Funding the future of Australian food & beverage: top investments of 2022

Apr 06, 2023 by Mark Dingley

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Funding the future of Australian food & beverage: top investments of 2022

Now four months into the new year, it’s interesting to look back: so what do alternative meat proteins, premium pet food and zero-alcohol beverages have in common?

These Australian food & beverage sectors attracted a tonne of local and foreign investment in 2022.

And the investments they are receiving can be staggering, with some food & beverage startups receiving more than $40 million to achieve their goals.

In this article, we reveal the top investments in Aussie food & beverage in 2022.

Alternative proteins and meat products

Aussie plant-based and alternative protein startups had a big year in investments, scoring backing from high-profile investors.

Last year even saw investment firms set up especially to help startups and emerging brands in this sector. One of these is PlantForm, which aims to help the alternative protein space to grow and scale and ultimately bring more meat-free options to the Aussie market.

Canberra-based food tech start-up Nourish Ingredients raised $45.3 million, which will be used to scale production and extend product development with the CSIRO and several universities in Australia and worldwide.

This cash injection follows a $14m seed funding round back in 2021 by Horizons — which has also supported Impossible Foods — and Main Sequence.

So, what exactly is Nourish Ingredients doing that grabs the attention of high-profile investors?

Led by founders Dr James Petrie and Dr Ben Leita, who are former CSIRO scientists, the business is developing meat-free fat using synthetic biology.

It's no secret that fats and oils are essential for making meat and dairy-based products taste great¬ – they make Wagyu steak mouth-watering and ice-cream irresistible. But for those who want to avoid animal proteins, the plant alternatives just don't cut it.

Instead, Nourish uses microbes to create fats with sugar, a yeast strain and fermentation process. This makes the molecular structure of animal fats – but without using any animals.

Instead, Nourish uses microbes to create fats with sugar, a yeast strain and fermentation process. This makes the molecular structure of animal fats – but without using any animals.

Nourish Ingredients, with its fats that provide an authentic meat taste and experience, is set to hit the market this year.

But it isn't the only Aussie alternative-protein company that attracted investors last year:

Non-alcoholic beverages

As the "sober-curious movement" surges, virgin-drink brands are seizing the opportunity to attract investors. (Here are some more consumer trends to pay attention to.)

The global rise of the non-alcoholic drinks market means it has a 3.5% share of the total beer, spirit and wine market, according to beverage market researcher IWSR. The value of the alcohol-free market is already $152m a year in Australia, and is forecast to rise at a rate of 31% a year until at least 2024.

Naked Life Non-Alcoholic Spirits took out the top rank in last year’s AFR's Fast 100. Meanwhile, independent Australian brewer Heaps Normal, won the World’s Best Non-Alcoholic Pale Ale at the World Beer Awards.

So, who are investors putting their money on to join the likes of Heaps Normal and Naked Life?

  • Melbourne-based non-alcoholic brewer Monceau Co secured the backing of industry heavyweights in its seed funding round to raise $850,000 to fund expansion, new product development, and a hospitality venue. The brewer attracted prominent investors and industry professionals, including Never Never Distillery’s George Georgiadis and David Burson from Canva.
  • Creator of non-alcoholic, ready-to-drinks and brewery, Monday Distillery, raised over $1m in its equity crowdfunding through the public to focus on new product development. In the process it grew online channels, new distribution networks and saw international growth. (Want to expand your business overseas? Here are some tips to see food and beverage export success.)
  • Brunswick Aces Distillery, producers of Australia’s first non-alcoholic gin, Sapiir, kicked off an equity crowdfunding campaign in November to raise $1m to focus on international expansion. Last year saw the distillery secure a national stocking listing with Dan Murphy’s and a growing presence in Vintage Cellars, Liquorland, First Choice and independents around Australia. To highlight the interest, it had raised over half of its target by the start of this year.

Premium pet foods

Australia has one of the highest pet ownership rates in the world, with over 60% of Australian homes keeping a pet

With all these pets comes tonnes of food requirements, seeing the Australian pet-food market surge to new highs every year. In 2023, the pet food market in Australia is expected to be worth AU$3 billion, and is expected to grow by 2.7% per annum until 2026.

More and more “pet parents” are willing to pay a premium for food that puts their pet’s health first.

This is the target market for Lyka; a premium pet food brand co-founded by vet Matthew Muir and consultant Anna Podolsky in 2018 after her Border Collie had a bad reaction to regular pet food brands.

The pair found research that suggested the average lifespan of some dog breeds has declined by up to 40% since processed pet food dominated the shelves. In addition, they found that store-bought food is often filled with pet-grade ingredients instead of whole foods, has a high carbohydrate content, and is ultra-processed, all of which slashes the nutritional value.

Since starting the company, the pair has prepared 10 million dog meals through a subscription service. The dog food is tailored to the specific needs and breed of a customer’s dog, which they provide upon subscribing.

After initially raising $6.5m from investors, in 2022 Lyka attracted a further $30m after an Israeli entrepreneur – known for his investment in Adobe's – backed the Australian start-up.

Biodegradable packaging

Materials-science company Great Wrap is on a mission to “completely knock petroleum plastic off the supermarket shelf” with its biodegradable stretch wrap.

The Victorian-founded company raised $24m last year, which includes an $11m equity portion with participants including Darren Thomas, W23, Grill’d Innovation Fund, Giant Leap, Small Giants, Thai Wah Ventures, GroundSwell, Trail Mix Ventures and Springbank Collective.

Great Wrap’s stretch wrap is made from potato waste, which is 100% compostable and breaks down in less than 180 days while still working in all the ways you’d expect, according to CHOICE.

The company is adding a biorefinery to its Tullamarine manufacturing site – one of 10 in the world – to process potato waste into polyhydroxyalkanoates, or PHA biodegradable plastic.

The direct-to-consumer side of the business has already sold products into 50,000 Australian homes, and is launching in the United States. Great Wrap also plans to venture into the business-to-business market.

Looking for funding to kickstart growth?

There are many funding opportunities for food & beverage businesses wanting to grow. Here are just a few:

But it's not all about the money – check out our business tips to thrive and survive.