Sustainable Food and Agriculture: Investment Deep Dive by Esmée Fairbairn Foundation

Investment Deep Dive

Sustainable Food and Agriculture

Translating themes into investable opportunities

December 2024

Report by Hayley Mole and Thomas Slattery for Esmée Fairbairn Foundation

Forward from Esmée Fairbairn Foundation

A deep dive series on Thematic Impact Investing

Esmée Fairbairn Foundation aims to improve our natural world, secure a fairer future and strengthen the bonds in communities in the UK. One of the largest independent funders in the UK, we provide £40m to £50m in grants each year towards a wide range of work in support of our aims. We also have a £60m allocation towards social investment (also referred to as impactfirst investing) for organisations with the aim of creating social and environmental impact.

In 2021, we established a £10m allocation for impact investing to test the potential for achieving financial returns through impact funds that align to our goals and which generate a measurable impact. We are now building out our thematicled investment strategy to explore how we might integrate Esmée’s strategy across our spectrum of capital.

To help us do this, we are commissioning a series of ‘deep dive’ reports to explore investment opportunities for impact investing, which is impact-driven to support our mission and our main investment portfolio.

We hope that by sharing the deep dives and focusing on their practical application, there is an opportunity to strengthen and grow thematic impact investing, and in turn, effect broader change for both people and planet.

We commissioned Hayley Mole and Thomas Slattery for our first deep dive, focusing on the theme of sustainable food and agriculture, which contributes to our impact goals in our aim for Our Natural World.

The review has looked at the market and investment opportunities as they currently exist, which in isolation do not necessarily transition us to the market we wish to see. It has been extremely useful in identifying and/or positioning companies and funds, that can accelerate the development of new and better models of food and farming that meet our impact goals.

But we are also cautious that there are investments that, at best, could perpetuate a broken food and farming system and/or divert resources into incremental solutions that do not engage with the systemic nature of problems we face and the transformative change we need to see.

Forward from Esmée Fairbairn Foundation

A deep dive series on Thematic Impact Investing

Whilst the deep dive goes some way to plotting a way through this for investment opportunities, we know a full spectrum of capital is needed. This is why we are challenging ourselves to understand how opportunities identified in this deep dive can work in concert with our grants and social investment. For example, how can the grant funded work we support on influencing policy and regulation create the conditions for better food and farming models where we and others can deploy more of our capital?

Our grant and social investment programmes also enable us to take a higher risk, longer-term approach to piloting future models, such as more localised supply chains, that will not offer market rate returns for the foreseeable future but will pave the way for radical and transformative models. A key next step is for us to consider how we can best join up these areas of our work.

More information on our approach to investing in sustainable food and agriculture is on pages 92 to 100.

Future deep dives will focus on decarbonisation, circularity, freshwater, nature finance, employment and training, renewables, sustainable aquaculture, community-led regeneration and more. www.esmeefairbairn.org.uk

About this report

Commissioned by Esmée Fairbairn Foundation, this report aims to highlight and deconstruct the investment opportunity across the sustainable food and agriculture value chain (also referred to as the agrifood system). This work is for investors and asset owners considering their approach to this theme and who are early in the process, as well as anyone interested in the role private capital can play in transforming food systems.

Through the lens of impact investing, it explores the economic and investment potential of key themes in food and agriculture, alongside impact outcomes. With the assumption in mind that both are possible, this report will seek to landscape and categorise what is currently investable from an asset owner’s perspective, and areas of interest within the theme.

Extensive research has sought to clarify what sustainability or a sustainable food systems transformation means in food and agriculture, and what principles, goals and guidelines can be followed to achieve best-case outcomes. This research thus leverages much bigger pieces of research to form its conclusions, and compares these findings to bottom-up research on individual fund opportunities. This report then investigates where themes can be accessed across asset classes, and where capital gaps exist for more catalytic involvement.

What is Thematic Investing?

Thematic investing is a forward looking, top-down approach based on capturing emerging trends. These structural shifts and macroeconomic, geopolitical and technological megatrends are also reflective of global crises, therefore a tool to leverage the most appropriate forms of capital towards solutions.

Disclaimer

This report is published for educational and illustrative purposes only. It should therefore not be construed as promoting any specific investment products or opportunities and does not constitute investment advice or any other kind of advice.

The contents of this report have been informed by the insights of a number of people across the food, farming and finance/investment sectors (as listed in the Acknowledgements). However, the opinions expressed in the report are those of the authors.

Whilst the report was compiled with reasonable care, Esmée Fairbairn Foundation and the authors make no representation or warranty and assume no responsibility or liability for the accuracy or completeness of the information set out in it or for any use by any reader of the information set out in this report.

Each reader of this report should take full responsibility for evaluating and acting on the basis of any information contained in it and should seek its own investment, financial, legal, tax or any other professional advice as may be necessary in relation to its specific circumstances.

About the authors

Hayley Mole and Thomas Slattery, independent consultants in the field of impact investing and sustainable food systems.

Hayley is an investment professional with experience in the food and agriculture sector spanning both professional experience in New York/ London for an impact-dedicated investment advisory firm, as well as hands-on exposure to operating farms in South Africa and the UK, which formed an integral part of her upbringing. As VP, Private Market Investments at Flat World Partners until 2023, Hayley led investment research, process buildout, due diligence and client engagement for foundations, pension funds and HNW families on private market investments across numerous impact themes, and included building and maintaining the funds pipeline in food and agriculture within a broader database of 300+ managers. These investments ranged from early stage agrifoodtech to large scale farmland, later encompassing the emerging sub-themes of carbon and natural capital. She holds a MS Sustainability Mgmt from Columbia University.

Thomas is an expert at the nexus of regenerative agrifood systems, technology, innovation, and thought leadership content. He is wholeheartedly dedicated to advancing sustainability and regeneration within the agrifood sector and Thomas holds a master’s degree in Agricultural Technology and Innovation. He leads initiatives that create and share thought leadership in this field, nurturing significant connections between innovators, investors, producers, and industry. Thomas has 15 years of experience as a marketing consultant and advisor, demonstrating a versatile skill set in marketing and communications across various sectors. His extensive portfolio includes working with renowned companies such as Airbus, ASDA, Bayer, Cafedirect, Canon, Capco, Carlsberg, Castrol, Capcom, GSK, HTC, Nokia, and Unilever.

Executive Summary

Capital is flowing into food and agriculture sustainability, but not at the scale, and with the prioritisation necessary, to meet both the challenges and opportunities facing the sector.

Financial actors can leverage the socioeconomic opportunities of the food systems transition to seek investment returns, and simultaneously, understanding these system challenges can serve to mitigate the increasing financial risks presented by the current food system.

At the same time, these efforts can underpin strong economic recovery, climate action, nature protection and public health. The market opportunity for private capital in agrifood is consequently one of alpha generation and risk mitigation, as well as, importantly, influence.

This work focuses on Thematic Impact Investing, whereby targeted thematic alignment can mutually seek financial returns and impact.

It zooms in on where private capital can play a role in a sustainable food systems transformation:

•Shifting capital allocations to impact

• Driving engagement

• Setting standards, transparency and disclosure

• Driving generational change

• Collaboration across the supply chain

Food system challenges and drivers

Global megatrends of population growth, shifting diets, and technological advancements are intertwined through agrifood value chains with the global challenges of environmental degradation and climate change, socioeconomic inequality and poor public health, among others.

These system challenges are also causal drivers for a wide range of policy, technology and producer/ consumer responses to transform the food system.

The next page gives a summary of the challenges and drivers, leading to the three themes explored in this report.

Executive Summary

From drivers to themes for systems change

Demand-side and Supply-side Market Drivers

Environmental Challenges

Strong fundamental driving forces underpin agrifood industry growth such as population growth, shifting diets, resource and land scarcity, and technological innovation.

The climate crisis and corresponding nature crisis are integrally linked to food production.

Food Security Challenge

Supply chains are under pressure and at risk of “unknown unknowns”, including global conflicts and weather events, susceptible to single points of failure.

People are central to these value chains, from workers to consumers, with deep ongoing inequities and access disparities.

Socio-economic Challenges

Poor diets drive poor health, and a huge economic burden – particularly in the UK.

Food needs to be produced continually through more sustainable methods, using fewer or different resources, and accounting for externalities. This implies continued efficiency gains and a reduction in food loss and waste through the value chain.

Nature has been fundamentally ignored – all transitions, practices and technologies should aim to protect and restore nature by preserving intact ecosystems, rehabilitating degraded landscapes, and enhancing biodiversity.

Resiliency, transparency and traceability, whilst seeking efficiency and mitigating food loss and waste through the chain. Food security and diversification of food sources is also critical.

