ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel

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ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
ISRAEL’S THRIVING
FOOD-TECH ECOSYSTEM
OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL’S
        PROMISING FOOD-TECH INDUSTRY

                                                 JANUARY 2020
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
ISRAEL’S THRIVING
FOOD-TECH ECOSYSTEM
OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL’S
        PROMISING FOOD-TECH INDUSTRY

                      JANUARY 2020
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
TABLE OF CONTENTS

Defining the Food-Tech Industry ..................................................................................... 4                                                          Packaging .............................................................................................................................................. 27

   Industry Sectors ........................................................................................................................................... 6                Restaurants ............................................................................................................................................ 28

   The Ecosystem ............................................................................................................................................. 7                 Retail and e-Commerce ........................................................................................................................ 30

Food-Tech Market Characteristics ................................................................................... 10                                                          Consumer Lifestyle ............................................................................................................................... 31

   Market Growth Indicators ........................................................................................................................... 10                       The Israeli Ecosystem ........................................................................................................................... 34

Global Food-Tech Trends ................................................................................................ 14                                                 Manufacturing Opportunities .................................................................................................................... 40

   Sustainability ................................................................................................................................................ 15   Why Invest in Israel Today? ............................................................................................ 42

   Novel Ingredients and Production Methods ........................................................................................... 15                                  Global R&D Leader ...................................................................................................................................... 43

   Nutrition Personalization ........................................................................................................................... 16                 Start-Up Nation ............................................................................................................................................ 45

   Food Delivery ................................................................................................................................................ 17    Invest in Israel – The Israeli Investment Promotion Agency ........................................... 46

   Robotics and Automation .......................................................................................................................... 18                Footnotes ...................................................................................................................... 48

   Added Values ................................................................................................................................................ 19

The Israeli Food-Tech Ecosystem ................................................................................... 20

   A Growing Market ........................................................................................................................................ 20

   The Ecosystem ............................................................................................................................................. 22

        Food R&D and Product Development ................................................................................................ 22

        Food Development ................................................................................................................................ 26

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ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
DEFINING THE FOOD-TECH
INDUSTRY

                     Food-Tech is an emerging and dynamic
                     industry dedicated to improving the
                    food industry’s entire value chain in a
                            sustainable manner.
                      This unprecedented intersection of food
                     and technology has been disrupting the
                    traditional food and beverage industry in
                 various ways, forcing the existing players to re-
                 think many of their fundamental assumptions
                    about the market, the costumers and the
                            manufacturing processes.

4 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                            2016 | 5
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
DEFINING THE FOOD-TECH
INDUSTRY

Industry Sectors                                           practices such as lean manufacturing, smart ERP
                                                           and AI-based logistics and waste management
                                                                                                                                                                        The Ecosystem
   The Food-Tech industry consists of five main            platforms. Companies in this sector include                                                                     The food-tech's rich ecosystem is present
sectors.                                                   Veolia Environment and Waste Management                                                                      throughout the entire food-tech value chain,
                                                           which specializes in waste management, IBM with                                                              supporting its players and technologies and
•	Novel food R&D and product design - The                 Barilla and SIG in food traceability, CleenSonic’s                                                           facilitating their activities. The ecosystem positively
   industry is rich in cutting-edge food R&D which         ultrasonic cleaning system for the food industry,                                                            affects the industry, steering technologies, business
   improves, enhances and produces a wide range            and many others.                                                                                             expertise and resources in promising new directions.
   of food products. R&D and product design are
   driven by various actors such as corporations,       •	Packaging technologies – New solutions for                                                                   1.	Biotechnology and food engineering academic
   entrepreneurs, and academic researchers. Within         sustainable, efficient and safe packaging are                                                                   institutions are responsible for many of the
   the sector, one might find the development of           highly sought-after in the food industry. Food           local consumer demand, as well as implement            recent breakthroughs in food technologies. Many
   innovative ingredients and production processes         producers are always on the lookout for food-            automatic cooking solutions that can prepare           institutions have expanded their technology
   such as alternative protein, fat and sugar              related waste reduction through the use of               food and serve it more efficiently. Retail stores      transfer efforts through dedicated companies,
   ingredients, as well as functional nutrition aimed      degradable and edible materials, for materials           utilize big data and AI in logistics in order to       and have been providing the market with new
   at certain consumer groups. Players in this sector      that keep food fresh and healthy for longer              make shopping for food cheaper, healthier, and         technologies and ideas.
   range from young companies such as Beyond               periods of time, and for compact and lightweight         easier for consumers. E-Commerce is expanding,
   Meat and Impossible Foods, to established               packaging techniques. Examples of notable                aiming to provide a simple, personalized and        2.	Food tech incubators and accelerators, like
   multinationals (MNCs) such as Tyson Foods               companies in this field include Dai Nippon               rapid delivery system for foods and ingredients,       their counterparts in the internet and high-tech
   and Nestle.                                             Printing, Amcor, and Embrapa Food Technology.            using applications to increase both comfort and        industries, provide entrepreneurs with tools and
                                                                                                                    value for consumers. Prominent companies in            resources to transform ideas into innovative
•	Food processing technologies – Food processing       •	Restaurants, Retail and e-Commerce                       this sector are GrubHub, Delivery Hero, Swiggy,        products.
   technologies, which seek to provide a sustainable       technologies – The food distribution industry            Deliveroo and Meituan-Dianping in the delivery
   production process alongside reduced food-              is highly diverse and has also been benefiting           sector. Multinational, established actors such as   3.	Dedicated food tech venture capital firms
   waste, healthier and more traceable foods,              from innovative food-technologies. Restaurants           McDonald’s, KFC and Walmart, among others,             play a critical role in the growth of promising
   and prolonged shelf life. This sector includes          attempt to intelligently customize menus to fit the      are also utilizing such technologies.                  companies.

                                                                                                                 •	Consumer lifestyle – A collection of technologies   4.	Governments, albeit new players in the
                                                                                                                    that enable consumers to personalize their             ecosystem, are becoming prominent ones,
                                                                                                                    diet according to physiological data, eat              providing incentives for food-tech actors and
                                                                                                                    healthier foods, cook faster (and sometimes            lowering barriers to entry by providing additional
                                                                                                                    autonomously), and order food efficiently. A           funding to the market.
                                                                                                                    few examples of companies that employ these
                                                                                                                    technologies include MyFitnessPal, Noom,
                                                                                                                    DayTwo, and Purple Carrot.

