Can Israel find a place for itself among the leaders in global Food Tech? The Israel Innovation Authority and Nestl\u00e9 are two examples of believers \u2013 and they are collaborating to meet the challenge of connecting multinational corporations with local start-ups.<\/p>\n\n\n\n
\u201cThe food sector is full of excitement,\u201d declares Ilanit Kabessa-Cohen<\/strong>, Head of Corporate Innovation, Startups & Digital Business for Nestl\u00e9-Osem Israel. \u201cToday it touches on a range of fields: biology, physiology, the environment, agriculture, lifestyles, emotional satisfaction, and our ties to family and friends. There are many directions that growth in this industry can take, but innovation is always the way. At Nestl\u00e9, our vision is to become important partners in projects where global innovation will start in Israel.\u201d \u201cOur funding is a filter concerning the excellence and quality of the project. It\u2019s also an indication, to the corporation, of whether the project is worthwhile \u2013 a stamp of approval, as it were. Our judgment is impartial. We judge only the technology and its commercial potential. At Nestl\u00e9, we believe that the combination of scientific research and technological development will help us understand how nutrition influences the way different genes are revealed, it will enable us to improve the health of future generations and will enhance the quality of life.
This past year, Nestl\u00e9 <\/strong>joined the Israel Innovation Authority\u2019s Global Enterprise R&D Collaboration Program. This program helps multinational corporations (MNCs) locate Israeli technologies that they can benefit from, and it provides financial support for completing the necessary R&D. The goal: to bring new and improved products into the global market while promoting the Israeli startup culture and local innovation.
Noam Bar-Gal<\/strong>, head of MNC Collaboration at the Israel Innovation Authority, explains: \u201cThe Israel Innovation Authority is ready to fund the kind of innovative projects that are likely to emerge from Nestl\u00e9\u2019s partnerships with high-tech companies and with older companies that are technologically innovative.
\u201cIn other fields \u2013 communications, computers, and software, for example \u2013 more than a few projects have already begun. However, in the food sector, even though we are working with Coca-Cola, Abbott (makers of Similac baby formula), and Unilever, no collaborations have emerged yet. Various subjects and ideas have been explored, but Food Tech is apparently more complicated in this regard.
\u201cThe Israel Innovation Authority is encouraging cooperation between big and small companies. Success is connecting Startup \u2018A\u2019 with MNC \u2018B.’ If we can pair them up \u2013 and that\u2019s by no means a clear opportunity \u2013 we\u2019ve done our job, because then we\u2019ve created an opening for dialogue between the two companies. Once we\u2019ve matched them, we enable the two sides to talk and progress by themselves however they see fit. And if their negotiations lead to agreement on a high-quality joint project, we\u2019re right here to examine the possibility of funding it.\u201d
Kabessa-Cohen describes the efforts invested in creating dialogues and connections between a conglomerate and several startups: \u201cIt\u2019s not simple to build a relationship. It\u2019s a labor of Hercules, and that\u2019s an understatement. But I can say that some contacts have led to successful experiments and we\u2019re considering extending them. Two are reaching the signature stage for continued collaboration. Others came to the stage of due diligence but stopped because Nestl\u00e9 sets a very high scientific bar. We do have several projects that are going to be implemented this year.\u201d
How Is Collaboration Born?<\/strong>
Kabessa-Cohen explains how the process began: \u201cOur journey commenced thanks to the people who live in the Startup Nation. We began it as a local initiative, to persuade Nestl\u00e9 to take a close look at the startup scene and then get involved in connecting the company as a multinational corporation with Israeli start-ups. We\u2019re learning as we go because the process of bringing about this kind of change in an international organization \u2013 that is, creating a relationship between a conglomerate and a selection of startups \u2013 is very complicated. It has its ups and downs, successes and failures, and, it\u2019s equivalent to founding a startup that\u2019s internal to the organization.
\u201cWe signed the corporate cooperation agreement with the Israel Innovation Authority, and even though our program isn\u2019t active yet, we\u2019ve already examined several ways we can advance it.
The Israel Innovation Authority has already proven itself in many fields, so when they selected a new one and we have the privilege of taking part in it, we immediately realized that we could count on them. The offer everything from support for our initiatives, a group of professionals willing to listen, professional advice, a limitless network of professional connections, and a willingness to be true partners in the work we\u2019re doing,\u201d says Kabessa-Cohen.
\u201cThe patience of an organization like the Authority is crucial to our chances of success. They\u2019re not new to this, they\u2019re experienced, they know how to provide guidance, and they have the tools for supporting initiatives utilizing meetings, delegations, and more. When I include meetings with the Chief Scientist in my tours, our professional visitors are very appreciative of the fact that there is an organization dedicated exclusively to these issues.
\u201cNow, we\u2019re at the very beginning of the process,\u201d says Bar-Gal regarding the understanding between Nestl\u00e9 and the Authority. \u201cIt\u2019s difficult, both because food manufacturing in Israel isn\u2019t at the forefront of innovation, and because of the current corporate attitude in the Food Tech sector. The food industry in Israel needs to be incentivized toward technological innovation. When seeds of an innovation culture are sown in the industry, collaborative ventures can be created.<\/p>\n\n\n\n\n
\u201cIt\u2019s important to us to incentivize the whole Food Tech sector so that innovation will become a more regular part of it. These things go without saying in High-Tech, but not yet in Food-Tech. A critical mass of economic and business stakeholders \u2013 like the state, for example \u2013 has yet to be reached. The knowledge exists, but it\u2019s extremely technical. In every sector, including Food-Tech, there must be some enthusiasts in the field, who come from the industry itself.
