A first-of-its-kind AgTech fund is currently underway to boost innovation for AgFood startups in Brazil. New and novel formulations are therefore evolving and advancing to reflect changing consumer needs.
Focusing on the key nutrition trends in Brazil and the wider Latin American market at present, Francisco Jardim, Co-Founder, SP Ventures emphasizes that LATAM is being “absorbed” by many of the global nutrition trends. Brazilian and Latin American consumers are also responding to nutrition needs, causing food formulators, manufacturers and marketers to respond.
Animal protein is currently disrupting the nutrition scene and is a category that is “most threatened by nutritional trends”, Jardim noted.
Leading animal alternative trends
Speaking to NutraIngredients LATAM, Jardim explained that there are currently three “very strong shifts” in the region. These are coming from new demographics that are “pushing away” from an animal protein-rich diet:
- Health concerns involving cancer and cardiovascular diseases
- Sustainability awareness including global warming, deforestation and water inefficiency, associated with the current livestock production system
- Animal care and welfare attention
Animal-to-grain investment
Away from animal protein, Jardim revealed that these three drivers are causing new demographics to turn towards more “grain protein” diets. Moving forward in 2020, animal-to-grain consumption is a “key factor behind venture investment in alternative protein sources”.
Brazilian and Latin American nutritional startups are engaging with these specific demands and trends to enhance their nutritional offerings for consumers.
The impact of the digital environment
Digital transformation is taking over the agribusiness value chain, causing several important shifts in nutritional offerings to consumers to take place, Jardim highlighted. Namely, these revolve around those digital implications that are “powered by traceability and direct to consumer” models.
“Digitalization brings transparency,” added Jardim. In the LATAM landscape, for example, farmers are starting to manage their operations with cloud-based farm management systems (FMS) and monitor their crops with drones and satellites. By adopting these digital processes and implementing them into their daily operations, farmers start to build up data to show consumers how their food is developed.
As a result, “nutritional demographic shifts have a direct ability to engage new preferences and alter (incentive) new production systems”, which are then able to create more sustainable and nutritionally-dense food.
Ultimately, there is a key trend of “more accountability” on farmers towards both what and how they produce.
A new business model
Also, the AgTech and AgFood environments are seeing startups enable direct-to-consumer business models, which is disrupting “traditional retailing and distribution centers”. By invoking such disruption, there is “a window of communication that shortens the distance between where and how food is manufactured and end consumers”.
Startup Pink Farms is “surfing these trends” by producing microgreens in São Paulo, Brazil. Focusing on sustainability efficiency, the vertical farming outfit’s microgreens contain 98% less water and zero agrichemicals.
The brand delivers the produce hours after it is harvested to end consumers, such as restaurants. Digital transformation advances Pink Farms brand as its value proposition is enabled by technology breakthroughs in automation, robotics, artificial lights and the recently built last-mile logistics platforms.