This country appears as a laboratory to develop food innovations at a regional level and the startup environment has reasons to be encouraged in this regard, since the global market size of the food technology industry is expected to exceed US$385 billion by 2030.
While about two hundred people crowd into a venue designed for no more than 120, former Chilean Olympic gymnast Tomás González is applauded by the crowd.
But his presence there has nothing to do with sports. At least, not directly.
It is the preview of the Complete Day – the name given to the hot dog in Chile – a celebration that, as in previous years, is led by the local fast food chain Domino, and with which it has made the holiday its own, offering almost 20 varieties of hot dogs.
González is there to promote his protein food startup ReFoods, with which he produces nearby foods, such as sausages, ground beef and hamburgers.
“Our main challenge is to be able to bring common foods to people, but with a high protein value and low in fat. We focus on offering high nutritional density to people,” explains Tomás González to AméricaEconomía in the midst of the noise.
Along with this nascent foodtech , there is the local unicorn NotCo, to show its latest product, the Not Sausage. A jerky with a slightly smoky flavor and, as is the company's trademark, made from plants.
Both companies are the stars of the event. And attendees crowd for several minutes at the bar to get a complete plant-based or a highly protein one.
"We have responded to Domino's call to demonstrate that, through science and technology, you can make a product that has the same sensory experience, and with a nutritional profile equal to or superior to the original, and you can do so without sacrificing flavor that It is the essential thing in food,” Max Silva, country manager of NotCo in Chile, tells AméricaEconomía.
The company's niche is that: to deliver the same, or even improved, flavor of foods of animal origin, but plant-based.
And this is how they have developed, thanks to artificial intelligence (AI), Not Mayo and Not Milk, the flagship products that sparked Jeff Bezos' interest in investing US$30 million in them in March 2019. Their portfolio of Products today also include NotCheese, NotBurger, NotChicken, NotMila (Milanesa) and Not IceCream. All pretty self-explanatory names.
This rather vegan approach, which seeks flavor without the cruelty of the food industry, is what allows them to be present in Argentina, Brazil, Mexico, Colombia, Canada and the United States.
And for restaurants and fast food chains it is a way to expand their consumer base.
“For us it is very important to adapt to today's consumer and be able to innovate in a category as traditional as the complete one. These launches reaffirm Domino's commitment to remaining connected with consumers and being able to understand their interests, especially the youngest ones. Furthermore, we are very happy to have been able to make an alliance and create products together with two Chilean foodtechs such as NotCo and ReFoods,” emphasizes Sebastián Cabalin, commercial manager of Domído .
EMERGING DEMANDS
The success of business initiatives to deliver improved food, whether in flavor or components, is increasing in Chile.
Whether by fashion or conviction, the Latin American nation has 18% vegans, vegetarians and flexitarians, according to the study "Perception of veganism in Chile", released in December 2022, carried out by the NGO Animal Libre and the analysis company Criteria.
A previous survey had shown an even greater number of people in Chile opting for plant-based . “We conducted a survey together with Ipsos in 2021 and discovered that there are 36% of Chileans who are interested in reducing their consumption of animal products,” Ignacia Uribe, founder and president of the Vegetarianos Hoy foundation, informs AmericaEconomía.
According to this survey, the main reasons of those surveyed for trying to consume less of these foods are for health reasons (35%) and because they care about the well-being of animals (19%). The main foods that they have tried to eat less are red meat (82%) and pork and derivatives (74%).
“In general, vegetarian or vegan people are around 5% or 6% of the population, but the largest number of consumers of vegan products are not vegans, but rather ordinary people who have not made the change 100%, but They do have an interest in reducing their consumption of products of animal origin, whether for health, the environment or the animals,” confirms Uribe.
Along with this phenomenon, the introduction of seals on the packaging of processed foods that the country made 10 years ago - which warn if a food is high in sugar, fat, calories or sodium - and the discovery of many food allergies in adults and children has also triggered a change in the composition of these products. With them, the aim is not to sacrifice flavor, but to make them healthier or with some specific characteristic that makes them more attractive to certain target groups. Thus, traditional or new firms remain in the market.
“We are sure that in the future we will stop talking about calories, for example, because calories are energy and are necessary. The important thing is nutritional density; the quality of the food and the amount of nutrients we have in them. That's our focus: we are a mix of animal and vegetable protein to meet a nutritional profile that is healthy for the public,” says González.
The truth is that the impetus to modify meals has a good appetite among food companies and startups , as detailed in the Technological Center for Food Innovation, (CeTa) a Chilean laboratory specializing in food that works to improve the quality of these.
And this is not only at the level of the finished product, but throughout the entire value chain of the food industry, from agriculture to the extension of the useful life of foods already produced, CeTa explains.
