Thesis

The Logistics & Supply Chain Technology Startups in the Food & Beverage Industry

This report consists of technology startups innovating in the L&SCM (Logistics and Supply Chain Manufacturing) in the Artificial Intelligence, Robotics/AI, Software as a Service, Cloud/E-commerce, and Hardware as a Service.

Key takeaways: All sectors are interesting to an extent, and although the slide deck will be Robotics/AI specific, I will list some companies that I believe are winners here and in the slide deck at the end.

1. CommonSense Robotics
2. Zume Pizza
3. SmartCart

4. Alloy.ai

5. Provenance

6. No to Say2Eat, GrocerKey

In terms of looking at this research in order to find a winner, the market from an investor's perspective should be and is similar to the food tech industry in the following way: some sectors are viably becoming saturated, and there is more opportunity in sectors of this market in which the boundaries have not yet been met.

While all sectors look interesting, in order to be more successful, a level of specificity must be applied. My project's investor-focused thesis will revolve around a few sectors, as there are exciting opportunities coming out of almost each one.

I believe successful companies in the AI sector in this industry will have a consumer-tangible interface and will save the consumer or customer time or effort, such as SmartCart.

Robotics companies in this industry should have a capital-saving approach to their model. Although that is an obvious advantage for companies to form their pitch around, firms like CommonSense Robotics and Zume Pizza are taking that approach to the max, diversifying their offerings around the sector. F5 and Amazon are taking strides in the automated store space, although that may be a slightly linear play.

When it comes to looking at Hardware as a Service, Software as a Service, and Blockchain approaches to this market, I believe the practicality of an investment depends on the focus of the fund. Ten Acre Organics is setting the bar high, but it may be tough to see (too early) from a VC's perspective. inFarm may need validation before VCs get too active, although I think it's a phenomenal idea with a TAM connected to Amazon's Whole Foods stores and other health-forward supermarkets.

Say2Eat and GrocerKey stem from more of an add-on approach, sub-products dependent on another platform. From what I have learned about VC, interest in different types of business always depends on fund approach, and if it was my fund, I wouldn't focus on add-on offerings.

Traceability is something that can be innovated upon, not just from an add-on approach. Traceability from companies that can be a one-stop shop for all services, SCM&L focused. FoodLogicQ seems to have one of the most diverse set of offerings, but has competitors. One item separating their company is their proposed blockchain solution, offering clientele the ability to place a transaction tracer on a blockchain network. Alloy.ai focuses on this type of digital supply chain solution, using AI to track real time transactions and provide continuously relevant information for clientele.

Provenance and Ripe.io both provide a more holistic and digitalized ledger for suppliers to be transparent in how they show customers and other partners their manufacturing, processing, and distribution actions. Provenance provides a digital tracking system, whereas Ripe.io provides a sensor-tracking system in addition to the leveraged decentralized networks each places on a blockchain network for verification of said processes.