Hot from the Food Tech incubator’s kitchen
Is there a way to feed nine billion people on this planet without destroying it? To adequately test foods for bacteria? To obtain meat without killing cattle? Or to make a vegan yogurt that tastes good? Food Tech is a hot industry, and The Kitchen is a Food Tech incubator that successfully confronts some of the industry’s most cutting-edge challenges
On the wall of The Kitchen, their mission is proclaimed, loud and definite: Better industry. Better food. Better world. That sums up the vision behind not just The Kitchen, but the Food Tech field as a whole.
The incubator was launched in Ashdod in 2015 as a joint venture of the Israel Innovation Authority (IIA) and Strauss Group. Since then it has interviewed no fewer than 350 hopeful companies in this new sector. Among the projects it selected for development and advancement at the incubator are a natural yogurt without a drop of milk, a microchip that identifies bacteria in food, a rich protein made from the larvae of flies, and a smart robot that quickly learns production-line tasks.
“Each year, we’ll invest in three or four promising Food Tech start-ups”, says Jonathan Berger, CEO of The Kitchen. “Each company receives individual support from the incubator staff and a team of experts that Strauss Group, with its vast pool of knowledge, makes available to us. We can provide startups with know-how and expertise on every issue that challenges them – from food engineering to regulation, and from manufacturing to marketing and consumer behavior. We offer advice and know-how free of charge, as part of the support the incubator provides to its portfolio companies. The startups can also benefit from Strauss Group’s global contacts, which include PepsiCo, Danone, other multinational food giants, and even conglomerates such as [Chinese consumer electronics company] Haier.”
Anya Eldan, Director of the Israel Innovation Authority's Startup Division, adds: “The Israel Innovation Authority’s incubator program gives technological and biotech start-ups a platform for innovation, and it makes them visible to Israeli and foreign corporations, mainly for the added value that they can bring to the incubator’s start-ups. The Kitchen is an independent incubator, but its startups benefit from Strauss Group’s global contacts and from access to technological infrastructure, market knowledge, marketing channels, and specialized expertise. A startup requires all those things to succeed, and Israeli startups in the food sector haven’t had them available. Thanks to the incubator, which was set up with the Authority’s support, Israel has a new Food Tech ecosystem that it didn’t have just a few years ago.”
“Almost no one understood what ‘Food Tech’ meant even three or four years ago,” says Amir Zaidman, VP of Business Development at “The Kitchen”. “They’ve only recently started relating to Food Tech as an independent industry.” Zaidman is also the founder and manager of an Israeli Food Tech Group on LinkedIn.
“Food Tech includes any technology that helps the food industry or food consumers by solving a problem or adding value,” Zaidman explains. “It can directly involve the food and raw materials, or on the other hand, it can deal with manufacturing, logistics, and management at food and beverage companies. Everything related to the quality and safety of food, including smart packaging and so on, also belongs to the world of Food Tech.
“Some highly significant global trends are driving this industry while raising problems that the Food Tech community is trying to solve. For example, how will we consume our food in the future? How do the concepts of sustainability and food fit together? – In other words, how can enough food be produced without destroying our planet and leaving future generations an inheritance of scorched earth? How will we feed the Third World? And how can we make the food we eat more nutritious and more natural?”
70% of the world’s farmland produces animal fodder, mainly soybeans, meaning that 70% of agricultural production does not go directly into meals for people. Instead, it feeds the animals that people, in turn, will eat. Cattle is more harmful to the ozone than automobiles, they drink more water than humans do, and they produce more pollution than vehicles. Even though, humanity continues to eat meat.
Zaidman explains that this problem has inspired some novel solutions. One startup is planning to produce ‘meat’ without killing any animals at all – test-tube meat. “They do a biopsy to take starter cells, and they culture the cells in a laboratory to grow them into a cut of meat. This process isn’t food engineering; it’s the food of the future. If it succeeds, we can have steak without the need to raise a single animal.
“This is exactly the kind of startup our incubator looks for – companies whose innovations will significantly change the food industry. Companies out to reduce production costs, to make food more accessible, to reduce sugar content, and to give people new sources of protein that will replace pollution-heavy livestock farms. Our mission is to bring positive change to the food industry, and in that way, to have a global impact.
“Corporate responsibility has improved in recent years. Startups are using technologies from the environmental sector to develop a more sustainable way of producing food: better production efficiency, treatment of waste and pollutants, and so on. Tracking and traceability are also provided for products, to ensure that a product which shouts ‘organic’ or ‘fair trade’ is true to its label.
