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Exciting times ahead…Eight emerging trends in food technology in 2023

By Guardian Nigeria
09 February 2023   |   2:00 am
Over the past decade, the African tech ecosystem has been in the spotlight by breaking fundraising records, industry collaborations or acquisitions.

Global food and energy prices. PHOTO: gettyimages

Over the past decade, the African tech ecosystem has been in the spotlight by breaking fundraising records, industry collaborations or acquisitions.

In 2022, total funding invested into tech startups in Africa reached $6.5bn, an increase of eight percent vs 2021, spread across 764 deals – compared to 724 rounds in 2021, according to Partech Africa.

Fintech remains the most funded sector in Africa, across all sources of capital, with 39 percent of the total equity volume ($1.9bn) and 45 percent of the total debt volume ($691m).

With a growing population and rising demand for agricultural produce, investments in agriculture technology solutions have been growing rapidly worldwide. The global agritech market was valued at US$ 17,442.7 million in 2019 and is projected to reach US$41,172.5 million by 2027. It is expected to grow at a CAGR of 11.3 percent from 2019 to 2027.

In Africa, fundraising by startups stood at $482.3 million in 2021, a 250 percent growth from a year earlier. With agritech hotspots also rapidly expanding in countries like Nigeria, Kenya and South Africa, here are eight trends to watch in food technology this year.

1. Population Growth and Demand For Food

According to the United Nations, more than half of the projected increase in the global population up to 2050 will be concentrated in eight countries, including the Democratic Republic of the Congo, Egypt, Ethiopia, Nigeria, and Tanzania. While the population in about 61 countries or areas is expected to decrease by at least one percent over three decades due to sustained low fertility levels and emigration, the African population is expected to multiply.

In addition, the continent also has a growing class of middle- to high-income urban-based Africans who are interested in commercial farming.

Accordingly, this will lead to an increased demand for agricultural land, which will, in turn, drive up land values. As the urban population and incomes grow, it will also drive an explosive growth in food demand. Due to the recent floods and high fertiliser prices, Nigerians must be prepared for higher food prices and food insecurity in 2023 due to recent floods and high fertiliser prices.

In the first quarter, it is expected to affect the food supply up until March 2023. To prevent future food crises, governments and private institutions must invest in crop intensification technology and climate-smart agriculture so farmers can maintain their crops throughout the farming season.

2. Virtual Restaurants & Cloud Kitchens

As the pandemic decimated the hospitality industry, restaurants, bars, and hotels responded to stay-at-home orders, lockdowns and social-distancing restrictions by embracing new revenue streams such as takeaway cocktails, online cooking classes, e-commerce and reliance on delivery – with Bolt Food, Chowdeck, Jumia Food and others experiencing exponential growth.

The demand for delivery has led to a surge in ghost kitchens, host kitchens and virtual brands. A state-of-the-art, tech-enabled, delivery-only kitchen facility that can house a multitude of brands, including satellite locations of brick & mortar restaurants and virtual brands. This could be a miniature, delivery-only restaurant within existing restaurants or virtual brands with delivery-only concepts but no connection to an existing restaurant.

These have become increasingly popular and have evolved into a stable business model. With a rising urban population and a bourgeoning middle class with different palates, it provides more opportunities for industry players to interact with technology, especially rapid and recurring deliveries, fully cooked, partially cooked or raw items for meal kits. It will also expand viable economic opportunities and expand the customer base.

3. Building food self-sufficiency and reducing food wastage
The African continent generates more than 100 million metric tonnes of food yearly, equivalent to $4bn, which could feed 44 million people. However, around one-third of food produced is lost or wasted, resulting in an estimated $1 trillion annual economic losses. In sub-Saharan Africa, the estimate is roughly 37 percent, with 120 -170 kg/year per capita failing to make it to the consumer during procurement, transportation and distribution.

The COVID-19 pandemic exposed the weaknesses in the global food system, especially with the disruption of supply chains due to lockdowns, travel restrictions and economic downturns. But tackling the scourge of food loss and waste represents a triple-win opportunity for the climate, and food security, including the sustainability of agrifood systems and ensuring that the most vulnerable have access to safe and nutritious food.

There is greater recognition that the food system needs to be made more sustainable, including tackling the issue of food loss and waste. Recently, a $150 million investment fund recently launched by a consortium of investors formed by African Infrastructure Investment Managers (AIIM), Bauta Logistics and Mokobela Shakati to combat food waste and improve food security in sub-Saharan Africa. These investment companies, all based in Africa, will invest in food preservation infrastructure through the Commercial Cold Holdings (CCH) platform.

Prioritising the reduction of food loss and waste is therefore critical for the transition to sustainable agrifood systems that improve the efficient use of natural resources, lessen their impact on the planet and ensure food security and nutrition.

