April 28, 2013

Venture Capitalists Are Making Bigger Bets on Food Start-Ups

By JENNA WORTHAM and CLAIRE CAIN MILLER

http://www.nytimes.com/2013/04/29/business/venture-capitalists-are-making-bigger-bets-on-food-start-ups.html?hp&pagewanted=print

 

What if the next big thing in tech does not arrive on your smartphone or in the cloud? What if it lands on your plate?

That idea is enticing a wide group of venture capitalists in Silicon Valley into making big bets on food.

In some cases, the goal is to connect restaurants with food purveyors, or to create on-demand delivery services from local farms, or ready-to-cook dinner kits. In others, the goal is to invent new foods, like creating cheese, meat and egg substitutes from plants. Since this is Silicon Valley money, though, the ultimate goal is often nothing short of grand: transforming the food industry.

“Part of the reason you’re seeing all these V.C.’s get interested in this is the food industry is not only is it massive, but like the energy industry, it is terribly broken in terms of its impact on the environment, health, animals,” said Josh Tetrick, founder and chief executive of Hampton Creek Foods, a start-up making egg alternatives.

Some investors say food-related start-ups fit into their sustainability portfolios, alongside solar energy or electric cars, because they aim to reduce the toll on the environment of producing animal products. For others, they fit alongside health investments like fitness devices and heart rate monitoring apps. Still others are eager to tackle a real-world problem, instead of building virtual farming games or figuring out ways to get people to click on ads.

“There are pretty significant environmental consequences and health issues associated with sodium or high-fructose corn syrup or eating too much red meat,” said Samir Kaul, a partner at Khosla Ventures, which has invested in a half-dozen food start-ups. “I wouldn’t bet my money that Cargill or ConAgra are going to innovate here. I think it’s going to take start-ups to do that.”

In the last year, venture capital firms in the valley have funneled about $350 million into food projects, and investment deals in the sector were 37 percent higher than the previous year, according to a recent report by CB Insights, a venture capital database. In 2008, that figure was less than $50 million.

That money is just a slice of the $30 billion that venture capitalists invest annually, but it is enough to help finance an array of food start-ups.

The venture capital firms helping to finance these businesses are some of the valley’s most prominent names, in addition to Khosla: SV Angel, Kleiner Perkins Caufield & Byers, True Ventures and the Obvious Collection. Celebrities from Hollywood (Matt Damon), pro football (Tom Brady) and the tech world more broadly (Bill Gates) have also joined in.

“Consumers are interested in sophisticated experiences that are beautifully delivered, which we’ve seen happen on the Web and with products like the iPhone,” said Tony Conrad, a partner at True Ventures, which was an early investor in the coffee company Blue Bottle. “Now, we’re seeing that happen with food and beverage.”

Still, some tech analysts and venture capitalists are skeptical that these companies, with their factories and perishable products, can reach the scale and market valuations of big Internet companies.

“I don’t see a multimillion-dollar business coming out of any of these companies,” said Susan Etlinger, an analyst with the Altimeter Group, a firm that advises companies on how to use technology. “The majority of Americans will not likely be able to participate, they’re simply too expensive for them.”

Venture capitalists have strayed from pure technology to food before. Restaurant chains like Starbucks, P. F. Chang’s, Jamba Juice and, more recently, the Melt, were backed by venture capital. Recipe apps and restaurant review sites like Yelp have long been popular.

But this newest wave of start-ups is seeking to use technology to change the way people buy food, and in some cases to invent entirely new foods. Investors are also eager to profit from the movement toward eating fewer animal products and more organic food. They face a contradiction, though, because that movement also shuns processed food and is decidedly low-tech.

“It’s not Franken-food,” Mr. Kaul of Khosla Ventures said. “We’re careful not to make it sound like some science experiment, but there is technology there.”

Hampton Creek Foods, based in San Francisco, uses about a dozen plants, including peas, sorghum and a type of bean, with properties similar to eggs, to make an egg substitute.

