Jacob Wolinsky
Hedge fund expert

Israeli companies and startups are accelerating alt-food technologies

The global recognition of alternative food products, those produced without the need for animal products has claimed its spot on the world stage – rapidly appearing in supermarkets and restaurant menus around the world.

While most countries have been open to the idea of vegan and animal-free products, Israeli companies and startup businesses are now pushing the limits even further, accelerating development and innovation in the alt-food tech industry.

Data by the Good Food Institute Israel (GFI Israel) revealed that alternative protein companies raised more than $114 million in investments in 2020 alone, representing 154% year-over-year growth. In 2021, that figure grew even bigger, seeing food tech businesses raise more than $623 million in capital, another 450% increase from the year before.

On an international and domestic front, support for the alternative meat, dairy, and egg industry has established itself as a strong driver of economic advancement. Recently, Tel Aviv has opened its doors to more than 100,000 visitors hosting one of the world’s largest vegan festivals, hosting more than 100 different food stands.

The first Vegan Fest in Tel Aviv was held back in 2013, and again in 2019, this year will mark the third of such festivals.

In a very short span of time, Israel, more so, Tel Aviv has claimed the spot of becoming the world’s vegan capital, and it looks to only grow within the next few years.

With a rapid change in diets growing out of all generations, and the increasing global population seeking more alternatives to improve global and national food security – food technology companies and startups are pivoting Israel onto the global stage of affluence and determination.

Plant-based Technologies

The recent expansion of the food tech industry stems from the domestic support companies and local businesses that have received from both the national government and educational institutions.

Companies such as Technion have assisted in the early development and startup process of agri-food tech-based innovations in Israel. The Hebrew University has in more recent times, created an assortment of academic programs and career paths for those interested in agriculture, technology, and nutrition.

These early-stage development platforms have meant that the country itself can establish a strong focus on science, technology, and food security. These efforts helped to evolve into the startup ecosystem, seeing a mirage of young startups, those acquainted with food-tech and alternative food technologies, founded and headquartered in Israel.

But these companies are not restricted to Israel alone, seeing their influence reaching a global market of consumers.

In early December 2021, Israel Chemicals Ltd., one of a handful of publicly-traded companies on the New York Stock Exchange announced the opening of an $18 million production facility in St. Louis. The reports stated that at full capacity, the plant will be able to produce more than 15 million pounds of alternative protein products per year.

Israel Chemicals, more commonly known as ICL is headquartered in St. Louis, one of few such companies that have chosen America as its head of productions and operations.

The expansion of these companies, especially those in food tech has undergone in recent years has pivoted Israel, and smaller startups to the global stage, offering them the recognition that expands further from our traditional understanding.

Cultivating Opportunities

Although the private sector and businesses within the agri-tech and food-tech industry have been a hive of activity, opportunities for expansion have also come from governmental institutions.

While 70% of all food-tech investments went to alternative protein and animal-free consumables startups in 2021 in Israel at least, around 13% of those came from government programs.

Estimates by The Israel Innovation Authority, a branch of the Israeli government has managed to pump more than $69 million to establish four new institutions looking to improve the acceleration of niche industries, with cultivated meat being one of them.

Reports by the World Bank found that Israel spent 4.95% of Gross Domestic Product (GDP) on research and development (R&D) in 2018, outpacing countries including South Korea, Switzerland, Japan, and the United States.

But over time these figures have only increased more sufficiently, looking to act on behalf of the acceleration of niche markets and domestic sectors, one such, the alternative protein sector.

The latest figures released by GFI revealed that there are currently more than 100 protein or alternative food companies and startups actively participating in the Israeli economy. Additionally, the report claims that there are also around 28 dedicated research labs in this sector, allowing for a combination of both private and public resources.

R&D in the food-tech industry has meant that companies are able to increase their domestic activity, both on the consumer and economic front. This has given startups focus on creating animal-free consumables and a platform through which they can receive the necessary support, funding, and recognition.

More than this, 2021 also saw Israel welcoming international delicates such as the Minister of Food and Water Security from the United Arab Emirates, Mariam Almheri meeting with experts at the Hebrew University of Jerusalem on possible partnerships between the two nations and the academic institution.

The meeting was said to be an example of collaborative spirit among Middle Eastern nations to help improve the overall production, manufacturing, research, and development of the local food-tech sector.

These are only one such partnership the government and private firms are looking to establish, offering not just ingenuity, but collaborative innovations.

Science-based Approach

Perhaps the most notable direction alternative-protein companies are taking is to combine changing consumer behavior with a science-based approach.

What this means is that companies are not limited to traditional practices, and are open to experimenting with a mirage of alternatives that can help meet a changing consumer diet.

One such example is Nestlé Israel which has recently noticed a drastic shift in the way consumers view animal-based dairy products. According to Nestlé Israel CEO Avi Ben Assayag, he found that their company should start focusing on creating science-based industrial agriculture. Not only does this mean the company will be able to pivot itself towards an evolving consumer market, but it could also help lighten pressure on the global food supply chain.

While corporate giants are taking a step in a new direction, various other companies and startups have also approached the market with the aid of science.

Among some of the 152 food-tech startups in Israel, names such as Future Meat Technologies, Redefine Meat, Remilk, Aleph Farms, DouxMatok, and Goji Food Solutions, among others, have taken traditional forms of business and combined their efforts with science and technology.

From lab-grown meats alternatives to cultivated plant milk, and plant-based food processing equipment, the direction these companies, and others, are looking to take will help the food-tech sector grow beyond its institutional proportions.

But the millions, if not billions investors are pouring into food-tech year-over-year is not just helping the number of elite plant-based consumers enjoy better, and more improved animal-free ingredients and food products. It’s establishing a chain in the link that could help provide further innovation and transformation for food security.

A report by the Intergovernmental Panel on Climate Change (IPCC) has found that rising average global surface temperatures and changing weather patterns are putting millions of people at risk of food reliability.

Countries in sub-Saharan Africa, including South Africa, could see increasing risks regarding food availability. The severity of climate change and the impact of human activity has meant that an increasing number of developing nations could see a decrease in the availability of crops and increasing costs in production and consumer prices if viable and technological solutions aren’t brought to life.

Meat, Eggs, and Milk: It’s all changing

Whether we notice these changes in the consumer market or not, it’s clear that food tech has evolved into more than just offering alternatives for vegetarian and vegan consumers.

Their practices have meant we’re now able to see a consortium of businesses and startups drive change in the alternative-protein market, opting to push the boundaries of what they have to offer on an international level.

In Israel, alternative food-tech companies are pivoting the nation, its academics, and business leaders into the next generation of animal-free consumables, alternative protein, and food security that can help offer viable solutions for the changing consumer market and the risks associated with climate change.

About the Author
I am the founder and CEO of ValueWalk - a popular financial information company. Before launching ValueWalk, I was first an equity analyst at a micro-cap focused private equity firm and then moved to a small/mid-cap value-focused research shop. I also have experience working in business development for hedge funds. I live with my wife and four kids in Passaic, New Jersey.
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