Zynga weighed in on M&A activity in food and drink – a sector he acknowledged was lagging behind its contemporaries in the health sector, but growing steadily.
“When you look at sources out there that are tracking those activities, every year we see deal sizes and the number of deals go up, so the interest is growing rapidly,” said Zynga.
“We’ve [EIT Food] been in conversation with one company that’s right in the middle of the growth equity space, which is right between early venture capital and larger private equity. That’s the space they’re looking to target. That’s common in the US but new here in Europe.”
COVID-19’s effect on M&A
Despite the disruption caused by the spread of COVID-19, Zynga was positive more deals will be made in the food and drink industry. He predicted that it would increase quite dramatically and return to previous levels.
“We have a venture community here at EIT food and the signals we’re getting now is that it’s picking up again,” Zynga continued. “It has been on a very steep growth trajectory, so chances are it’s not going to take very long to get back there.”
The threat of coronavirus to food businesses has presented EIT Food with opportunities to work with its partners to overcome the issues presented by the pandemic.
“The interesting thing we’ve seen is that even in adversity there might be opportunity,” Zynga explained.
“In the foodservice industry we’ve seen a lot of food surplus that’s been going around and we’ve actually started a project with the hospitality sector to pick up extra food items to turn them into soup that our partners are selling at a very low price point.”
EIT Food projects
Zynga went on to discuss some of the projects that EIT Food is working on to help promote sustainability and limit food waste. This included a new labelling system that informs consumers of the product’s environmental impact and a food waste reduction scheme that turns surplus bananas into breakfast cereal.
He also weighed in on the future trends in the food industry and identified the potential of the alternative proteins industry. However, rather than focusing on making one-to-one analogues of meat products, Zynga suggested a different direction for alternative proteins.
“Really, when you think about it, you don’t have to necessarily mimic meat if what you offer to the consumer is flavourful,” Zynga added. “Why do we have to mimic meat to the last iota?”
This video is part two of our exclusive interview with EIT Food chief executive Andy Zynga. The first part can be viewed here.
EIT Food is a Knowledge and Innovation Community (KIC) established by the European Institute for Innovation & Technology (EIT), an independent EU body set up in 2008 to drive innovation and entrepreneurship across Europe.
The group hoped to build an inclusive and innovative community that directly involved the consumer. To achieve this, EIT Food has six strategic objectives:
- Overcome low consumer trust - supporting European citizens in the transition towards a smart food system that is inclusive and reassuring
- Create consumer-valued food for healthier nutrition - enabling individuals to make informed and affordable personal nutrition choices
- Build a consumer-centric connected food system - developing a digital food supply network with consumers and industry as equal partners
- Enhance sustainability through resource stewardship - developing solutions to transform the traditional ‘produce-use-dispose’ model into a circular bio-economy
- Educate to engage, innovate and advance - providing ‘food system’ skills for students, entrepreneurs and professionals through advanced training programmes
- Catalyse food entrepreneurship and innovation - fostering innovation at all stages of business creation