Tastewise CEO and co-founder Alon Chen looked around the crowded ballroom at Future Food-Tech’s San Francisco conference this spring.
The room was full of companies showing off new advances in food tech. There were different variations of plant-based meats and sauces. Ingredients made from unconventional plants, grains and legumes. Technology to improve and enhance cell-based meat growth. All sorts of products made through fermentation. He spoke matter-of-factly.
“If you look around us, nine out of 10 of the presenters are going to fail, which is a shame, right?” he said.
Chen said that startup failure has nothing to do with a company’s idea or how much the product is needed. It has more to do with the way those products are executed, what attributes they highlight, and how well they fit what consumers are looking for at the moment.
Tastewise’s goal is to turn that trend upside down.
“We're trying to get from a 90% failure rate to a 100% success rate,” he said.
The Israel-based company has a unique value proposition, and Chen says it has succeeded in work with food businesses of all sizes. Basically, Tastewise has a sophisticated artificial intelligence system that sifts through massive amounts of data online — the company estimates it accesses more than 22 billion social media interactions, more than 5 million home recipes and more than 1 million restaurant menus — to find what’s trending right now. And its co-founders know exactly where to look and how to mine that data. Chen is a former Google executive, and Chief Technical Officer Eyal Gaon has worked with several Israel-based tech companies.
The company, which got its start in 2017, works with an array of food makers including Nestlé, PepsiCo, Kraft Heinz, Campbell Soup and Eat Just. It’s quickly tripled its revenues, the company said in a statement. In March, it received a $17 million Series A investment, led by Disruptive AI. The company, with total lifetime funding of $21.6 million, has plans to expand its coverage to help capture the up and coming trends in new markets including Canada, Germany, France, Australia and India.
"If you do a really large survey, you'll usually be talking to like 200 people. We observe 10 million consumers every single moment, and what we basically allow you to see actually is way more statistically significant and meaningful in real time.”
Co-founder and CEO, Tastewise
Chen said the data that Tastewise can provide is much more significant and useful to food companies than traditional information. Historically, food companies relied on point-of-sale data — which takes some time to compile and only can record what a consumer buys, but provides no information about the decision-making process or the reasons behind a purchase. And consumer polls — another traditional source of information — are full of inaccuracies, Chen said. Consumers are not always truthful about the products they are looking for and why, or what they are hoping for in the future.
“We basically look at behavior and we analyze that,” Chen said. “And we look at a much higher scale. In a survey, if you do a really large survey, you'll usually be talking to like 200 people. We observe 10 million consumers every single moment, and what we basically allow you to see actually is way more statistically significant and meaningful in real time.”
In general, the COVID-19 pandemic was good for the food business. CPG manufacturers reaped the benefits as restaurants, offices and schools closed their doors and consumers returned to cooking and eating at home.
But it was especially good for Tastewise, Chen said.
“There'd been so much change with what consumers want, right?” Chen said. “That was never changing so fast until COVID.”
Tastewise was able to prove just how valuable its insights were as the world — and consumer behavior — literally changed overnight. For example, Chen said, before the pandemic shut everything down, there was huge emphasis on sustainability through making reforms to food packaging and related items, like disposable plastic straws. Quickly though, consumers became more interested in personal safety, so more packaging — like individual snack bags — was in demand, and concern about straws was forgotten.
Most changes in consumer sentiment and behavior are not so quick and dramatic, but what people want from their products is ever-changing, Chen said. A lot of this is because of the pace of modern digital media. All it takes for an idea to catch fire is a handful of the right kind of influencer videos or well-timed tweets.
“If you don't understand the consumer, and you start developing a product, and then you don't check if your hypotheses or assumptions are still valid 12 months later, you'll be launching a product that is not necessary,” Chen said. “And that's what we do. We basically help you monitor the consumer needs and demand to be able to launch with confidence.”
Because Tastewise looks for data in all kinds of social interactions online, Chen said that the information it collects is uniquely useful to companies. For example, he said, Tastewise can figure out what people are doing with the food items they buy at the store, since about 70% of items purchased are actually to be used as ingredients in another dish, he said. If point-of-sale data shows someone buying taco seasoning and tomatoes, it doesn’t indicate how those ingredients are being used. Tastewise can not only determine if they’re being used together, but can use data to show if they’re being combined for a taco bar or taco bowls, according to the company.
And, Chen said, the level of detail in Tastewise’s insights can really explain the trend and how it is coming together. They could pick up something unique, like rainbow-colored baked goods. But then, Tastewise can go a step further to determine who is making these bright breads. Are there lots of photos from a couple of small bakeries, or are some larger ones and influential restaurants making them too? Where are they, geographically? All of this information, Chen said, comes together to make what he called Tastewise’s “explainable AI” — which tells the manufacturer the whole story of the trend so it can trust the data and make decisions with confidence.
The future is not about “health”
One of the most remarkable things Chen is seeing now is a rapid decline in consumers’ interest in “health.” Not healthy eating, but general interest in “health” as a term, he said.
“All the more granular, sophisticated needs are actually rising,” Chen said. “So people will not say, ‘Oh, I’m eating something healthy.’ They will say, ‘Oh, this is great for my immunity system.’ ‘This is great for my gut and it's impacting my brain.’ Or ‘This is great for energy.’”
Chen said that this new degree of sophistication on the part of consumers is good news for food companies. It provides evidence of the different functional roles consumers want in their food, and can help manufacturers of both products and ingredients develop offerings that are targeted to those needs.
“If you don't understand the consumer, and you start developing a product, and then you don't check if your hypotheses or assumptions are still valid 12 months later, you'll be launching a product that is not necessary. And that's what we do. We basically help you monitor the consumer needs and demand to be able to launch with confidence.”
Co-founder and CEO, Tastewise
Watching the trends, the popularity of individual functional ingredients is somewhat volatile — agave and ashwagandha are hot right now, but that could change, Chen said. The specific functions consumers want in their food, what he called their “deep human motivations,” have been more of a sticky trend.
As Tastewise expands to more countries and is able to find and process more data, Chen said he sees these specific food functionalities continuing to be central to tomorrow’s trends. And while the threat posed by COVID-19 infection subsides and consumers are returning to some of their pre-2020 patterns, sustainability concerns are coming back into the fore. But Chen said these two aspects aren’t necessarily the most important things for food companies to consider going forward.
“The biggest message that I have is that there's so many new opportunities, and the biggest opportunity is to actually create products that consumers actually need,” Chen said. “This is where we’re trying to bridge the gap with technology.”