Biotech
Advances in Biotech are Helping Consumers Get a Healthier Nutrition
Consumer habits are changing. This is especially visible in sectors like the food industry, nutrition, and pharma. People’s concern about their well-being is leading a growing number of consumers to adopt a healthier lifestyle, and to worry about the sustainability of companies’ production and distribution processes. For this reason, concepts like “natural” and “organic” have started to take a growing preponderance in the way food, nutrition supplements and even drugs are marketed and commercialized. And while this can be perceived as a risk and a burden for traditional food production and pharmaceutical companies, it is also a big opportunity to improve their products’ quality, and to solve people’s needs with new offers more adequate for their lifestyle.
New consumer preferences are expressed in a great variety of ways. In the US, for example, some supermarket chains like Whole Foods (acquired by Amazon in 2017 for $13.7 billion) and Trader Joe’s, offer catalogs made up exclusively by organic products. In Spain, 72% of consumers expressed they prefer to purchase natural foods that help them protect their health, and according to Nielsen, 71% of the world’s consumers have visited a store specialized in natural products at least once, and are more worried than ever about the nutritional aspect of the products they eat, as well as by the people involved in their production and their impact on the environment. And while this is a generalized trend, it is even more visible among young people. Although other segments, like men and women aged 50 to 65, also show a big concern about their health, and prefer products that can satisfy their need for well-being. In this context, it should be no surprise that the number of products that “healthy” and “natural” products are becoming the norm.
The development of new dietary models, and the expansion of philosophical currents such as veganism and flexitarianism, as well as the increasing concern about the origins of food and pharmaceutical products have led these industries to invest in new production and distribution models, and to continuously seek for innovative solutions in these fields. In this context advances in biotechnology are very important and pose a fantastic opportunity.
Personalized Nutrition
Also called neutrogenetics, nutrigenic nutrition constitutes one of the most significant advances in biotech. It is based in the personalization of food and nutrition supplements based on each person’s needs according to their general health, preexisting diseases and genetic predispositions.
Although they may seem like taken from science fiction stories, there are a handful of companies working on solutions that would allow users to tailor specific diets based on their genetic makeup, and even to chemically adapt foods for each individual, based on the results of a genetic study. This way, they seek to minimize the odds that an unfavorable condition for which the person has a predisposition expresses itself and, at the same time, to optimize the individual’s health based on her own specific traits.
One of the startups developing this kind of foods is Nutrigene, a Y Combinator alumnun, that tailors vitamin supplements for each user based on a questionnaire and a DNA test. The company is aiming to take over the vitamin supplements market, which today has a magnitude of $37 billion dollars in the US alone.
Another example worth reviewing is Habit. Founded in California in 2015, this company has already raised $32 million dollars with the objective to reinvent the way we eat. But far from developing food or supplements, it uses the data obtained from a generic blood test provided by the user to generate a very detailed tailor-made nutritional plan using foods available at stores and in restaurants to improve the user’s well-being and help her overcome conditions like high cholesterol and other threats to their health.
And these are just a few examples. Other companies like Fitbit have been combining hardware and software for years to create innovative solutions that help track their users’ habits and general health conditions. This way, they can offer reports that stimulate them to improve. Down the line, data obtained with these devices will be very useful to detect statistical trends that will help physicians stay ahead and detect potential diseases and conditions far before they manifest themselves, based exclusively on indicators that, today, escape their detection. This may help the medical profession switch from a reactive paradigm to a preemptive one, avoiding the appearance of diseases altogether, rather than waiting for them to show up in order to heal them.
Applied Biotechnology
The increasing consumer demand for transparency is compelling companies to do a better job communicating the composition of the food and nutritional products they sell. This way, many companies are choosing to eliminate preservatives and coloring agents from their products and reformulating many others in order to reduce the content of harmful substances like sodium, fats, and sugars. But this is just the beginning. Modern consumers want to know how their food is produced, and whether production methods are sustainable, which is why incentives are in place to develop value chains focused on local production and distribution, which in turn are more amicable with the environment.
Biotech can make this happen, by generating more sustainable production methods. For this reason, plenty of startups, and also large corporations, are innovating in the manufacturing of foods incorporating natural and organic ingredients, as well as “superfoods” made up of plants and flowers, which contain very positive properties for the human body.
At the same time, new startups are working on the development of new food production methods, like meat substitutes based on vegetable proteins, lab grown meat, and even the creation of vertical farms located right in urban areas. This way, several companies like New York based Bowery Farming — which has raised over $137 million dollars — have started to produce vegetables and produce in places as unlikely as buildings and warehouses right in the middle of their home city using methods like hydroponics and aeroponics, which offer very high yields, and eliminate the need to use fertilizers and agrochemicals altogether. These farms also bring production closer to the consumer, thus cutting the environmental impact of transporting those goods.
A Diverse Market That’s Growing Fast
2018 was a record year in terms of investments in biotech. According to Crunchbase, startups working on this vertical raised $29 billion dollars worldwide, some $10 billion more than in 2017, in more rounds than ever before.
At the same time, last year marked a historic record of corporations investing in startups operating in this vertical. Throughout the year, different big companies — mostly in the pharmaceutical space — invested in 138 companies, which held a combined valuation of $8 billion dollars. More than ever, big companies are outsourcing innovation to entrepreneurs, and this is especially true in this field.
However, corporations are not the only force behind biotech innovation. More entrepreneurs than ever are venturing in this vertical, in spite of it requiring higher levels of capital to develop their products due to the need to mount big complex labs, and to experiment for long periods of time before hitting the market.
In Latin America, Argentina is one of the leaders in Biotech innovation. With more than 120 new companies working in this vertical, the country is seeing innovation in areas as varied as the development of dairy substitutes, drinkable foods, and the creation of supplements and foods made with sustainably grown elements. Another important market for this vertical is Brazil, where 105 startups are working on similar innovations.
In both cases, state backing through special funds created to support biotech has been very important for the growth of this kinds of companies. This shows there is a big opportunity to develop this vertical in the region, and that by providing capital and business opportunities, it is possible to create more and better products, and to export them to the entire world.