Mr. Tetrick, its founder, started the company after working on alleviating poverty in sub-Saharan Africa. He hired a protein chemist, a food scientist, a sales executive from Heinz and a contestant from the television show “Top Chef.” Two large food companies are using the egg substitutes in cookies and mayonnaise, and he said he planned to sell them to consumers next month.

Unreal, based in Boston, makes candy that the founders say has no artificial colors or flavors, preservatives, hydrogenated fats or genetically modified ingredients, with at least 25 percent less sugar than similar candy on the market and added protein and fiber. The candy is sold in stores including CVS and Target.

Lyrical Foods makes cheese from almond milk and macadamia milk under the name Kite Hill, which is the first nondairy cheese to be sold by Whole Foods. Nu-Tek Salt uses potassium chloride instead of sodium chloride to lower sodium. Beyond Meat and Sand Hill Foods are making veggie burgers that their investors say taste and grill more like beef than others on the market.

Yet some investors say the projects have a better chance of success if they steer clear of selling actual food. “The food category has been a hard nut to crack because it’s a perishable item,” said Mark Suster, an investor at GRP Partners. “The No. 1 thing V.C.’s are looking for are scalable and repeatable, high-margin businesses. You can create those in food, it’s just harder.”

His firm, for instance, is tapping into the food industry by investing in Internet services like ChowNow, an online restaurant ordering company.

GoodEggs, another Web service, is a marketplace for local farmers and chefs who make artisanal goods like cheese, honey, jam and olive oil. Another company, Farmigo, is taking a similar strategy.

Kitchensurfing is a site that lets people hire private chefs to give pasta-making lessons or prepare an authentic Thai meal, just as one might book a room on Airbnb.

“Chefs spend all of their time working and at farmer’s markets,” said Chris Muscarella, a chef in Brooklyn who helped to found the site. “They aren’t sitting in front of a computer. So the fact that you’re finally getting more chefs online through mobile devices is actually a big deal for the culinary world.”

Still, food start-ups have their own challenges that are unfamiliar to tech entrepreneurs and investors, like a broken-down delivery truck or a bad oyster. These setbacks can be more difficult to recover from than a software malfunction.

In the early days of Plated, for instance, which sells ready-to-make dinner kits for recipes like Greek lamb burgers with cucumber salad, the founders sank $15,000 into building a customized refrigerated warehouse in Queens. Then they discovered that it would not cool lower than 70 degrees, unsuitable for food handling and preparation.

“We just had to walk away from that investment,” said Nick Taranto, one of the founders.

Bill Maris, a partner at Google Ventures, the search giant’s investment arm, has not yet put money into any food-related companies. But he said he was closely watching the trend.

He said, “Start-ups are unpredictable and all these companies are trying to take advantage of new technology and markets that are changing.”

But, he added, “in 2000, the same questions were asked about YouTube and no one knew how it would even work, let alone become a business.”

 

April 26, 2013

The Brain: Our Food-Traffic Controller

By KATHLEEN A. PAGE and ROBERT S. SHERWIN

http://www.nytimes.com/2013/04/28/opinion/sunday/the-brain-our-food-traffic-controller.html?ref=opinion&_r=0&pagewanted=print

IMAGINE that, instead of this article, you were staring at a plate of freshly baked chocolate chip cookies. The mere sight and smell of them would likely make your mouth water. The first bite would be enough to wake up brain areas that control reward, pleasure and emotion — and perhaps trigger memories of when you tasted cookies like these as a child.

That first bite would also stimulate hormones signaling your brain that fuel was available. The brain would integrate these diverse messages with information from your surroundings and make a decision as to what to do next: keep on chewing, gobble down the cookie and grab another, or walk away.

Studying the complex brain response to such sweet temptations has offered clues as to how we might one day control a profound health problem in the country: the obesity epidemic.