Themes to address the challenges and capture the driving opportunity

Agricultural labour should be fairly compensated, rural livelihoods prioritised, gender disparities addressed and efficiency should not come at the expense of people or they environment they live or work in.

Health and nutrient density are key, alongside consumers making healthy choices, through development of less processed, nutrient dense food, while improving consumer knowledge and behaviour towards optimal nutrition and health.

1. Sustainable Agriculture and Food Production

2. Supply Chain Resilience and Traceability

Aligning themes to the agrifood value chain

The complexity of the food system also speaks to the complexity of finding solutions – whereby solutions to one serve as solutions to another.

Whilst the themes overlap in many ways, it's helpful to link them to the agrifood value chain to better understand where interventions are possible.

Through these themes, the investment opportunity can be captured on the front edge of an evolving system, whilst simultaneously seeking to deliver true impact and sustainable systems change through resolving system tensions.

Sustainable Agriculture and Food Production

Primary production forms the foundation of all agrifood value chains, yet it bears a disproportionate responsibility for greenhouse gas emissions and environmental harm. While interest in sustainable methods, particularly regenerative agriculture, is growing, scaling their impact requires significant capital investment.

This can be achieved through real assets like farmland and infrastructure, transition finance via private debt, or venture capital to drive innovation and enabling technologies. These investments can advance sustainable production systems and enhance the measurement, monitoring, and reporting of outcomes, supporting the broader transformation of agricultural practices.

Supply Chain Resilience and Traceability

Food processing and distribution connect sustainable production to healthier consumption, and are responsive to both demand and supply side drivers. The midstream is critical to reducing food waste, and ensuring local food security is not depending entirely on offshore processing.

However, midstream receives less attention from private impact investment than other parts of the value chain.

(Re)developing infrastructure via real assets or private equity stage investments, with ingrained innovation catalysed by venture, needs aligned capital to build and adapt to the system which is changing around it.

Nutrition and Health-Focused Food Innovation

Food consumption drives the value chain to adapt in response to consumer demand or to regulation. In the face of diet-related poor health, macro-drivers are beginning to converge on “nutrition” in food, in addition to sustainability. This has helped health and nutrition to become a priority in end products and a key focus in the value chain.

Starting with alternative products that are striving for better health and sustainability, alongside technologies supporting traceability (venture capital), this theme can be carried backwards through value chains with local context for supply availability, production practices, and innovation in ingredients.

Executive Summary

Where investors can look

Investable Areas | A framework for agrifood investments as 20 system interventions

Sub-themeswithin agri-foodguide the goalsof where capital can effect change.However, thefood system has endless componentparts,from farms and other forms ofprimary production,toinnovationsin supplychain efficienciesandtechnologieswhich are reshaping theway wethinkaboutproducing and consuming food.Based ondiscussionand research, this report has landed on 20 investable areas of priority, for consideration.

What does this do and how can its operations be labelled in the food system?

See the glossary on pages 39 and 40 for information about each investable area.

How is this addressing the imperatives for change?

Bybreakingout the systemintothese parts,andfocusingon investable,sustainable focus areas,potential investmentscan be alignedtoaframework tovisualise where theyfit in the system.Distinguishingbetween the WHERE and WHAT can help provide clarity.

The themes,investable areasandvalue chain purposefullydonot fullyalign,to acknowledge the complexity and non-linearity of the system.

Executive Summary

What to consider in practice

The context of each investment, its role in the value chain, the team driving it forward, and the appropriateness of the capital to the business model of the company are paramount to decision making on allocations to each theme.

In impact investing, food and agriculture is most commonly approached through real assets and venture capital, where longtermism and practice shifts can meet innovation across the value chain.

Here, we consider the systems change role of each asset class and opportunities within each theme.

Assets

Producing food with nature and health central to farming and land management practices.

Equity

Agrifood Value Chain Operating Businesses

Same as above, plus connecting the up- and downstream value chain and catalysing new markets.

Venture Capital

Enabling the transition with technology across the value chain

Private Debt

Financing change and bridging near term expenditures.

Blended Finance (for further research)

Leading in other forms of capital by buffering traditional returns expectations.

Scaling Sustainable Agriculture and Food Production

Supply Chain Resilience and Traceability

Embedding Nutrition and Health-Focused Food Innovation

Opportunities with experienced managers, with a clear thesis how their operations are more sustainable than the status quo (contextualised for region, product type, opportunity cost relative to natural capital).

Managers that are investing in hardware and solutions to tough, capex heavy infrastructure challenges.

Managers looking to expand learnings from production downstream through vertical integration, or where synergistic assets can prove out the ability for midstream development with technology integration.

Opportunities which can link the downstream, consumer and regulatory pull, to the upstream production operations where nutrient density can be linked to inputs and farming practices.

Early stage opportunities either directly or via fund managers, with the depth of experience to cover more technical areas in deeptech and agbiotech.

Digitisation solutions for supply chain connectivity, transparency and efficiency – notably those applicable across different supply chains and product types.

Opportunities in consumer products where nutrition meets sustainable consumerism goals, understanding if expanding the product base is responding to validated demand.

Tailored transition finance with flexibility around growing seasons but stringency around practices.

Real

Private

Creating

Transition Finance Technology and innovation Land and Infrastructure

Executive Summary

The Market Map (Europe)

Investable Landscape |The Market Map (Europe)

Examples of fund managers investing in food systems (by

estimated AUM of most recent fund)

Managers investing in Food Systems (by estimated AUM of most recent fund)

/Fundraising

(or unknown)

Back to market 2025

Tikehau Capital

Van Lanschot Kempen

One Ventures

Thisreport reviewed 60+ global venture capitalfund managers with eitherexplicit focus or part-focus onthetopic offood and agriculture,to assess areas ofthematic focus, portfolioconcentration andoverlap,and differencesin strategy.

1 NotaEuropean-focusedfund,but featuredhereduetoEsméeFairbairn Foundationinvestment.

Indicatesgeneralist/multi-sector climatemanagerswithagrifood coveragefeaturedduetoEsmée FairbairnFoundationinvestment,not agrifoodspecific.TheEuropean climatetechandnaturalcapital landscapeissignificantlybroader thanmanagerslistedhere.

these, 27 are Eurocentric venture and growth equitymanagerswith potential or existingUKexposure,alongside anumberof dedicated realassetmanagers (somefollowing PE-like strategies).Acknowledgingthat the agrifood techspaceparticularly has seena tough few years,there isaresurgence in fundactivity andinterest indicatedbythe breadof these strategies.This list is not exhaustive but provides good coverageoftheimpact-focused manager subset.

these, 27 are Eurocentric venture and growth equitymanagerswith potential or existingUKexposure,alongside anumberof dedicated realassetmanagers (somefollowing PE-like strategies).Acknowledgingthat the agrifood techspaceparticularly has seena tough years,there isaresurgence in fundactivity andinterest indicatedbythe breadof these strategies.This list is not exhaustive but provides good coverageoftheimpact-focused manager subset.

Pelican Ag

Bramble Partners The First Thirty (TFT)

Capagro

Climate

Peak bridge (Edmond de Rothschild)

Gullspång Re:food

Five SeasonsVentures

Green Generation

Blume Equity

key vertical)

Anterra

Peakbridge (Edmond de Rothschild) Mudcake

FoodLabs

GullspångRe:food

Five SeasonsVentures

Green Generation

Blume Equity

Kempen SDG FarmlandFund

Tikehau Regenerative Agriculture Fund

Transforming the system

Introduction: Transforming the system

The role of private capital

Capital is flowing into food and agriculture sustainability, but not at the scale and with the prioritisation necessary to meet both the challenges and opportunities facing the sector. Financial actors can leverage the socio-economic opportunities of the food systems transition to seek investment returns, and simultaneously, understanding these system challenges can serve to mitigate the increasing financial risks presented by the current food system. At the same time, these efforts can underpin strong economic recovery, climate action, nature protection and public health. The market opportunity for private capital in agrifood is consequently one of alpha generation and risk mitigation, as well as, importantly – influence.

Research has zoomed in on where private, return-seeking capital can play a role in a sustainable food systems transformation, including the opportunity for returns, at a global level.

Provide Significant Funding

Private capital can bridge funding gaps, by supplying essential resources for growth and innovation.

Shift Capital Allocation

Prioritising sustainable investment and putting capital behind them can help shift the broader financial system towards more responsible practices, and can unlock larger pools of public and/or catalytic funding alongside it, through blended finance models or public private partnerships

Engagement

Institutions with significant portfolio exposure to food and agriculture can engage with companies to improve their policies and practices, and align them with global standards and targets.

Collaborate Across the Supply Chain

Working with stakeholders across the supply chain and convening stakeholders in nodes of influence can drive systemic changes.

