Functionality shift b2b ingredient reinvented

In 2021, according to Good Food Institute figures one of the hosts cited, $7bn went into food tech. In 2025 it was under $800m. When the hosts asked which founders had been turned down for being food tech, hands went up. Five or six years ago the money chased alternative proteins. The founders still standing are building functional, high-value ingredients to sell to manufacturers, and Matteo Leonardi of Grey Silo Ventures and Bodil Sidén of Kost Capital wanted to know whether investors will back them.

A founder gave the rule that the rest of the session tested. Anything that works in food either costs less or adds a health benefit while everything else stays the same. "People don't really pay for sustainability benefits," the founder said. Sustainability is now simply expected. An impact investor had moved from consumer brands to high-value, lower-volume ingredients for a blunter reason. It is the only way a company can become profitable fast without relying on venture capital, which is in very short supply. Matteo added that Italy resists food innovation aimed at consumers, while an ingredient that disappears into a manufacturer's recipe is accepted more easily.

The GLP-1 effect

One of the hosts said one in five people in the US now take a GLP-1 drug, forecast to rise to one in four next year, and that it comes at the expense of snacks, sugary foods and other cheap calories. A participant who uses one said it had changed their relationship with food, entirely towards quality. Users who pay for the drug protect that investment with better choices, and companion products were described as a booming category. Another participant saw the drugs becoming a Swiss army knife for healthcare, also cutting heart attacks and treating sleep apnoea, and still in their early days. There were worries too, about eating disorders as the peptides move out of prescription, and about incumbents watching their snack revenue fall and scrambling to reformulate. The conclusion was short. "If you invested in snacks, get out."

People don't really pay for sustainability benefits.

Claims need science, and science needs time

One participant expected a shift away from functional products that add not very healthy ingredients to earn a label, towards ingredients backed by science. The labels do not help. A corporate venture investor in agri-food said iron added to a product can fill the label without being bioavailable, and European rules limit what anyone may claim. Another participant said claims today rest on a claim carrier, an active ingredient added in a tiny amount so the label can say something. Their hope for the next decade lay with wearables. Sleep trackers already show drinkers what a glass of wine does, and trial platforms such as People Science could run individual and large studies.

Matteo asked how long investors will wait for scientific validation or novel-food approval. One founder's view was that nobody wants to touch novel food. An early-stage impact investor said they take that risk when the impact is real, such as iron deficiency, but not for consumer fads. A corporate investor from the dairy industry would wait for something truly disruptive, but not five years for a claim that a product contains more iron. Soft claims can carry a successful short-term business in the influencer economy, another participant said, but a lasting one needs evidence.

Premium first, or not

The hardest disagreement was over price. Asked whether the sector risks building only for a premium few, a fungal-protein founder described starting in fish and poultry feed and in pet food. Consumers buy the same chicken, nobody has to be taught to eat fungi, and the revenue pays for studies so investors need not wait five years. An investor said no wave of new products has ever entered the economy without starting premium and coming down, from flat-screen televisions and electric cars to iPhones, and now cultivated meat going into premium pet food. Another investor found far more people now know the word bioavailability than five or ten years ago, and big supplement brands want a trusted premium mark, as Gore-Tex has in clothing.

One participant challenged the rule. Plenty of chocolate products entered on cost, and skincare brands have reached the masses by taking a lower margin on what used to be premium. One of the hosts said portfolio companies had dodged the hardest route by going through cosmetics or into high-value ingredients such as lactoferrin. A founder took the last word. It may not be every case, the founder said, but for commodities such as soy and wheat, and for dairy and meat, more than 90% of new products must go premium first.

The hosts' own conclusion was modest. People are still building in food and still investing in it, one of them said, and the sector has become more intelligent about food.

This Ripple was hosted by Matteo Leonardi (Grey Silo Ventures) and Bodil Sidén (Kost Capital) at The Drop 2026 on 16 September.