Innovation in a time of uncertainty

Between rising labor costs, steep fluctuations in supply and demand, and the disruption of the pandemic, farming and food processing organizations in New York have faced major obstacles in recent years. By just examining the impact of the pandemic, you can see how stress was put on every part of the food processing industry. There were serious supply chain disruptions; in many cases, product sales were either reduced or stopped in schools and restaurants during state-mandated shutdowns, and businesses had to adapt quickly to ever-changing safety protocols.

Yet, what remained constant through it all was the community's ongoing resilience.

New York still ranks second in the nation behind California for food and beverage manufacturing, with an estimated 2,946 plants in operation. While the economy of the state has diversified over the past three decades, food and agriculture businesses remain significant sources of employment, especially in rural areas.

Bakeries and tortilla manufacturers currently employ the highest number of people in food manufacturing (more than 22,000 people across 1,389 establishments), with dairy product manufacturing being the next largest manufacturing sector in the state (10,767 workers at 143 plants).

And with the likes of Chobani, Wells Dairy, LiDestri, Seneca Foods, and Constellation Brands all calling New York their home, it’s easy to see why agrifood is driving community, culture and innovation.

Plenty of novel ideas

At Grow-NY, an international business competition that attracts high-growth food and agriculture startups from across the globe, hundreds of entrepreneurs recognized the vast opportunities the state provides agrifood businesses and submitted applications with the goal of introducing novel business ideas to the region. In 2019, this could be seen by Slate Milk’s presentation of its line of lower sugar, higher protein lactose-free chocolate milks. And in 2020, we saw this again with Norwhey's unique, lightly alcoholic drinks made from upcycled whey from yogurt production. Yes, yogurt!

Both companies offered products that were “out of the box,” and the pitches were well-received. This kind of ingenuity is what the industry needs to continue pushing forward, especially as we navigate recovery amidst the pandemic. And what’s clear from the inquiries and requests we have received is that investors are eager to support this kind of innovation as well.

While investment in upstream ventures such as agricultural biotechnology, farm management tools, robotics, cellular agriculture and novel farming has grown significantly over the past decade, investors continue to focus mainly on consumer-packaged goods and food delivery services. We’ve seen this trend firsthand as the grand prize winner of Grow-NY was RealEats, a company that offers consumers at-home delivery of chef-prepared meals using locally grown ingredients.

According to CB Insights, from 2010 through the first quarter of 2021, there were at least 860 deals in the agriculture and food and beverage sectors. The majority went to food and beverage companies producing consumer-packaged goods such as yogurt, cheese, sports drinks and alcoholic beverages.

The largest category for upstream investment included food safety and traceability, logistics and transport — all technologies that New York farmers, distributors and retailers said would improve their operations and a category booming with potential. With companies like Halomine leading the charge with its antimicrobial products for disinfecting food processing plants among other facilities, we’re excited to see what the future holds as this category continues to expand.

To date, New York is a national producer of milk, cottage cheese, sour cream and yogurt — but the opportunities for further evolution and growth in dairy foods are endless. The pandemic created some new challenges, but the state’s business owners are not backing down. We are optimistic that we’ll continue to see strong category growth and product development in years to come.

Economic survival. The overarching challenge business owners face day in and day out — those in the agrifood industry are no exception.

According to Cornell University’s recent Agrifood Innovation Report, a study that aggregated and analyzed the strengths and opportunities within New York State’s farming and food processing industries, agrifood business owners felt economic survival is the driving force behind their business decisions.

Between rising labor costs, steep fluctuations in supply and demand, and the disruption of the pandemic, farming and food processing organizations in New York have faced major obstacles in recent years. By just examining the impact of the pandemic, you can see how stress was put on every part of the food processing industry. There were serious supply chain disruptions; in many cases, product sales were either reduced or stopped in schools and restaurants during state-mandated shutdowns, and businesses had to adapt quickly to ever-changing safety protocols.

Yet, what remained constant through it all was the community's ongoing resilience.

New York still ranks second in the nation behind California for food and beverage manufacturing, with an estimated 2,946 plants in operation. While the economy of the state has diversified over the past three decades, food and agriculture businesses remain significant sources of employment, especially in rural areas.

Bakeries and tortilla manufacturers currently employ the highest number of people in food manufacturing (more than 22,000 people across 1,389 establishments), with dairy product manufacturing being the next largest manufacturing sector in the state (10,767 workers at 143 plants).

And with the likes of Chobani, Wells Dairy, LiDestri, Seneca Foods, and Constellation Brands all calling New York their home, it’s easy to see why agrifood is driving community, culture and innovation.

Plenty of novel ideas

At Grow-NY, an international business competition that attracts high-growth food and agriculture startups from across the globe, hundreds of entrepreneurs recognized the vast opportunities the state provides agrifood businesses and submitted applications with the goal of introducing novel business ideas to the region. In 2019, this could be seen by Slate Milk’s presentation of its line of lower sugar, higher protein lactose-free chocolate milks. And in 2020, we saw this again with Norwhey's unique, lightly alcoholic drinks made from upcycled whey from yogurt production. Yes, yogurt!

Both companies offered products that were “out of the box,” and the pitches were well-received. This kind of ingenuity is what the industry needs to continue pushing forward, especially as we navigate recovery amidst the pandemic. And what’s clear from the inquiries and requests we have received is that investors are eager to support this kind of innovation as well.

While investment in upstream ventures such as agricultural biotechnology, farm management tools, robotics, cellular agriculture and novel farming has grown significantly over the past decade, investors continue to focus mainly on consumer-packaged goods and food delivery services. We’ve seen this trend firsthand as the grand prize winner of Grow-NY was RealEats, a company that offers consumers at-home delivery of chef-prepared meals using locally grown ingredients.

According to CB Insights, from 2010 through the first quarter of 2021, there were at least 860 deals in the agriculture and food and beverage sectors. The majority went to food and beverage companies producing consumer-packaged goods such as yogurt, cheese, sports drinks and alcoholic beverages.

The largest category for upstream investment included food safety and traceability, logistics and transport — all technologies that New York farmers, distributors and retailers said would improve their operations and a category booming with potential. With companies like Halomine leading the charge with its antimicrobial products for disinfecting food processing plants among other facilities, we’re excited to see what the future holds as this category continues to expand.

To date, New York is a national producer of milk, cottage cheese, sour cream and yogurt — but the opportunities for further evolution and growth in dairy foods are endless. The pandemic created some new challenges, but the state’s business owners are not backing down. We are optimistic that we’ll continue to see strong category growth and product development in years to come.