With the rise of digitalisation and tech innovation, many industries have seen tremendous growth. The foodtech sector, for example, is projected to see exponential growth in the next five years. Estimations indicate that it will be worth around $342.5 billion USD by 2027. Foodtech startups in Southeast Asia are taking advantage of this growth and the changing foodtech trends to help utilise innovative ideas to further address the demands within the food industry solvable through the adoption of tech and digitalisation.
Among the sector’s sub-industries, such as online grocery and food delivery, changes to consumer habits including conscious consumption, a move to plant-based and bioengineered foods, and more nutritious, bespoke pet food. These growing habits are all part of the increase in foodtech solutions. The social and economic trends attributed to this growth are consumer lifestyle, values, and preferences. The impact of COVID-19 is also playing a role in the projected growth of the foodtech industry.
We explore Singapore’s growing foodtech industry
Conscious consumption is on the rise
Recent research has shown that one of the most significant food industry changes in the last decade has been the demand for healthier food options. From plant-based foods to dairy-free alternatives, many people are starting to see the error in overly processed and unhealthy foods and are looking to change the way they eat on a grand scale. This alteration in consumption has opened the door to new innovative startups looking to get in on the healthy living ground floor.
Reports from Ai Palette found that consumers were looking to address potential and existing health issues by improving the food that they put into their bodies. According to the report, the type of foods that were most important to people were those that could help with mental health, meditation, and de-stressing. Many others were looking to improve sleep disorders through diet.
It is not just that consumers are looking to help alleviate ailments through their diet, but they are also more concerned about what they are putting into their mouths for other reasons. For instance, people are turning to vegan lifestyles to reduce their carbon footprint. The report found that plant-based protein is an emerging trend in Southeast Asia. The foodtech startup Karana recently launched a new jackfruit ‘pork’ product across restaurants in Singapore. To set themselves apart from the crowd, Karana makes their meat substitute using novel food technologies and natural whole food ingredients, a different take on plant-based than the other, generally, heavily processed companies have done so far.
Food delivery market poised to continue its incline
Even before the pandemic, food delivery services had begun their surge in popularity. Food delivery apps were popping up everywhere, giving customers more options for their next meal. Since the spread of COVID-19, those numbers have seen a steep increase due to social distancing regulations, fear of catching the virus, and the necessity to still find food sources despite reduced shopping hours. As a result, online grocery sales and food delivery are growing at a compound annual growth rate of 11% in the region.
This increase in competition means that key players in the industry have plenty of work to do to stay on the top. Unicorn Gojek, which offers food delivery services, has been rumoured to be in discussions about merging with eCommerce startup Tokopedia, although neither company has commented on the speculation. If it does occur, the merger could create a tech giant in Southeast Asia with millions of driver-partners and merchants.
Pet food sector trends
In Southeast Asia, and indeed, most of the world, many consumers have changed how they purchase their pet food, and how much they were spending to feed their fur families. With the pandemic lockdowns in place, consumers were driven to do more online shopping and were also more open to purchasing different brands than they had been in the past. These changed habits have opened the doors for more pet food companies, and they are relishing the opportunity to increase their stake of the industry.
Key players in the foodtech industry
The latest trends in the foodtech industry have opened up more opportunities for innovations from startups. There has been an increasing switch to more plant-based options due to food security concerns, and biotech companies like TurtleTree Labs have begun creating sustainable dairy and infant nutrition products. It aims to supply high-quality dairy products through sustainable and responsible business practices.
Another startup, Life3 Biotech prides itself on its locally-sourced plant-based protein products. With a formula combining the foodtech industry with agritech and biotech, they are paving the way for more startups to follow in their footsteps to create environmentally sound and healthy plant-based foods.
Consumers’ attitudes to food and health have been shifting for many years, but the onset of the COVID pandemic welcomed new foodtech trends as health, and plant-based proteins became more fashionable. With the foodtech startups in Southeast Asia taking advantage of this shift, the sector will likely see cohesive and rapid growth in the coming years.