What does the future hold for our food? Will consumer demand for “real food” continue to grow and will suppliers be able to fill the demand? Will synthetic foods continue to fill gaps amid current criticism? The quick answer: Yes! There are tremendous growth opportunities in both areas.
First, what are we talking about when we say real or synthetic? The following list of attributes is by no means complete, but it gives you a good idea of the characteristics of each group.
- Locally produced
- Clean label
- Humanely raised animal practices
- Meat Produced/grown in laboratory settings
- Meat Analogs: Vegetable or synthetic protein
- Complete meal replacement – Soylent
- Synthetic GMOs – CRISPR
- Synthetic additives, preservatives, and flavors
Helping to define the long-term future of food are several macroeconomic drivers that will be with us for the foreseeable future.
- Nutrition: The nutritional content of food has taken a back seat to taste and cost over the last 50 or so years. This is no longer the case with better nutrition being a key driver of the “real food” movement and an important part of the creation of new synthetic foods. Nutrition is important both from a standpoint of what is in our food and what is not.
- Government Involvement: Despite the current election results, the level of government involvement in the food space will continue to increase. Food safety concerns and agriculture subsidies will continue to exist. A major new driver of government involvement will be healthcare costs. The connection between better nutrition and healthcare costs is very solid. The government is the largest payor of healthcare through Medicare, Medicaid, and the VA systems. Through food stamps, school lunch and similar programs, the government is also the largest direct and indirect subsidizer of food purchases. There will be increasing pressure on government to not only subsidize food but also to dictate the nutritional content of what we should eat.
- Sustainability: The current system of food production cannot support a future population of over 9 billion people with many more achieving a middle-class life style. Feed for meat production currently takes up 80% of the US agricultural acreage. The oceans are overfished in many areas and soil depletion is a major concern. Food waste at over 40% in many countries, along with packaging waste and other by-products of the food system, are also not sustainable.
As the food system moves toward becoming simultaneously more real and more synthetic, several opportunities emerge.
- Infrastructure for Local Food Systems: Locally grown food is currently in the low, single digits as a percentage of the total food supply. The stated goal of the local food movement is to bring that number up to 25%. At this level, many local food systems will be achieving multibillion in sales. If you find that hard to believe, remember when my grandfather first got into the restaurant business 100 years ago, almost all food production was local. Rebuilding this infrastructure will require regional food processing and transportation hubs, improved vertical farming techniques, software to better connect supply and demand in local food systems and many other new and efficient support systems.
- Government/Insurance Companies Direct Purchasing: To control spiraling healthcare costs the government and insurance companies will get more into the direct purchasing of food. Case in point: a company that does prepared meals for Medicaid and insurance patients has grown from $10 million to over $100 million in 10 years and was recently acquired by a major medical supply company.
- Science and Food: Opportunities to apply new scientific discoveries to both real and synthetic food will grow rapidly. From assisting in the creation of more efficient organic and natural farming methods to nutrition based on an individual’s genome, science will play a pivotal role in the future of food.
I hope you found this information thought-provoking. At New Food Strategies, our focus is on helping food companies, large and small, develop and execute growth strategies.
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