Setting Standards, Requirements, Transparency and Disclosure

Drive Generational Change

Investing in emerging technologies and innovative business models can drive sustainable disruption and resilience, which often do not fit the timelines or restrictions of other forms of capital. Working in tandem with policy, private capital can support very longterm trajectories.

Expectations set by investors can increase transparency, data availability, monitoring and reporting in the industry as a whole, ultimately serving goals of the broader sustainable investing space. This can also push corporate reporting, enhancing transparency on global financial flows and impact, and can be driven by public awareness raising.

Transforming the system

Thematic Impact Investing

Thematic investing is a forward-looking, topdown approach based on capturing emerging trends. “Themes” emerge from assessing structural shifts or driving forces, believed to shape the future of economies and societies, which then underpin a multi-asset class approach to investment selection.

From an impact perspective, thematic investing and its alignment ability offers the opportunity to focus on structural shifts and macroeconomic, geopolitical and technological megatrends from the lens of global crises, and to leverage the most appropriate forms of capital towards solutions to these challenges.

Consequently, the goal of thematic investing can be both return-seeking and one of impact and systems change.

The Impact Investing Spectrum by Sonen Capital (see the next page) is commonly used to highlight where opportunities sit in the discussion of financial returns and potential trade-offs for impact outcomes. The Spectrum moves from “traditional” investing, which prioritises financial returns, through to forms of impact capital that put environmental and social outcomes as higher priority.

Transforming

the system

Thematic Impact Investing

Thematic Impact Investing is the first segment of capital focused on maximum-impact. Through this focus, targeted thematic alignment can mutually seek financial returns and impact. Competitive Returns

Seeks financial returns regardless of Environmental, Social or Governance (ESG) factors Investments screened out based on ESG Risk (“negative screening”)

Negative screens: (examples) Tobacco, alcohol, weapons, gambling, pornography, nuclear energy

Sustainability factors and financial returns drive investment selection Factors considered:

• Carbon footprint

• Resource use

• Waste reduction

• Compensation

• Product safety

• Gender equality

Targeted themes and financial returns drive investment selection

Solutions for:

• Climate Change

• Population growth

• Urbanisation

• Water scarcity

• Food systems

Social and environmental considerations take precedence over financial returns

Financial returns disregarded in favour of social and environmental solutions

Support for:

• Innovation and risk-taking

• Proof of concept/pilots

• Enabling environments

• Commercial capital leverage

Transforming the system

Areas of further research

This work seeks to focus on the driving imperatives that form the basis of the agrifood investment opportunity, not necessarily full coverage of the systems challenges which are all investable through multiple focus themes and sectors.

As a result, the following themes have been acknowledged with a recommendation for further work outside the scope of this report.

Natural capital and ecological restoration, through the lens of pure-play conservation and restoration, as well as through timber and forestry investments.

Water, as an overarching environmental challenge.

Circularity, supply chains and waste, agnostic of only agrifood.

Aquaculture, fisheries and oceans, as a separate and nuanced value chain.

Biomass energy and biofuels, which are primary drivers of global commodity production, in addition to food.

System

Sustainable agrifood A systems approach

The food system describes the entire range of actors and their interlinked value-adding activities involved in the production, aggregation, processing, distribution, consumption, and disposal (loss or waste) of food products that originate from agriculture including livestock), forestry, fisheries, and food industries, and the broader economic, societal, and natural environments in which they are embedded. Production includes pre-production actors, for example input industries producing fertilisers or seeds.”

(Von Braun et al. 2021)

Investing in food and agriculture has historically been discussed in a sector-focused format, encompassing the direct agrifood value chain from farming, growing and other forms of production, through processing to distribution and finally, food products. As impact investing has evolved alongside systems thinking, the food system has come to be viewed as an interconnected web of social and natural resources, alongside the various stages and actors of the value chain.

Macro forces of population growth, land availability and ecosystem pressures, climate change and declining health, alongside technology acceleration are all directly connected – in both cause and effect – to the agrifood system. With this shift in definition comes the opportunity to look at a broader range of enabling factors which may influence, or even drive, a sustainable food systems transformation.

To begin with, into the structural shifts affecting the food system has two primary goals.

Acknowledge that many of these seismic shifts are in fact tailwinds for the food system to transform, and an interest in solving for these challenges

Focus on the challenges such that, through this investment deep dive, investable solutions can be identified.

Sustainable agrifood A systems approach

Source: Adapted from “ Systems thinking: an approach for understanding ‘eco-agrifood systems”, TEEB for Agriculture & Food: Scientific and Economic Foundations (2019)

Alternate futures for the agrifood system

The future of the agrifood system is moving toward diverse scenarios of change. Some transformations can be achieved within the current structures through incremental improvements, while others will require a complete reimagining and rebuilding from the ground up to fully integrate sustainability, resilience, and social equity. Investment capital will remain a key enabler of change.

Key components of aternate future systems

Localised Production and Consumption

Reduces carbon footprint, strengthens local economies, and enhances food security.

Dispersed and Decentralised Networks

Enhances resilience to global shocks, reduces dependency on centralised systems.

Diverse and Inclusive Business Models

Encourages innovation, supports smallholders, and promotes equitable growth.

Regenerative and Sustainable Practices

Restores ecosystems, improves long-term productivity, and combats climate change.

Technological Innovation

Increases efficiency, reduces waste, and supports data-driven decision-making.

Social Responsibility and Equity

Prioritises fair labor practices, equitable resource access, and community engagement.

Alternate futures for the agrifood system

We are here

The investable landscape in Agrifood Impact Investing sits between current system improvement and emerging pathways to sustainability and resilience.

Incremental Improvement within the Current System

Maintains the core structure of the current agrifood system but integrates modest improvements in sustainability, resilience, and nutrition. Changes are largely driven by market forces and existing policies, resulting in gradual enhancements without fundamentally altering the system.

Emerging Pathways to a Sustainable and Resilient System

Represents a significant shift towards sustainability and resilience, driven by stronger policy interventions, technological advancements, and changing consumer preferences. The agrifood system becomes more adaptive and healthoriented, though it still operates within a recognizable framework.

Radical Transformation to a Decentralised and Health-Centric System

Envisions a complete overhaul of the agrifood system, shifting to a decentralised, locally focused model that prioritises environmental regeneration, supply chain resilience, and optimal human health. Changes are driven by transformative policies, societal shifts, and substantial investment in innovation.

Structural drivers of agrifood systems Challenges or tailwinds?

Having grown to meet the immense food demands of a population of over eight billion people, the current system is a marvel of modern productivity, and driven by a continuous supply-demand mismatch whereby continued population growth indicates that “more food will be required to feed more people”.

This is true in principal, but also fails to acknowledge the cracks and nuances of the current system, highlighted by system shocks in recent years including, at a global scale, the COVID-19 pandemic and the Ukraine war.

The food system faces a number of complex challenges. These can be loosely grouped into the challenges below, which are causal drivers for a wide range of policy, technology and producer/consumer responses.

Uneven distribution and waste

Biodiversity and ecosystem degradation Climate change

Environment challenges

Climate change, nature destruction and biophysical instability

Socio-economic challenges

Nutrition

Workforce dependency Industry concentration

health, food access, workforce

Food security challenges

supply chains, localisation, market concentration

Structural drivers of agrifood systems

Challenges or tailwinds?

Food system challenges

Uneven distribution and waste

Enough food is produced today to meet all population needs, but inadequate distribution, supply chain imbalances and the complexity of global commodity flows means that vast amounts of food is wasted.

Biodiversity and ecosystem degradation

Intensive farming practices and deforestation for agriculture are leading to the loss of biodiversity and ecosystem services, which are essential for maintaining soil health, water regulation, pollination, and overall environmental resilience.

Climate change

Agriculture is one of the largest contributors to global greenhouse gas (GHG) emissions, and one of the most at-risk industries in the face of the biophysical instability caused by climate change and the destruction of nature. Driving growth in the existing industrial agricultural complex without innovation and new business models will only perpetuate this.

Structural drivers of agrifood systems

Challenges or tailwinds?

Food system challenges

Nutrition

Mass production of nutrient poor, over-processed food from the current industrial system have meant that the most affordable food is often the least nourishing – driving obesity and broader poor public health.

Workforce dependency

Loss of agricultural productivity, largely as a result of climate change, is a direct trigger of migration, and agricultural workforces are historically subject to socioeconomic disparities in pay, workplace health and safety, and equity.

Industry

concentration

Fragmentation, and conversely corporate concentration, are deepening food insecurity, in the form of an imbalance between a small number of agro-exporting states and many importdependent states, administered by highly financialised and concentrated global agrifood markets. This system is based on a narrow selection of staple crops, fossil fuels and chemicals, with many single points of failure.