6 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                    7
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
DEFINING THE FOOD-TECH
INDUSTRY

                                                                     FIGURE 1: FOOD-TECH SECTOR MAP

                                                      Incubators &                               VC Funds
                                                      Accelerators

                                            Academy                          Packaging                            Government
                                                                            Technologies   Restaurants,
                                                                 Food
                                                                                             Retail &
                                                              Processing
                                                                                           e-Commerce
                                                             Technologies
                                                                                           Technologies

                                                      Novel food
                                                       R&D and                                        Consumer
                                                       Product                                        Lifestyle
                                                        Design

                                                                       The Food-Tech
                                                                         Ecosystem

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ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
FOOD-TECH MARKET
CHARACTERISTICS

   FOOD-TECH is a promising Industry that                   A second indicator is the evident growth of food-     companies (See figure 2). Geographically, China
is disrupting the large, traditional global food and     tech’s sub-sectors, which are easier to define and       and the US are leading investments with over 50%
beverage market - which is valued at over $8 trillion    analyze accurately. For example, the $1.5 billion        of all funding headed to companies based in their
and makes up more than 10% of the global GDP.      1
                                                         (by revenue) food robotics market is aimed at            markets. The Indian, British, German, and Indonesian
                                                         food-processing corporations as well as packaging        markets are also prominent, as well as Singapore
   Although undoubtedly significant, it is difficult     solutions, automated restaurants, and home kitchen       in the Southeast Asia region, Brazil in Latin America
to estimate the market’s full potential - mainly         applications. The technology is expected to grow at      and Israel in the Middle East.8,9
because of the dynamic nature of food-tech, which        a CAGR of 12.7%, more than doubling to $3.1 billion
makes it hard to uniformly define and study it. While    by 2025.5 Another exploding sub-sector is the rapidly
the constant changes brought-about by disruptive         expanding plant-based protein market. Currently
technologies and emerging trends make the precise        valued at $5 billion, it is expected to grow at a CAGR
market size difficult to evaluate, there are several     of 28%, increasing in value to $21 billion by 2025. 6
indicators of its considerable growth in recent years.                                                                                        FIGURE 2: GLOBAL INVESTMENT BY INNOVATION FIELD, 2018
                                                            Hand in hand with the investment growth, an
                                                         increasing number of food-tech startup companies                                                           Robotics

Market Growth                                            are being established. There are currently more
                                                         than 1,200 food-tech startups operating worldwide,
                                                                                                                                               Novel Food
                                                                                                                                                                    1%
                                                                                                                                                      6%
Indicators                                               including over 230 companies dedicated to                                                                                     Home & Cooking
                                                         researching production of novel ingredients, and                                                                              1%
                                                                                                                         Food-Tech logistics
   A leading indicator of the food-tech market growth    a similar number dedicated to creating consumer
                                                                                                                                         6%
is the increase in funding through acquisitions,         apps.7 Some of these startups have rapidly increased
funding rounds, venture capital firms, incubators        in value, with more than 32 food-tech companies                                                                                        Restaurant Marketplaces
and accelerators. The increase in funding for food-      surpassing the $1 billion valuation mark as of 2018,            Retail and                                                             and Mealkits

tech has been substantial, from $60 million in 2006      earning the unicorn status.
                                                                                                                    Restaurant Tech                                                             42%
                                                                                                                                30%
to $5.7 billion in 2015,2 and to a record of $11.5
billion in 2018.3 While most venture capitalists and        With the first company reaching this status in 1998
accelerators invest in one startup, notably active       (OpenTable), the number of unicorns in the market
accelerators such as SOSV and Y Combinator invested      has been steadily increasing ever year. Remarkably, 23
in as many as 28 food-tech startup companies in          of the 32 companies that have reached the $1 billion
2018. On the VC fund front, notable in their activity    valuation are food delivery companies. Similarly, the                        e-Groceries

are S2G ventures with 20 food-tech investments,          14 biggest food-tech investment deals of 2018 are
                                                                                                                                            30%
and AgFunder with 11.4                                   comprised of mostly e-Commerce and food delivery

10 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                11
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
FOOD-TECH MARKET
CHARACTERISTICS

                          FIGURE 3: LEADING FOOD-TECH INVESTMENTS IN 2018

               US
                                                                          CHINA

                                                                  INDIA

                              BRAZIL

  Instacart    DoorDash            ZUME Pizza      Brandless      Toast           Impossible Foods
  $600M        $535M               $375M           $240M          $115M           $114M
  e-Commerce   Delivery            e-Commerce      e-Commerce     Restaurant      Novel Food
  US           US                  US              US             US              US

  Dada-JD      MissFresh           Dianwoba        1919 Wines     Yijupi
  Daojia       e-Commerce          $450M           & Spirits      $200M
  $500M        $450M                               $288M
                                   e-Commerce                     e-Commerce
  e-Commerce   e-Commerce          China           e-Commerce     China
  China        China                               China

  Swiggy       BigBasket.com
  $1B          $300M
  e-Commerce   e-Commerce
  India        India

  iFood
  $590M
  e-Commerce
  Brazil

12 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                           13
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
GLOBAL FOOD-TECH
TRENDS

   WHILE SOME of the following trends have a short-term impact on the traditional food industry,
others have far-reaching future implications.
                                                                                                   Sustainability                                             Many leading multinational corporations such
                                                                                                                                                           as Nestle, Pepsico, and Coca-Cola are pledging to
                                                                                                                                                           reduce packaging waste, and are on the lookout for
                                                                                                   Sustainability in food is all about                     new solutions to replace single-use plastic.10 This
                                                                                                   increasing the production efficiency                    is also true for the startup ecosystem, with over 70
                                   FIGURE 4: GLOBAL FOOD-TECH TRENDS                               of food products, prolonging shelf-life,                startups worldwide specializing in waste and surplus
                                                                                                   using minimal/degradable/recyclable                     management.11

             Sustainability
                                                                                                   packaging, and reducing surplus
                                                                                                   production as well as food-related
                                         Added Values                                              waste                                                   Novel Ingredients and
                                                                          Robotics and
                                                                          Automation                  Arising mainly due to consumer demand,               Production Methods
                                                                                                   sustainability is already impacting the entire value
                                                                                                   chain by providing actual economic benefits,            The invention of novel ingredients and
                                                                                                   increased efficiency and reduction in the food          processes for the production of food
                                                                                                   industry’s ecological footprint.                        that is tastier, more nutritious, more
            Novel Ingredients
                                                                                                                                                           sustainably produced and shipped, can
             and Production
                                                                                                      Sustainability has driven the research and           be grown in new environments, as well
                     Methods
                                                                       Food Delivery
                                                                                                   incorporation of various inventive technologies and
                                                                                                                                                           as provides alternatives to traditional
                                                                                                   processes into the industry. Sustainable production
                                                                                                                                                           sugar and animal proteins
                                                                                                   lines that reduce waste, water usage and greenhouse
                                                                                                   gas emission, are introduced with solutions                The food industry is already greatly influenced by
                                                                       Nutrition                   from companies such as Aromyx (a developer of           the invention of new ingredients. Most remarkably,
                                                                       Personalization             odor biosensors that aid in production process          plant-based proteins and cultured meats, fish and
                                                                                                   optimization), Just Inc., and Renaissance Bioscience;   poultry are quickly gaining popularity,12 due to their
                                                                                                   Sustainable packaging, compact and degradable/          associated moral and ecological benefits and their
                                                                                                   recyclable, is introduced with innovative products      constantly improved taste and nutritional values.
                                                                                                   from the likes of IBM’s VolCat technology - which       Prominent companies in this market include Beyond
                                                                                                   has revolutionized plastic recycling, ChemCycling,      Meat, Impossible Foods, Memphis Meat, Future
                                                                                                   Tetra-Pak, Eco-Products, and Apeel Sciences; Waste      Meats and more. A similar process can be found
                                                                                                   reduction and surplus minimizing technologies are       in the production of dairy, chicken eggs and sugar
                                                                                                   also increasing in popularity and include products      alternatives, as well as ingredients that enhance
                                                                                                   from companies such as Waste Management, Whole          food flavor and scents.
                                                                                                   Surplus, Karma, NoWaste and Olio, among others.

