F&A: What’s Next?
This year’s F&A Next conference addressed some of the big changes that the Food & Agriculture industry will be feeling in the coming year, particularly in light of the coronavirus crisis. The moderation panel pointed out that rather than create new trends, the crisis has accelerated ongoing trends, such as:
- Digitization: with the whole world working remotely, traditional B2B businesses realize selling online is not only possible, but also cost-efficient. Whereas B2C businesses are looking at a temporary slump, B2B businesses should account for online sales becoming increasingly popular.
- Climate change and GHG emissions: added to the existing push for shorter supply chains, current transportation restrictions will create a shift for localisation. Alternatives to air transportation will have to be explored. Bear in mind, however, that as the crisis hits, consumers will not be willing to pay the costs of localisation.
- Affordability & Health: While staying at home, consumers are looking for food that is healthy. The trends of plant-based and home-cooking will help. But in light of the economic recession that may last for the next 1-2 years, we will see more and more consumers scrambling to feed their families. Affordability will very likely become the number 1 trend pretty soon.
Valuations will be under pressure, but F&A is a resilient industry
Money will continue to be invested in ventures that address the safety, security and health in the overall supply chain. Sustainable (and affordable) ingredients and agricultural products, supply chain innovation, and novel food safety solutions – all require serious technology. In order to scale, upstream ventures need to invest in a factory, a serious R&D testing program, or establish a real joint venture with a large corporate.
These things are not cheap or easy. The ecosystem needs to step up in a serious way to allow these innovations to scale. We’re seeing some people step up, like the participants at F&A Next, but there is still a long way to go.
We see a need for:
- A serious F&A upstream series B fund in the Netherlands
- Professional support to the companies to transition from start-up to scale-up
- Real support on internationalizing beyond Europe
- Corporate partnerships that move the needle, especially on capital intensive activities like building factories and testing.