The environmental challenge

The climate crisis is central to food systems

Producing, processing, transporting, packaging and consuming food is estimated to contribute 26 to 34% of global anthropogenic GHG emissions, including carbon dioxide, methane from intensive beef systems and nitrous oxide from artificial fertilisers. The biggest contributor to this is land use change, which includes deforestation, while industrial livestock contributes heavily to both direct methane emissions and to land use change, accounting for half the total agricultural emissions (54%). Food waste is also a culprit, with 14% of food lost between harvest and retail, and 17% wasted in retail and consumption – consequently accounting for 8 to 10% of emissions.

The climate crisis is the focal issue, but also symptomatic of a number of environmental crises for which agrifood value chains are disproportionately responsible – depleting the resources on which the system relies.

Source: Our World in Data (2022), above, based on data from UN FAO, UN AQUASTAT, and our World in Data (2019), right, based on Poore & Nemecek (2019) and Bar-On et al. (2018), Crippa et al. (2021) by author Hannah Ritchie

The socio-economic challenge

Food production and consumption are rooted in deep social inequalities

Paradoxically, more food is currently produced per capita than ever before in history, yet food insecurity, poor diet-related health, social inequity in food access are on the rise.

Poor public health and unhealthy diets

Food is central to the “triple malnutrition burden”: undernutrition, nutritional deficiencies and overweight/obesity. Many countries still face rife undernutrition, even as food calories per capita have increased by 33% globally. Consumption of vegetable oils and meat has more than doubled per capita since the 1960s, linked to obesity and overweight-related disorders across income groups – one of the primary drivers of poor public health. According to the WHO in 2022, 2.5 billion adults were overweight (including 890 million in the range of obese), while 390 million were underweight.

Food access, affordability and social inequity

Wealth and food are inherently connected through both access and quality, with lower income groups most at risk of being priced out of nutritious food, and consequently having to bear the cost of more food-related health problems. The cost-ofliving crisis, particularly in the UK, has pushed more households to purchasing cheaper, more processed food.

Workforce

shortages and instability

While labour shortage is pertinent in developed markets, higher land prices, the lure of higher income urban jobs, political events such as Brexit influencing migration patterns and worker rights are leading to an overall decline in personnel available and willing to work in the agricultural sector. At the same time, global agriculture is responsible for immense social inequity in land ownership, and the livelihoods of rural and agricultural workforces.

The socio-economic challenge

Food production and consumption are rooted in deep social inequalities

ImpactontheUK

Diet-related health issues

Obesity rates have surged, with nearly 28% of UK adults classified as obese in 2021, and contributes to the rise of diet-related diseases such as diabetes and heart disease. The economic cost of obesity and overweight in the UK is approximately 4% of GDP, equating to £98 billion per year.

The UK has one of the highest rates of child overweight and obesity in Europe. People in the most deprived decile in the UK are:

• 2.1 times more likely to die from preventable heart disease

• 1.7 times more likely to die from preventable cancer

• 3 times more likely to have tooth decay at age 5

• Nearly twice as likely to be overweight or obese at age 11, compared to those in the least deprived decile

Social inequalities and poor diets

Social inequalities exacerbate poor diets, limiting low-income populations’ access to healthy foods. There are stark differences in diet quality across socioeconomic groups, with healthier options being more expensive and less accessible. The most deprived fifth of the UK population would need to spend 50% of their disposable income on food to adhere to the government’s recommended healthy diet, compared to just 11% for the least deprived fifth.

Household food insecurity

Over 4 million people in the UK relied on food banks in 2022, with numbers rising since the COVID-19 pandemic.

Workforce

The UK food industry employs nearly one in seven people, underscoring its importance as a major employer across both urban and rural areas.

References: (BPR), (NFS)

The food security challenge

Market concentration causes narrow supply chain dependencies

Food security is multifaceted, but in agrifood, huge responsibility falls to the handful of “agrifood majors”.

Due to the disproportionate ownership of the few large corporate firms that dominate the industrial food and agriculture complex, when food supply chains become constrained due to geopolitical or other factors, these companies are able to gain more power in controlling how food moves through the value chain – from how commodities are grown, the prices they are traded at, input pricing, how and where they are processed, and ultimately how they are retailed.

The Herfindahl–Hirschman Index (HHI) is used to measure market concentration. An HHI of <1,500 is considered a competitive marketplace, while 1,500 to 2,500 is moderately concentrated. An HHI of 2,500 or greater is highly concentrated, and can suggest the presence of an oligopoly or even a monopoly. For context, ADM, Bunge, COFCO, Cargill and Louis Dreyfus Company together control 70-90% of the global trade in commercial grains.

Market Concentration in Agrifood

(Planet Tracker, 2023)

The Food Security Challenge

Market concentration causes narrow supply chain dependencies

The Industry’s response is a driving force

The corporate response to environmental and social externalities of the food system, or more so its response to public and investor awareness, is a driving factor in itself. As it becomes clearer that these problems are material risks to corporate operations, large corporate agriculture, food and retail players are driving large scale industry shifts in commitments to sustainability.

• Industry Commitment: 63% of 79 major agrifood companies (representing $3T in revenue) mention regenerative agriculture in sustainability strategies.

• Substantial Individual Action: e.g., PepsiCo aims for 7m acres of regenerative farming by 2030.

• Financial Support: e.g., Nestlé commits $1.3B by 2025 for regenerative agriculture adoption.

• Strategic Alignment: 24% align regenerative initiatives with Scope 3 emission targets. Only 36% of companies had a quantifiable regenerative agriculture target.

• Tech Opportunities: 14% adopt hybrid nature-tech solutions, indicating agtech potential.

• Data and Metrics Focus: Growing investment in data collection and metrics.

• Investor Interest: $7T AUM backing climate-aligned agricultural support.

Key outcomes sought by companies with regenerative initiatives

(based on FAIRR’s sample of 50 agrifood companies)

Source: FAIRR The Four Labours of Regenerative Agriculture: Paving the way towards meaningful commitments (2023)

The UK Context

How is policy responding to these challenges?

In response to challenges such as the COVID-19 pandemic the then UK Conservative Government commissioned the National Food Strategy in 2019, which was published in July 2021. In June 2022, they published their ‘Government Food Strategy’ in response to the National Food Strategy.

Government Food Strategy

Established under the previous UK Conservative Government, the paper set out its commitments to ensure a secure and prosperous agrifood and seafood sector that supports quality jobs nationwide, promotes a sustainable and affordable food system with access to healthy, locallyproduced diets, and enables trade that expands export opportunities and consumer choice while maintaining high regulatory standards.

Ambitious environment targets including:

• Halt species decline in England by 2030

• Treble woodland creation rates

• Restore 280,000 hectares of peatland in England by 2050

• Protect 30% of our land and sea by 2030

• Improve soil health

• Reduce climate emissions by at least 6Mt CO2 equivalent per annum by 2035

Research Investment: The UK’s ‘Transforming Food Production’ programme has allocated £90 million for agrifood research and innovation.

Favourable Ag Policy: The UK’s Environmental Land Management scheme (ELMs) and Sustainable Farming Incentive (SFI) subsidise farmers to adopt environmentally friendly practices. These programs aim to balance food production with environmental stewardship, encouraging a shift towards more sustainable agrifood systems.

The UK Context

How is policy responding to these challenges?

Assumptions so far under a new UK Labour Government

During the research and writing of this report, the UK underwent a change in government, transitioning from a Conservative to a newly elected Labour administration. While no official policy announcements have been made yet, early indications can be drawn from Labour’s manifesto.

Food Security: Identifies food security as a national priority

Food Prices: Acknowledges concerns about rising food prices and pledges to address this issue.

Land-Use Framework:

Proposes a comprehensive land-use framework to ensure environmental land management schemes benefit both farmers and the environment.

Public Sector Procurement:

Sets a target for 50% of public sector food procurement to be locally produced or meet higher environmental standards.

Support for British Farming:

Labour is committed to “champion British farming while protecting the environment.”

Industrial Strategy: Highlights the need for innovation to drive economic growth and productivity.

Research

and Development: Advocates for 10-year budgets for key R&D institutions to foster stronger industry partnerships and maintain the UK’s leadership in global innovation.

Market Opportunity

Addressing

“hidden costs” presents a unique investment case

It is assumed that change comes at a cost, but in the case of food systems, the better path is the one of improved economic viability. Two flagship pieces of work by the Food and Land Use Coalition, and by the Food Systems Economic Commission, the global food system has an estimated market value of $10–14 trillion, accounting for 16-20% of global GDP. However, the huge economic burden of poor health and destruction of nature as a result of the current extractive model reveal an estimated $12-15 trillion in uncounted, costs. These hidden costs, which are inherently social and environmental, have an equivalent economic cost.