14 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                   15
ISRAEL'S THRIVING FOOD-TECH ECOSYSTEM - OPPORTUNITIES AND BENEFITS OF INVESTING IN ISRAEL'S PROMISING FOOD-TECH INDUSTRY - Invest In Israel
GLOBAL FOOD-TECH
TRENDS

   Novel foods also play a part in the growth of the        New food products and ingredients enable the           Yet another corresponding market is the menu          of consumption is becoming increasingly important,
functional foods and nutraceutical products market.      creation of more diverse and beneficial foods, such    personalization platforms, which offer new recipes       with one-third of consumers worldwide using a
Using genetically modified organisms (GMOs) as well      as alternative protein sources that support vegan      to match food trends or a change in seasons, as well     restaurant or meal delivery service, and 7% ordering
as new breeding efforts, corporations are researching    diets, sugar alternatives that aid in preventing and   as personalized menus to consumers and restaurant        delivery at least once a week.13 Therefore, some of
and designing new foods and ingredients. These           living with diabetes, and foods with heightened        owners. Examples of companies in this market are         food-tech’s earliest and biggest global investments
new ingredients are being used for specific functions    health benefits.                                       The.Fit, McDonald’s Dynamic Yield, and Tastewise.        were directed at the food delivery sector.
such as manufacturing foods tailored towards
infants or elderly consumers, aiding with different                                                                                                                         Players in this sub-sector are plentiful and of high
illnesses or providing heightened health benefits.
Companies invested in such solutions include DSM’s
                                                                                                                Food Delivery                                            value. A few prominent examples include DoorDash
                                                                                                                                                                         (North America), GrubHub (North America), UberEats
development of functional foods and nutraceuticals,                                                                                                                      (Global), Delivery Hero (Global), Deliveroo (Europe),
and Kellogg’s investment in a mushroom-based
                                                                                                                Food delivery platforms are on the                       Just Eat (Europe), Takeaway.com (Europe), Ele.me
functional ingredient company.                                                                                  rise, catering to the ever-increasing                    (China), and Meituan Dianping (China).
                                                                                                                demand for the delivery of fresh
                                                                                                                food and groceries to consumers in                          Due to its success, many actors are trying to
Nutrition                                                                                                       a reliable, cheap and timely manner.                     enter the food-delivery market, hoping to gain the
Personalization                                                                                                 Food delivery has become the new                         upper hand over their competitors. Examples include
                                                                                                                standard for food consumption                            Postmates’ recent testing of autonomous food
                                                                                                                                                                         delivery robots in California;14 India’s Swiggy, which
Personalized nutrition utilizes large
                                                                                                                   Responsible for one of the biggest disruptions        runs its own cloud kitchen services that prepare
amounts of data in order to better                          Smart personalized diet solutions and               in the food industry, the delivery trend was one of      meals for its takeaway services in a cost-effective
understand the human biological                          technologies are complementary tools that provide      food-tech’s earliest and most influential trends. Ease   manner, dramatically cutting costs; and Zomato’s
system, and then to effectively                          the user with access to general knowledge based on
apply the relevant new findings to                       large amounts of data, as well as personal insights
consumers to improve their diets.                        based on sensorially gathered or manually entered
Some of the elements that influence                      data.
the personalization of diets include
age, genetic heritage, gut biome,                           Complementing this trend are personal
lifestyle choices, health issues and                     wellness coaching applications, which utilize data
moral preferences                                        and expertise to instruct users on healthier, more
                                                         personally suitable lifestyles. Leading companies
   Personalization is driven by two main                 in this sector include Diet.ID with a personalized
technologies: new food products and functional           diet assessment and insight digital solution,
innovations, and data analysis coupled with artificial   Ava’s nutrition coaching platform, Viome, Noom,
intelligence.                                            MyFitnessPal, and Shopwell.

16 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                  17
GLOBAL FOOD-TECH
TRENDS

expansion into fresh produce sourcing to cut costs
and provides higher quality produce for their delivery
                                                            Autonomous solutions driven by artificial
                                                         intelligence can be used to create a completely
                                                                                                                Added Values
platform.15                                              automated restaurant experience, from a fully                                                                                         Various, diverse technologies and practices
                                                         automated table reservation system to robots
                                                                                                                Consumers are looking to buy food                                       originate from this consumer demand-based trend.
                                                         cooking and serving foods and beverages. Prominent     from corporations that promote added                                    One example is the introduction of digitally native,
                                                                                                                values such as fresher and healthier
Robotics and                                             examples include Spyce, a completely automatic
                                                         healthy restaurant operating in Boston; AB InBev,      products, made with traceable
                                                                                                                                                                                        vertically integrated brands (DNVB) in the food
                                                                                                                                                                                        industry, which result in eliminating mediation
Automation                                                                                                      ingredients and transparent production                                  prices while increasing quality, traceability,
                                                                                                                methods, sourced responsibly, and                                       accountability and sometimes freshness of food
Automated robots are set to                                                                                     made safe through proper inspection                                     delivered to consumers. Blockchain is used to
revolutionize almost every aspect of                                                                            and processing                                                          increase traceability, with companies like Auchan,
the food industry value chain                                                                                                                                                           Walmart and Carrefour having already implemented
                                                                                                                    The added value trend has been influencing                          this technology.20 Using blockchain, consumers
   The incorporation of robotics and automation in                                                              almost all actors in the food industry, forcing them                    can scan a specific product’s QR code to receive a
food manufacturing meets the increasing demand                                                                  to adopt practices and technologies that contribute                     detailed report on its origin, production process and
for cost and energy efficient food processing . Giant
                                              16
                                                                                                                to these values. 19
                                                                                                                                                                                        delivery information.
food processing MNCs are already developing and
utilizing these solutions in their operations, with
the likes of JBS testing meat processing robots,
and Tyson Foods investing $215 million in robotics       which has incorporated intelligent beverage                                                           FIGURE 5: TRENDS HYPE CURVE
in the past five years.17,18 Another important role      dispensing monitoring that increases supply planning
for robots in processing is to increase food safety      and efficiency; and McDonalds’ recent acquisition of
by autonomous inspection of products, as well as         Apprente, aimed at incorporating automatic speech
                                                                                                                                                                       Robotics and
by automated maintenance and cleaning of food            recognition and interaction technologies in their                                                             Automation

production lines.                                        drive-throughs.                                                      Novel Ingredients
                                                                                                                               and Production
                                                                                                                                       Methods

