Just under 11 percent of German startups work in the food and nutrition sector. In total, more than 150 food startups were founded in Germany in 2019. Almost 90% of them generate sales in a wide variety of trendy areas. For established brands, they are formidable competitors, often enough capturing relevant market share. For packaging manufacturers and machine builders, on the other hand, they offer attractive growth opportunities. We provide an overview of the market and trends.
Startups are always worth a look for equipment manufacturers and suppliers of technology, materials and services. After all, the dynamic new players not only create new demand, they also often take enough market share away from the established brands.
Since startups do not yet have established partners along the value chain, especially in their early stages, they offer companies in the packaging industry good opportunities for new business and joint growth.
Startups in Germany: facts
- Most German startups are involved in software. Just under 11% are active in the food and nutrition sector.
- In 2019, more than 150 food startups were founded. Almost 90% of them generate sales, one in three makes a turnover of 1 – 150,000 €.
- Along the entire value chain of the German food industry, around 5.8 million employees work in approximately 700,000 companies.
- In total, more than 2,289 startups were founded in Germany in 2019. Berlin, Bavaria and NRW are the “startup hotspots” with a combined total of 1,343 startups.
- The most important business areas of German food startups are new products and delivery services.
- The average age for German founders is 35.
- Business Angels account for the largest share of startup financing at 74%. Venture capital follows with 12%.
Trends: Fertile ground for founders
Most startups look for emerging or ongoing trends that they can serve and innovate. We present the most important trends and their sub-topics here.
Consumers
- Individual health
- From general nutritional recommendations to individualized nutritional counseling tailored to one’s DNA or personal bowel microbiome.
- Responsibility – Social responsibility:
- Reduction of meat consumption (less meat; flexitarian, vegetarian or vegan diet).
- Alternative meat or protein sources (for example, insects).
- Regionality (local food for more animal welfare, short transport distances and less preservatives or chemical additives).
- Transparency (blockchain and new authentication technologies for environmental and social responsibility and equity).
Technology
- Hightech farming.
- Vertical farming. Vertical greenhouses in supermarkets.
- Underwater farming. Crops on the ocean floor.
- Floating farms. Floating farms are considered environmentally friendly and resource-saving. They are used for animal and plant breeding.
- Agricultural platforms. Food directly from the producer.
- Synthetic food.
- Biologically active plant substances.
- Ghost kitchens. Restaurants where only cooking is done, but no guest is served.
Products
- Phyto-nutrients. Foods that provide benefits for the immune system.
- Superfruits from the Amazon and the Andes. Mostly high in vitamins and minerals. Examples are Buriti, Camu-Camu and Maca.
- Plant-based food.
- Liquid evolution. Beverages are also becoming more functional. Examples are infused beer, fiber water, protein water, cold brew coffee or mocktails with superfoods.
- Non-alcoholic spirits.
- Functional teas. Here, the ingredients are supposed to lower blood pressure or provide energy.
Next Level
- Agritech & Smart Farming.
- Digitalization of production and new cultivation methods. The goals are an efficient and accelerated breeding progress, reduced emissions and environmentally friendly production.
- Cellular Agriculture. Here, bacteria produce nutrients in a sustainable way.
- Food robots. For example, for the production of burgers without human intervention.
- 3D food printing. To simplify the cooking process by food pressure. The starting product comes in capsules for this purpose. The printing of living cells is still in the experimental phase.
Best practice: Successful food startups
- Just Spices has revolutionized the market for spices, which until then had been dominated by traditional manufacturers and importers.
- Grillido has successfully entered the sports nutrition market with high-protein sausages.
- Luicella’s Ice Creams builds on an unprecedented combination of their own ice cream parlors, DIY kits and ready-made supermarket products.
- YFood has revolutionized the “in-between snack” market with a new drinkable meal.
- UNMILK was founded in the middle of the Corona crisis and has already made it into almost all Rossmann stores with plant-based protein drinks.
Food startups: Always worth a look
Startups have enormous potential. The fact that they are taking market share from long-established brands has long been proven and is not an isolated case. Our clear recommendation is therefore to explore the exciting segment of fast-growing startups and keep a constant eye on them. Because new players need new packaging, machines and services. Those who get their foot in the door in good time can book new growth.
