Food and drink start-ups to watch

The food and drink industry is the UK’s largest manufacturing sector, with an estimated 8,285 SMEs employing 148,000 employees and 260 larger businesses employing 294,000 in 2022.  

The sector is undoubtedly competitive, with conglomerates taking the lion share of turnover (£76bn vs £22bn for SMES last year). But there’s some truly amazing start-ups and challenger brands coming into the space – here we learn a bit more about a few of them hoping to make a breakthrough.

Cultivated meat offers potential

According to independent think tank, the Green Alliance, the UK’s sustainable protein market could be worth £6.8bn by 2035, employing 25,000 people​​.

While this growth looks set to be driven by numerous innovations, such as plant-based products which are already commonplace, cultivated meat is a new technology that plenty of start-ups are excited about.

Referred to as cultivated meat, cultured meat, cruelty-free meat or lab-grown meat, it is essentially meat grown from cells inside cultivators in a facility similar to a brewery. Currently, it is only legal for these products to be sold for human consumption in Singapore and the USA, while regulatory processes are ongoing in European countries including the UK and the Netherlands to ensure its safety.

Israeli start-up Aleph Farms is the only company to submit an application to sell cultivated meat in Europe to date, having done so in the UK and Switzerland, but there are multiple firms located across the continent targeting a commercial launch in the near future.

Based in Oxford, Ivy Farm Technologies has already developed a range of products that consists of cultivated British pork as well as Aberdeen Angus and Wagyu beef. It partnered with Northern Irish artisan food producer Finnebrogue earlier this year (July 2023) as part of its aim to develop cultivated Wagyu beef burgers, and has patents pending in 12 countries around the world in anticipation of regulatory approval.

“We’re making delicious real meat, but without the guilt and the negative impacts eating traditional meat has on people, planet and animals​,” Ivy Farm chief executive, Rich Dillon, told Food Manufacture.

“It’s healthy and nutritious with all of the essential amino acids, iron and protein that consumers need, and we believe it’ll convince more people to incorporate more sustainable proteins into their diets​.”

The start-up currently operates a pilot plant with a 600L bioreactor and is in the process of finding a location for its first manufacturing facility. To date, Ivy Farm has raised $30m (£23.7m) in funding, but hopes to attract further investment as it looks to scale operations and begin its commercial rollout.

“While we hope to launch our products in the UK and Europe, we will also be looking to the US and Singapore as markets that have already defined clearer regulatory pathways​,” Dillon added.

Meanwhile, Dutch start-up Meatable was announced earlier this year as one of two firms to take part in cultivated meat tasting sessions in the Netherlands. It raised $35m (£27.5m) in funding earlier this month (August 2023)​​, with total investment in the firm now tallying $95m (£74.6m).

Meatable, like Ivy Fam, is eager to launch its range of cultivated meat products and hopes that the tasting sessions this Autumn expedite the regulatory process.

“[The tasting sessions] mean that we can let consumers taste and experience our products and make our products even better with their feedback​,” a Meatable spokesperson divulged.

“Our goal is to make the tastiest products that are indistinguishable from traditional meat accessible to everyone, without harming people, animals or our planet. This development brings that goal one step closer.”​

Natural beverages and gut health

Aspartame, a sweetener used in diet soft drinks and low calorie foods, has been in the news this summer following the publication of two studies into its safety by World Health Organization (WHO) bodies.

While the acceptable daily intake for human consumption was not altered by the WHO, its cancer research arm, the International Agency for Research on Cancer (IARC), decided to change its classification and brand aspartame as “possibly carcinogenic to humans​​”.

The findings from these two studies have not resulted in reformulation across the food and drink industry as of yet, with a Food Manufacture feature published earlier this month (August 2023) analysing the debate in more detail​​.

However, while Coca-Cola and PepsiCo continue to use aspartame in their diet products, Belgian start-up FHIRST is focused on producing a “great-tasting soda​” that is made without sugar or sweeteners.

Its debut product, FHIRST Living Soda was launched in March 2023 by Steven Van Middelem, the company’s founder who has 20 years of experience in the food and drink industry.

“Both my wife and I still felt there was something missing​,” Van Middelem told Food Manufacture in reference to the existing soft drink market.

FHIRST Living Soda took two years to develop and is made with all natural, zero sugar living sodas that look to combine the benefits of both probiotics and prebiotics. It is available in cherry vanilla, ginger mandarin and passion fruit flavour.

“We’re all about delivering zero- sugar better-for-you sodas that promote gut, immune and brain health, as well as being big on taste​,” added Van Middelem.

“Each 330ml can of FHIRST contains two billion living probiotic cultures, microencapsulated for stability and allowing for controlled release in the gut.”​

The next step for FHIRST is translating its vision into a commercially viable business, overcoming the challenges that present themselves on the way.

“At the start-up stage you have to deal with every aspect of the business from creative to numbers, through to market standards​,” Van Middelem explained.

“I believe it’s important to always keep the bigger vision and mission on the horizon, not only for the founders but for every person involved in the company. I love the entrepreneurial energy vibrating in start-ups. It’s this energy we need to effect true change and disrupt the status quo​.”

Reduced sugar trend drives funding

The trend towards reduced sugar products has picked up steam in recent years, with many people keen to watch their intake of overly sweet treats.

Data from taste and nutrition specialists Kerry Group, published in May 2023, found that attitudes towards sugar among consumers continues to worsen, with 12,000 people across 24 countries surveyed.

In light of this development, start-up Fearne & Rosie is hoping to take its healthier jam products mainstream with the support of nearly £500,000 in investment.

The funding round was led by core investor TwinklHive and will be used to support product innovation and marketing, as well as building its retail distribution network.

Each jar of Fearne & Rosie jam contains 70% real fruit and contains 40% less sugar than an average jam product. The business has grown more than 400% in the past 12 months and is projected to hit £5m in turnover by 2025.

Stocked by Ocado, Waitrose, Morrisons and Amazon, it is also committed to reducing childhood obesity through its fundraising efforts. A Food Foundation report published in June 2023 analysed concerns surrounding high sugar products aimed at children​​.

“I’m excited to be working with [the investors] on driving the strategic development of Fearne & Rosie, helping propel the business from challenger brand into the nation’s favourite jam brand​,” said founder Rachel Kettlewell.

“All our investors share our vision of wanting to make a positive impact, and I believe the next 12 months will be truly game-changing​.”

Funding for Fearne & Rosie was also provided by angel investment community, Obu, which supports women in business.

“Rachel's start-up story inspired us and the Obu community from the get-go,” ​said Obu co-founders Sarah King and Claire Dunn.

“Fearne & Rosie is a great example of a purpose-led, innovative, commercially strong female-founded business - the type of business that, as we increase the number of diverse angel investors in the UK, has an opportunity to really flourish and grow​.”