The answer may partly lie in a primitive brain region called the hypothalamus. The hypothalamus, which monitors the body’s available energy supply, is at the center of the brain’s snack-food signal processing. It keeps track of how much long-term energy is stored in fat by detecting levels of the fat-derived hormone leptin — and it also monitors the body’s levels of blood glucose, minute-to-minute, along with other metabolic fuels and hormones that influence satiety. When you eat a cookie, the hypothalamus sends out signals that make you less hungry. Conversely, when food is restricted, the hypothalamus sends signals that increase your desire to ingest high-calorie foods. The hypothalamus is also wired to other brain areas that control taste, reward, memory, emotion and higher-level decision making. These brain regions form an integrated circuit that was designed to control the drive to eat.

With sophisticated brain-imaging techniques, we can now even see how our brains respond to specific nutrients (glucose, for example) and environmental stimuli (like the sight of food). Our research team, for example, recently conducted a study to see if the human brain responds in different ways to consumption of two types of simple sugar: glucose and fructose.

Glucose is a critical energy source for our body, particularly the brain. Even tiny changes in blood glucose can be detected by specialized glucose-sensing nerve cells in the hypothalamus. The hypothalamus’s exquisite sensitivity to glucose is especially important because the brain requires a continuous supply of glucose to meet its high-energy needs.

Fructose, a close relative of glucose, molecularly speaking, has the same number of calories but is sweeter than its cousin. Unlike glucose, though, fructose is almost entirely removed from the blood by the liver. Thus, very little of it actually reaches the brain.

The notion that these two sugars affect the brain differently is supported by animal studies. When glucose and fructose are injected directly into the brains of mice they have different effects: glucose blunts hunger signals, whereas fructose stimulates them.

We set out to see if the brains in healthy people would likewise respond differently to these two types of sugar. They did. Blood flow and activity in brain areas controlling appetite, emotion and reward decreased after consuming a drink with glucose, and participants reported greater feelings of fullness. In contrast, after drinking fructose, the brain appetite and reward areas continued to stay active, and participants did not report feeling full.

People don’t typically drink glucose and fructose separately; they are generally found together in foods and beverages. Table sugar is made of 50 percent glucose and 50 percent fructose molecules bound together. High-fructose corn syrup is made of unbound glucose and fructose molecules, usually in a ratio of 45 percent glucose to 55 percent fructose. We don’t yet know whether table sugar and high-fructose corn syrup affect the brain differently, or if they have different effects on body weight over time.

In today’s food-rich environment, we are surrounded with tantalizing food advertisements that sometimes stimulate eating, even in the absence of hunger. Brain imaging studies have shown us why. Pictures of mouthwatering foods can activate brain-reward pathways and stimulate the urge to eat — a response that is often countered by simultaneous suppression signals from “executive control” centers elsewhere in the brain. In obese individuals, though, the ability to suppress the initial brain-reward signals is often impaired. Thus, biological changes in the brain’s capacity to control our drive to eat might serve to perpetuate obesity.

Our brains were designed for a time when food was scarce and starvation was a common cause of death. While too much hunger remains in modern times, most people in the United States face a challenge opposite to what our distant ancestors faced. Natural selection has not wired us for a scenario in which food is abundant, relatively inexpensive and often high in calories.

Tackling this problem won’t be easy. But if we’re going to stop obesity in its tracks, we first need to understand how our brains influence what we eat.

Kathleen A. Page is an assistant professor at the University of Southern California’s Keck School of Medicine. Robert S. Sherwin, a professor of medicine at Yale, is director of the Yale Center for Clinical Investigation and the Yale Diabetes Research Center.