                                                                                                                    HYPE
   Smart and autonomous delivery robots and                 Lastly, another use for autonomous robots is
                                                                                                                                                                                                                       Food Delivery
vehicles are already in use for customer delivery        in the home-kitchen environment, by using smart
                                                                                                                                   Nutrition
services and for improved logistic operations. These     home and IoT technologies. Examples, already in                     Personalization

include the use of autonomous trucks for logistics       the market, include Moley Robotics’, Miso Robotics’                                          Sustainability
                                                                                                                                                                                                Added Values
operation, automated warehouse solutions for             and Samsung’s autonomous kitchen robot arms;
increased efficiency and safety in food inventory        GammaChef’s smart robotic cooker; and Genie’s
management, and ground and airborne vehicles that        pod technology that automatically cooks healthy
                                                                                                                              Discovery             Peak of                  Disillusionment           Enlightenment         Plateau of
can deliver food and groceries quickly and reliably.     vegetarian food at the push of a button.                                                 expectations                                                              productivity

                                                                                                                                                                                 TIME

18 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                                 19
THE ISRAELI FOOD-TECH
ECOSYSTEM

   ISRAEL IS home to one of the most vibrant,
forward thinking food-tech ecosystems in the
                                                         A Growing Market                                                                       FIGURE 6: ISRAEL: INVESTMENTS BY INNOVATION FIELD, 2018

world, which makes it a desirable innovation hub.           These unique market characteristics have created
This ecosystem’s growth and prowess have been            promising food-tech opportunities for entrepreneurs                                         Robotics

instrumental in fostering cooperation and bringing       and investors - and Israel promptly became home
                                                                                                                                                        12%
                                                                                                                                                                                                          Novel Food
in investments from some of the world’s biggest food     to some of the most promising innovations in the
                                                                                                                                                                                                          21%
corporations such as Coca-Cola, Mars, Mondelez,          food industry, and to approximately 300 food-tech                              e-Groceries
Tyson Foods, Nestle, Danone, AB inBev, Starbucks,        startups.21,22 However, much like the global food-                                     4%
PepsiCo, McDonalds, Heineken and Unilever.               tech market, the Israeli market is still young, with
                                                         124 of the startups having been established in the
   Behind the Israeli food-tech ecosystem’s              past three years alone.23 Another sign of the market
                                                                                                                         Restaurant Marketplaces
excellence on a global level are several unique          being in its early stages is the amount of investment
                                                                                                                                    and Mealkits
characteristics.                                         rounds achieved by startups, with 30% of them either
                                                                                                                                              19%
                                                         bootstrapped or having undergone a seed funding
   First, the country’s history of food and water        round only.24 Furthermore, Israel has yet to see IPOs                                                                                               Home & Cooking
shortages created a demand for ingenuity in food         of food-tech companies.                                                                                                                             27%
and agriculture, thereby promoting the formation
                                                                                                                                   Retail and Restaurant Tech
of advanced scientific and technological knowledge          Despite its early stage, the Israeli market is growing
and expertise. Second, Israel is home to some of         considerably and seeing an increasing amount of
                                                                                                                                                          17%
the first academic technology transfer companies         investment. Food-tech investment has doubled
in the world, with a strong connection between the       between 2013 and 2018, from $52 million to $100
academic and business sectors, and an advanced           million.25 As of October 2019, food-tech investments
culture of technology transfer. Third, Israel’s food     for the year have been $135 million total, nearly
culture is affected by the existence of its many         tripling food-tech’s annual investment in the span             The market has seen an increasing amount               Yield their largest acquisition in the past 20 years.30
immigrant communities, which demand a variety            of 6 years.26 Funding rounds are gradually becoming         of acquisitions, with one of the biggest exits in
of flavors and have a unique openness to new ones.       bigger, with companies in different innovation fields       Israel’s history occurring in the food-tech industry:        With the increasing attractiveness of Israel’s food
Last, the Israeli consumer has a sophisticated palate,   raising large sums. Examples include Hinoman (2017,         International Flavors & Fragrances purchased the          innovation, many international companies have
and is willing to pay more for higher quality food       $15 million), DouxMatok (2019, $8 million), Nutrino         Israeli Frutraom for $7.1 billion in October 2018.  28
                                                                                                                                                                               begun investing in business partnerships with the
products.                                                (2018, $8 million), and Bringg (2019, $25 million).27       The same year saw the acquisition of SodaStream           Israeli food industry. Prominent examples are Danone,
                                                                                                                     by PepsiCo, at a company valuation of $3.2 billion.  29
                                                                                                                                                                               which owns 20% of Strauss Health’s operations;
                                                                                                                     Another large acquisition is that of Dynamic Yield, an    and AB InBev’s acquisition of Weissbeerger and
                                                                                                                     AI high-tech company that develops personalization        its recently announced innovation hub in Tel-Aviv.
                                                                                                                     and decision logic technologies. McDonald’s has           Additional investors include General Mills, Mars,
                                                                                                                     recently announced it will purchase the company           Cargill and ADM.
                                                                                                                     for more than $300 million, thus making Dynamic

20 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                        21
THE ISRAELI FOOD-TECH
ECOSYSTEM

