Calories, Carbon, and Resources: Investing for Effect in Food & & Agriculture

Stanford GSB Impact Fund: Our 2022 Food & & Agriculture Thesis

Eating might be an average activity for a number of us, yet the food system behind it is ripe with unique problems. On the human side, one in every nine people are undernourished, while two in five adults are obese. ¹ With the occurrence of inexpensive, over-processed foods, it is now feasible to be at the same time overfed and undernourished. On earth side, this industrialization of food and agriculture has deteriorated environmental resources and communities at a startling pace. ² Overconsumption of cultivatable land, freshwater, and dangerous chemicals from ranch to fork is a substantial contributor to climate change, which additionally endangers the stability and resilience of food systems and areas of the future.

By 2050, the international populace is expected to grow by 50 % and land degradation is expected to raise by 90 % presuming current patterns hold. Three This leaves us to question, “Exactly how can we sustainably feed our world without destroying it?” In this message, the GSB Influence Fund’s Food and Agriculture deal group shares three vital pillars to attaining this vision throughout food production, consumption, and supply chain.

Column 1 (Food Manufacturing): Regenerative Agriculture

Regenerative farming is essential to sustainably offering our expanding worldwide need for food, both in quality and yield. Current practices are carbon intensive and leave our soils diminished of vital nutrients. Conventional farming likewise makes up a significant portion of the $ 8 T+ worldwide food and agriculture market, four with the best developments to be made in regenerative method fostering. By altering the method we farm and the techniques in which we have the ability to track our effect, we can grow our food supply in a much better method for the earth. We are particularly curious about the adhering to locations:

Agricultural hardware and software platforms are jumpstarting manufacturers’ change to regenerative agriculture methods and enhancing yields at the same time. Patterns in artificial intelligence and robotics allow farmers to produce more successfully. Beyond precision agriculture, expert system likewise plays a vital function in farming SaaS systems’ abilities to measure carbon sequestration and even more incentivize regenerative agriculture methods. In the organic protein room, software and hardware development is also improving animal and dirt wellness at range.
Feed additives are assisting to create much healthier animals and a much healthier world. Boosted feed ingredients in tank farming are minimizing waste, while producing healthier salmon and increasing earnings margins. In livestock operations, seaweed ingredients are found to reduce methane discharges by over 75 %.
Breakthroughs in animal well-being are good for the world, great for animals, and good for our health and wellness. Firms are concentrated on developing brand-new, extra resistant pet types– enhancing genetic variety to improve the health and durability of animals, which have commonly been reproduced for size and performance.
Breakthroughs in plant advancement & & protection purpose to boost plant return, nutrition, and health and wellness versus parasites and results of climate modification. The emerging systems utilize mycorrhizal fungi, bio-bactericides, probiotics, to name a few. The causal sequences of such technology encompass farmer resources, ecological conservation, food safety in creating countries, and food waste reduction.

Column 2 (Usage): Different Healthy Protein

Different protein could make up 11 % (~$ 290 B) of the worldwide healthy protein market by 2035, ⁵ according to a recent report from the Boston Consulting Team. Customers, particularly Generation Z and Millennials, have a twin objective of consuming foods that are both healthy and balanced and valuable for the atmosphere, and different healthy proteins provide on this twin mission. Because of this, resources has poured into the room, with 2021 noting the second year in a row in which investment levels surpassed $ 3 B. six We have actually especially focused on the adhering to when taking into consideration investments in this room:

Tidy active ingredient tags brands can distinguish themselves against first-movers in plant-based healthy protein, which have generally improved their products with unhealthy synthetic ingredients and chemicals. We are focused on clean and basic ingredient labels with very little man-made active ingredients and preservatives.
Cell-based and microorganism/fermentation-based items keep much of the healthy elements of animal proteins and supply a promising path to taste parity offered the greater flexibility of byproducts (eg. fermented mycelium meats with coarse structures that very closely resemble meat).
International scope is important provided the robust and promising developments in alternative protein in Singapore, Israel, China, Brazil, and several other markets; we have actually enjoyed speaking with owners from around the world!

Column 3 (Supply Chain): Waste Reduction

By 2050, it is estimated that worldwide GDP will be close to $ 180 trillion. Seven This suggests we need to not only boost result yet additionally use less sources to do so. In addition, we jointly need to be less wasteful. The United States alone generates over 30 % of the world’s waste (out of proportion when you consider its size). This is a major trouble. That stated, this is exciting for the food & & ag group. Why?” Need is the mommy of invention We’re excited to see just how startups can attend to the pressing needs of culture. We have actually invested some time exploring sustainability within food & & ag and have especially focused on the following: upcycling, supply chain development, and sustainable product packaging.

Upcycling is among the hottest fads in CPG– forever reason. According to research study, 38 million lots of food end in landfills or, at best, is composted or fed to pets. ⁸ Start-ups around the world are beginning to maximize the possibility to prevent waste and reuse ingredients/food to produce brand-new products that don’t compromise on taste or capability
Supply chain optimization addresses the root cause of the waste issue, though we additionally assume assisting to sell surplus/imperfect foods is appealing. We want discovering exactly how data/analytics/other systems can help reduce overproduction/waste previously in the supply chain
The shift to compostable plant-based product packaging from single-use plastic food product packaging is a crucial trend provided the destructive effect of single-use plastic both on the environment and human health and wellness

Our team has a depth of experience in this area, from dining establishment approach, CPG procedures, huge ag advisory, to wellness-focused investing. Along with idea leaders and professionals in effect investing, we are seeking to companion with businesses whose objectives are lined up with our vision of a food system that maintains both people and the world. If you would love to chat regarding methods we can assist your business grow, please get in touch with us here We can’t wait to meet you.

The Food & & Agriculture Group , Stanford GSB Effect Fund

Daniel Faierman, Luis Flores, Isabelle Kerr, Keunyoung Ma, Shaneez Mohinani, Maddy Shannon, Bryce Wilberding, Meghan Wood