The life science industry has grown tremendously over the last decade, and especially over the last two years. With this expansion came a natural diversification beyond pharmaceuticals and medical devices into biotech, which includes biofuels, cosmetics, and most notably food science. According to Scilife, the global biotech market size is expected to exponentially grow to nearly $730 billion by 2025. Food technology alone is making up a large percentage of this surge due to increasing food shortages, industrial globalization and significant technological advancements. Food science has become a critically significant industry that will look to support a sustainable model of producing food in the future. With the growth of the industry also comes the natural increase in demand for lab space and research facilities to sustain this expansion.
Commercial construction firm Skyline Construction has seen a huge growth in this area over the last few years, and the company has assembled a team of experts to assist clients in this niche market throughout the Bay Area, San Diego, Chicago and Seattle. The company’s focus in this sector has also translated into significant investment into the space, and Skyline has recently announced that it acquired a specialty life science contractor in San Diego, Prevost Construction.
“As the life science market becomes increasingly diverse, food technology labs and testing facilities are becoming more prominent than traditional pharmaceutical research spaces we often think of when we hear the term life sciences,” explained Rene Olivo, president of Skyline’s California portfolio.
WHETHER IT’S FOR FOOD-TECH OR LIFE SCIENCES, IT’S ABOUT THE CRITICAL ADJACENCIES BETWEEN THE SPACE IN THE BUILDING
Yet, the lab spaces in this sector do require somewhat unique features, which are not usually seen in typical labs utilized for life science research. “So what makes these spaces unique compared to traditional life science labs? A lot of our food-tech tenants have showrooms that are accessible to the public for viewing and testing. This is a completely different model from traditional R&D labs, which are private and utilitarian,” said Olivo. “Food-tech spaces, in contrast, display presentation kitchens, sensory display rooms and are built with an investor mindset, because many are still out raising capital.”
M2 Ingredients Inc., a food producer headquartered about 35 miles north of San Diego, is one of the world’s leading producers of certified, 100 percent organic mushrooms that are grown, dried, milled and packaged into powders to support daily health, sports performance, recovery and cognition. The company is relocating its headquarters from Carlsbad to Vista, Calif. to create a 150,000-square-foot warehouse/lab space that will be used for industrial indoor farming, manufacturing and distribution, along with an additional 20,000-square-foot traditional office space needed to maintain its operations.
Zagar Consulting, a consulting firm that works with a wide range of life science tenants with site selection, start-up operations, project management and design across the U.S., has also witnessed many of these same changes in the life sciences industry.
“In terms of similarities, when you’re out looking for buildings and have to design the space, whether it’s for food-tech or life sciences, it’s about the critical adjacencies between the space in the building,” said Gordon Zagar, president of Zagar Consulting. “How product and raw materials move through the space is critical in both industries. The workforce itself also looks similar; employees are moving between life sciences and food-tech companies pretty seamlessly because the skillset is easily interchangeable.”
Zagar, who has over 30 years of experience in the biotech industry working for firms such as Amgen and Genentech, has witnessed firsthand the rising activity in the food-tech sector. “The landscape of life-science has changed to a higher concentration of R&D. The food-tech industry has come on strong and currently makes up 50 percent of our clients,” he said. “A company in this space might have raised $50 million dollars or be in their Series A fundraising phase, so they’re looking to move through the development process more quickly than traditional pharmaceutical companies.”
Over the next several years, the proliferation of food-tech-based products for consumers is only going to increase, said Zagar. “The plant-based section within grocery stores continues to grow. In the next five to ten years, cell-cultured meats will join these food options, as well as mycelium products like The Better Meat Co.,” he added.
The similarities between food tech and typical life sciences are not just obvious in the lab. “Commercial real estate hubs for both life science and food science continue to be centered around academic clusters, information exchange and incubators in areas like San Diego, Seattle, South San Francisco and Berkeley,” Zagar said. “There’s a full life-cycle of academic knowledge, incubator, startup, to full-scale production that we’re seeing.”
Ultimately, the rapid growth of the food-based biotech industry will have a compelling trajectory in the coming years and will continue to make its impact on the commercial real estate industry as a whole. A lot of innovation is entering this space, and companies are vying for investment and venture capital dollars in order to deliver products that can transform the food industry. Yet, its success will likely be driven by the markets where scientific research is already conducted and where a strong foundation of academic and business development activities already exists.
This article was written in collaboration with Skyline Construction.
About Skyline Construction
Skyline Construction is a people-first organization that specializes in commercial interior construction projects. The company operates nine offices nationally. Skyline is 100% employee-owned and believes in building better outcomes every day. As a $600M company, Skyline is rapidly expanding with the vision that transparency, predictability, and consistency can lead to a better end product. Skyline is proud to be named one of Inc. Magazine and Crain’s Chicago Business Best Workplaces in 2022.