Two seemingly unrelated words, “food” and “technology” combine to create what is now the cool kid in the innovation space—foodtech which includes any innovation along the food value chain, such as food ordering, cooking, marketing, and selling. Southeast Asia has been warmly welcoming it, with newer entrants like Lalafood flourishing well in the already-competitive Philippines market. It’s no wonder that the region is at the forefront of this next big entrepreneurial wave, with the following companies leading the way.
Alternative foodstuffs include total food substitutes (TFS) and ingredient substitutes (IS). The TFS vegan, Halal minced pork created by Phuture Foods meets the increased demand for meat substitutes. TFS is nutritious and can boost food security, as the global population increases, it becomes even more urgent for companies to advance rapidly to satisfy public demand. The reception to meat substitutes has been favourable, when Singapore-based Fatboy launched a new menu made with Impossible Foods’ plant-based meat, it met with long queues and glowing reviews.
In the IS field, they replace traditional ingredients with engineered health-conscious alternatives. Singapore-grown Hoow Foods’ Callery’s brand, for one, boasts low-calorie ice-creams that taste and feel like their originals.
It’s official—robots can now be chefs. Singapore-based Orange Clove Catering uses a robot, Sophie, to whip up a steaming bowl of Laksa in just 45 seconds. Sophie can blanch noodles, add pre-cooked prawns, and pour spiced soup – all with minimal spillage, at the rapid speed of around 80 bowls an hour. With chefs relieved from these time consuming and repetitive tasks, they can concentrate on focusing on customer needs.
Sophie is just one pioneer. Others include Kurve Automation’s AUSCA, the first in the world to cook different styles of eggs, and Epic Food and Beverage’s D.I.A.N.A., who prepares 12 menu items in under four minutes each.
And the best part? “It’s excellent, I would say there’s no difference between the one created by the robot and human,” Paul Yong, a guest at Sophie’s launch event, commented. This ability to preserve a dish’s signature tastes ensures robo cooks’ rising popularity in the F&B industry.
A challenger awaits the centuries-old restaurant model: cloud kitchens. To meet the ever-increasing demand for online food orders, companies have set up delivery-only kitchens. As these kitchens only take online orders from delivery apps, they do not require retail space. Essentially, they are the F&B version of Amazon or Lazada vendors.
Three types of cloud kitchens are currently in use; individual chef’s setups for their own use, kitchens shared by multiple food vendors such as the GrabKitchen model, where Grab offers cooking space to its food vendors or thirdly the “full-stack” operation, used by Malaysia’s Dahmakan and Singapore-based Grain, where companies cook and deliver food under the same brand.
Such kitchens are advantageous for many reasons, including cost reduction. According to conventional estimates, brick-and-mortar restaurants spend up to 30% of revenue on labour and another 10% on rent. Without the need for customer seating, extra overhead costs diminish substantially, and there is less need to engage serving staff. Companies can also redesign warehouse or basement spaces in lower-priced areas as kitchens to cut costs.
Furthermore, restaurants, food court stall owners, street food vendors and even individual chefs having a hard time with profit margins can expand their reach to online delivery customers through apps like FoodPanda, GrabFood and UberEats. Even with commission charges (typically 15-30%), the opportunity to reduce overall outflow is significant.
On the marketing end, companies can provide multiple cuisines from the same kitchen, and market them separately online, enhancing their appeal to consumers with specific preferences.
In this booming sector, current leaders in the region include GrabFood, with over 50 kitchens, Grain, having raised over $10 million USD in funding last year with plans to expand into Malaysia, and Dahmakan, who also secured $5 million USD in 2019, and is eyeing expansion into Indonesia and Thailand.
In terms of future outlook, the regional food delivery market is predicted to experience astounding growth from 2018 to 2025, quadrupling from $2 billion USD to $8 billion USD. Moreover, the whole ASEAN region is undergoing an expansion of cities and urban populations, where the vast majority of online food delivery app consumers tend to be found. The projected enormous growth of the cloud kitchen space is no real surprise then. Seeing foodtech’s immense impact, governments and organisations have banded together to support it. WeWork Labs recently launched SPACE-F, a foodtech startup incubator and accelerator in Thailand. Singapore is also opening a government-supported 18-hectare Agri-Food Innovation Park targeting high-tech farming in 2021. With such concerted efforts, one can expect huge developments from Southeast Asia very soon.