\u201cOur investment arises from the companies\u2019 requirements for capital, which they need like oxygen. Obviously, the small companies don\u2019t have anything to give in return except equity. Afterward, the supporter can realize the investment by selling off the holdings. From the standpoint of a big corporation, if it invested in a small company that developed something in line with its strategy \u2013 it made an excellent move. The investment can be realized even if the startup developed a solution that turns out to be a part of a strategy that the big company didn\u2019t choose before.\u201d
Israel as a Culinary Superpower<\/strong>
\u201cNestl\u00e9\u2019s R&D focuses on developing new and improved products for the global market and on implementing technological innovations in the food-manufacturing process,\u201d says Kabessa-Cohen. \u201cAt the same time, the company is also involved in basic scientific research. Among the research topics are:<\/p>\n\n\n\n\n
\u201cInnovation plays a critical role in the food sector, which is an industry with a fast pace for new product launches. Moreover, Israel has one of the highest rates of innovation in the food arena. Granted, the profit margins here are low, so it\u2019s difficult to allocate resources for long-term technological development. Lookin into the future, these initiatives will be able to offer people proper and personalized nutrition based on an understanding of the relationship between nutrition, health, and quality of life.
\u201cAccording to this scenario, modern mapping technologies for DNA and microbes will show how the food we eat affects our health. This information will help us consume our food very carefully, considering its impact on our bodies. The industry will also use the data to produce a new kind of food containing active therapeutic and health components according to each person\u2019s individual needs. Zooming into the issue of “Smart Homes” and “Internet of Things, we can see the potential development of the industry there as well. We will have a “Smart House” with a “Smart Kitchen,” which is one of the more attractive rooms and has a lot of potential for innovation.
\u201cOnce you get into the disciplines that set the parameters for the Food Tech industry, Israel has the potential to lead the food sector. Israel besides being a technological leader, is also a leader in the health industry and the culinary arena, and it\u2019s earned an international reputation over recent years. Our strength lies in the integration of these fields.
\u201cWe\u2019ve seen several interesting initiatives in the Food Tech sphere,\u201d Kabessa-Cohen states. \u201cIt\u2019s a new field in Israel, but there is a small group of leaders here, and no less importantly \u2013 that team is passionately committed. We all have a sense of mission to expand this field in Israel, and that includes all our associates in the Israel Innovation Authority. We all have the feeling of building a new ecosystem and the hope that together we\u2019re constructing a high-quality engine of financial growth for the industry and everyone.
\u201cMeanwhile, we are only scratching the surface regarding the community that needs to be cultivated and the entrepreneurs. The Food-Tech sector has only a few entrepreneurs overall, and few serial entrepreneurs. We need to create and build a multidisciplinary group that includes biologists and chefs, chemists, engineers and designers, IT people and nutritionists, culture researchers and businesspeople. Because of the role that food plays in our lives, this really can be done.\u201d
Search for the Answers Here<\/strong>
How do we turn this kind of collaboration into a reality? Kabessa-Cohen describes it as follows: \u201cVarious channels are used to build ties between Nestl\u00e9 Israel and local industry. The starting point for it all, however, was drawing attention to Israeli innovation and emphasizing its relevance to Nestl\u00e9. The initial effort focused on informing Nestl\u00e9 executives that in addition to the extensive work done in Silicon Valley, Israel is another good place to look for innovative achievements. We brought senior Nestle executives to visit and gave personal tours to the appropriate people from the global company.
\u201cThe next step in building the inter-company relationship was accomplished by preparing reports and surveys about the startup picture and distributing them throughout the corporation to start the conversation. The next stage in promoting the connections took place this year. There is an expected phase of locating business units which have difficulty filling some need on their own and how to fill it by incorporating certain new technologies invented by the startups.
\u201cAt Nestl\u00e9-Osem Israel too, we work hard toward improving the organization\u2019s willingness to collaborate, to turn Israel into a leader not only in finding technologies but also in applying them. Here we\u2019ve had pretty good achievements. Start-up technologies are used mainly in marketing innovation, and people from all parts of the organization lend a hand in technological pilot programs, give professional opinions, and so on. The development of intra-organizational leadership that promotes collaborations with start-ups is one of our most critical challenges, as it\u2019s essential to driving Food Tech forward, and I am very proud of the cultural change in the organization.\u201d
In February 2016, Nestl\u00e9-Osem Israel inaugurated the Open Innovation platform. The platform is called \u201cHenry\u201d in honor of Henry Nestl\u00e9, who founded the Nestl\u00e9 company 150 years ago.
Bar-Gal explained Israel Innovation Authority approach; \u201cHow does a huge company innovate and exploit the market\u2019s resources? It opens itself to the market. It collaborates with entrepreneurs and with the entire ecosystem. In general, it participates as an investor, but it can also be an adapter or a user. This approach represents a whole philosophy that developed over the last decade and that deals with innovation rather than necessarily with the organization\u2019s existing R&D efforts.
\u201cThe Henry innovation platform that Nestl\u00e9 created is a kind of catalyst for making contacts in the industry. The idea is to build a tool that will make interactions between start-ups and the industry more systematic. Henry, a platform that already exists abroad, will be launched in Israel by Global Innovation Director Gerardo Mazzeo at a special event for start-ups. Similar events took place in London about a month ago, and in Silicon Valley at the beginning of the year. Now, Tel-Aviv Israel is joining the list of the most important cities on Nestle\u2019s global map.\u201d<\/p>\n\n\n\n