“There are trends that mark current and future research in accordance with the demands of emerging markets and, of course, the commitment to the environment,” Daniela Fuentes, business manager of the entity, explains to AmericaEconomía.
In this sense, the entity observes an increase in research for the development of new plant varieties and the “development of foods that not only satisfy basic nutritional needs, but also provide additional health benefits, and of course, new sources of foods that can be more sustainable and respectful of the environment, such as considering the evaluation of alternative proteins, cell cultures, precision fermentation for the generation of meat analogues and plant-based products,” lists the professional.
Quantifying the market, a study by Growth Market Report indicates that the global market size of the foodtech industry was US$233 billion in 2021 and is expected to exceed US$385 billion by 2030, expanding at a rate of annual growth of 5.8%.
Hence, CeTa also not only works in different regions of Chile and with Chilean clients, but also from other countries in the region, such as Peru and Argentina, where the institution supports different stages of the development of an ingredient or food product, whether from the identification of opportunities, testing, or the development of a prototype or scaling for an existing product.
“This happens a lot in large companies, since it is difficult and expensive to stop production to test a new product or small-scale improvements,” adds Fuentes.
READ ALSO : Chile's appetite to become the food hub of the future
FOODTECHS WITH VISION
Thus, the foodtechs interviewed have succulent plans to continue growing this year.
While NotCo has pivoted to being a venture capital company due to the context of declining funding for startups , it also recognizes that it is taking on increasingly larger projects as it transitions toward a break even operation, with greater focus on profitability.
“The projects we are in are much more focused on complementing NotCo's ability to bring out its own products and those that have a much larger scale. Therefore, that focus is on technology,” says Silva.
That is the reason for having entered into a joint venture with Kraft Heinz for the United States and Europe in 2023, focused on the development of a plant-based portfolio that does not yet have defined products, as detailed on the company's website.
Along the same lines, NotCo has already collaborated with multinationals such as Starbucks, Burger King, Papa John's, Chili's and Dunkin' Donuts, in which it also transitions from the B2C that saw it born, towards a safer B2B.
“It is a different business area, which places emphasis on the technological capabilities of the company that is much more scalable and not on an exclusive deepening of what is mass consumption, which is much more capital intensive. Soon, what you are going to see from NotCo is a much greater traffic in projects, in solutions, in its own products and those of other companies, which focus on how technological capabilities can contribute to having better products with plants in the portfolios, even from other companies,” adds Max Silva.
The company is defined today as a technology company that drives the development of its products, but that develops in-house a technology for its own use and that of others, of industrial foods in the fastest, most expert and efficient way in the world.
In the case of ReFoods, which is just starting, the emphasis continues to be B2C, therefore for two years they have been seeking to build their brand of protein foods among the local public, where animal and plant origin are mixed.
Foodtech began in the middle of the pandemic with the support of Corfo and the accelerator of the Faculty of Economics and Business (FEN) of the University of Chile, Open Beauchef, as well as mentors from the Universidad del Desarrollo and the Universidad de Valparaíso.
“We are in the pre-seed stage, we recently did a round which will allow us to push the products we have,” Eugenio Camus, co-founder of ReFoods , explains to AmércaEconomía.
With just two years of research, the foodtech says it has discovered a number of products to develop, but today they want to enhance what they have today: sausages and ground meat, but without fat.
“We want to consolidate ourselves in Chile with the products we have and with the new products that are in the pipeline and then, once we have that, we want to go out and look for markets outside,” says Camus.
At the national and continental level, Camus highlights a significant increase in foodtechs , which not only develop new products or ingredients, but are also integrated into the entire production value chain, such as logistics, transportation and storage.
These companies have managed to raise capital with independent investment funds or those associated with firms, in the corporate venture capital format. In fact, a study carried out by the Endeavor accelerator for foodtech startups in the Latin American region shows that in the last 10 years they have raised 206 capital rounds in which US$ 1.7 billion were invested in early stages.
And although it might seem like an ode, CeTa assures that it is not, but rather that it is a trend that is here to stay, given the environmental needs that are being seen on the planet.
“The sixth report of the Intergovernmental Panel on Climate Change (IPCC) points out changes in the way crops are developed, transformations in diet and integrating innovation in food production to reduce waste as an aspect of change that may be easier to implement and that would have lower costs than other measures [to confront the effects of climate change]” says Daniela Fuentes.
The Vegetarians Today foundation remembers that the water footprint – that is, the amount of water involved in obtaining a food – of meat products versus vegetables is widely known.
“To produce just one kilo of meat, more than 15,000 liters of water are needed, while to produce one kilo of legumes, around a thousand liters are needed. The difference is too much and then one begins to wonder if it is worth producing and consuming these types of products, if we are in this type of environmental crisis,” says Ignacia Uribe.
“This is why industries, companies, governments, and public policies must adapt to this scenario and make transformations,” concludes Daniela Fuente, from CeTa.
