possible agreements that they might have like joint development or collaboration agreements, and most importantly, on their next round fundraising.

J: You have a view of the entire food tech ecosystem here because you’re working with many startups, but you also have a more specific view of individual startups and what they need. What secret weapon do startups here have that make them competitive in a global market? 

A: I think there’s a few elements to that. One is that Israelis are very entrepreneurial, which means that a person might define himself as an entrepreneur, regardless of the vertical that he’s working in. One day, he’s an entrepreneur in medical technologies and the next in food tech. When there is a new field which is impactful, it will draw seasoned entrepreneurs from other verticals to come and build their next startup in the space. 

The second thing is that there’s a lot of innovation in Israel. 

But I think the most important is that because Israel is such a small market, all Israeli startups are born global. They never consider the Israeli market first. They think of Europe, the US, and Asia first. They have to think global which helps them get a bigger sense or a better sense of the bigger picture.

J: Where do you find the best research and the best founders here?

A: Everywhere. The food tech sector is so diverse. If you look at cybersecurity, they come from specific intelligence units in the military. It doesn’t work like that in food tech in Israel. We source the IP and science from specific research institutes, but the entrepreneurs themselves, we get them from everywhere. We get them from previous entrepreneurs of biotech companies, medical technologies, or food companies.

J: They come from everywhere but what are the characteristics that they share? When you’re thinking about building a community of food tech startups here, what are you looking for? 

A: You don’t stumble upon foodtech. It’s not something that you do because it was there, you have to want it. And you typically want it because you feel that this is something that can change the world for the better. All of the CEOs and founders of those companies are passionate like that and this is what makes them unique. 

J: With the Kitchen’s access and view of the food tech community as a whole, what is it that you think that founders here really need? What kind of resources do you hope will become more accessible in the coming years?

A: You’re touching a very hot point, because we’ve been talking about those issues for the past three years. If you’re a food startup in the US, you’ll come up with the idea, you will go to a research center, and they will help you develop it. In Israel, you cannot outsource the development or the manufacturing.There’s a lot of infrastructure that is missing. And we’re working on that. Not the Kitchen specifically, but the Israeli community with some support from the government. Every startup in precision fermentation has to buy some equipment and there’s a movement to set up a precision fermentation center, which will be like cloud computing but for precision fermentation. You can do the very small scale in your lab and when you go up one notch to bigger fermenters, you will be able to lease and not buy. 

J: This is interesting because food tech is a very capital intensive industry compared to software.

A: Software used to be capital intensive, because you used to have to own your own servers,  until AWS and Amazon invented web services. And suddenly, it didn’t have to be so capital intensive because you can have everything on the cloud. 10-15 years ago, it wasn’t like that. This is now also changing in food tech.

J:Ultimately, the goal of food tech is to change the way people eat which requires a big behavioral change, even if the technology is there. How would you say the consumers here in Israel have been reacting to things like cultivated meat? 

A: I can’t really say because no cultivated meat product has been launched in Israel yet. We’re hoping the first ones will be launched by the end of this year. I can tell you that Israel is very fast to adopt new trends and technologies and it’s very plant based. I expect those new technologies to be very well accepted. Although the market is small, it’s gonna be a very good test market for every new product. We have a lot of chefs that are extremely interested in what’s happening in food tech because they want to incorporate the new technologies into their menus. It wasn’t like that, three-four years ago but now the culinary world and the food tech worlds are getting closer together.

J: Cultivated seafood was one of the theses the Kitchen had that resulted in Wandafish and Forsea. Clean packaging and reduced sugar have also been themes among the Kitchen’s portfolio. My final question is, as you’re thinking about the trends and new theses to follow, what technology are you hoping to see?

A: One of the main things we are hoping to find is technologies that will enable sophisticated technologies like precision fermentation and cell cultivation to produce products that will be affordable. Because today those technologies are expensive and they produce expensive products. Cultivated steak will probably be more expensive than a regular store-bought animal based one because the meat industry is good at creating affordable products at mass scale. It’s very difficult to compete. The companies that are creating cultivated meat are very close to market but they have premium prices. So we’re looking for the technologies to enable them to reduce costs, to reduce price, to be more efficient, and to bring the gospel to the people. 

Edited for clarity and length