Kim Anders Odhner hid in a corner of his company’s Amsterdam office to talk to me about Teams. My colleagues were quite loud, so I decided to come here. The lighting is not very good.
After adjusting the screen so we can both see each other, he’s ready to chat. Odhner has an American accent, but he moved to Asia when he was young to work in emerging markets investing.
He spent 25 years working in Asia, particularly in agribusinesses. After a few stops in the United States, he found a position at Unovis Asset Management in the Netherlands, formerly known as New Crop Capital.
It was the first company to raise money to invest in companies like Beyond Meat, and in alternative dairy and proteins in general. “We’ve invested in a lot of companies that are eliminating animals from the food supply.”
Unovis is on a mission to transform the agriculture industry. The company has invested in more than 50 food technology companies, learning over time what works and what doesn’t. It’s also learned how to enter this market.
Odhner, the company's managing partner, came to the Netherlands to open an office and launch Unovis' second fund, which raised €150 million.
What is the best way to start a food tech startup?
Why target the volatile market for alternative meat and dairy? Odhner explains that the project began as an anti-cruelty initiative, funded by an ethically inclined vegan who thought it was a worthwhile use of his money to change the reliance on animal agriculture.
Food technology was a great way to generate interest in the sector.
This IPO took place in 2019 and has been dubbed one of the best of 2019. Beyond Meat got off to a flying start, but quickly declined. Its valuation fell from $5.8 billion to just $90 billion three years after its peak.
In a sense, tomorrow's successors are built on yesterday's graveyard.
Beyond Meat’s story is similar to many other alternative meat markets in Europe, where sales have not grown consistently and there has been market consolidation over the past year. There must be winners and losers [in investing] “Some expect these companies not to succeed as they would with any other innovation.”
Odhner compares the dairy and alternative protein markets to the dot-com bubble when asked how to regain momentum and growth. He says if you look at Silicon Valley today, there are very few companies that were there during the dot-com boom but helped create the technology.
Yesterday's cemeteries are the foundations of the future.
Alternative meats and alternative dairy won’t be a direct path to success. It takes money to launch a brand, especially in the alternative protein space where consumers still need to be convinced. Odhner says it’s not just about the product, but also the environment around it.
Alternative protein companies have clear requirements to meet. Launch new products – even if they are not profitable You can also learn more about the following: The “best” product must meet these needs to be successful.
Conversations are a challenge. [between supplier and retail] He explains that it doesn't happen often enough. We've seen a lot of things that didn't succeed because they weren't targeting the right channels.
This can be a great idea that is nutritious, inexpensive, or sustainable. New foods and ingredients are competing to replace existing products. It is possible to change the customer experience by reformulating ingredients.
New food brands face tough times
Odhner believes that despite the many variables, there are still opportunities for food technology to succeed. To thrive and meet the needs of consumers and retailers, companies must do more than just solve consumer problems.
It’s hard for innovators and new brands to get their products to market. In order to come up with a great idea from my perspective, I first need to understand if there’s a logical path; if it involves, includes, or meets some of these needs in foodservice and retail.
And the future, and what areas should new startups target? Odhner believes that meat analogues are easy to commercialize. “But you have to change the texture and the technology itself can be interesting.”
His focus for the future will be on technologies surrounding products. In addition, ingredients that can solve problems strategically, such as those that improve sustainability and consumer health, are interesting.
There’s no single product or need that Odhner can (or wants to) focus on as something he’s eager to see come to fruition. Every period of innovation—remember the dot-com bubble?—is going to be spectacular, and there’s been some incredible stuff in food tech. You can’t solve a problem with one company. Instead, you have to refine your approach.
This sector is becoming more and more attractive and we are going through a period of innovation. It is worth millions and it is something that people need every day. So it is worth paying attention to it.
Kim Anders Odhner, Managing Director, Europe and Asia, at Unovis Asset Management, will chair Industry Collaboration: Strengthening Partnerships with Foodservice, Retail and Enterprise, at the upcoming Future Food Tech show in London, October 2-3.
Food and beverage manufacturers need to know
What is the biggest challenge for European food and beverage producers?
I think companies will be increasingly scrutinized for their nutritional and health content. Many ingredients are neither sustainable nor healthy, and that will be the focus.
What are the best ways to leverage technology in the food and beverage industry?
Ingredients are key. In a sense, companies are trying to do more with less. Whether it’s environmental devastation or sustainability challenges, big food companies will have to be more creative with their resources. Innovation is needed to produce food more sustainably and to maintain high nutritional standards for an ever-growing population. The nutritional content of food has declined because we are under pressure to produce faster and over longer periods of time.
Innovation is the only way to reverse some of this negative impact of a growing industry.
What are some mistakes you see in restaurant startups?
There is something wrong with you. [the business] thinks the end consumer. The end consumer is often the one holding the fork, but it is often the distributors who deliver the product. There needs to be more collaboration between manufacturers and distributors.
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