The Capital Gap

While this directs us towards economically viable solutions, these hidden costs also raise the question of “who will pay” to transform the system. It is estimated that $9 trillion of private finance (63-90% of the estimated asset value) is currently supporting this food system, giving private capital disproportionate influence over change.

On an annual basis, transforming the food system will require $300–350 billion per year by 2030, but this research indicates that there is a strong economic case for transformation: capital can not only support science-backed solutions which serve to moderate climate change, protect biodiversity and improve public health through food –but also that $4.5 trillion in new business opportunities can be created as a result, by 2030.

Estimated costs of food system externalities

(trillions USD, based on 2018 prices)

Graphic Source: FOLU (2019) based on SYSTEMIQ Data Data from UNDP, 2023; FOLU, 2019; FSEC, 2024.

Market Opportunity

Addressing the supply-demand

mismatch

Fundamental macro trends and resulting structural drivers embed a core opportunity to invest in the evolving food supply the global population will continue to require, with all the nuances of addressing the aforementioned challenges.

Supply-side Drivers

Resource and Land Security

Limited land, water and other natural resources combined with historical damage done to these natural systems means that agriculture is required to produce more, and better food, with less and/or varied resources.

Regulation and Policy Changes

Climate change and sustainability have become goals in themselves, and are increasingly regulated, written into policy and channelling government and institutional support, creating a strong regulatory tailwind.

Technology, Data and Digitisation

Science and technology are continuing to drive resource efficiency (which has ultimately always been the goal of agriculture), and making more data available, such that the ripples of innovation continue to grow.

Demand-side Drivers

Population Growth

The global population is projected to reach nearly 10 billion by 2050, increasing demand for food, especially demand for more resource intensive food, such as animal-based products.

Urbanisation and Convenience

Urbanisation trends call for efficient and proximate food production and distribution systems, while consumer awareness, poor public health and increased spending power in cities is driving demand for healthy products.

Shifting Diets and Consumer Preference

Migration brings more cultural nuance to consumer preferences, while poor diet-related health and consumer awareness are driving demand for healthier, affordable food options.

Market Opportunity

Addressing the supply-demand mismatch

While these are positive driving forces in terms of the opportunity set providing enduring tailwinds, challenges of inflation, geopolitical instability and emerging technology risk should not be forgotten.

Agrifood macro context to bear in mind in 2024:

Trends are not changing, from declining resource availability to dietary shifts, technology and sustainability – these trends drive openings in harder-to-access sectors such as agrifood.

New investable themes and opportunities should emerge, against a volatile geopolitical backdrop.

Inflation and interest rates will continue to be integral to food value chains, with recent inflationary pressures shifting consumer spending patterns likely to continue.

Financial conditions have tightened in bank lending, which means companies are seeking alternative forms of capital. While observationally agrifood-focused capital is available and expanding, it is more cautious and selective, particularly where agtech and foodtech losses are still being felt.

Combined insights from FAO, FOLU, Valoral Advisors, fund manager discussions and materials

Thematic focus

Investing in agrifood systems transformation presents a compelling opportunity to address escalating global challenges, while unlocking significant economic potential. Global megatrends are intertwined through agrifood value chains and environmental, socioeconomic and food security challenges. The complexity of the system also speaks to the complexity of finding solutions – whereby solutions to one serve as solutions to another, and are dependent on national, regional and even farm-level context.

This work has led to three areas of focus – themes for investable solutions that can help to shift the food system. These themes are linked back to the (simplified) agrifood value chain in order to better understand where interventions are possible.

The next section of the report explores interventions and solutions through an investment lens.

However, midstream receives less attention from private impact investment than other parts of the value chain.

Where Investors Can Look

From drivers to investable solutions

20 system interventions

Investing in agrifood systems transformation presents a compelling opportunity to address escalating global challenges, while unlocking significant economic potential.

Themes within agrifood guide the goals of where capital can effect change. However, the food system has endless component parts, from farms and other forms of primary production, to innovations in supply chain efficiencies and technologies which are reshaping the way we think about producing and consuming food. Based on discussion and research, this report has landed on 20 investable areas of priority, for consideration. By breaking out the system into these parts, and focusing on investable, sustainable focus areas, potential investments can be aligned to a framework (see page 41) to visualise where they fit in the system.

Investable Areas: A Glossary

Agbiotech and Inputs

Advanced biological and chemical solutions for crop protection, seed technology, genetics, soil and animal health to boost agricultural productivity sustainably.

Agricultural Livelihoods and Workforce

Initiatives that support fair labor practices, skill development, and improved livelihoods for agricultural workers and rural communities.

Alternative/Novel Food Product Offering

Innovative approaches in food distribution, restaurant operations, and retail experiences that prioritise sustainability, health and consumer convenience.

Circularity and (Food) Waste Management

Solutions that minimize food waste and promote circular economy principles in the food industry.

Climate Risk and Weather

Technologies and services that help farmers food producers mitigate and adapt to climate-related risks and weather uncertainties.

Consumer Behaviour & Food Culture

Initiatives that influence and shape consumer preferences towards more sustainable and healthier food choices.

Data, measurement and monitoring

Digital tools and platforms for collecting, analyzing, and utilising data to optimise agricultural production, processes and food supply chains.

Education and Knowledge Exchange

Innovative approaches in food distribution, restaurant operations, and retail experiences that prioritise sustainability, health and consumer convenience.

Ethical Livestock and Animal Welfare

Technologies and practices that improve the quality of life for farm animals while maintaining production efficiency.

Investable areas

FarmTech

Technologies/solutions that enhance farm productivity, efficiency, and sustainability through automation, IoT, robotics, remote sensing, and other smart farming tools.

Food Service and Retail

Innovative approaches in food distribution, restaurant operations, and retail experiences that prioritise sustainability, health and consumer convenience.

Natural Capital and Ecosystem Services

Approaches that recognise and monetise the value of nature to agriculture and food production. Aiming to incentivise land stewards to protect and enhance ecosystem services, rebuilding damaged ecosystems and making food production more resilient.

Novel Production Systems

Innovative food production methods such as vertical farming, aquaponics, and controlled environment agriculture that maximize resource efficiency.

Nutrition and Health

Products and services focused on improving human health through better nutrition, functional foods, and personalised dietary solutions.

Supply Chain Infrastructure

Advanced physical and digital systems that form the backbone of food distribution networks. This includes smart warehousing, cold chain logistics, intermodal transportation hubs, and data-driven management platforms that enhance the speed, reliability, and sustainability of moving food products from producers to consumers.

Supply Chain Innovation

Solutions that optimise the journey of food from farm to table, enhancing efficiency, transparency, and sustainability.

Sustainable Agriculture

Farming practices that focus on soil health, biodiversity, and ecosystem restoration while producing food and sequestering carbon.

Sustainable Aquaculture and Fisheries

Technologies and practices that promote sustainable fish farming and responsible wild-catch fishing to preserve marine ecosystems.

Sustainable CPG

Consumer packaged goods that prioritize sustainability in ingredients, packaging, and production processes.

Transition Finance

Financial products and services designed to support the transition of food systems towards more sustainable models.

Investable areas

A framework for agrifood investments

Investable Areas | A framework for agrifood investments as 20 system interventions

The themes, investable areas and value chain purposefully do not fully align to acknowledge the complexity and non-linearity of the system.

The themes,investable areasandvalue chain purposefullydonot fullyalign,to acknowledge the complexity and non-linearity of the system.

Value Chain

Where the intervention taking place?

Investable Area

What does this do and how can its operations be

How is this addressing the imperatives for change?

Priorities for a better food system Highlights from existing research

Prioritising areas of interest based on both opportunity and maximum impact is an essential step in narrowing down investable areas. Extensive research across a number of reports has sought to narrow down the pathways to a better food system, and cumulatively, these reports highlight common themes which set the trajectory, which in turn forms the basis of parsing out investable areas in the value chain.

We’ve highlighted the reports for further reading on page 66.

Common themes across reports

Regenerative Agriculture

Emphasised as a core opportunity in all reports

Transition Finance

Highlighted in various forms in all reports as a means to get there

Data, Measurement and Monitoring

Recognised as crucial in the pursuit of transparent systems and traceable supply chains, especially for environmental outcomes.

Supply Chain Innovation

Driving “true cost” efficiency is seen as a key area to leverage that data.

Consumer Connection

Consumer connection and sustainable consumption, which encompasses healthier food choices, as well as education around food, are noted as important across most reports, with varying emphasis.

Less common themes

Sustainable Aquaculture and Fisheries

Receive limited attention across the reports, as this theme is generally separated out into decided Blue Economy research.

Education and Knowledge Dissemination

Noted as important, but not typically highlighted as a primary channel for investment capital.