                                                      In addition to financial backing, start-ups will       printing method developer Aleph Farms, Redefine      with Israel’s Innovation Authority and with its
                                                      benefit from the full range of Frutarom’s know-        Meat and more.                                       support. Eshbal has access to the world’s most
                                                      how, expertise, and corporate synergies.                                                                    advanced food technologies as well as the ability
                                                                                                                                                                  to utilize knowledge and expertise in order to
                                                         On May 8, 2018, International Flavors &                                                                  supply high-end food products both nationally
    FRUTAROM
                                                      Fragrances acquired Frutarom for $7.1 Billion.                                                              and globally.
    Founded in 1933, and headquartered in
 Haifa, Frutarom is one of the largest flavor and                                                                                                                    In addition, the company's subsidiary -
 fragrance companies in the world.
                                                    The Ecosystem                                                 ESHBAL FUNCTIONAL FOOD
                                                                                                                                                                  Eshbal Functional Foods Labs Ltd. (EF2L), was
                                                                                                                                                                  founded as a collaboration of leading industrial
    The company develops, manufactures              Food R&D and Product Development                                                                              players in this groundbreaking field, and offers
 and markets an extensive variety of flavors                                                                      Founded in 1940 in Kibbutz Maanit, this         the opportunity of significantly shortened cycles
 and ingredients which cater to customers in           Israel is well-known for its expertise in research     company is a food manufacturer active in            for innovative food products, food supplements
 many industries such as food & beverage, taste,    and development, and food R&D and product design          several local and international food sectors.       and medicinal foods, from initial development
 fragrance, pharmaceutics, nutraceuticals, food     are no different: R&D is present across all sectors of    The company produces nutraceuticals,                stage to global market penetration.
 additives, and cosmetics. Frutarom markets         the food industry, from food processing companies         medicinal foods, sugar-free and gluten-free
 and sells over 10,000 raw materials and 70,000     to research centers. Long established companies           products, syrups, and dry mixes. Eshbal's
 products to more than 30,000 customers in 150      include Frutarom, with its wide array of flavors,         production capabilities include the mixing
 countries. It has 92 R&D labs and 110 sales &      fragrances and ingredients both in Israel and abroad,     of various powders and cereals, cooking and
 marketing offices throughout the world, employs    Eshbal Functional Food’s innovative solutions in          preparation of syrups and liquids, baking and
 5,500 people and operates 73 production            specialty foods and nutraceuticals, and Galam.            packaging of gluten-free products, and diverse
 facilities in Europe, North America, Israel and    Other major food processing companies, such as            packaging technologies. The company focuses
 Asia.                                              Tnuva and Strauss, run innovation incubators in           on functional food ingredients that affect health
                                                    collaboration with the Innovation Authority (see          beyond their nutritional values, incorporating
    In April 2018 the company announced that        later sections for additional details).                   development and production capabilities for
                                                                                                                                                                     FUTURE MEAT TECHNOLOGIES
 it will launch FoodNxt, an innovation lab for                                                                retail brands, private labels, and B2B.
 food-tech startups in northern Israel which           Alongside the major food producers,                                                                           Future Meat Technologies is a lab-produced
 will focus on the development of all-natural       entrepreneurs are constantly bringing new disruptive          Eshbal Functional Food exports to the United    meat startup based in Jerusalem, founded in
 ingredients for the food and beverage industry     technology to the market. Israel’s biggest promise in     States, England, Russia, the Ukraine, Denmark,      2018.
 worldwide. Frutarom was selected by the Israel     this sector is in alternative food source innovation.     and other countries.
 Innovation Authority to operate the innovation     Just recently, Tyson Foods invested in Future Meat                                                               The startup developed a technology for
 lab for three years. Each start-up chosen by       Technologies in an estimated $14 million investment           The company has an R&D team that                non-GMO (non-Genetically Modified Organism)
 Frutarom for FoodNxt will enjoy financing of       round.31 Other Israeli companies developing               includes some of Israel’s leading experts in food   production of meat directly from animal
 up to $280,000 to reach a proof of concept.        alternative meat production methods are 3D meat           development. The team works in coordination         cells, without the need to raise or slaughter

22 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                       23
THE ISRAELI FOOD-TECH
ECOSYSTEM

 animals. The company focuses on developing               With current small-scale production costs of          Alternative protein solution companies include          The company developed a nutritious,
 a sustainable and cost-effective production              $150 per pound of chicken and $200 per pound       Hargol’s grasshopper protein farms, Flying SpArk’s      plant-based liquid egg that tastes, looks, and
 method of fat and muscle cells in small-scale,           of beef, the company plans to release its hybrid   fruit fly protein, SuperMeat’s cultured chicken meat    functions like a real egg and can be used as an
 rejuvenating bioreactors. Due to its rapid growth        products, at a competitive cost level, from its    products, Kinoko-Tech’s mushroom-based protein,         egg substitute in any recipe.
 cycles, producers can adapt to market demand,            pilot production facility by 2021. A second line   ChickP’s chickpea seed protein, and Hinoman’s
 changing their growth capacity as needed.                of 100% cultured meat products at a cost of less   Mankai protein plant.                                      The product is made up of the selection of
                                                          than $10 per pound is to be launched by 2022.                                                              non-GMO proteins and has the properties of a
    The model is expected to utilize 99% less                                                                   Other examples of “faux-foods” include ZeroEgg,      real egg. Although the egg replacement market is
 land and emit 80% less greenhouse gasses                    As of October 2019, Future Meat has raised      winner of the Food-Tech 2019 startup competition        a crowded one, the company boasts two unique
 compared with traditional meat production.               a total funding of $16.2 million.                  for its vegan egg replacement; Yofix, a manufacturer    attributes: the versatility of the product, and its
                                                                                                             of vegan, soy-free yogurt and dairy alternatives, and   cost effectiveness.
                                                                                                             winner of PepsiCo's European Nutrition Greenhouse
                                                                                                             Program; Tamiz’s almond-based dairy replacement            As of December 2018, the startup raised
                                                                                                             products; and Amai Proteins’ sugar-replacing            a total funding of $1.5 million. It is also the
                               FIGURE 7: ISRAEL’S ALTERNATIVE PROTEIN MARKET                                 proteins. Additional innovative companies have          winner of Calcalist's 2019 Food-Tech Innovation
                                                                                                             been producing novel ingredients for the food           Competition, in association with Tnuva.
                                                                                                             processing sector, for example Phytolon, which
                                                                                                             develops sustainable and healthy food coloring
                                SuperMeat                                                                    technologies, based on research conducted at the
                                        Poultry
                                                                                                             Weizmann Institute of Science and supported by
                 Aleph Farms
                      Clean Beef                                                      Hargol                 Trendlines’ incubator.
                                                                                      Cricket
     Redefine Meat                                                                                                                                                      BETTER JUICE
             Clean Beef
                                                                                        Flying SpArk                                                                    Better Juice is sugar reduction startup
   Future Meat
        Clean Beef
                                        PROTEIN                                         Fly
                                                                                                                                                                     founded in 2017 in Ashdod.

                                                                                   Kinoko-Tech                                                                          The company’s flagship device utilizes non-
                                                                                   Mushroom
                                                                                                                  ZEROEGG                                            GMO micro-organisms in order to convert the
                                                                          Hinoman                                                                                    natural sugars found in fruit juice into non-
                                                                          Mankai
                                                             ChickP                                               Plant-based egg substitute startup ZeroEgg         digestible compounds such as dietary fiber,
                                                             ChickPea                                          is a portfolio company of The Kitchen FoodTech        while maintaining flavor and nutritional value.
                                                                                                               Hub, founded in 2018 in Ashdod.                       This technology could reduce 30%-80% of all

