Population growth and the increasing demand for food are fueling businesses with new products and farming methods. Young Swiss companies like Yasai or Planted want to capitalize on this trend.
The facility looks more like a factory and has nothing to do with agriculture at first glance. At the Yasai Experimental Station Basil, dill, coriander and Moroccan mint grow in Niederhasli ZH – without contact with the soil. The company builds vertical farms for this purpose. These are facilities where crops are grown on several floors under controlled conditions. Our video team accompanied Yasai on camera for two years from the start.
Swiss start-up Yasai is one of the leaders in a growing market. Many companies are looking at how to farm in a more resource-efficient way and still increase yields.
The United Nations estimates that by 2050 the world will need to feed an additional 2 billion people. So food production must grow by 50 per cent to meet the projected demand.
In order to bridge this gap, companies are taking different approaches. They work on smart harvesting robots, drones to monitor the harvest, or simply on new fertilizers.
Hundreds of young companies hope to succeed
Billions are already being invested in Agtech, the collective term for cutting-edge agricultural technologies. According to a market report by the analysis firm PitchBook, more than $3 billion flowed into more than 200 industry startups worldwide in the first half of this year.
Switzerland still plays a small role in this area. In the market report on Swiss startups, “Swiss Venture Capital Report”, there are only a few companies that have a direct connection to food or agriculture.
But there are exceptions: Yasai and Plantide are two examples. Al Mazrouah offers meat alternatives such as chicken and peas. The business is developing well, the company from Kemptthal ZH New investor funds have been raised recently 70 million Swiss francs. The startup wants to use the capital to research new alternatives to meat, such as synthetic chicken breast.
According to analysts at UBS, the business offers great opportunities for growth. “Overall, we estimate that the market for food innovation will reach $700 billion by 2030,” they wrote in their report on the food revolution.
UBS experts see both parts as promising. On the one hand, plant protein works. They estimate that this market will grow nearly twenty-fold to about $85 billion by 2030. Second, they see great potential in modern agricultural technologies. Sales here are expected to increase sixfold, reaching $90 billion by 2030.
A study conducted by the US bank Morgan Stanley also sees significant growth opportunities. The speed of market development also depends on whether suppliers limit themselves to “high-quality” crops, that is, products that command high prices, such as leafy greens and strawberries.
However, it is not easy for investors to take advantage of these opportunities, writes UBS. “In contrast to other trends, the food innovation industry is primarily characterized by start-ups and business units of large food groups and newly listed companies.” The Walmart retail group in the United States is collaborating with a young company that is building vertical farms. In Switzerland, the agricultural cooperative Fenaco has invested in the Yasai system.
UBS experts assume that the industry will merge in the next three to five years, which means there are likely to be mergers between companies. This will also make it easier for investors to invest in the sector.
negative food scandals
Credit Suisse analysts have discovered another rapidly growing area of business: food safety. Contaminated food scandals show the downside to global food production. The most recent example is Ferrero children’s chocolate has been contaminated with salmonella. More than a hundred children fell ill.
This pays service providers. CS Analysts write: “The global market for food safety is constantly growing with interesting investment opportunities.” According to their estimates, sales of food safety providers will be around $19 billion in 2021. By 2027, their sales could grow to more than $33 billion.
Gorgos Prozos He has been a business journalist at Tamedia since 2015. He mainly reports on the Swiss financial center and the commodities sector. He studied political science at the University of Zurich.More informationTweet embed
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