Ethical Livestock and Animal Welfare

Generally subsumed under broader regenerative agriculture discussions, but given the prevalence of technology and practices emerging on this topic, this research will hold it as its own theme.

Investable Areas

Which areas are interesting within each theme?

Innovative approaches and technologies that enable food production with minimal environmental impact while maintaining or improving yields. This includes precision agriculture, regenerative farming practices, alternative protein sources, and resourceefficient production systems that address climate change, biodiversity loss, and resource scarcity. Highlighted

Solutions that enhance the robustness, transparency, and efficiency of food supply chains from farm to fork. This theme encompasses advanced logistics, blockchainbased traceability systems, and digital platforms that improve coordination among stakeholders, reduce waste, drive circularity and ensure food safety and quality.

Products, services, and technologies at the intersection of food and consumer wellbeing. Examples include functional foods, microbiome-targeted and personalised nutrition solutions, and innovations addressing diet-related health issues and meet evolving consumer preferences for healthier options. Research has begun to link health to food production, although still nascent.

and

Physical and digital connectivity of the value chain – pulling production sustainability through to consumer health, and mitigating waste.

Alternative food products, ingredients and the platforms to create them, supported by solutions to information sharing and consumer education.

Theme 1

Sustainable Agriculture and Food Production

Key Investable Areas

Agbiotech and Inputs

Sustainable Agriculture

FarmTech

Novel Production Systems

Transition Finance

Natural Capital and Ecosystem Services

Sustainable Aquaculture and Fisheries

Where: Pre-farm and on-farm

What: Sustainable seeds, biofertilizers, genetics, crop protection solutions

Appeal: Reduces chemical inputs, improves crop resilience, and boosts yields

By developing inputs that are less harmful to the environment and more efficient, this area supports the transition to sustainable farming methods that maintain soil health and biodiversity.

Highlighted Investable Areas

Where: On-farm

What: Practices that improve soil health, increase biodiversity, and sequester carbon

Appeal: Addresses climate change, improves farm resilience, and creates new revenue streams such as insetting, offsetting, diverse offtakes

Sustainable agricultural production are at the core of this theme, actively restoring ecosystems while producing food, thus enhancing long-term sustainability.

Where: On-farm

What: Precision agriculture tools, IoT sensors, farm management software

Appeal: Enhances productivity, reduces resource use, and improves profitability

FarmTech enables precise application of inputs, reducing waste and environmental impact while optimising yields, directly contributing to more sustainable agricultural practices.

Theme 1

Sustainable Agriculture and Food Production

Case Study

Klim is a Berlin-based company that focuses on promoting regenerative agriculture through their digital platform which helps farmers transition to nature friendly farming practices by offering tools and financial incentives which reward farmers for restoring soil health, increasing biodiversity, and reducing carbon emissions. They focus on insetting rather than carbon offsetting: reducing or sequestering carbon emissions within a company’s own value chain.

Esmée Fairbairn Foundation has exposure through Green Generation Fund and Ananda Impact Fund III

By encouraging farmers to shift to nature-friendly methods, thereby embedding environmental restoration and sustainability into the very foundation of food production. This approach not only mitigates the environmental impact of agriculture but also strengthens the resilience of natural ecosystems, aligning closely with broader goal.

Theme 1

Sustainable Agriculture and Food Production

Agriculture and primary production have the highest GHG emissions reduction potential

Two important pieces of context are worth considering when assessing emissions in agrifood:

40% of agricultural emissions come from four countries : the USA, China, India and Brazil, and

Half of production emissions come from soil practices –tillage, fertilisation and irrigation.

Theme 1

Sustainable Agriculture and Food Production

SustainableAgriculture & Food Production

Agriculture and primary production have the highest GHG emissions reduction potential

Upstreamactivitiesandprimaryproduction disproportionatelycontribute tothe GHG emissionsburden of the agrifoodsector,but the otherthemesshouldnot be disregardedaseitherpullingor pushesforcestoallow primaryproduction toshift,ortechnologiesthat enable atransition.Twoimportant piecesof context are worth consideringwhen assessingemissionsin agrifood: 1) 40%of agricultural emissions come from four countries: the USA, China, India and Brazil, and 2) half of production emissions come from soil practices - tillage,fertilisation andirrigation.

Sources: Our World in Data (2022), CGIAR Research (2015) Agriculture and primary production have the highest GHG emissions reduction potential, but connect through to almost all investable areas.

Sources:OurWorldin Data(2022),CGIAR Research (2015)

Thesizeofbarsisnotquantitativeorto scale,merelyrepresentativeofoverlap

Agricultural Livelihoods and Workforce

Agbiotech and Inputs

Sustainable Aquaculture and Fisheries

Ethical Livestock and Animal Welfare

Sustainable Agriculture FarmTech

Climate Risk and Weather

Natural Capital and Ecosystem Services

Alternative / Novel Food Product Offering

Supply Chain Infrastructure

Supply Chain Innovation + Novel Production Systems

Food Service and Retail

Sustainable CPG

Full Value Chain: Circularity (Food) Waste Management

Push-and-pull factors enabling upstream transformation

Nutrition and Health

Data, Measurement and Monitoring

Education and Knowledge Exchange

Consumer Behaviour and Food Culture

Transition Finance

Theme 1

Sustainable Agriculture and Food Production

Comparing two pathways for Sustainable Agriculture

The need to transition away from conventional agricultural systems is widely recognised, given its significant environmental and social impacts. However, the path forward is complex, with numerous interpretations and definitions of alternative farming systems – regenerative agriculture being a topical example. To navigate this landscape without becoming entangled in definitional debates, this report focuses on the two approaches.

Source: Chatham House

Environment & Society Program: Sustainable Agriculture and Food systems; Comparing contrasting and contested versions (2022)

Version 1.

“Sustainable” intensification and land sparing

•Assumes demand for food will inevitably increase due to population growth and rising incomes

•Focuses on increasing agricultural productivity and efficiency to meet growing demand

•Aims to intensify production on existing farmland to spare other land for nature conservation

•Relies heavily on technological innovation to boost yields while minimizing environmental impacts

•Gives primacy to market forces and consumer choice

Version 2. Agroecology and land sharing

• Assumes demand can be shaped through policy and structural changes

• Focuses on changing diets and reducing waste to decrease overall food demand

• Promotes agroecological farming methods that work with nature

• Aims to create heterogeneous farming landscapes that share land with biodiversity

• Calls for restructuring markets and policies to prioritize health and sustainability outcomes

Esmée Fairbairn Foundation’s report on Nature-Friendly Farming advocates for practices that restore biodiversity, improve soil health, and reduce the use of chemicals, aligning most closely with the 'Agroecology and land sharing' pathway.

Theme 1

Sustainable Agriculture and Food Production

The balance between these approaches will likely be determined more by political and ideological factors than purely scientific evidence. Achieving true sustainability in agriculture will require changes in governance, market structures, and consumption patterns regardless of which version is emphasised.

Agroecology and land sharing have significant environmental benefits, but will take time to scale up and will require adaptations to existing supply chains and retail systems.

Both approaches have merits and drawbacks, and that the future will likely involve some combination of the two rather than a pure version of either. Some key points on how both are needed are below.

Achieving the necessary scale of change in the near-term will likely require improvements to the existing intensive agricultural system acknowledging the need to sustain productivity.

3. Technological innovations from the intensification approach can potentially be applied to make agroecological methods more productive.

A hybrid approach could involve intensifying production sustainably in some areas while expanding agroecological methods in others based on local contexts.

Shifts in diet and reducing food waste would reduce pressure on land, potentially allowing for more agroecological approaches.

Theme 2

Supply Chain Resilience and Traceability

Key Investable Areas

Distribution and Logistics

Food Service and Retail

Supply Chain Innovation

Novel Production Systems

Supply Chain Infrastructure

Data, Measurement and Monitoring

Circularity and (Food) Waste Management

Where: Acros the value chain

What: AI-driven waste prediction tools, upcycling platforms, smart composting systems

Appeal: Reduces waste, creates new value streams, and improves overall supply chain efficiency

Enhances resilience by reducing waste and creating more efficient resource use. Contributes to traceability by tracking food products through their entire lifecycle, including disposal or reuse.

Highlighted Investable Areas

Supply Chain Innovation

Where: From production to retail

What: Smart logistics solutions, predictive analytics for inventory management, digital marketplaces connecting farmers and buyers

Appeal: Improves efficiency, reduces waste, and enhances adaptability to disruptions

Directly addresses resilience by creating more flexible and adaptive supply chain systems. Improves traceability through enhanced connectivity between supply chain.

Supply Chain Infrastructure

Where: Transportation and storage

What: Smart warehouses, autonomous vehicles, advanced cold chain solutions

Appeal: Improves efficiency, reduces spoilage, and enhances traceability throughout the supply chain

Directly enhances both resilience and traceability through improved physical infrastructure and digital integration.