 

'Western' Diet Doesn't Make for Healthy Seniors

Download Complimentary Source PDF 

By Chris Kaiser, Cardiology Editor, MedPage Today

Published: April 17, 2013

Reviewed by Robert Jasmer, MD; Associate Clinical Professor of Medicine, University of California, San Francisco and Dorothy Caputo, MA, BSN, RN, Nurse Planner

Action Points

• A diet high in fried, sweet, and processed foods is not associated with ideal aging, defined as the absence of chronic diseases and mental health problems.
• The study found that a diet with high intake of vegetables, fruits, and fish (the "healthy-foods" diet) was significantly inversely associated with noncardiovascular mortality.

A diet high in fried, sweet, and processed foods is not associated with healthy aging, a large cohort study found.

Participants on a Western-style diet had lower odds of ideal aging, defined as the absence of chronic diseases and mental health problems, as well as good cardiometabolic, respiratory, musculoskeletal, and cognitive function, according to Tasnime Akbaraly, PhD, of INSERM in Montpellier, France, and colleagues.

The odds of participants in the Western diet group aging ideally were low (OR 0.58 for top tertile versus bottom tertile, 95% CI 0.36 to 0.94, P=0.02), researchers wrote in an early online release of a study in the May edition of the American Journal of Medicine.

Researchers characterized the Western diet as one consisting of fried food, processed food and red meat, pies, sweetened desserts, chocolates, refined grains, high-fat dairy products, and condiments.

Although the impact of diet on specific age-related diseases has been studied extensively, few investigations have adopted a more holistic approach to determine the association of diet with overall health at older ages, researchers said.

They therefore sought to identify dietary factors assessed in midlife that can not only prevent premature death, but also promote ideal aging.

"Identifying predictors of exceptional health in old age ... may provide new insights into optimal levels of established risk and protective factors," Akbaraly and colleagues wrote.

The investigators suggested that new thresholds and targets for intervention may surface when more research into ideal aging is commenced.

Akbaraly and colleagues used data from the Whitehall II cohort (phase III) and included 3,775 men and 1,575 women (mean age 51 at baseline) whose baseline assessment spanned 1991-1993. Diet was ascertained at baseline, and health status was ascertained every 5 years from various sources.

The research team created five potential phenotypes to characterize aging outcomes after 16 years of follow-up: ideal aging (comprising 4% of the cohort), nonfatal cardiovascular event (7.3%), cardiovascular death (2.8%), noncardiovascular death (12.7%), and normal aging (73.2%).

For a comparator, the investigators relied on dietary patterns and adherence to the Alternative Healthy Eating Index (AHEI).

The AHEI is a "validated index of diet quality, originally designed to provide dietary guidelines with the specific intention to combat major chronic conditions such as cardiovascular diseases," diabetes, and the metabolic syndrome, according to the study. High AHEI scores have correlated with reduced risk of these conditions.

"Analyses were adjusted successively for age, sex, total energy intake (model 1), and health behavior: smoking and physical activity (model 2)," the authors explained.

They found that a diet with high intake of vegetables, fruits, and fish (the "healthy-foods" diet) was significantly inversely associated with noncardiovascular mortality (model 1; OR per 1 standard deviation [SD] increment 0.76).

However, when researchers adjusted for smoking status and physical activity (model 2), the association was no longer significant (OR 0.90).

Participants in the highest tertile of Western diet were nearly 50% less likely to reach ideal aging compared with the bottom tertile (model 1), and 42% less likely using model 2.

The Western diet conferred a 53% greater chance of cardiovascular death and a 36% greater chance or noncardiovascular death in model 1 (per 1 SD increment on the OR), which lost significance after further adjustments.

Other disadvantages associated with the Western diet (top versus bottom tertile) included poorer musculoskeletal status, measured by walking speed (OR 1.45), and worse cognitive function (OR 1.58).

However, researchers did not find any significant association with the Western diet and indicators of cardiometabolic and respiratory functioning and mental health.

"While our results indicate that low adherence to healthy recommendations of the AHEI guidelines is associated with increased premature death, the 'Western-type' diet significantly reduced the likelihood of achieving ideal health at older ages ... independent of other health behaviors such as physical activity and smoking," they concluded.

