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Yoni Glickman is the managing partner of FoodSparks, the agrifood seed-stage fund of venture capital firm PeakBridge. Opinions are the author’s own.
After nearly $8 billion in investments, massive overvaluations, and countless high-profile bankruptcies, the days of easy money in food technology are over. I slept well. What we need is no more scientific projects chasing capital. It’s a framework that separates costly experiments from real opportunities.
I have worked in the food industry for over 20 years and have participated in over 50 transactions as a corporate leader and PE investor. When we look back on food tech investments over the past five years, we come to one conclusion. Looking past the wreckage, it seems we are now poised for some of the most significant opportunities the field has ever had.
Let’s take a look at the good, the bad, and the ugly of food tech investments over the past five years to understand what got us here and, more importantly, where we need to go next.
The Ugly: Billions of dollars lost due to predictable failures
Let’s do this in no particular order and start with the massacre. Because we need to learn from it.
Vertical farming. Frankly, I never understood how cash replaces photosynthesis. The theory is that someone will spend a lot of cash to get what we get from the sun. Take your lettuce, which is 90% water, to a fancy restaurant where you’ll pay more because it’s grown locally. Not the soundest business model. And now we are seeing massive bankruptcies.
insect! In Thailand, people enjoy eating insects. Not so much in the West. So insect protein pitch was converted into food. But they ended up incurring massive CapEx, no adoption, and inevitably widespread restructuring or bankruptcy. A solution in search of a problem. Again, billions of dollars were burned. This was predictable. Investment and innovation in food technology is ineffective if we ignore what people will actually do. eat.
Overall, the pattern was there if anyone wanted to see it. But in an age of easy money, pattern recognition is less important than storytelling (look at you, AI investors).
The Bad: Why Good Ideas Still Fail
Now we get to the trickier issues, such as hidden adoption issues, monetization challenges, or promising sectors with timelines that simply don’t lend themselves to venture capital.
Sugar substitute. Whenever someone tells me about this, my first instinct is to leave the room. Of course, sugar is not good for us. is The enormous potential of smart clean label technology. But sugar itself is more than just sweet. It’s texture, volume and texture. It’s really cheap. If you want to get rid of it, you’ll have to replace it with something much more expensive, and most food industries can’t afford to absorb it.
Discovery Platform. The promise is as follows: ‘We will use AI in our discovery platform to discover new and surprising things.’ I have seen this movie. It takes at least 7 to 10 years before a product can be released because it has to go through discovery, regulation, and production. So how can you make money? Royalties. This is not a venture play. I don’t care how much AI there is. The rest of the work after that would still take seven years.
This isn’t bad technology, it’s bad venture investing. There is a difference.
The Good: Where Real Value Is Built
There’s a reason (in fact, a lot of reasons) why I’m such a big believer in food technology. So, let’s take a look at what really works and why it matters right now.
Data plays out with a clear ROI. It doesn’t matter whether you call it AI or generative AI. I’m only interested in one thing. Can you measure the benefits? Process efficiency, reduced waste, faster NPD? You need a very specific solution that can demonstrate outstanding ROI. Basic skills are a tool, not an end.
Special materials. This is still where the greatest value capture in the food chain takes place. If you look at the entire value chain, from agriculture to CPG, the only place where companies are getting 20-35% EBITDA margins is specialty materials. There is no other place with these margins.
However, there are also non-negotiable factors such as existing demand, clear labeling, taste, and cost that will work. Why do I like vanilla? because everyone I like vanilla. It gets sucked into the food system. We don’t invent the wheel. That’s what makes it scalable through proven manufacturing.
This is a proven nutritional product. The idea of general well-being is over. People don’t want to take a multivitamin a day, they want something that helps their cardiovascular health or cognitive health. They want specificity backed by science. Solid clinical results not only create trust, but also pricing power. Ultimately, we have to engage in a margin game.
Current Situation: Meeting Crisis and Promise
It was. am. to. crisis. I cannot underestimate how important it is. Tropical products are experiencing massive disruption. Prices of coffee, cocoa, vanilla and palm oil are skyrocketing, followed by Mediterranean crops. Does anyone know the price of olive oil? Crop yields doubled last year as they were halved. And grape prices have risen 50% in the past two years.
This isn’t just about climate change. is really. Agricultural input prices are rising rapidly due to severe labor shortages, transportation disruptions, and tariffs on crops, machinery, and fertilizers. Because of immigration policy changes, we’re not sure who will actually be picking crops in California or elsewhere.
Companies that can provide truly robust supply chains have a huge advantage. But the important thing is that these supply chain solutions need to work in the real world, not in a presentation. In large plants, positive unit economics apply.
The good news is: We actually have significant upside potential right now. Decent rating. The regulatory framework is finally moving in the right direction. The EU is simplifying new foods, there is a clear path for cell-based products in several regions, and Make America Healthy Again could actually change the regulations of the world’s most important economy.
Additionally, consumer preferences have completely changed. People want to read labels and see ingredients they can understand. Big Food is experiencing disruption as the company breaks down into more agile business units and understands the need for innovation. The only way they know how to get it is through acquisition.
AI is creating new opportunities in robotics, precision agriculture, and logistics. Climate is forcing change. The crisis is creating demand.
Taking advantage of this requires entrepreneurs who understand two things: capital efficiency and strong unit economics. For investors and innovators who succeed through these healthy market adjustments and heed these guidelines, the future is bright.