Theme 2

Supply Chain Resilience and Traceability

Ooooby is a social enterprise that focuses on making local, sustainably grown food accessible to communities. They operate as an online platform that connects consumers directly with small-scale farmers and local food producers. Ooooby facilitates online sales and coordinates deliveries of fresh organic produce and other locally sourced food products to customers’ doorsteps through a subscriptionbased service.

By supporting small-scale farmers by helping them reach a wider market, providing a stable income, and promoting sustainable farming practices, they help support local economies and reduces the carbon footprint of food. By sourcing food locally and eliminating middlemen they make food more affordable and accessible to a more people. Additionally, this fosters a stronger connection between consumers and their food building food security through resilient, community-based networks.

Esmée Fairbairn Foundation has a direct investment into Ooooby through its impactfirst investment allocation.

Supply Chain Resilience and Traceability

Addressing

the supply chain through the “missing midstream” in the value chain

The midstream includes processing, storage, aggregation and distribution, marketing, and could also bridge into retail and end-distribution (D2C, B2B, and wholesale). This segment plays a vital role in the value chain, but has received relatively little investment attention compared to upstream production and downstream food service or retail-stage innovation.

Why the midstream?

• Food safety is paramount, as traceability, quality controls, regulation and compliance require processors and food handling to generate and report operating, real-time data.

• Minimising post-harvest losses, particularly in developed markets. Food waste occurs mainly midstream and downstream, with 16% of total food waste attributed to supply chain inefficiencies. For instance, cold storage is crucial in minimising food loss during transit.

• Sustainable farming practices require robust middle infrastructure to process and transport agricultural products efficiently, and to create viable channels for regeneratively or sustainably produced goods, or shorter, regional supply chains.

Supply Chain Resilience and Traceability

Adapted from Croatan Institute’s Investing in Regenerative Agriculture Infrastructure Across Value Chains (2022) Theme 2

Addressing supply chain through the “missing midstream” in the value chain

Supply Chain Resilience and Traceability

The “missing midstream”

There is a misnomer between overall investment in the midstream, and investment in the midstream that is fit for, or directed, towards supply chains which are targeting all the outcomes of a sustainable food system transition. Planet Tracker’s Financial Markets Roadmap indicates that 60% of external funding is directed toward manufacturers and distributors. However, this is from a dataset of banks with large public equity holdings and large debt providers, rather than private capital, and also does not account for the alignment of this capital towards any broader outcomes. The report also notes the critical requirement for midstream/downstream companies and their funders to take responsibility for their indirect impacts which link back to production.

Two pieces, notably from a US perspective, cover this topic with more nuance for regeneration and sustainability. Croatan Institute’s Investing in Regenerative Agriculture Infrastructure Across Value Chains (2022) highlights five considerations for midstream investments:

• Capital alignment is lacking: These are often nontraditional businesses are working in complex regional and local food systems with small- to mid-sized producers, which often find their business models do not align to conventional capital which cannot accommodate uneven growth trajectories and longer timelines, or high capex outlays.

• Strong value chain partnerships are critical: Due to the proximity to producers, commitments in the form of contractual partnerships but also in terms of sustainability are the only way for these entities to reach viability.

• Technical assistance with finance: Cost management, risk mitigation and digitisation support are critical, and investors should be in a position to connect investees with these resources.

• Skilled labour is a challenge: Workforce development was noted as a key bottleneck, which links the midstream to a huge skilled job creation or just transition opportunity.

Theme 2

Supply Chain Resilience and Traceability

CREO’s Unlocking Regenerative Agriculture report highlighted whitespace opportunities in the value chain for midstream solutions. This is primarily driven by the acknowledgment of the gap for venture funding in the midstream to enable innovation and catalyse alternate systems. These businesses have to consider how to push against industry consolidation and commodification by, for example, addressing mismatched demand and supply with technologyenabled marketplaces.

Whitespace opportunities in the value chain for midstream solutions (CREO, 2021)

Theme 3

Nutrition and Health-Focused Food Innovation

Key Investable Areas

Data, Measurement and Monitoring

Supply Chain Innovation

Consumer Behaviour and Food Culture

Alternative/Novel Food Product Offering

Ethical Livestock and Animal Welfare

Circularity and (Food)

Waste Management

Nutrition and Health

Where: Processing and consumer-facing

What: Plant-based proteins, fortified foods, novel ingredients with enhanced nutritional profiles

Appeal: Meets demand for healthier alternatives to traditional foods, often with improved environmental footprint

Develops new food products with improved nutritional profiles, expanding the range of healthy food options available to consumers

Highlighted Investable Areas

Where: Processing and consumer-facing

What: Plant-based proteins, fortified foods, novel ingredients with enhanced nutritional profiles

Appeal: Meets demand for healthier alternatives to traditional foods, often with improved environmental footprint

Develops new food products with improved nutritional profiles, expanding the range of healthy food options available to consumers

Where: On-farm and near-consumer

What: Vertical farms optimized for nutrient-dense crops, precision fermentation for alternative proteins

Appeal: Enables year-round production of fresh, nutrient-rich foods close to urban centers

Creates new, often more controlled production environments, less susceptible to external disruptions. Typically involves highly monitored, datarich production environments, enhancing traceability.

Theme 3

Nutrition and Health-Focused Food Innovation

Edacious is a technology company that specialises in measuring and differentiating the nutrient density of food. Proving that more regenerative farming practices result in increased nutrient density. Their platform uses advanced scientific methods and data analytics, drawn from leading global sources, to assess nutritional content, rather than just its appearance or basic attributes, such as yield.

Edacious produces data to empower the the whole food and farming industry to focus on nutrition above yield, which has been the status quo for so long: providing another basis for farmers to farm more regeneratively, retailers and producers to market based on nutrition and to empower consumers to purchase for health.

The protein dilemma

The excessive consumption of animal protein in wealthy countries significantly contributes to climate change, harms natural ecosystems, and is associated with a rise in non-communicable diseases (NCDs). As global demand for animal protein increases alongside population growth, it becomes crucial to shift away from overconsumption in order to sustain the planet’s resources. While integrating practices such as regenerative agriculture, increasing nutrient efficiency, and improving on-farm energy use have significant climate mitigation potential these efforts alone are insufficient. Embracing alternative protein sources, such as plant-based whole foods and innovative protein options, is essential for reducing public health, climate, and environmental risks while ensuring long-term food security.

Plant-based meat and grass-fed beef (which includes regenerative beef) each make up less than 1 percent of the total meat market. Meanwhile, global meat demand shows no signs of slowing down. Per-person meat consumption in 2019 exceeded every year before, and the United Nations predicts that global meat production will increase by more than 50 percent by 2050 to meet growing demand. (GFI)

Sustainable Agriculture

Novel Production Systems

Alternative Protein Sources (FAIRR, 2024)

What is alternative protein?

Plant-based proteins:

Fermented proteins: Sources: Tempeh, natto Theme 3 Nutrition and Health-Focused Food Innovation

Sources: Legumes (soy, peas, lentils), nuts, seeds, grains (quinoa, amaranth)

Insect proteins: Sources: Cricket flour, mealworms

Algae-based proteins: Sources: Spirulina, chlorella

Mycoprotein (fungal protein): Sources: Derived from Fusarium venenatum fungus (e.g., Quorn products)

Cultured or lab-grown meat: Sources: Animal cells grown in a laboratory setting

Does a complementary protein system lead to healthier diets?

Role for regenerative animal protein

Regenerative animal protein production, when done properly, can have positive impacts on both the environment and human health. These systems often mimic natural grazing patterns, which can improve soil health by increasing organic matter content and enhancing carbon sequestration, and this process helps combat climate change by removing carbon dioxide from the atmosphere. Additionally, wellmanaged grazing can promote biodiversity, restore degraded grasslands, and improve water retention in soil.

How the two systems can benefit each other:

Regenerative agriculture and alternative proteins can work hand-in-hand to create a just, secure, and sustainable food system.

Integrated land use:

• Alternative proteins can reduce land demand for livestock, allowing more space for regenerative practices.

• Regenerative agriculture can provide sustainable inputs for plant-based proteins.

Diversified protein sources:

• Regenerative farming can produce diverse, high-quality animal proteins.

• Alternative proteins can fill gaps and reduce overall demand on animal agriculture.

Circular economy:

• Byproducts from alternative protein production can be used as inputs for regenerative farming.

• Regenerative practices can provide sustainable biomass for certain alternative proteins (e.g., insects fed on crop residues).

There are certain plantbased diets that would have a lower environmental impact, but they wouldn’t be as nutritious, so it’s a tradeoff. Animal protein is a nutrient-dense food and so having it as part of your diet is an easy way of ensuring you get complete protein.”