“A most recent and high-profile trend is returning focus to the food itself,” Zaidman continues. “The trend is to remove everything unnatural from our food – all preservatives, stabilizers, oxidizers, and emulsifiers. The developers want the resulting food to have less sugar and less salt, have more vitamins, be less processed, and so on”.
Yofix | Vegan yogurt
Vegans and others who stay away from dairy products know how hard it is to find a tasty, satisfying non-dairy yogurt with a pleasant texture and without an extensive list of ingredients. Yofix, one of The Kitchen’s startups, aims to produce just that – a natural, rich, delicious yogurt with no milk ingredients.
“I stopped consuming dairy products many years ago,” says Yofix CEO Ronen Lavee. “At first, I made all sorts of plant-based milk at home, and I reached the stage of making yogurt for myself. Then other people wanted some too, and as time passed, I became more professional. I wanted something that was dairy-free and soy-free. My idea was to create products based on plant fermentation. Fermented foods have many advantages. They preserve the good bacteria in the human body, which improves digestion. And they boost our body’s various systems, including the immune system.
“It all started four years ago. For two years I ran everything on my own, and then some friends joined me. We were three founders. Later we met the incubator professionals, we managed to find our way in here, and we entered the Israel Innovation Authority track. We arrived with a prototype, and by now we have our process fully developed. Through the incubator, we received broad support from Strauss Group experts in many areas, from the development of flavors and textures to the proper way of designing the product label. We expect to exit the incubator at the end of July 2017.
“As for our target audience, 25% of the population now want to eat less animal-based food; they include vegans and lactose-intolerant consumers. In the United States alone, there is a $2.7 Billion market for plant-based foods – and the trend is on the rise. The plant-based yogurt market has grown by 31% in the United States while dairy yogurt is up only 3%.
That large demand has brought a relative abundance of dairy-free products. However, Lavee explains: “There seem to be lots of plant-based milk products on the shelf, but when you look at the list of ingredients, you discover that they contain a whole chemical laboratory inside! We, on the other hand, have a clean label. There are 7 ingredients, and they are all natural and healthy, with no additives: no stabilizers, no preservatives, no added sugar, nothing. Our product has probiotic bacteria with preservative qualities, the same as in dairy yogurt.
“The raw material that we’ve created is cheaper than cow’s milk. Production costs per liter of our ‘milk’ run 30% lower than the cost of cow’s milk. I hope that we’ll reach the shelf at a price not far away from our dairy based colleagues, even though we manufacture on a smaller scale. We’re wrangling with regulators about what to call our product because according to the Israeli standard at least, yogurt is a dairy product by definition.
“We’re ready to market this food, and we’re moving now to a facility where we can produce under a manufacturer’s license. Having succeeded so far, we hope to raise the funds we need for manufacturing and marketing 10,000 yogurts a day. It’s challenging to introduce a refrigerated shelf product in Israel. When one day I see our brand on the shelf, it will be the result of tremendous efforts.
“The incubator provides a supportive environment where an entrepreneur like me can focus on the critical path of product development. There’s a community atmosphere, and I can always talk with the other entrepreneurs about the questions on my mind. “
BactuSense | Detecting pathogens in food
“Last summer, Salmonella was found in cornflakes. That was all the public relations we needed,” says Eyal Yoskovitz, CEO of BactuSense Technologies. Another of The Kitchen’s start-ups, Yoskovitz’s company is developing a near-real-time technology for detecting and identifying live bacteria in food products.
“My entrepreneurial job is easy,” he says, “because I don’t have to convince anyone in any company that they need what we’re developing. The market is hungry for a solution.” There is a small group of disease-causing bacteria, or pathogens, responsible for most of the problems. The most well-known are Salmonella, Listeria, and E. coli.
“The damage that can be caused to food manufacturers is not only the cost of recalling products, but also the burden of storage costs, and the loss of sales. There’s also the immense damage to their reputation,” explains Yoskovitz. “Companies can easily be bankrupted by such incidents.”
Every food product in Israel must be tested for pathogens. Today, the tests require two to three days of letting bacteria grow. Faster methods do exist, but they are much more expensive.
The BactuSense solution consists of two parts: a microchip and an optical sensor. “The chip is full of tiny holes that trap bacteria,” explains Yoskovitz. “The chip is coated with a special material where the bacteria settle. They enter the holes and are trapped there. When light is reflected, the trapped bacteria change the light slightly. The sensor picks up the difference and decodes it, and the detector says: ‘Bacteria alert!’
