BUSINESS
F&B
F&B
INVESTMENT OUTLOOK & KEY TRENDS The food and beverage sector has benefited from increased levels of investment over the past decade. Maya Bekhazi Noun, founder and managing director of The Food Studio, looks ahead and shares details of the investor trends shaping the F&B industry.
News about multi-million dollar venture capital investments in food and beverage startups may give the impression that such funding is the best way to scale a business, but the model is far from perfect and actually harms the majority of entrepreneurs. In the year ahead, consumer trends triggered by the coronavirus pandemic are expected to continue, driving further innovation in food production and distribution. Startups tackling key issues in the supply chain are capturing the attention of investors.
Investor trends Investor trends have accelerated since the onset of the pandemic, which will undoubtedly have long-term implications for the industry. As for the short term, the following are trends to keep an eye on: • Private equity groups and high-networth individuals will continue to be active investors of restaurants and hospitality industry assets. As food and beverage industry liquidity was down more than 60 percent from 2019, private equity groups and institutional investors took advantage of assets that were made available for sale. • The manchise structure is on the rise, as parent brand companies evolve from traditional franchise management agreements.
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• Consumer preferences will drive technology advancements.
Covid-19 impact While uncertainty plagued 2020 due to the Covid-19 pandemic, the global food industry is eager to move forward. Interest in a wave of trends has grown, as restaurateur leaders quickly shifted operations and strategy to navigate through one of the most transformational and economically challenging times in modern history. As many put R&D on hold during the pandemic, it is clear that innovative ideas will emerge over the next few years. The pandemic encouraged the purchasing of food online, and plenty of curation platforms are emerging, whether online or pop-ups.
Healthy food We saw a huge evolution of functional foods with high-impact ingredients concentrated with super foods, together with the creation of the dining experience at home, as well as the need for clean, whole and lessprocessed labels. Alternative protein companies and plantbased options with a surge of food traceability solutions have been the biggest driver of these trends as sustainability and
supply chain resiliency come into greater focus. Health and wellness products are expected to gain greater relevance as consumers continue seeking food and beverage brands promoting immunity benefits, relaxation and stress relief. Consumer demand for healthy food and beverage products that can improve mood, immunity and overall mental health will undoubtedly continue to see an unprecedented spike. Several experts expect to see increased investment in technologies that automate production and delivery as labor challenges persist across the food and agriculture industries.
The rise of e-commerce Another trend supercharged by the pandemic is e-commerce, which will continue to grow across categories as large corporate buyers acquire directto-consumer brands at higher multiples. Consumers are shopping from a food or beverage brand website because of better quality, better selection, better customer service and personalization.
Sustainable packaging Large- and medium-packaged food companies seeking to sustain top-line gains achieved in the past year due to the
