Israel sets up new incubator to feed global interest in foodtech

Hub will identify and nurture innovative technologies to develop the next generation of food and beverages as interest in the sector in Israel grows

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

Illustrative image of hamburgers (Kesu01; iStock by Getty Images)
Illustrative image of hamburgers (Kesu01; iStock by Getty Images)

The Israel Innovation Authority is planning to set up a new food technology incubator in the north of Israel, close to the city of Safed, with an investment of over NIS 100 million ($28 million) over eight years.

The authority, in charge of setting out the nation’s innovation policies and supporting its tech sector, issued a tender for candidates to run the incubator, which will support the establishment of foodtech startups and will get benefits that the authority gives to incubators in the country’s geographical periphery, including an annual operating budget of NIS 600,000 and a NIS 5 million grant to every company in the incubator.

The project’s goal will be to identify and nurture innovative technologies in a variety of fields and activities, including developing the next generation of food and beverages; converting agricultural land used for animal food and husbandry to food production for humans; optimize the food-growing process in a sustainable manner; shortening and optimizing the supply chain and supply methods to preserve food safety and freshness and prevent surplus production and waste; and growing healthier food and adapting it to consumer tastes.

The incubator will help establish companies in these fields in Israel, connect them with local players, and penetrate international target markets, the statement said. The initiative is part of a government push to transform Israel’s north into a hub for agriculture and food technology companies. In July, Economy Minister Eli Cohen said the state would allocate NIS 110 million in the coming year for foodtech ventures in the Upper Galilee and in Kiryat Shmona, Israel’s northernmost city.

Foodtech — the art of using technologies to make healthier food or streamline distribution and developing the next generation of food and beverages — is a growing trend around the world. According to the database of Start-Up Nation Central, a non-profit that tracks the tech industry in Israel, there are some 266 active startups working in the field. Recent exits of Israeli companies in the food segment have raised Israel’s profile in this sector.

PepsiCo said in August it would buy SodaStream for $3.2 billion in cash, while the US firm International Flavors & Fragrances (IFF) said in May it will purchase Israel’s Frutarom, a maker of flavors and fragrances for use in food, beverages and pharmaceuticals, for $7.1 billion, in the second largest deal ever for an Israeli firm. Meanwhile, in July, Dutch signed an accord to buy online food marketplace 10bis for $157 million.

“The global focus on Food Tech is motivated by projections suggesting that there will be 9.6 billion mouths to feed by 2050,” said Aharon Aharon, CEO of the Israel Innovation Authority, in the statement. “It is extremely important to develop solutions to this growing challenge, and one of our responses is the establishment of the new Food Tech incubator in Safed.”

The new incubator will join 18 existing incubators supported by the Israel Innovation Authority’s incubator program.

Anya Eldan, VP at the StartUp Division of the Innovation Authority, said that the incubators “have already proven themselves as an important tool of establishing innovative companies based on academic knowledge in a variety of fields.”

Among the 18 incubators run by the authority, just The Kitchen FoodTech Hub in Ashdod owned by the Strauss Group focuses on investments in the field of food and beverages, she said.

The Israel Innovation Authority “sees great importance in bringing additional innovative companies into this field in order to help them get established, develop and become global leaders,” Eldan said.

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