Why is Israel so prominent in the FoodTech industry? An interview with Amir Zaidman, VP Business Development of The Kitchen FoodTech Hub

  • Why is Israel so prominent in the FoodTech industry? An interview with Amir Zaidman, VP Business Development  of The Kitchen FoodTech Hub (the-kitchen-7.jpg)

Amir Zaidman is Vice President of Business Development and a member of the founding team of The Kitchen FoodTech Hub opened in 2015 by The Strauss Group, one of Israel’s largest food producers, as part of the Israeli Ministry of Economy’s Technological Incubators Program.

He provides business development support to the portfolio companies in all aspects of their business, from go-to-market plans to pitching to investors.

Amir Zaidman has close to 20 years of experience in business development and early stage investments in several technology sectors.

We talked to Amir about the structure and daily operations of The Kitchen FoodTech Hub, the role of Israeli companies in the modern FoodTech industry and the upcoming FoodTech IL 2019 event that will take place on the 23rd of September in Tel Aviv.

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    Amir Zaidman

These days, we hear of numerous Israeli companies working in the areas of cell-based meat, food safety and sustainable packaging. Why is Israel so prominent in the FoodTech industry?

There are several reasons for this phenomenon. One of them is that Israel as a country is very entrepreneurial in its nature. Our people are impatient and creative, they are always thinking about the next big thing they want to do.

Considering the importance and relevance of food for our health and environment, Israelis understood that the next big thing should be in FoodTech.

Another reason is the geopolitical position of Israel. As it mostly relies on its own resources and not on trading, the country developed strong expertise in inventing agricultural and food technologies and established an independent food economy.

And there is also government support in this sector. It comes in the form of technological incubators like The Kitchen FoodTech Hub and The Sparks FoodTech Incubator, also sponsored by the government, that will be launched next year.

It has been four years since The Kitchen was founded. What are your key learnings?

From the very beginning, we have been working not necessarily with food products but rather with FoodTech companies that deal with food safety, logistics, supply chain, packaging, circular economy, food processing or manufacturing.

The Kitchen is both a seed investor and technological incubator. We invest from 700 000 to 900 000 USD in a startup and provide it with an incubation facility. Our cooperation period lasts longer than in an accelerator format, we are not working in classes or cohorts.

To answer your question, we learnt a lot. One of the main learnings is that collaboration between a FoodTech startup and a food company may be very difficult as there is a huge cultural gap. Corporates find it hard to understand the needs of startup companies and find a way of working with them.

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    Team of The Kitchen FoodTech Hub

One more thing: you have to talk to your potential customers as early as possible. Sometimes entrepreneurs prefer to get their technologies in the lab close to perfection before they go out and talk to potental customers. It is a big mistake. You can develop a great technology that will be perfect in your eyes, but customers want something different, sometimes even pretty trivial.

Talk to your audience as early as possible: make a consumer panel or do a public tasting if you are working in B2C segment; as a B2B company you can offer a trial or special conditions so your potential customers and partners could get a feel of your product.

Do you have partnership agreements with stores where your portfolio companies can collect consumer feedback on products and solutions?

Our startups work with very different products and have different needs. For example, Aleph Farms was the first company in the world to demonstrate a cell-based beef steak. They are still not in the market with their product and therefore don't need a shelf space; we offer them technical, operational and business development support. However, we have a network of international partners that can help our portfolio companies in various aspects of their development.

We have partnerships with Mitsui in Japan and Haier from China. In Europe, we are cooperating with Danone and Givaudan, in the US — with PepsiCo and Mondelez International. They share their know-how and act as strategic partners for our startups throughout their journey at The Kitchen.

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    Startup working in The Kitchen

How does the daily operational work at The Kitchen look like?

Our hub is a startup-oriented environment, designed as a coworking space. Every startup has its dedicated office and a lab based on their specific needs. Inspecto, for instance, develops a nanoscale portable device for early detection of food contaminants in the field. Their lab has sophisticated optical equipment that identifies pesticides, herbicides and everything else that you don’t want in your food.

Better Juice is a company that reduces the amount of sugar in natural fruit juice. As this startup works with enzymatic processes, their lab is biological.

We also have a large communal space, the kitchen of The Kitchen, where we gather for lunches and happy hours. We created a strong community where all the startups interact and cooperate. Each startup has 3 to 5 employees in the team. Many of them are travelling frequently, trying to scale the business.

The Kitchen team works closely with each one of the startups on their existing challenges. We rely on the expertise of Strauss Group as they have a lot of knowledge and expertise that FoodTech startups need. Sourcing of raw material, packaging, labelling, regulation, process engineering — someone at Strauss Group is an expert in that area.

At our FoodTech Hub, we have room for 12 companies. A typical program lasts for 18-24 months but some startups stay longer, we allow that if we have some space available. Startups that graduate move to their own facility.

What are you looking for in the startups that are applying for The Kitchen FoodTech Hub?

The requirements are roughly the same that any investment company or group would have: big market, a major problem to solve, unique technology, scalability, a team of entrepreneurs that can grow the business. It doesn't need to be a food product, we work with various technologies that add value to the food industry. As our motto is: better industry, better food, better world, we look for the companies doing something good for the environment, nutrition, the planet.

Tell me about one of your graduate startups you are proud of.

Aleph Farms is a good example of that. Initially, we approached professor Shulamit Levenberg who was a Dean of the Faculty of Biomedical Engineering, Technion Institute of Technology and an expert In tissue engineering. Together with her and the team we recruited for this purpose we started a FoodTech business in the clean meat segment.

18 months later, Aleph Farms was the first company to ever demonstrate a steak grown in a lab environment from cow cells. The company moved on to raise 12 million dollars in series A round and keeps scaling rapidly.

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    FoodTech IL 2018

How do you see further development of The Kitchen?

We want to maintain our leading position in early-stage investment and incubation for the most promising FoodTech startups. We are expanding in terms of verticals where we invest, food retail for instance, but are not planning to change our scope dramatically. As we keep supporting our graduate companies, there will be a lot more work within the next four years.

We also aim to bring more multinational companies so they could experience different fields of innovation that The Kitchen companies are working on.

What awaits us at FoodTech IL 2019?

FoodTech IL 2019 is the seventh FoodTech symposium that we are organizing. In 2017, it became international — people are coming from different countries, all the way from Japan and Brazil. Most of the global food leaders send their top-level executives, so the main focus of FoodTech IL is about networking and creating business opportunities. We prepared a very interesting agenda as well as an exhibition of over 50 startups.

FoodTech IL is a part of Israel's AgriFood week that takes place from the 23rd to 26th of September. We are going to have other events around FoodTech, AgriTech and RetailTech with multiple receptions, meetups and workshops. You can find the full list on this website. Hope to see you there!

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