24 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                            25
THE ISRAELI FOOD-TECH
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  the sugars in orange juice, which is especially             Israel’s biggest food and beverage company, in          The group operates The Kitchen FoodTech               throughout Israel, and over 80% of its raw
  beneficial for conforming to new FDA and EFSA            terms of revenue, is Tnuva Group, acquired by Bright    Hub, a technological incubator founded in                materials come from Israeli agriculture, with
  standards. Furthermore, Better Juice uses micro-         Foods in 2015 at a $2.3 billion valuation. Tnuva
                                                                                                       32
                                                                                                                   2015 which provides seed funding, mentoring,             more than 1,600 farmers counted among its
  organism activity and continuous bioconversion           recently joined the Sparks FoodTech consortium          industry connections, and a full set of operational      6,500 suppliers.
  to process large volumes of juice with little effect     - alongside Tempo and the VC firms Finistere and        services for early-stage ventures operating in
  on overall costs.                                        OurCrowd - to establish “Fresh Start”, a government-    all areas of the food and beverage value chain.             The group has recently won a government
                                                           backed food-tech research center. Second to Tnuva                                                                tender to construct a $100 million food-tech
      Recently, the company has partnered                  is Strauss Group, currently valued at $3.4 billion on      Alpha Strauss is the company’s venture arm,           incubator in the northern region of Israel, as
  with Citrosuco S.A, Brazil, one of the largest           TASE, which boasts business relationships with many     which engages in the connection between the              part of a collaboration with Finistere VC, crowd-
  orange juice producers worldwide. As part of             multinational companies. Strauss can take credit        technology manufacturers and venture capital             funding based OurCrowd VC, and Tempo. The
  the partnership, Citrosuco will set up a pilot           for numerous innovations in the food-tech market,       funds, market service providers, government              incubator, operating under the name Fresh Start,
  program for the production of low-sugar orange           as the company has been investing and promoting         representatives and strategic partners. Alpha            is scheduled to open in 2020.
  juice, using Better Juice’s technology.                  startups through its incubator, The Kitchen, and VC     Strauss also promotes FoodTech IL - the main
                                                           fund, Alpha VC.                                         event of Israel’s Food-Tech’s ecosystem. Along            These two giants are closely followed by
      Better Juice won the "Most Innovative                                                                        with the community, the event has grown over           Osem, owner of the Tivall brand, one of the first
  Technology" award at the 2018 Startup                                                                            the years from a few dozen participants to over        manufacturers to introduce meat substitutes to the
  Innovation Challenge at Health Ingredients                                                                       one thousand.                                          market; the Neto brand - an investor in Future Meat
  Europe (Frankfurt). Its technology was developed                                                                                                                        Technologies; and Tempo, which is also invested in
  in conjunction with The Hebrew University and                                                                                                                           the aforementioned Fresh Start incubator. MNCs are
  The Kitchen Hub incubator.                                                                                                                                              also present in this sector, with Coca-Cola, Heineken
                                                                STRAUSS GROUP                                                                                             and Unilever food producing facilities in Israel.
      As of March 2019, the startup raised a total
  funding of $600K.                                             Strauss Group Ltd., founded in 1933, is an            TNUVA GROUP
                                                             international Food & Beverage company and
                                                                                                                                                                          Packaging
                                                             among the largest food manufacturers in Israel.          Founded in 1926, Tnuva Group is one of
                                                             The company focuses on dairy products, coffee,        the largest, leading food groups in Israel, with          With their economic and ecological benefits,
Food Development
                                                             water, snacks, salads, and dips. It employs           a workforce of 6,500 employees. In 2014, it            sustainable packaging technologies have not
   Despite its sophisticated palate and a demand for         over 14,000 workers across 20 countries in 29         boasted a revenue of NIS 7 billion. The majority       skipped the attention of Israeli innovators.
innovative food products, Israel’s local food market is      production sites. As an international company,        part of Tnuva’s activity takes place in Israel, with   Prominent examples include TIPA, a manufacturer
limited by its relatively smalls size. As a result, many     Strauss works in collaboration with international     its products supplied daily to approximately           of degradable, flexible and durable plastic-like bio-
of Israel’s food processing giants have established          corporations such as Danone, Haier, Sao Migel         18,000 retail points across the country and to         materials for the food industry; Tadbik’s flexible
global business partnerships in an attempt to gain           etc. The group’s sales totaled NIS 8.6 billion        over 7 million customers.                              packaging technologies; and NanoAF, which designs
access to other markets and leverage the Israeli food        in 2018, of which its international operations                                                               biocompatible and ecological packaging materials
research expertise.                                          accounted for 54%.                                       The company has 36 production sites                 that resist bio-fouling, thereby increasing product

26 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                    27
THE ISRAELI FOOD-TECH
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shelf-life. NanoAF’s technologies were developed at      Awards. In addition, Google’s shopping site                                                                   provides insight promoting sustainability and profit,
Yissum, the Hebrew University's technology transfer      has recently begun shipping its products in                                                                   was acquired by AB InBev in 2018.
company.                                                 packaging produced by the Israeli company.

                                                            As of September 2019, the startup raised a
                                                                                                                    DYNAMIC YIELD
                                                         total funding of $48 million, from investors such          Dynamic Yield was founded in 2011 in Tel
                                                         as Li Ka-Shing’s Hutchison Whampoa, Hearst              Aviv and employs approximately 180 people.
                                                         and Blue Horizon.                                                                                                  WEISSBEERGER
                                                                                                                    The startup developed a platform which
     TIPA                                                                                                        helps companies enhance marketing and                      WeissBeerger is the developer of Beverage
                                                                                                                 increase revenue by adapting their website              Analytics, a platform that provides breweries
                                                       Restaurants
     Founded in 2010, TIPA is a compostable                                                                      content to customers' preferences.                      with real-time feedback on bar operations and
  plastic company. It has over 40 employees and           Restaurants in Israel are a major sector of the                                                                consumer behavior. The startup was founded
  is based in Hod Hasharon.                            country’s food industry. Facing challenges like              As of November 2018, the startup raised a            in 2011 in Tel-Aviv, and employs over 60 people
                                                       food ordering apps and food delivery platforms,           total funding of $80 million. In March 2019, it was
     TIPA designs and manufactures plastic-like        restaurants in Israel are developing innovative           acquired by the global McDonalds Corporation               WeissBeerger has developed Internet-of-
  bags and packaging materials that are fully          solutions to stay attractive.                             for $300 million.                                       Things analytics tools that include sensors in beer
  compostable, as an alternative to conventional                                                                                                                         taps, refrigerators and other important points in
  plastic packaging. The company’s compostable            The biggest fast-food chain in Israel, McDonald’s,        McDonald's, which operates some 38,000               the supply chain. This, in order to provide bar
  plastic is made up of 20%-60% plant-based            recently re-introduced its delivery services and          branches worldwide, stated it will use Dynamic          and restaurant owners as well as brewers and
  ingredients, and disintegrates under compost         launched new technologies such as McTouch-to-             Yield's technology to better personalize its            beverage manufacturers independent data, such
  conditions within 180 days.                          table ordering, McCoins member club currency, and         outdoor digital drive-thru menu, with varying           as whether the beer served to the customer was
                                                       RightHear - accessibility solutions for handicapped       choices based on time of day, weather, current          poured at the right speed and temperature,
     TIPA’s packaging is as durable and                consumers. McDonald’s employs an order and                restaurant traffic and trending menu items - and        whether it was poured from a fresh barrel, and if
  impermeable as traditional plastic packaging         pick-up app, and recently acquired the Israeli AI         also to offer customers additional choices based        the barrel should be replaced. Big data systems
  and is good for a range of products, such as fresh   personalization technologies startup Dynamic Yield,       on existing selections.                                 gather information about drinking habits in
  produce and frozen goods. TIPA’s packaging           in order to promote personalization in restaurants                                                                the bar and analyze them with insights about
  also expands beyond the produce aisle, as the        and services.                                              Another prominent restaurant chain in the              customer behavior. According to the company
  company also produces packaging for fashion                                                                  country is Aroma Israel, with sales of $284 million       website, bars which have used the company's
  retailers.                                                                                                   in 2018 and 214 retail locations. In 2018, Aroma
                                                                                                                                                  33
                                                                                                                                                                         tools have increased revenue from each beer
                                                                                                               launched an order-and-pick-up app which includes          tap by 32% and reduced beer wastage by 50%.
     The company received the Transformational                                                                 a club member discount. On the startup scene,
  Solution Award in the category of Waste, Water,                                                              WeissBeerger, which developed a beverage analytics           In January 2018 Anheuser-Busch InBev, the
  and Land at the 2019 Transformational Business                                                               platform that tracks beverage consumption and             world's largest brewer, acquired WeissBeerger

