15 Unique characteristics present challenges Israel has company – other notably hot jurisdictions Stronger infrastructure needed As Gornitzky’s Rom points out: “The difficulties in Foodtech in Israel are related to the size of the local market, which is very small, the long distance from the target market, extensive segmentation, heavy regulation with different rules for different territories. Food manufacturers are very sensitive to changes in the product, the production processes and the effect of the substance integrated into their products.” “The difficulties in AgTech in Israel - and in general - are related to the unique characteristics of the field. The field is characterized by extensive segmentation, each crop has different needs and solutions depending on the type of crop, the territory and even the size of the growers.There is no uniform business model or solution that fits all. It is essential that the company carry out a correct and orderly Total Addressable Market (TAM) and Serviceable Obtainable Market (SOM) procedure already in the product development phase to identify the right market for the solution.” According to anOctober 2021 report by nonprofit, TheGood Food Institute (GFI) Israel and multinational EY, stronger infrastructure for the domestic industry is needed, suggesting approximately NIS 1.4 billion (USD 450 million) will be required over the next 10 years to build the infrastructure to support the local industry in the form of multidisciplinary research centers, technology transfer programs (from university labs to industry), research grants and training, and an additional NIS 230 million (USD 74 million) should go toward building specific innovation hubs for cultivated meat, plant-based proteins, and fermentation tech start-ups. According to the report, the Israeli government should supply 56% of this funding, or almost NIS 900 million (USD 291 million), and the rest should be drawn from private investments in Israel and abroad. Researchers also estimated that, through the establishment of more food tech companies, the creation of thousands of jobs, possible future acquisitions, and food tech exports, the government could stand to gain NIS 26 billion (USD 8.4 billion)
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