About MissionPoint Partners
MissionPoint Partners, fka MissionPoint Capital Partners, is an impact investment manager and advisor focused on solving large-scale environmental problems through the deployment of high-impact capital.
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Westport, Connecticut, 06880,
Latest MissionPoint Partners News
Oct 4, 2018
October 4, 2018 CleanTechIQ gathered numerous executives from food and agriculture companies, as well as investors, for its recent Sustainable Food & Agriculture Forum . Here are some of the highlights. An important consumer trend these days is growing demand for cleaner and healthier food brands, says Andrew Ive, executive director at Food-X , which is part of SOSV Ventures and was the most active AgTech investor in 2017 in terms of the number of investments made, according to an AgFunder report. Food-X cultivates strong relationships with large food corporate players to identify where it will focus over the next five years. Another big trend is the move toward non-meat, alternative proteins as consumers cut back on their meat consumption. Ive cited statistics from Top Trends in Prepared Foods 2017 , which said that 6% of people identified as vegan in 2017, up from 1% in 2014. Related Content Ive sees newer AgTech companies bringing new products to market faster and more efficiently than large food companies can. These younger companies are responding to new consumer tastes for healthy, local foods and are taking demand away from big food companies’ products. Aiding these changes is the fact that younger an emerging set of consumers are more prepared to try new food brands if those brands align with their values. This trend is driving “big food” corporates to acquire new food brands that fill a specific niche in the marketplace, and is also opening up more opportunities for venture investors to make investments in the space, Ive adds. However, this surge in corporate M&A activity is also driving up food brand startup valuation multiples which is of growing concern to investors. Also, as more traditional venture capital firms enter this market and make investments in later stage food brands and drive up their valuation, it’s pushing established food venture capitalists to make bets on earlier stage food startups, according to several investors speaking at the forum. This boom in food industry M&A activity is due to the fact that large Food & Ag companies are realizing they need to get their “foot in the door” with new food trends in order to stay on top of the latest consumer demands, says Bill Aimutis, global director for external innovation at Cargill. M&A is a great way to do this, regardless of valuations, he says. Aimutis points to Cargill’s recent investment in Memphis Meats , a startup that develops cultured meat in a lab. He explains that, although his firm probably won’t see a return on that investment for 10 to 15 years, “clean meat” is an area that Cargill had to be in, due to growing consumer demand for more sustainable protein. MissionPoint Capital Partners , a venture firm that also seeks to capitalize on growing consumer food trends, prefers to invest in areas that are not receiving a lot of attention, says managing director Jeff Possick. Areas the firm likes include eliminating food waste and changes to the supply chain that allow for greater food safety and traceability, which are increasingly important to today’s consumers, Possick says. Among MissionPoint’s recent investments are AeroFarms , an indoor farming company that delivers local foods in urban areas while reducing waste and emissions, and Spoiler Alert , which develops software that helps groceries and food manufacturers reduce food waste. Food Supply Chain Changes All these new consumer food trends are driving major changes to the food and agricultural supply chain, which, in turn, are creating major new investment opportunities. “Consumers are driving what we do,” says Cargill’s Aimutis. For example, Cargill is investing in technologies that increase efficiency and reduce waste in the food supply chain, which allows the firm’s corporate CPG customers to launch new food products faster and with less risk, he says. A key focus at Cargill now is developing new supply chains for healthy ingredients that go into new food brands, he says. Another major area of focus in Cargill’s portfolio is area of food safety. There are major challenges protecting people protecting people from a food safety perspective, he says. In fact, Aimutus has been looking for a rapid pathogen detection method that would take detection time down to milliseconds from hours, he says. However, he says, “we are not having a lot of success there.” Key Challenges to Launching Food Startups Startups in the Food & Ag industry have a much less developed investment ecosystem than technology in general, Ive says. One reason for this is that it takes more time, and more capital, to build a food business compared to a typical technology company. There also fewer investors in the space, so food corporates have a lot more leverage with startups. The biggest challenge that small food brands face is building their supply chains to gain access to enough raw materials to build a pipeline that meets the growing demand for their products, says Aimutis. Another major challenge for food startups is the capital intensity of the food business. “It takes a lot of brick and mortar and stainless steel to produce new food products,” Aimutis says. The need for capital is every bit as intensive in the food industry as it is in the pharmaceutical industry, which is driven by large R&D expenditures, and this is not well understood, he points out. In fact, all Cargill’s potential acquisitions are screened for how quickly they can develop a supply chain for the raw material that goes into producing the end product. If the product doesn’t have adequate supply of its raw material, but if they feel it has big potential to be successful over the long-term, they are willing to invest to help build the supply chain, which might take several years, he says. What is The Role of Large Food Corporates Today? Due to growing consolidation in the Food & Ag sector, large food companies are increasingly tapping into young food companies , via investments, partnerships or acquisitions, as their source of new products to keep up with the latest consumer trends. The key challenge for corporates is to figure out how to produce those products at scale, in a way that ensures both safety and quality, and then distribute them to consumers globally, Ive says. However, the key challenge facing large food corporates that acquire startups is producing them at scale without changing the key attributes that made the young food brand popular in the first place, he says. Aimutis adds: “They come out and buy a small brand, and quite frankly, screw it up, because they will reformulate it to make it cheaper.” Excitement for Alternative Proteins Among other important global consumer food trends, “the world has been screaming for alternatives to soy and dairy protein for last 10 years,” Aimitus says. That comes in part from what Cargill feels is a major concern over whether the food industry will be able to nutritionally feed the world as the global population continues to grow and demand more protein. To capitalize on the growing trend towards alternative protein, Cargill analyzed the potential of multiple sources, including hemp, quinoa, rice, peas and insect protein, he says. However, they found major challenges to building out the supply chains for these sources, Aimitus adds. The company now feels that pea protein will become the dominant alternative protein of choice and is investing heavily in companies in this space. For instance, Cargill invested $37.5 million in Puris Foods , the largest producer of pea protein, as part of that firm’s Series D round. Cargill is also investing heavily in aquaculture to develop alternative protein sources to beef and chicken, Aimitus says. As emerging markets consumers move towards a higher-protein, Western-style diet, the industry needs to create alternative protein products that taste as good as meat while also providing adequate nutritional requirements, Ive says. MissionPoint provides another perspective on how to reduce the negative impacts of the growing demand for meat. Possick says the most efficient way to make meat production more sustainable is by reducing waste, since 50% of the waste in the meat production supply chain is actually consumable protein. MissionPoint is currently looking at investments that help solve that issue, he says. Along these lines, Cargill is implementing digitization programs in its animal feed supply chain that reduces waste to make meat production more sustainable, according to Aimutis. Overall, these new consumers around the world will drive what the future of food looks like. This will include a range of food products that are nutritionally superior, less wasteful, produce fewer emissions and are less harmful to the planet, while also tasting great.
MissionPoint Partners Team
7 Team Members
MissionPoint Partners has 7 team members, including current Founder, Managing Director, Mark Cirilli.