New products often start out as a niche: limited options, high prices, and limited availability. Then, over time, as awareness and interest grow more broadly, options increase, prices come down, and availability improves.
The same paradigm holds true with better for you food and beverages ("F&B"). Venture capital is helping accelerate the democratization of healthy F&B, including making healthy food increasingly easy to get, while backing innovation on new products and offerings.
Crunchbase noted that in 2023, eight companies focused on making better for you F&B more readily available received approximately $180,000,000 in venture investment. This included companies such as Bobbie, which offers subscription-based organic baby formula, and Everytable, a restaurant chain offering healthy grab-and-go food at variable prices, depending on the median income of the zip code in which the restaurant is located.
The “DTC” or direct-to-consumer model has also fueled the ability of even the smallest of companies to reach customers, and customers have become increasingly comfortable using DTC to purchase F&B. In part spurred by the pandemic, overall DTC sales grew from $17.75 billion to approximately $213 billion in 2023, or an average rate of 144% per year.
Expect this trend to continue into 2024 and beyond as startups and venture capital continue to innovate in this space and provide all of us with better choices about what we eat and drink.