The Intelligent Future of Food

Offering personalized coffee subscriptions has been a successful business model for bff.

A handful of Taiwanese entrepreneurs are paving the way forward through a combination of technology and innovation, changing the game for everything from production to delivery. 

There’s a buzz of activity inside Taipei Tech Arena, a sports facility partially repurposed into a startup hub, providing first-class office amenities like well-proportioned conference rooms and presentation areas, desks, co-working spaces, and the IT infrastructure needed to launch entrepreneurial dreams.

Inside sits Foodland Ventures, a Taiwan-based Agritech venture capital firm and accelerator dedicated to F&B innovations and farm-to-table solutions. The company believes opportunities in this sector are often overlooked by bigger venture capital funds.

“Taiwan is very strong in technology as well as agriculture,” says Foodland Ventures CEO Victor Chen. “We hope to marry these two skills and bring this to other markets. Taiwan has so many tech talents and a robust farm-to-table system, with many good entrepreneurs who can propose solutions to current problems.”

One lesson learned by the F&B industry during the pandemic is that restaurants need to be more than physical locations. Most restaurants extended their business well beyond the walls of their dining rooms through delivery service and take-out. In fact, 65% of Taiwan’s restaurants still offer food delivery. Many successful eateries have also developed a “brand,” easily identifiable on the internet and attracting online orders that bolster revenues.

Chen posits that a strong brand creates the opportunity for expansion abroad, pointing to the popularity of new Taiwanese franchises in the U.S., such as 85°C Bakery Cafe, Din Tai Fung, and numerous bubble tea shops. These companies perfected their business model in Taiwan before going overseas.

“Taiwan is good at standardizing practices and making food accessible through low prices or what is referred to as CP (cost-performance) value,” says Chen. “Taiwan is also a small geographic area, leading to innovation and quick adaptation to market trends.”

Currently, many of the abovementioned businesses are also implementing new technology. For instance, Din Tai Fung uses a QR code to direct patrons to an ordering platform with assistance provided by waitstaff.

“This form of digital ordering offers better sanitation, as you aren’t touching a common menu anymore,” says Chen. “It’s also better than a shared menu tablet, which needs to be cleaned after each use.” He adds that such orders can be linked to a delivery robot, which can also lead to reduced staffing costs. “Restaurants spend a lot of money when it comes to training new personnel,” he says, stressing the significant time required to teach cash register systems, order delivery processes, and other tasks.

Eliminating such training through online menus and digital payment can lead to big savings. In fact, one Foodland-invested company, DotDot Global, provides an online ordering system where participating restaurants are given printer boxes that print new order tickets. The system even collects payments, eliminating many front-of-house functions and allowing local business owners to compete directly with Uber Eats and Foodpanda.

Another Foodland investee, Kabob, offers platform-level management of digital menus, online ordering, and inventory and account management. With just a few simple clicks, menus, signage, and displays can be updated to reflect new prices or add new menu items.

“To change the menu in a store or throughout the entire network takes less training and manpower now,” says Chen. “It is all interconnected digital signage and digital ordering. We want to offer SaaS [Software as a Service] solutions that are modularized and interconnected, and all based upon software and computer technology.”

Space Bao uses plant-based meat substitutes to break stereotypes of traditional and vegetarian food.

Innovations at the source

While many food businesses benefit from innovations, they also face challenges from the impact of climate change. Drought-like conditions have already displaced rice planting in central and southern Taiwan this year, and other agricultural industries may also be affected as climate change exacerbates extreme weather.

Taiwan’s aquaculture industry is now suffering from seasonality, or differing temperate conditions, which can affect the growth of fish, shrimp, and mollusks. Chen says neighboring Southeast Asia is faring better, as it’s not only more competitive in terms of weather but also labor costs.

Foodland’s biggest investment success is ID Water, which uses IOP sensors to test water quality for shrimp breeding pools. The company implements IoT solutions such as underwater cameras, sensors, and other equipment for real-time monitoring to solve water quality problems.

After developing a simple and cost-effective solution to maintain ideal shrimp breeding conditions, ID Water was able to export its technology to Thailand. The technology also helps cut down on pesticides and chemicals once needed to keep shrimp ponds clean and free of dreaded parasites.

As many countries move toward intensive agricultural practices due to limited land availability, more parasites and disease will inevitably affect crops and livestock. This problem is especially prevalent in Taiwan.

“We have lots of biodiversity because of our year-round temperate climate, but this also leads to a lot of pests,” says Chen. “There are many pests that need to be controlled throughout the year. Many entrepreneurs are trying to pinpoint how to combat these pests in an economical way.”

Many are turning to technology and automation to help battle the problem. Technological solutions also help alleviate shortages caused by skyrocketing labor costs and a decreased interest in physically demanding agricultural work.

