Foodtech: Feeding the Future

Foodtech: Feeding the Future 

Thought Leadership

How innovators from the UAE are transforming our relationship to food.

The global food system is transforming fast and for multiple reasons, but climate change and environmental concerns are now key drivers of this revolution as the sector is estimated to contribute 30% of total greenhouse gas emissions, with over half of those a result of agriculture. What’s more, food waste accounts for an additional 6% of global GHG emissions, with 1.3 billion tonnes of food (around 13.8% of the global food production) wasted across the food supply chain. 

As it is, the modern-day food industry does not seem sustainable, so let’s look at the solutions and companies shaping this rapidly evolving landscape in the UAE.

Different Food, Different Production 

From plant-based substitutes to meat, dairy, eggs, and seafood to cellular agriculture, also known as lab-grown or cultured, innovative food has been a paradigm shift in food production in recent years. In the UAE, a company like Switch Foods, which unveiled the country’s first plant-based meat production facility in Abu Dhabi last April, is leading the charge.

Yet, and although German innovative food startup Yfood Labs topped the global Foodtech funding ranking in 2023 with a $229 million Series A, the sector has experienced a sharp drop in funding last year, plunging from $3.2 billion in 2022 to $1.1 billion in 2023 amid widespread concerns over low demand and business failures – San Francisco-based plant-based chicken startup Nowadays being but one example. The future of these intriguing products remains in limbo for the time being.

In contrast, innovative agricultural techniques like vertical farming are booming, spurred by the pressure of a global population expected to exceed 9 billion by 2050 and the need to produce more food in less space to feed it. By growing crops in vertically stacked layers in a controlled environment, vertical farms can maximise yields and minimise land and water usage, while reducing dependence on seasonal fluctuations and external factors. No wonder that, in a MENA region that has historically relied on imported food and where the need to address food security issues is pressing, this market is poised to reach almost $5 billion by 2029, according to market research firm Data Bridge. The UAE is the region’s foremost pioneer of indoor vertical farms, with Pure Harvest Smart Farms, an Abu Dhabi-based soonicorn launched in 2016 that has secured a total funding of $387.1 million as of 2023 and now produces more than 17 million pieces of fruit and vegetables a year; Madar Farms, a vertical farming company launched in 2017 to grow fresh produce using sustainable production methods; Bustanica, the world’s largest hydroponic farm, set up by Dubai’s Emirates Flight Catering and US company Crop One in 2022; Pure Food Technology, that has developed an hydroponic, robotic, solar-powered prototype needing 95% less water and delivering 100x higher plant-based crop yield; iFarm, a Finnish tech startup that facilitates automated vertical farming and has joined Hub71 in 2022. 

Tackling Food Waste 

With two-thirds of food waste coming from losses in the supply chain (due to poor storage, lack of refrigeration, and spoilage in transport and processing) and another 9% coming from food thrown away by retailers and consumers, food waste is a vast problem that Foodtech innovators are tackling with targeted solutions. From smart packaging that extends the shelf life of perishable goods to apps that connect consumers with surplus food from restaurants and grocery stores, technology is playing a crucial role in minimising waste throughout the supply chain. Additionally, advancements in food preservation techniques and processing methods are enabling companies to repurpose food by-products into valuable ingredients.

From the UAE, Revoltech, that offers an innovative super freezing technology, sets the bar high by aiming to all at once reduce waste in the supply chain, extend food shelf life, and address restaurants and food distributors. Meanwhile, the Distichain B2B platform, launched in 2019, focuses on developing a more sustainable and efficient F&B trade supply chain, combining technology, ecosystem integration, and a robust legal framework.  And B2B food marketplace Supy, established in 2021, digitises the communication process between restaurants and suppliers, empowering them with insights into their purchasing trends at an ingredient level and supplier level. 

The Age of Convenience

Convenience-first food services, including e-grocery (online stores and marketplaces), in-store retail and restaurant tech, online restaurants and marketplaces, and cloud retail infrastructure, offer a contrasted picture.

As global funding in e-grocery continued to decline, from $4.8 billion in 2022 to $1.3 billion in 2023, due mainly to consumers returning to in-person shopping post-pandemic, the sector is doing well in the UAE, reaching $810.8 million in 2023 and accounting for 13.8% of the country’s total e-commerce market. Numerous platforms – such as El Grocer, Kibsons, Instashop, Bawiq, and Trolley – share the market with large corporations – including Carrefour, Lulu Hypermarket, Amazon, and Noon. 

As for cloud kitchens, they could create a $1 trillion global opportunity by 2030, while delivery and takeaway operations aggregated an estimated AED11.6 billion in the UAE in 2022 according to Euromonitor International. The success of a tech-powered multi-brand restaurant Kitopi illustrates this massive potential. Founded in 2018, the scale-up has raised $805 million over the years and was valued to $1.55 billion in May 2022, largely thanks to its proprietary Smart Kitchen Operating System (“SKOS”), a suite of applications it leverages to cook multiple brands in one single kitchen, taking care of the end-to-end operations, and delivering directly to consumers. 

In fact, the shift towards ghost kitchens – commercial kitchens optimised for third-party food delivery service – is real. These virtual restaurants operating as a digital storefront is what The Cloud is banking on. Established in 2019 and supported by Hub71, the platform defines itself as ‘the Airbnb of kitchens,’ with a proprietary tech stack and a virtual brands portfolio utilising restaurants to prepare dishes off of their menus for delivery only.

Meanwhile, Grubtech, launched in 2019 and now operating in 23 countries, brings much-needed technology and efficiency to the way these cloud kitchens and restaurants operate, offering an end-to-end solution including omnichannel point of sale, integration with food aggregators, interactive kitchen display systems, menu and recipe management, AI reporting and analytics, and much more.

Foodtech is reshaping the way we produce, consume, and interact with food. As these technologies continue to evolve and mature, they hold the potential to address some of the most pressing challenges facing the food industry, paving the way for a more sustainable, nutritious, and enjoyable future of dining.

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