“Our technology can detect small concentrations of bacteria. Our goal is to identify as few as 100 bacteria per milliliter. That’s low density, but the industry would rather catch bacteria without waiting for them to multiply. The advantage of our product is that it produces results quickly and it’s easy to operate. And the beauty of our solution is that it can tell dead bacteria from live bacteria. By adjusting the chip, we can also target only a particular type of bacteria.
“With the help of Strauss Group quality assurance experts, we can choose objectives for the development process. We’ve targeted low cost,” says Yoskovitz, “and we can achieve that. Our components are inexpensive, our production methods are familiar ones, and the chemical coating isn’t complicated. Today’s market stresses the need for a solution like ours. Clean, healthy food is the focus of increasing legislation, regulation, and public demand. Regarding market size, we’re talking about reaching a food testing market of $15–20 billion within five years.”
Flying SpArk | Larva-based protein
Another startup at The Kitchen is Flying SpArk. “I’ve been an entrepreneur for about 14 years,” says CEO Eran Gronich. “I’ve already Founded a few startups, but nothing about food so far. I got into most of my past innovations by chance or out of curiosity.
“After I had sold my previous company, and was looking for something to do, I saw a TED talk by a Dutch university professor dealing with how to feed the world in another 40 or 50 years, when the global population reaches nine billion people. He spoke about the harm to the environment from cattle, poultry, and pig breeding. And the inefficiency, instability, medical problems, and so on. The professor said that the solution is to switch to an insect protein.
“That grabbed my interest, and I started to study the issue. Despite intense study, I struggled to find a solution. But then I met my partner, who’s an entomologist – an expert on insects. It was his idea to produce the protein from fruit fly larvae.”
The fruit fly is considered a pest. It eats only fresh fruit. Its life cycle has four stages: egg, larva, pupa, and adult fly. It doesn’t emit greenhouse gases, it doesn’t pollute the environment, and it is very nutritious. In protein and iron, it’s comparable to regular meat if not better. “The most important angle is the economic one,” Gronich explains. “This is the cheapest source of animal protein. We turn it into a powder, we remove the fat, and the resulting low-fat powder is 75% protein with no cholesterol. No other meat product can compare with it in nutritional values.
“Our final product has the texture of flour. There’s no problem of taste. We tried all kinds of experiments in making products from this powder: bread, beans, breakfast cereals, crackers. We realized that if we use our powder instead of about 30% of the flour in a recipe, we get bread or cookies that are rich in protein, iron, magnesium, calcium, and more. We’ve also created ‘juicy’ products – such as hamburgers or schnitzel substitutes – without slaughter, without environmental pollution, and without cholesterol. We’ve also produced milk with more protein and calcium than cow’s milk has.”
“We’re now in the R&D stage. We have two labs: one to grow and feed the larvae, and the other for the hard work of turning them to powder. We’ve started preparing samples, and several customers are already interested in the product. In another six months, in mid-2017, we’ll be ready to sell small quantities. Then we’ll progress to our next round, to set the larger-scale factory up.
“There’s a significant advantage in belonging to The Kitchen. Here we can gain expertise in specific fields, as well as utilize what I call ‘the benefit of centralization.’ Every week or two the incubator has visitors – a suitable investor, a multinational food company, or a large delegation from somewhere. Whether Israeli or foreign, everyone interested in Food Tech visits the incubator. So, we find a lot of opportunities to make contacts and raise capital”.
DLR | Teaching robots to learn
DLR (Deep Learning Robotics) is also featured in The Kitchen. It provides a way of coping with the vast variability of food industry production lines and products.
“The food industry lags far behind in automation, and particularly in robotics,” explains Zaidman. “We recognized that the problem is in production processes that change over between small batches. When you live in a very uninventive environment, and when the factory is staffed not by engineers, but by simple laborers, then the robot needs to be very simple too.
“DLR is developing a smart robot that can observe what a production line worker is doing, learn the task, and then perform the same task on its own. Within a few hours the robot can master a new task – inserting cookies into a package, for example – and there’s no need for someone to reprogram the robot each time the product or the task changes. The result can be higher industrial output and lower food prices.”
So, does Food Tech look promising for investors? “In 2015, nearly $6 Billion of venture capital was invested in Food Tech worldwide,” says Zaidman. “That’s almost double the amount of investment in 2014, and 2014 was almost a twofold increase from 2013. Food Tech in Israel is still in its infancy, with a limited number of investors. At present, we are Israel’s first and only Food Tech incubator.
“I want Food Tech to be recognized as a sector where things happen, an industry with money, one where you can change the world and where you can make a lucrative Exit. I want to see a vibrant and fruitful Food Tech community here, not only for the sake of The Kitchen or Strauss Group but for everyone. We’re not about competition, only about collaboration.”