“One entrepreneur notified us that there is now a shortage of drone pilots,” notes Chen. “They are highly in demand in the agriculture sector, which is now using drones to apply pesticides. Traditional applications – a person spraying a field, for example – wastes 70-80% of pesticides as they are blown away by the wind. “With drones, downward wind caused by propellers allows for a more efficient application of pesticides.”

Lypid showcased its latest innovation, the world’s first plant-based “pork belly” at the 2023 Consumer Electronics Show, held January in Las Vegas.

New, flavorful experiences

Across from Yongkang Park in central Taipei sits a sleek, futuristic restaurant with a new take on dining. At Space Bao, the ingredients are just as futuristic as the ordering and payment methods, which are done on a large touchscreen monitor at the front of the store.

Space Bao has already won over many netizens eager to gain a glimpse of future dining experiences. The restaurant serves vegetarian food with a modern twist on traditional pan-fried buns. Space Bao’s buns are made from a meat alternative infused with PhytoFat, a source of plant-derived fat, and available in innovative new flavors, including corn soup and Szechuan pepper.

Alternative protein is a growing segment that’s gained considerable hype for being healthier and having a smaller impact on the environment. One company that’s gained from the increased interest is Lypid, a Taiwanese startup focused on driving innovation in the food industry and the creator of PhytoFat.

As a self-proclaimed “foodie, food addict, and avid cook,” Lypid co-founder Michelle Lee is passionate about making a difference through her work in food innovation. Her goal is to have a positive impact on the world by creating new and exciting food products that push the boundaries of what’s possible.

Lee has dedicated much of her life to food science, first joining National Taiwan University’s Food Science Department before attending Ohio State University and then earning a Ph.D. at Cornell University. She later went to work for heavyweights in the food industry, such as Nescafé and Nestlé. Her specialization in micro-encapsulation technology, which she says is “basically adding a coating to fats so they don’t dissolve easily, increasing bioavailability of active ingredients,” inspired her to create PhytoFat.

Previous incarnations of plant-based meats used coconut oil, which melts and leaks out of the product easily. Lee’s innovation mimics real animal tissue and helps plant-based meat retain fat throughout the cooking process. Her innovations aim to make vegetarian foods on par with – if not tastier than – meat dishes like hamburger patties or high-quality steaks.

“At the moment, about 40% of a burger is fat,” she says. “This has been overlooked in many plant-based meats. Our solution is PhytoFat, which is like animal tissue and has better flavor delivery with 33% less calories and zero cholesterol.”

Lee’s work earned her an invitation to the UN’s COP27 climate conference, where she delivered a speech about how food production contributes to climate change. Around 30% of global carbon emissions, water use, and land use are associated with food production. Greening this production chain can bring great benefits to everyone, she stresses.

Lee believes there’s a big market for her innovation. Alternative meat represents only 2% of the sliced meat market, and Lee notes a substantial potential for growth, especially due to the contributions of flexitarians who eat meat but prefer plant-based items.

“We are working with Louisa Coffee and their 500-plus stores, which offer six different products and flavors,” she says. “This partnership is growing and has inspired us to offer other products that target Asian cuisine, like steamed buns.” Lee’s company is already working on making the world’s first plant-based pork belly.

Another business using technology to cater to consumer needs is Bean Friends Forever (bff), co-founded by Samson Huang. His company is a coffee subscription service that predicts a customer’s taste profile through an introductory questionnaire.

“Our questionnaire is the secret sauce for our business,” says Huang. He says that asking just six questions can accurately predict what type of coffee a customer likes. Anything more can be overkill, and fewer questions would make customers feel the quiz is too superficial.

The questions asked by bff are quite common, even bordering on banal. They include “where do you shop,” “what desserts do you like,” “what kind of coffee flavor do you like,” and “where do you buy coffee?” As it turns out, these questions have a statistical significance that can help predict a person’s flavor profile.

After answering the questions and receiving a personalized flavor profile, customers are invited to purchase an initial shipment of single-use drip coffee packets for around NT$420 (US$12). Flavor notes and reviews from local baristas are attached to the packaging.

Bff currently has 1,000 subscribers after doubling in 2022. Aside from individual customers, the company also services offices and restaurants. “We don’t have a membership fee as we are totally based on frequency of orders,” says Huang. “Typically, a customer gets a new order every six weeks. Sometimes the contents are like a mystery box as they don’t know beforehand what’s inside.”

Huang attributes some of the company’s success to its collaborations with numerous independent roasters, including those who roast in small quantities and want to impart their extensive knowledge of coffee to friends and fellow baristas. “We often sell our coffee to high-end restaurants, who appreciate our quality because the coffee at the end of the meal has to be quite good,” he adds.

Huang doesn’t operate a physical store. He attends fairs and uses Google ads and search engine optimization to promote his business. So far his team is quite small, with fewer than 10 people actively promoting the company on social media and its website by sharing a few stories each week. Huang believes his highly focused, niche business model, which allows consumers to access exactly what they want at a competitive price, will play a prominent role in the future of retail.