Limitations of the study included a lack of generalizability of the results to a more ethnically diverse population; the exclusion of participants with missing values; questionnaires with only specific foods represented; and the possibility for unmeasured confounders, researchers said.

The Whitehall II study is supported by grants from the British Medical Research Council, the British Heart Foundation, the British Health and Safety Executive, the British Department of Health, the National Heart, Lung and Blood Institute, the National Institute on Aging, and the Agency for Health Care Policy and Research.

The investigators reported no conflicts of interest.

 

April 10, 2013

Food Politics Creates Rift in Panel on Labeling

By STEPHANIE STROM

http://www.nytimes.com/2013/04/11/business/a-dismissal-raises-questions-about-objectivity-on-food-policy.html?pagewanted=print#h[]

¶ The politics of genetically modified food has created a rift in a policy-setting committee of the influential Academy of Nutrition and Dietetics that demonstrates the difficulty in finding anyone — anywhere — who doesn’t already have an opinion on the issue.

¶ A dietitian working on a panel charged with setting policy on genetically modified foods for the academy contends she was removed for pointing out that two of its members had ties to Monsanto, one of the biggest makers of genetically modified seeds.

¶ “Perhaps it is possible for someone who works for an organization that creates or promotes G.M.O.’s to be objective, however, that would be hard to do,” Carole Bartolotto, a registered dietitian in California, wrote in a Feb. 6 e-mail to an academy executive.

¶ The academy cited her failure to disclose a consulting practice she lists on her blog as its reason for dismissing her, though she insists it is a business in name only.

¶ Ryan O’Malley, a spokesman for the academy, declined to discuss the dispute except to say in an e-mail that the issue was “ongoing” and would be discussed internally on Thursday.

¶ The incident arises at a time of growing consumer awareness and debate over genetically modified foods — with more than 30 states considering labeling laws — and rising pressure on companies to reduce their use of genetically engineered ingredients.

¶ Last fall, the dietetics academy, which has 74,000 members and whose endorsement is coveted by companies and advocacy groups alike, found itself embroiled in the war over a California ballot initiative that would have required labels on foods made with genetically engineered ingredients.

¶ The official voters’ guide had listed it among a group of scientific organizations and associations that had “concluded biotech foods are safe.”

¶ In fact, the academy pointed out in a news release on Oct. 8, it had not taken a position on the issue. It promised a position paper on genetically modified foods sometime this year.

¶ In December, the academy selected seven members, including Ms. Bartolotto, who is employed by Kaiser Permanente but emphasized she was not speaking on its behalf, to serve on the Advanced Technologies in Food Production work group.

¶ In February, Ms. Bartolotto sent an e-mail to Kari Kren, a manager of research and business development at the academy, asking about the academy’s conflict of interest policy and raising questions about two other members of the group, Marianne Smith Edge and Jennie Schmidt.

¶ Ms. Schmidt, a dietitian who operates a farm in Maryland, won a $5,000 prize from Monsanto and is a test farmer for the company.

¶ Ms. Smith Edge, chairwoman of the committee, is a senior vice president at the International Food Information Council, which is largely financed by food, beverage and agriculture businesses, including companies like DuPont, Bayer CropScience and Cargill, companies that were among the biggest financial opponents of the California labeling initiative.

¶ Later, she questioned the academy’s decision to hire Christine M. Bruhn, a professor at the University of California, Davis, to write its position paper on genetically engineered foods.

¶ Professor Bruhn, who works for the university’s agriculture extension service, was an opponent of the California labeling measure. Additionally, the university has scholarships and other programs financed by Monsanto.

¶ But what really concerned Ms. Bartolotto was the academy’s decision that Professor Bruhn would write the paper before the work group finished its review of the scientific materials. “Why have a work group if its conclusions are not going to be the basis for the position paper?” she said in an interview.

