How are we going to feed an expected 10 billion people by 2050 in a sustainable way? It is a daunting task. Our climate is changing, and a combination of environmental and economic factors are already resulting in widespread food shortages. There is no simple solution to this problem, but innovation in the food and agtech sector will help alleviate the burden. To make this possible, stakeholders – including researchers, entrepreneurs, investors, and governments – need to make agrifood innovation a priority immediately.
We’ve already started witnessing the devastating impact of climate change across the world. Agriculture and food systems are particularly vulnerable to the extreme conditions – including droughts, floods, fires, pests, and disease – associated with this environmental crisis.
Ironically, agriculture is itself a part of the problem, significantly contributing to greenhouse gas emissions, freshwater use, deforestation, and loss of biodiversity. Subsequently, there is a strong push for more sustainable agriculture industry: one that is less reliant on the use of synthetic fertilizers, chemicals, and water; that not only requires less land, but also regenerates the soil and sequesters carbon.
The sheer number of scientists, innovators, entrepreneurs, farmers, chefs, communities, and so on that are busy innovating in this complex field gives us reason to be optimistic. With so many helping hands and bright minds on the task, there is hope that we will find a way to drastically change our food system to make more sustainable and climate resilient.
“Food and agriculture innovation must go hand in hand: to shift towards a more sustainable and climate-proof agriculture will require us to adapt our diet, rethink and anticipate which crops we need, and where and how we should grow them.” – Aurelie Nowack
Progress has been made so far. The agrifood industry has provided farmers around the world with machinery, irrigation, fertilizers, improved crop varieties and crop protection. There has also been a huge uptick in data and connectivity, which fits the needs of a highly productive food system that responds to consumer demands. The intensification of a limited number of food and feed crops in the past 70 years has reduced famines and food shortages, while sparing land for nature.
But if we are to reduce our greenhouse emissions, helping farmers increase their yields is not sufficient anymore. We have just under 8 years left to meet the UN 2030 goals, to mitigate the impact of climate change and limit global warming to 1.5º Celsius above pre-industrial levels. Due to the urgency, food and agriculture innovation must go hand in hand: to shift towards a more sustainable and climate-proof agriculture will require us to adapt our diet, rethink and anticipate which crops we need, and where and how we should grow them. And these changes need to happen very soon.
Problematic diet
Currently, four crops dominate agriculture lands globally – wheat, rice, soybean, and maize. These four are indicative of the widespread adoption of diets based on carbohydrate-rich crops and animal protein (livestock which is often fed soy or corn). The unfair distribution of these plentiful calories has resulted in 462 million adults and 200 million children in the world being underweight, while in other parts of the world almost 2 billion adults and 380 million children are either overweight or obese (according to the Food and Agriculture Organization of the United Nations (FAO)).
“The world population simply cannot be fed on the meat- and dairy-rich diet currently predominant in high-income countries.” – Aurelie Nowack
As we redesign our global food system to stop hunger and avoid an epidemic of diet-related diseases, it is crucial to ensure we not only produce nutritious food but also that we make solutions available globally. As the world population rises, we’re not only experiencing an increased need for food in terms of the total number of calories required to keep the population healthy – with rapidly growing urban populations and improved incomes, the demand for specifically protein-rich foods is skyrocketing. Unfortunately, the world population simply cannot be fed on the meat- and dairy-rich diet currently predominant in high-income countries. Animal proteins as a group are the least planet-friendly protein choice available to us, requiring huge amounts of resources to produce – including land, water, and feed – while driving greenhouse gas emissions, deforestation, and zoonotic diseases.
Reducing the demand for animal products needs to come from two fronts: discouraging people from adopting this ‘Western’ diet in the first place; and encouraging cultures who currently adhere to it to switch to more plant-based proteins. Unfortunately, progress is likely to be slow: to illustrate, a recent survey by the European Investment Bank concluded that the percentage of Europeans who would find it easy to give up meat is a measly 16%.
Efforts are underway to help consumer adoption of protein alternatives along. There are more vegetarian options on supermarket shelves than ever before, with animal products replaced by plant-, fungi-, and even insect-based foods. But to drive widespread adoption, the commodities required to produce these new products will need to be made available on a large scale – intensive but sustainable production will be key. Companies like Belgian start-up Protealis are working hard to improve sustainable plant protein production – predicting local needs and breeding new seeds before the farmers even ask for it.
For the time being, livestock will clearly remain a major part of our agricultural industry, which means that parallel efforts to improve the sustainability of meat, egg, and dairy production is essential. This also includes improving the health and well-being of the animals – as Belgian start-up Animab is doing with oral antibodies for livestock – for both ethical reasons and prevention of future pandemics triggered by zoonotic diseases or antimicrobial resistance.
VCs have appetite for agrifood innovation
Redesigning our food system – to combat climate change, provide food security, and improve human health – is becoming more relevant by the day. It’s a promising sign that irrespective of the state of the world economy, substantial investments are taking place in this sector. Despite the COVID-19 pandemic and resulting market instability, 2020 was a record year for VC agrifood investments, with over $30 billion spent on new initiatives. Which makes it all the more astounding that investments in the following year increased by a further 85%, with VCs injecting $51.7 billion into new agri-food innovations in 2021. The trend is set to continue in 2022, despite the Ukraine-Russia conflict impacting the agri-food sector.
As indicated by the VC interest, there are numerous business opportunities to be found in the sector. Many solutions are being developed by academic labs, start-ups, or within large companies, aiming to improve everything from the way we exploit crops to livestock, fisheries, and forestry. Innovations include novel crops varieties adapted to biotic and abiotic stresses; new approaches to fertilization, plant health, weed control, and vertical farming; digital technology to help breeders and farmers; carbon farming; reducing waste and valorizing waste- and side- streams (to name but a few). The number of agri-food start-ups is growing fast, fuelled by specialized incubators like biotope by VIB.
There is plenty of room for the many approaches being developed, as we will need a plethora of creative solutions to tackle this challenge. It bears mentioning though that greenwashing and impact washing are increasingly problematic – many start-ups in the agri-food sector will claim to have a profound effect on the environment, and quantifying their actual impact is difficult. Of course many of them genuinely do, which is why we – as investors active in sustainable agriculture – need to go beyond the claims of environmental activities and ESG scores and assess potential investments on an even deeper level.
Examining all these ongoing efforts, it’s clear that there are numerous technologies in development that together can provide solutions to the crisis facing the world’s agricultural industries and food systems. Currently, there are still barriers preventing progress, which require innovative regulations and a change in consumer mindset. If these novel technologies are to have a potent impact, their deployment and adoption needs to be accelerated further. Investors, innovators, scientists, and governments all need to come together to drive this change.
