A Fast Changing Food World

By Alexandre Stephan , Partner, SP Ventures

Alexandre Stephan , Partner, SP Ventures

Farming has reshaped the way we exist, and how the planet works. Economies and governments rely upon it. However, the current ag. framework is unsustainable. Agribusiness as of now, represents a large portion of our water (70%) and a high degree of our land use (40%), just as the majority of human-created ozone depleting substances (30%). With diminishing natural resources, the test of how to nourish a developing, urbanizing populace without further harming the earth is becoming increasingly more important.

There will be 10 billion people living on our planet by 2050. Farmers will have to grow more food in the next 30 years than they have in the last 8,000 years combined with less arable land and fewer people desiring to become farmers. Farmers will also have to grow more sustainably, more efficiently, and adapt to a changing consumer behavior. In order to produce healthy food in a sustainable way to such a large number of people, it involves rethinking our current approach to the food supply chain and intelligently applying technology to improve what nature already provides.

Additionally, there is a need to create a food ecosystem that integrates small and medium farmers while conserving natural resources with friendly practices to the environmental footprint. There is little doubt that governments and policymakers will have a profound impact on how the food ecosystem will evolve, as these stakeholders are directly affected by the impact of a changing climate and natural resource constraints.

Urban population will bring added pressure to governments to clean the air, and food producers to install socially responsible practices such as: reduce GHG emissions and waste, and more transparency on ingredients and production practices. It could even be affirmed that positive impact will become a core value of food companies.

In the past, before social media came to life, large corporations would generate tremendous influence in how consumers viewed food/ingredients/brands thus affecting directly how and what people would eat. In a “real-time” “informed” and “omnichannel” world, these companies had the power over information to communicate with the market in their benefit. Yet evolving market dynamics threaten the traditional food industry to adjust rapidly on a constant basis in order to stay ahead of consumers. These multinationals now have a new motto: Change/adapt fast or lose attractiveness to consumers.

Spearheading this transformation is the consumer. Consumers are changing their habits and getting more demanding. They are looking for greater output traceability, compliance, and chemical-free food, leading to healthier, sustainable, functional and culture-adapted food. Awareness is growing about the significant impact on the planet and culture that the current model of agricultural production has had. The rules of the game need to change for the farmers, and they agree with it. They are the ones with the most to gain from changing agriculture system while the most to lose if the current “modus operandi” does not change.

But hope should not be lost. There is a revolution around the agribusiness value chain that is taking place right now. Emerging innovations are changing how we produce, distribute and consume what we eat, bringing a greater level of certainty to the notoriously uncertain business of growing food. There are quite a few new unique technologies aimed at increasing productivity, improving health and environmental standards, and bringing new items to deliver on dynamic consumer preferences. These include biological solutions with enhanced environmental safety and radical new methods that maximize yield and increase the resilience of plants to diseases and pests. Innovations such as vertical farming, lab-grown food and algae aquaculture, besides digital technologies such as big data, the Internet of Things and artificial intelligence are already transforming the food/agriculture supply chain.

In light of the above discussed, I see myself as an investor that can bring further change to the future of agriculture, food, health and sustainability while also looking for long term returns to my investors. I see new opportunities arise on a daily basis to back entrepreneurs/ ideas/innovations that are willing to change the current food system.