¶ The work group’s members agree not to talk to the media about its affairs.

¶ Ms. Kren responded to Ms. Bartolotto’s concerns about Ms. Schmidt and Ms. Smith Edge with an e-mail that included the academy’s conflict of interest policy. “Conflict of interest will not eliminate a candidate from an eligible appointment,” it says in part.

¶ “Sometimes those who work in industry have the most expertise on topic, so these candidates may score well,” Ms. Kren wrote, explaining the process a selection committee uses. “That being said, the conflict of interest/disclosure form is reviewed and taken very seriously in the consideration.”

¶ But in a March 22 letter dismissing Ms. Bartolotto from the work group, Bill Swan, chairman of the Workgroup Selection Subcommittee, and Paula Jean Ziegler, senior director of research and analysis at the academy, said they found her blog during an Internet search that had been done of all the work group’s members.

¶ The blog includes a post she wrote last July titled “What You Need to Know About GMOs.” In it she noted that research on the health effects of genetically engineered foods is limited, a fact most experts agree on. She also advocated support for the California ballot measure.

¶ The subcommittee focused on another aspect of her blog, its link to “Healthy Eating Consulting,” a page highlighting services she can provide, and chided her for failing to disclose it.

¶ “Due to your failure to disclose the aforementioned, you have been dismissed from the work group,” they wrote.

¶ Ms. Bartolotto said she was stunned. “I didn’t list it because I didn’t think it was an issue at all,” she said. “I created the link because at some point, I think it would be nice to have a consulting business, but right now, I work full time and don’t have time to have one.”

¶ She said her consulting was limited to one consultation for a friend’s wife about a year ago.

¶ “They didn’t even ask me about it,” she said. “They just removed me from the committee.”

¶ Ms. Bartolotto said she made several attempts by e-mail to discuss the decision with the panel’s leadership.

 

Are there “food deserts” as a dietary problem?

by Tyler Cowen on April 4, 2013 at 2:22 pm in Food and Drink | Permalink

Via Jacob A. Geller, the evidence is now in and it seems to suggest no, food deserts are not a real problem:

Here is more, and here is the study itself.  If you look at the statistical tables, they’re pretty striking.  Even where there is statistical significance — which is the exception to the rule — the size of the effect is so tiny, it’s like practically nothing.  For example, on the margin, adding one full-service supermarket within a one-mile radius of your house is associated with an average BMI decrease in your neighborhood of .115.  That is a difference of just one pound.  (see back-of-the-envelope calculations here)

So there is really no relationship, according to this one recent study of nearly 100,000 Californians, between the distance between your body and a full-service supermarket (or any other kind of food store), and whether or not you are obese.  Distance, which is a proxy for access (the idea of a food desert is that the nearest supermarket, which has fresh produce, is distant), is for all practical purposes a non-factor.

Here is a good example:

For example, when you last ordered food at McDonald’s, did you even notice those ten salads on the menu?  Did you order them?  No, and me neither.  And did you ask for a cup of water, which is free, instead of a soda?  No again.  (That’s my experience anyway, and that of millions of other Americans)

And an excellent parallel:

And what’s interesting from a political standpoint, is that this analysis similarly applies to drugs — tackling the supply side does little for heroin addicts, for example, increases the price of heroin, which induces supply to come back into line with the addicts’ inelastic demand curve — and yet most liberals would probably agree with me that drug addiction ought to be tackled on the demand side (spending money to convince young people not to shoot up heroin for example, instead of spending money on patrolling the border), but the same liberals who agree with this analysis of the drug war will often turn around and favor unproven supply-side solutions to obesity like subsidizing supermarkets in low-income neighborhoods, despite the absence of evidence to support those ideas.  Note that libertarians are more consistent on those issues — they oppose supply-side interventions in most, if not all, illicit drug markets, and also oppose supply-side interventions into food markets.