4. Regenerative Agriculture
Regenerative Agriculture refers to “farming and grazing practices that, among other benefits, reverse climate change by rebuilding soil organic matter and restoring degraded soil biodiversity. Techniques such as aquaculture, agroecology, agroforestry, composting, holistic planned grazing, no-till, pasture cropping, and perennial crops can help avoid environmental and ecological catastrophes.

As governments and stakeholders try to mitigate the impact of floods and climate change on food security, regenerative agriculture will take centre stage in 2023. For example, farmers are increasingly taking the ‘au naturel’ approach with minimal use of chemical fertilisers, ‘green’ water management and the active rotation of crops.

The cycle of legumes, such as beans with maize, is one example of the remarkable practices farmers have been using in various parts of Africa to improve soil quality, reduce pests and diseases, and improve crop performance.

Similarly, intercropping (growing one crop next to another) improves farm biodiversity and soil quality and helps farmers reduce their dependence on one crop. Also, they are encouraged to plant a diverse range of produce to feed different nutrients into the soil.

The future of modern African agriculture must see more circularity and deliberate adoption of regenerative agricultural practices.

5. Accelerated pace of technical innovation in digital agriculture

There is considerable progress in adopting technical, institutional and systemic innovations in the African agricultural sector. For instance, compared to other regions, the rapid adoption of mobile phones and internet connectivity has accelerated agricultural services deployment for farmers, contributing to social, economic, and technological progress among farming households. In addition, farmers can now access information across the agricultural and food value chains – such as price, input and output market situations.

The growing trend in digital finance has also driven access to necessary capital to enable farmers and other value chain actors to engage in more robust farming and value chain activities. As a result, there is great potential and synergy between top-down innovation (from research institutions) and bottom-up (from farmers) to ensure sustainable agricultural growth and improve food and nutrition security. But the continent can only achieve the full potential of a digital agricultural revolution through increased investment in communications infrastructure in rural areas. Africa’s digital ecosystem offers massive potential to spur economic recovery, promote opportunity, advance social equality and gender equality, and create jobs.

While the pace of technical innovation across the agrifood value chain is considerably lower when compared to other sectors, digitisation of agriculture remains the most effective way to reduce the climate impact of farming as well as the impact of looming economic slowdown in certain regions, so enterprises and governments globally will accelerate technology investments in agriculture – leveraging advancements in cloud computing, earth observation, remote sensing, data, and AI/ML (Artificial Intelligence/Machine Learning) models – to help the sector unlock new possibilities.

6. Increased use of renewable energy sources, such as solar and wind
Many African countries have low electrification rates, with millions of people still needing access to electricity. Renewable energy sources, such as solar and wind, can help improve access to energy in rural and remote areas, often served by something other than traditional energy grids. The continent has the wealthiest endowment of renewable energy in the world. China has already committed to investing up to $1.2 billion to establish 40 mitigation programmes in more than 30 developing countries.

Food insecurity comes at a high cost. According to the African Development Bank, Africa spends $64.5 billion importing food commodities that could be produced locally, including rice, beef, soybeans, sugar and wheat. This figure is projected to increase to $110 billion by 2025. Amidst disruptions such as climate change and a rapidly-returning pandemic, a decentralised, renewable energy resource can be a critical solution to boosting food production and establishing more resilient food systems.

7. Improved Demand Forecasting and Planning
Current technology allows for high-quality improvements to be made in the supply chain, and it ensures operational efficiency. Tools such as ERP solutions and farm management software optimize workflow processes and improve business productivity through automation. Due to the pandemic, more companies are becoming open to incorporating innovative technologies into their supply chain management techniques in order to increase accuracy and sustainability, leading to more precise and efficient processes. New technology and applications such as GPS systems, delivery route planner apps, inventory tracking systems, cloud-based communication systems and predictive analytics are now crucial for decision-making for transportation, inventory, and procedures.

Food producers will continue to leverage technology for demand planning, and forecasting is an efficient way to stay on top of the supply chain management process within the food industry. Using technology to forecast product demand will ensure they have the right inventory, safety stock, and processes to meet the demand. This will also be improved with automated data analytic systems to provide the latest data, show how certain events and promotions affect inventory and production, and predict seasonal demand increases.

8. Agri-financing and sustainability investments will skyrocket
The United Nations recently noted that the world needed to do more to help poorer nations withstand the effects of global warming, as climate adaptation finance has been woefully underfunded. However, there has been an improvement in 2022, which is expected to continue in 2023.

Examples can be seen from PepsiCo’s recent $1.25 billion 10-year Green Bond announcement to fund eligible Green Projects and The Bill & Melinda Gates Foundation’s pledge of $1.4 billion to help smallholder farmers in sub-Saharan Africa and Asia build climate resilience into their work practices, including the US Department of Agriculture’s plans to invest up to $2.8 billion in 70 selected projects under the Partnerships for Climate-Smart Commodities plan. More private institutions are expected to contribute and invest in the sector.

*Wale Oyepeju is the co-founder and chief technology officer of Vendease, an online marketplace that connects restaurants and other food businesses directly with manufacturers and farms.*

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