May 29, 2019

By Lynda Kiernan

Bits x Bites, the first food-focused VC fund and accelerator launched in China, has partnered with a multinational consortium of ag, biotech, processor, and food giants to launch the China Food Tech Hub, a new model to foster cooperation between startups and global leaders in the space.

The consortium backing the hub includes General Mills, Coca-Cola, PepsiCo, Danone, Louis Dreyfus Company, Givaudan, Griffith Foods, Novozymes, Nutreco, and Puratos. Each partner, along with Bits x Bites has agreed to share insights and collaborate in order to accelerate the food tech ecosystem in China.

“Like most parts of the world outside of EU and US, food tech is still in its infancy in China and there hasn’t been a strong ecosystem to support startups in this space,” said Matilda Ho, founder and managing director of Bits x Bites. “As China’s first food tech VC, we see an opportunity to bridge and strengthen these partnerships and hopefully make it easier for startups and corporations to share insights and work together.”

Ho launched Bits x Bites in Shanghai in 2016. As the first food-focused VC in the country, the fund has a mission to invest in food tech startups situated along the entire food chain from field to fork in order to address the specific challenges faced in China’s food system.

Over the past three decades, China has rapidly undergone a significant shift from being largely rural and agrarian to a more urban and market-engaged society. This rather jolting change has brought food production away from fragmented small holders and into the realm of commercially-scaled industrial agricultural production. And although this has resulted in a rising of the standard of living in the country, it has also created a system fraught with challenges to be addressed including food safety, environmental contamination, and standards of animal husbandry.

While attending business school in the U.S., Matilda Ho experienced a new relationship to food, becoming more food conscious and more aware of the importance of sustainability and the connection between food production and the environment.

Ho noted that China’s consumers are willing to pay more for higher quality, safe, and sustainably produced food, however the country’s food and beverage companies have not kept pace with consumer sentiment, often becoming mired in food safety scandals, increasing consumer mistrust.

“There are more and more entrepreneurs aware of [China’s food system] challenges, but they don’t have enough capital, experiences, or the mentor network to help them succeed and grow rapidly,” Ho told Tech in Asia in 2016.

Now, Bits x Bites is launching the China Food Tech Hub as a neutral platform through which companies can work with startups and each other to develop smarter ways to innovate, address challenges, and create new growth opportunities.

All the participating multinationals are looking to expand their presence in China, and through regular meetings, the consortium will exchange insights, and work with food tech startups on pilot projects and other venues of collaboration.

For legacy food companies this can mean working to develop new ingredients and products, or the fleshing-out of new business models, while connecting with small startups that are highly plugged in to shifting consumer trends.

“The Chinese market evolves at an incredibly fast pace,” says David Machiels, R&I Director Asia Expansion and Innovation Acceleration at Danone. “To maintain our edge in the categories where we play, we believe that it is key to be able to identify emerging new ingredients, technologies, product formats and business models in order to define new innovation opportunities for our consumers.”

“By working with the startup and corporate community through the China Food Tech Hub, we want to contribute to further build the food tech ecosystem in a collaborative way, feed our innovation needs and identify new project opportunities in China.”

And for biotech companies, this collaborative project offers tie-ins with food and beverage startups that could provide new ways to apply their technologies to the rapidly growing consumer industries.

“At Novozymes, innovation is the key to our business and in helping our customers drive business growth,” said TC Tan, vice president, Novozymes. “With the ongoing consumption upgrade and increasing consumer focus on health, wellness and natural products, we look forward to exploring collaboration opportunities with food and beverage startups and other stakeholders to bring forth even more impactful innovations to meet the diversified demand of the Chinese consumers.”

Granted, each multinational company and startup involved in the hub will no doubt have their own strategic goals to achieve. But by working together in a collaborative manner through a single platform in a massive, emerging market, the China Food Tech Hub will serve to grow the business of all participants.

-Lynda Kiernan