High-tech food companies that leverage science, different ingredients and novel ways of producing food in a more sustainable way are a hot ticket for investors.
According to Finistere Ventures, $8.37 billion was invested in the food technology space in the first three quarters of 2020. Many of these investments came from huge equity funds focused on technology, pension systems, celebrities with vast fortunes and Big Food.
Patrick Morris, who has worked in capital markets for 15 years, likes to see the enthusiasm around the alternative protein sector. But he also saw a problem that needed a solution.
"What we found is that there wasn't much opportunity for the retail investor to participate in some of these investments in the food space, and what we call the future of food," Morris said.
Late last year, he started Eat Beyond Global Investment Fund, which aims to help ordinary investors put their money toward alternatives, as well as share in some of their success. Eat Beyond, which is based in Canada, began trading on the Canadian Stock Exchange last month. It's also trading on the Frankfurt Exchange in Germany and OTC Markets in the United States. It has a board of investors with decades of experience in the food, CPG, grocery and investment industries.
Soon after its IPO, former Mars Canada CEO Don Robinson joined Eat Beyond's board of directors. Robinson, who went vegan just over a year ago, sees the industry headed to this sector.
"[When you eat] plant-based foods, you feel better, you look better, you have more energy and you're doing something good for the planet," Robinson said. "Plant-based foods are great-tasting products in better-for-you — a win-win. And so from my food background ... this is all about the future of food."
The concept behind Eat Beyond is pretty simple. It has a slate of portfolio companies in the future protein space that receive both funding and expert advice from the fund's board. And those who don't have millions of dollars to invest but want to do more to support the animal alternative industry can buy shares in Eat Beyond.
The fund currently has seven portfolio companies, all developing products to replace food and drink items that are traditionally animal-based. Robinson said this is the current focus because it is the most active area of the business right now. Eat Beyond chooses portfolio companies after doing a deep dive into different players in the space, and looking at branding, marketing and product taste, Morris said. It looks at market penetration and shelf space for the current brand, if it has reached that stage yet. And it looks at the companies' downstream partnerships.
The fund's current portfolio companies are located throughout the world. They include plant-based meat producer The Very Good Food Company; plant-based egg producer and cell-based meat pioneer Eat Just; cell-based milk company TurtleTree Labs; plant-based dairy and meat maker Nabati Foods; cell-based manufacturing process company SingCell; plant-based packaging maker Good Natured; and GreenSpace Brands, which owns the Go Veggie and Central Roast brands.
While many of the portfolio companies are headquartered in Canada, a few are based in Singapore. The Asian island nation is home to TurtleTree Labs and SingCell, while Eat Just has regulatory approval to sell its cell-based chicken there. In a statement early this month, Eat Beyond said that Singapore — with its large population and limited land space — is where many of the food industry changes are likely to begin, since the country has the goal of producing 30% of the food it needs by 2030.
With so few of the food companies concentrated on the plant-based and cell-based spaces publicly traded, it's difficult for someone who wants to invest in the technology to know where to turn. This is another reason Eat Beyond works, Robertson said.
"Our tagline is we make it easy to invest in the future food. That's really, in a nutshell, where it all started," he said. "And the more we looked at the space and what is good for the globe and people's health. The more we realized it was a great place to be in business."
Because Eat Beyond's board has experience in different facets of the food, beverage and grocery industries, they also help advise and mentor the portfolio companies, Robertson said. It's not a formal program, but it's more sharing knowledge and giving advice.
Robertson said the larger food industry has been "a bit deer-in-the-headlights" about the animal-alternative space. He knows from experience it takes companies some time to move and react to new trends. Eat Beyond isn't one of those companies; instead, it works with startups that can be nimble and lead the way into the future.
Morris said many of Eat Beyond's investors want to put their money toward something ethical that they believe will help the world. But the fund also gives them a confidence that they're putting their money into companies that are more likely to succeed.
"We want to have a platform for anyone that wants to invest in this space to know that we've already done a lot of due diligence around it," Morris said. "We have professionals from the industry that are vetting investment decisions. And they can dip their toe in the public market and get involved."