28 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                29
THE ISRAELI FOOD-TECH
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  for an approximate $80 million. Anheuser-                   has 15,000 employees, 358 stores spread across                The startup operates a digital supermarket        transfer company. Another example of using high-
  Busch InBev owns more than 400 beer brands                  533,000 square meters and four online logistic             that guarantees fast deliveries within four hours    tech for smarter food consumption is Water.io. The
  worldwide including Becks, Stella Artois, Leffe             centers covering 12,000 square meters. The                 with no delivery charge. It employs some 35          company manufactures SmartCaps, sensor-packed
  and Budweiser. The company operates in North                group's 2018 revenues totaled NIS 12.8 billion.            people and has its headquarters in Rishon            IoT caps that can be placed on any product, including
  and South America, Europe and Asia, and has                 Its shares are traded on the TASE.                         LeZion.                                              water and juice bottle, powdered foods and medicine
  offices in the USA and the UK.                                                                                                                                              and even pills.
                                                                  Shufersal is Israel's most significant player in          In June 2019, the Israel-based drugstore chain
                                                              the e-commerce market, with at least 16% of the            Super-Pharm, together with local manufacturer           Israeli startups are also tackling the home kitchen
                                                              chain's revenue originating from online sales.             and distributor of Coca-Cola products The            appliance sector, with different solutions for making
Retail and e-Commerce
                                                                                                                         Central Bottling Company Ltd. and Tel Aviv-          cooking healthier, faster and easier. One example is
   While Israel only has 17 national food retailers,   34
                                                               Much like in other countries, new players are             based Union Tech Ventures, invested a combined       Genie, an autonomous pod-to-plate solution that
recent years have seen them in intense competition,         trying to capitalize on the increasing demand for both       sum of approximately $10 million in the startup.     cooks vegetarian meals in three minutes, providing
driving them to constantly improve the purchasing           food delivery and e-commerce. One example is Quik,           What makes Quik so unique its ability to make        a speedy and healthy choice of foods to consumer
experience. In search of a competitive edge, food           an online supermarket that guarantees the delivery           short term deliveries, within the same day - a       with little to no effort. Another example is that of Deep
retailers have also become the major e-Commerce             of fresh foods and food products within 4 hours,             rare concept in the pharma field. Its service        Learning Robotics, a robot developed to study human
players in the market, seeking to cater to the              free of delivery charges. Another innovator trying to        matches the worldwide trends including fast          cooking and to replicate actions through computer
demands for ease-of-consumption.                            revolutionize e-commerce, both in Israel and abroad,         and personal service.                                vision and learning software. Deep Learning Robotics’
                                                            is Bringg. The company caters to customers in over                                                                product is already being used as an autonomous
   Shufersal is the largest retailer with $3.8 billion in   50 countries, offering the retail and restaurant sectors                                                          packaging robot in industries around the world.
revenues in 2018, marking a year-over-year revenue          a comprehensive AI and ML based logistics platform.
                                                                                                                       Consumer Lifestyle
increase of 8.4%.35 Shufersal is also the biggest           Israelis also use international food e-commerce
e-Commerce food player, with 16% of its revenues            platforms, most notably iHerb and Vitacost.                   Another promising field for the Israeli food-tech
originating from online sales. Other major players
                                36
                                                                                                                       ecosystem are food-tech and wellness apps and
are Rami Levi Hashikma Marketing with a $1.5 billion                                                                   products.
revenue in 2018, Dor-Alon Retail (also known as                                                                                                                                     DAYTWO
AM:PM), Merav-Mazon Kol, Bitan Wines, and Victory.                                                                        One leading app is DayTwo, whose product is
                                                                                                                       a microbiome-based personalized nutrition and                DayTwo is a microbiome-based precision
                                                                                                                       medical diagnostic tool. Such technology is expected     medicine company which develops personalized
                                                                  QUIK                                                 to provide useful insights for food manufacturers        nutrition, diagnostics, and therapeutic solutions
                                                                                                                       in the future, enabling the development of highly        using artificial intelligence and machine learning.
     SHUFERSAL                                                    Quik is an innovative service for purchasing         personalized food products. As with many other           Founded in 2015, it has offices in Tel Aviv and
                                                              products online, founded in 2017 by BringBring           success stories in the food-tech industry, the           San Francisco, with 85 employees.
     Founded in 1958, Shufersal is the largest                Solutions LTD.                                           technology behind DayTwo was developed by Yeda
  supermarket chain in Israel. The Shufersal Group                                                                     - the Weizmann Institute of Science technology               The company developed a microbiome

