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Agri food tech

Spain sees huge growth in its agri-foodtech ecosystem, with investments of €268 million in 2022, ICEX report reveals

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5 min read
AUTHOR: Fiona Holland
Typical Andalusian landscape of olive groves surrounding a farmhouse

Investment in the Spanish foodtech sector reached €268 million (almost £236 million) in 2022 and grew by 9.38% in the past year, according to the latest report from ICEX Invest in Spain.

Last year, global investment in foodtech start-ups and scaleups reached $27 billion, a 44% decline in comparison to 2021, yet the report reveals innovators in Spain still managed to thrive.

Around 43.5% of investment in start-ups in 2022 was at the seed stage, while the number of start-ups in their Series A round was close to 30%.

Spain is one of the major agricultural markets in the EU. Currently sitting just behind China and the US, it is the third largest global exporter of fruit and vegetables. It is also a leading exporter and producer of olive oil, making up 60% of EU production and 45% of international supply. In 2021, exports reached 17.1 tons, the report says.

Food and drink is the biggest manufacturing industry in Spain, representing 25.4% of the industrial sector, making it unsurprising to see why the country has seen such success and growth in its food tech sector.

The space has prioritised the development innovative solutions to tackle a range of issues within the industry. According to the report the main areas of focus for start-ups in 2022 included:

  • Finding new ways to develop alternative proteins
  • Creating infrastructure for the provision of animal-free proteins
  • Developing functional ingredients
  • Making the agrifood industry more efficient
  • Bringing sustainability and foodtech together to provide solutions and achieve Sustainable Development Goals (SDGs.)
  • Creating a new approach to foodservice

The research also revealed the highest number of start-ups work in food production and transformation (34%.) The most popular sector for Spanish start-ups that followed was agrifood and logistics, distribution and retail – which interests 24% and 25% of start-ups respectively. The remaining 16% of businesses operate in restaurant tech.

More than half of Spanish start-ups are working in new product development due to the growing interest in alternative proteins, with close to 22% of them also looking at new sources of ingredients.

Spain is home to 412 start-ups in total, with 32.9% having patents for their technology and nearly 30% having a trade secret, according to a study from investment firm and Food Matters Live partner Eatable Adventures.

In addition, the country also hosts around 50 specialised universities and more than 20 cutting-edge technological centres. Technological centres in particular are working to develop sustainable and healthy food solutions. Some of the most prominent in the F&B innovation space include CTIC-CITA, AZTI technology centre, and MAAVi Innovation Center. Research parks, have also acted as essential spaces for scaling innovations. Elche-based start-up Oscillum for instance was able to develop its smart packaging to avoid food waste with the support of the University of Miguel Hernández in Elche.

Innovation ‘clusters’ have also been noted for their growing role in facilitating the collaboration of various agents. Among these initiatives is the Foodwaste for Foodpack project, promoted and organised by the Packaging Cluster, which aims to create compostable packaging using organic food waste produced by the industry. Another is the first association of plant-based products, Vegetales, which was founded last year and aims to bring together the country’s primary plant-based drink brands such as Alpro, Frías, Iparlat, Liquats and Vivesoy.

A wide variety of incubators, accelerators and innovation hubs have also helped to drive the growth of food tech in Spain. Within the private sector, Eatable Adventures launched its Spain Foodtech incubation programme together with ICEX and CNTA for national agri-food tech businesses. Last year also saw the launch of the first alternative proteins workshop led by ProVeg International in collaboration with Madrid Innovation Hub. Several multinational agricultural companies such as Syngenta and John Deere have also started recognising Spain as a centre for innovation by opening their own hubs.

More traditional food companies in Spain are too showing support for agrifood-tech, the report shows. One example is the meat, dairy and cheese producer COVAP, which launched an open innovation programme in 2022, where start-ups were picked to work together with the organisation and develop new innovative products. One start-up among many chosen last year includes Cultiply, which develops High Cell Density Cultures for the ingredients sector. Some major national companies have also acquired start-ups, such as DACSA, which completed its eighth purchase of alternative protein startups in the past year.

Start-ups are also receiving support at a national level from government agencies. One example includes ICEX which launched the second edition of its Desafía Foodtech – an international immersion programme in the Netherlands supported by Next Generation EU. The initiative aims to boost internalisation and accelerate growth of Spain’s foodtech sector.

2022 also saw the establishment of the PERTE project, which plans to support the transformation of the country’s agrifood chain – making it more digitised, modern and prepared for taking on a range of environmental, social and economic challenges within the next ten years. PERTE is supported by the Ministries of Agriculture, Fisheries and Food; Industry, Commerce and Tourism; Economic and Digital Transformation and the Ministry of Science and Innovation. The Ministry of Agriculture also launched the Agroimpulso initiative in collaboration with the Empresa Nacional de Innovación (National Innovation Company), which will grant loans to agri-food SMEs and agri-food tech SMEs that are working on technology-based activities.

Investment has been key to the success and growth of start-ups in Spain throughout 2022. The biggest round raised in this period was €52 million by restaurant management software platform CoverManager, followed by sustainable and healthy food company Flax & Kale at €22 million, and plant-based meat producer Heura, which received €20 million in 12 hours through crowdfunding and convertible notes.

Some major national investors supporting foodtech were Clave Capital, which invested in seven Spanish start-ups over the past year through its Tech Transfer Agrifood platform. Eatable Adventures was also noted for its consistent investments in alternative protein start-ups such as Innomy. When it came to international investors, major companies like Cargill have also shown interest in Spanish start-ups over the past year, investing in cultivated fats specialists Cubiq Foods, as well as cultured meat technology developer Cocuus.

Highlighting the importance of working towards a sustainable and secure food system on a global scale, ICEX (ICEX ESPAÑA EXPORTACION E INVERSIONES, E.P.E) will be one of the international partners at the Sustainable Food Forum taking place in London on 19-20 September 2023.

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