Hi tech in Israel is about to get tasty, as startups are being asked to pitch for government investment to develop the next exciting idea in food technology.
Fledgling companies are being invited to submit ideas to a business incubator that will ply the best five proposals with cash and support in an effort to take their ideas to market. Pitches include innovations for reducing salt and sugar in food and dependency on meat, and for helping to feed Africa.
Israel’s Minister of the Economy Eli Cohen said that after the country’s success in cyber and self-driving cars, “we are now targeting FoodTech as the next big thing.”
The incubator model is part of the secret to Israel’s tech success — companies that take startups under their wing and try to make a success of their business plans.
As on Dragon’s Den, they get a stake in the startup for their efforts but, unlike the television programme, the companies also receive state support with the Israeli government providing grants of hundreds of thousands of dollars to companies.
The new incubator, named Sparks, will be run by a consortium that includes some of the biggest names in Israeli business including food giant Tnuva and Tempo, which produces Maccabee beer. The consortium was awarded a tender from the Israel Innovation Authority to run the incubator.
Jon Medved, chief executive of the crowdfunding platform OurCrowd, which is also part of Sparks, said innovation in food and agriculture technology was at an all-time high.
“We are excited to be part of this initiative to establish Israel as a world leader in the food tech arena,” he said.
Sparks will be Israel’s second food-focused incubator, joining The Kitchen, which was established in 2015 four years ago.
Technology linked to food and drink became the talk of Israel a year ago, when PepsiCo announced that it is buying SodaStream in a deal worth $3.2 billion (£2.5 billion at the time).
SodaStream was still a small company when it decided to take on Coca Cola and Pepsi a decade ago by trying to convince people to swap big brand drinks for its products. It made such a success and its technologies became so appealing that in the end PepsiCo stopped fighting SodaStream and bought it up instead.
The buoyancy of food tech in Israel is also clear from ambitious plans for the FoodTech IL conference in September. The annual event attracted just 100 people when it started in 2011; this year there will be around 1,500 attending from Israel, Asia, Europe and America, and more than 80 startups will have exhibits.
OurCrowd already has a track record in the sector. As Israel’s most active venture investor it has raised $1 billion (£798 million) in commitments, and made investments in 170 companies and funds.
They include Beyond Meat, which develops alternatives to meat and chicken and is often held up as an example of what innovative thinking on food can achieve. The Los Angeles-based company has become a big name in America, and just a decade after launching has been trading at a value of close to $5 billion (£4 billion).
Ori Sobovitz of OurCrowd told the JC: “We would like to see the next Beyond Meat coming out of Israel.”
His team is excited about the potential for innovation in alternative proteins and dairy, improving food nutrition value anddeveloping “novel food and ingredients.” There will also be a focus on eco-friendly and “smart” packaging, he added.
Mr Sobovitz said that food innovation is relevant everywhere, and there are major markets that make new technologies and products profitable. It is relevant to rich countries — and has particular appeal in poor places, where populations struggle to eat.
He said: “Africa is a hungry continent, and if we can help with technology that can make lives there better that’s very positive. We want to make the world a better place, and not only help the rich countries.”
There is also an expectation that the business incubator will help to redress economic inequality in Israel, with the centre of the country benefitting disproportionately from tech success. Instead of being located in the Tel Aviv area, Sparks will be in the town of Kiryat Shmona, near the Lebanese border in the north.
Eyal Malis, chief executive of consortium partner Tnuva, said: “The real winner is Israel’s north and Kiryat Shmona, where we are going to fund over 40 new FoodTech companies that will create hundreds of new quality jobs.
“Together with our partners, we are going to invest significant resources and knowledge, making this new incubator a massive success.”