30 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                         31
THE ISRAELI FOOD-TECH
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 human discovery platform that offers a glycemic      measures the volume of a liquid, solid or powder         Ltd. was founded in 2010 in Rishpon.
 control solution for people with type II diabetes.   in a container and relays the data via Bluetooth
 The platform provides its customers with             technology to an app, which then filters it                 The company developed a single-serving,
 personalized nutritional recommendations             through the customer’s preferences and funnels           pod-based cooking robotic device which uses           DEEP LEARNING ROBOTICS
 through a smartphone app, based on mapping           it to the manufacturer. The platform allows the          patented artificial intelligence and machine
 and analyzing the individual's intestinal            manufacturers to aggregate the data, analyze it,         learning methods to cook a meal in three              Deep Learning Robotics (DLR) is a technology
 microbiome - for the purpose of maintaining          and use it in their marketing logistic. In the future,   minutes.                                           company that specializes in robotics, computer
 balanced blood sugar levels and leading a            this technology could help customers plan their                                                             vision, and machine learning . The company was
 healthier life.                                      meals for the week, protect them from allergic              The device performs a sequence of actions       founded in 2015 in Ashdod.
                                                      reactions, and help achieve nutritional goals.           such as heating, cooling, microwaving, and
    According to founder and CEO, Lihi Segal,                                                                  steaming and offers over 30 menu items and            DLR developed a vision-based robotic
 DayTwo is the only evidence-based, actionable,          The company has signed agreements with                a variety of dishes including breakfasts, soups,   controller that uses advanced machine-learning
 microbiome platform in the market today.             a dozen companies in the food, beverage,                 pasta, noodles, and baked goods. Meal pods         algorithms in order to enable robots to learn and
                                                      pharmaceutical and personal care industries,             combine freeze-dried fruits, vegetables, and       replicate tasks by observing humans performing
    As of October 2019, the startup raised a total    including the German chemicals giant Bayer               meats as well as raw ingredients such as herbs,    them. The robotic device captures 3D images
 funding of $53 million.                              as well as Danone.                                       spices, and grains. The technology uses three      of a user performing the intended task on a
                                                                                                               types of heat: precision microwave targeting,      specific object, and translates them into robot
                                                         Last January, Mey Eden, an Israeli bottler of         the company’s patented steam technology,           control language.
                                                      mineral water, included a Water.io cap in each of        and conduction heating via the cradle that
                                                      several hundreds of thousands of its six-packs.          holds the meal container. After scanning the          The technology is used in food manufacturing
                                                      The supply sold out in six weeks – less than             meal, the algorithms know how much water           and packaging facilities in Israel and Australia.
                                                      half the time both companies expected – and              to add, the extent of the three heating types to   Many companies in these industries are small
                                                      boosted sales by 60% compared with packs that            use, and when to properly cook each element        and cannot bear the high capital expenditures
    WATER.IO                                          did not include a smart bottle.                          within the container.                              and, more importantly, the ongoing operating
                                                                                                                                                                  and programming expenses associated with
    The innovative smart packaging company,                                                                       The company operates two lines of               adapting industrial robots to their constantly
 Water.io, was founded in 2015 in Ness Ziyyona.                                                                production in Israel and one in Chicago, with a    changing needs. For this reason, the DLR
                                                                                                               combined manufacturing capacity of around 30       technology, which can be programmed over
    The company develops IoT smart packaging                                                                   million meal capsules a year. The company has      and over again by personnel who are expert in
 solutions, which include disposable sensors                                                                   recently begun marketing its smart oven and        the processes and tasks but have no robotics
 within packages that capture data about product                                                               meal pods in the U.S. and Australia.               knowledge, is a unique solution.
 volume, temperature, homogeneity and use.               GENIE
                                                                                                                  As of April 2019, the startup raised a total       As of August 2015, the startup raised a total
    The platform provides a technology that              Israeli smart-oven company Genie Enterprise           funding of $10 million.                            funding of $500K.

32 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                       33
THE ISRAELI FOOD-TECH
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                                                          ecosystem, contributing to Israel’s status as one of                                                              VC firms – Many Israeli VC firms have been
                                                          food-tech’s leading hubs.                                                                                      providing the necessary capital needed to allow
                                                                                                                                                                         the country’s various food-tech startups to grow.
                                                             Academia - Israeli Academia has been enriching                                                              Among these firms are Trendlines - which invested
     BRINGG                                                                                                             YISSUM
                                                          the market with groundbreaking technologies and                                                                in Hargol’s grasshopper protein company; JVP, which
     Founded in 2013, Bringg is a Tel-Aviv                ideas, utilizing years of scientific research expertise.      Founded in 1964, Yissum is the technology        recently entered a cooperation agreement with Mars;
  based delivery logistics platform that enables          Israel is home to one of the oldest tech transfer          transfer company of The Hebrew University of        OurCrowd and Finistere Ventures, which are part of
  enterprises to efficiently manage their complex         companies in the world, Hebrew University’s Yissum,        Jerusalem.                                          the Sparks FoodTech consortium invested in the
  delivery operations. The company, which                 which is credited for the development of thousands                                                             National Food-Tech Center incubator; Agrinnovation
  employs over 70 people, has its headquarters            of various technologies - and has contributed to over         The company serves as a bridge between           - which is part of Yissum and has invested in ChickP
  and R&D center in Tel Aviv, field headquarters          21 success stories in the food-tech industry alone.   37
                                                                                                                     cutting-edge academic research and a global         and Future Meat; FoodLab - which has invested in
  in Chicago, and offices in New York.                                                                               community of entrepreneurs, investors, and          NextFerm and InnovoPro; PeakBridge VC, which
                                                             This uniquely advanced culture of tech-transfer         industry organizations. Since its inception,        recently invested $5 million in Tastewise; Pitango -
     The company developed an innovative SaaS             in Israel has created an effective bridge between          Yissum has registered over 10,000 patents           investors in DouxMatok’s sugar reduction technology;
  tool, which was first used by small businesses          entrepreneurs and the academy, promoting both              covering more than 3,000 inventions, licensed       Medstrada, which recently announced a collaboration
  and is now also employed by the likes of                the growth of the scientific community as well as          over 950 technologies, and produced over 150        with Cornell University, and many more.
  Walmart, Panera Bread, and Coca-Cola and                the transference of more advanced knowledge into           spin-off companies. Yissum is involved with
  others in the enterprise market. Bringg enables         the consumer market.                                       long term industry-university collaborations,
  the companies to run complex delivery and                                                                          startup creation and support, enterprise-directed
  dispatch operations in real-time from first to last        Overall, 16 tech transfer organization are              research and more.
  mile, and enjoy visibility and traceability across      operating in Israel. These include the Weizmann
  the supply chain, all while providing customers         Institute’s Yeda, which contributed technology to             Yissum has been collaborating with Hebrew
  with a seamless experience.                             microbiome innovator DayTwo; the Technion’s T3,            University’s HUgrow, an acceleration track that
                                                          which developed the food-tech behind startups              further supports the development of early stage          JVP
     As of January 2019, the startup raised a total       Algafalafel and OlfaGuard; and Bar-Ilan’s Birad whose      research, together with the Robert H. Smith
  funding of $57 million.                                 technology and knowledge were sold to consumer             Faculty of Agriculture, Food and Environment.            Founded in 1993 by Erel Margalit under the
                                                          wellness startup ContinUse.    38
                                                                                                                     This collaboration has resulted in valuable           famed Yozma program, Jerusalem Venture
                                                                                                                     technological innovations with significant            Partners (JVP) has invested in over 120 companies
                                                                                                                     commercial potential.                                 in Israel, the US and Europe.
The Israeli Ecosystem
   The Israeli food-tech ecosystem - consisting of                                                                      Some of HUgrow's graduates include                    With over $1.4 billion raised through 8 funds,
Academia, VC firms, Incubators and the Government                                                                    producers of GMO-free cultured meat, Future           and a rich network of strategic and business
- supports the different sectors and players operating                                                               Meat Technologies; Better Juice - which reduces       partners spanning the world, JVP has led some
in the field. Together, they create a vibrant food-tech                                                              sugars in fruit juices; Bactusense, and ChikP.        of Israel’s largest and most noteworthy exits.

34 | ISRAEL’S THRIVING FOOD-TECH ECOSYSTEM                                                                                                                                                                                  35
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