Jack

Bobo, Director of the University of Nottingham Food Systems Institute

A route to healthier diets?

The Intergovernmental Panel on Climate Change (IPCC), the FAO and WHO have identified the intrinsic link between replacing the excess consumption of animal protein with plant-based foods and positive outcomes human health.

A complementary system combining regenerative agriculture and alternative proteins has the potential to significantly enhance human health by providing a diverse array of nutrient-rich food options. Regenerative agriculture can yield animal proteins with improved nutrient profiles, such as better omega-3 to omega-6 ratios, while also fostering healthier soils that produce more nutrient-dense crops. These crops, in turn, can serve as inputs for alternative proteins or be consumed directly. Alternative proteins complement this by offering

additional sources of essential nutrients, often with higher fiber content and lower saturated fat than traditional animal proteins.

This diversified approach can lead to more balanced diets, potentially reducing the risk of chronic diseases, supporting gut health, and improving overall nutritional status. Moreover, the reduced use of pesticides, antibiotics, and synthetic fertilizers in this system may lower exposure to harmful compounds, further contributing to long-term health benefits. By providing a wider range of protein sources, this complementary system also promotes food security and resilience, ensuring consistent access to nutritious proteins for populations.

Impact Risks A complex system of paradoxes, and many possible outcomes

There are risks that the outcomes sought by an intervention are either not met or are something other than what was intended. The paradoxical nature of some of these challenges, highlighted here, provides some examples of where assumptions about agrifood system actors and behaviours could be different to the reality of the system.

1.Sustainable Agriculture and Food Production

Farmers would change, but often can’t

Farmers want their land to thrive, and the long-term economics of regenerative agriculture are positive, but…

• …changing behaviour is hard.

• Adopting new practices requires capital, while farmers are operating tight budgets and industry is running at tight margins.

2.Supply Chain Resilience and Traceability

The market and value chain should support innovation, but often doesn’t

The commodity-centred food system is efficient and expansive, but…

• …fragmented and untraceable.

• Reinvention from what is produced to how it is produced requires collaboration, coordination, data, and new approaches.

3.Nutrition and Health-Focused Food Innovation

Consumers say they want to buy better, but often don’t

Consumers value sustainable and healthy food offerings, but…

• …not at the expense of good taste, high quality and reasonable price.

• And they struggle to find clear, consistent information to support these decisions.

Adapted from Food System Transformation:

The Time Is Now, Bain & Company (2022)

• Market Volatility: Transitioning to systems could disrupt food supply and price volatility.

• Economic Viability: Sustainable practices have transition costs, unproven returns and a seeming reliance on ecosystem service credits.

• Social Resistance: New tech and practices may face resistance from farming communities due to unfamiliarity, skepticism.

• Carbon tunnel vision: Natcap options tend to focus carbon revenue streams which don’t necessarily account for biodiversity, water or other factors.

• Leakage: Moderating yields or preserving land in favour of nature may result in intensive practices replacing them somewhere else.

• Complexity and Transparency Overload: Excessive data leading to difficulty for consumers and stakeholders to understand key sustainability metrics.

• Data misuse: Maximal transparency created may provide ways for irresponsible actors to exploit pricing, resources or regulatory loopholes.

• Cost of Implementation: Solutions may be cost-prohibitive for smaller, local producers or suppliers being unable to compete with larger corporations.

• Energy intensity: High-tech and deep-tech solutions require intensive data usage which (especially in the case of AI) could multiply the value chains’ energy burden.

• Lack of supporting research: Longtime beliefs around “health” have been disproven, and current beliefs could prove to be wrong (i.e. “non-fat” leading to realisation of “good” vs. “bad” fats).

• Access and Affordability: Sustainable, personalised nutrition solutions and functional foods may be expensive and inaccessible

• Healthy but not Sustainable: Changes in downstream requirements for food may catalyse over-production of high-footprint products (i.e. avocados, and water usage/ transit footprint).

• Fads not solutions: food-as-medicine, nutraceuticals and alt. products rapidly become trends, with the risk that new value chains develop that turn out to be fleeting and redundant (wasted infrastructure and capital).

Impact Risks Context based on nine types of risk outlined by Impact Frontiers

The food system is immensely complex and the context of each investment, its role in the value chain, the team driving it forward, and the appropriateness of the capital to the business model of the company are paramount to decision making on allocations to this theme, to ensure that no unintended consequences occur as a result.

Risk Type and Description

External Risk

The risk that external factors, such as economic, social, or political changes, could negatively affect the impact of an intervention.

Execution Risk

The risk that the intervention is not implemented as planned due to operational challenges or capacity limitations.

Evidence Risk

The risk that the evidence supporting the effectiveness of an intervention is weak or incomplete.

Agricultural operations inherently carry a lot of external risk due to supply chain dependencies, and disruptions up- or downstream of the portfolio company (including weather events) can have ripple effects through the value chain. The global import/export markets also mean that national level regulation change can have implications wherever these chains originate or end.

There is a risk that companies or portfolio assets are still run in an “extractive” manner, either due to pressure on margins or due to lack of ability to adjust within industrial value chains. This is particularly a concern with real asset investments in production of known intensive products, such as nuts, where there is huge market demand and a strong commercial opportunity. This can result in expansion of the footprint and operations alongside only marginal efficiency gains.

Data collection and monitoring, and the technologies to support this, are still an emerging field. Currently, tracking, agricultural supply chains globally are opaque and having an accurate baseline off of which to base any impact improvement is difficult. This means that a strategy or company could claim credit for deeper impact than what has actually been achieved. Greenwashing to be a risk of many of these strategies, whereby the array of high quality reporting and materials may distract from the content or actual outcomes represented in these reports, or where methodologies or systems viewpoints are not fully expressed.

Potential Mitigants

• Vertically integrated operations and supply chain transparency (data).

• Onshoring of production and shortening of supply chains.

• Brownfield redevelopment and overhauling of existing assets mitigates some greenfield risk of new operations.

• Yield improvements through technological advancements should result in lower land requirement to reach the same output levels.

• Mission-aligned LPs and LPAC representation with reporting expectations.

• Intentional impact mission from the team and strategy thesis.

Impact Risks in Agrifood

Context based on nine types of risk outlined by Impact

Frontiers

Risk Type and Description Agrifood Investment Context

Stakeholder Participation Risk

The risk that key stakeholders, particularly beneficiaries, are not sufficiently involved in the design, implementation, or evaluation of the intervention.

Agriculture and food involves people from farm to fork, from investors and operators, to workforce and end consumers. Growth in companies or assets may involve increased use of resources affecting community stakeholders, and changes to the agrifood system – notably through technology – may change the labor requirement such that more efficient or innovative food production results in changes to agricultural workforce or rural community livelihoods.

Drop-off Risk

The risk that the impact of an intervention diminishes over time or does not last as long as expected.

Endurance Risk

The risk that the impact of an intervention does not endure over time or is not sustained after the intervention ends.

Due to the finite life of private market funds, there is a risk that impact outcomes and the integration of improvements to company operations do not endure past the fund term. With startup and growth companies, there is equally a risk that through M&A or IPO, processes are changed that dampen the earlier positive impact that the company set out to integrate.

This is particularly a risk with food products which, as production scales, tend to seek cheaper (and consequently more processed) ingredients.

Potential Mitigants

• Good governance and ESG reporting.

• Social goals and criteria embedded in investment process.

• Strong local context noted for each investment or operating geography.

• Sustainability inherent to business models of companies incentivises long-term impact preservation.

• Changes in established companies at scale would be costly, embedding fund or companies efforts.

• Arguably the most crucial time frame for climate action is now – long term endurance is important but short term effective change is also critical.

Impact

Risks in Agrifood

Context based on nine types of risk outlined by Impact Frontiers

Risk Type and Description Agrifood Investment Context

Unexpected Impact Risk

The risk that the impact of an intervention does not endure over time or is not sustained after the intervention ends.

Leakage is risk with agrifood whereby a shift in operations in one place can offshore the problem to another geography. This is the case with many natural capital initiatives whereby European farmland is eyeing conversion to rewilded land or natural capital projects, which may result in an increased dependency on food imports from other countries (especially in grains), and consequently further destruction of nature in those places. This is also a priority risk where carbon is the strategy focus, without encompassing broader ecology and community systems.

Efficiency Risk

The risk that resources (time, money, etc.) required to achieve the desired impact are higher than anticipated, reducing the cost-effectiveness of the intervention.

Alignment Risk

The risk that the interests and incentives of stakeholders (e.g., funders, partners, or beneficiaries) are not aligned with the impact objectives.

Most companies and fund managers are inherently aiming to achieve these outcomes with the greatest possible efficiency, so this is considered a lower risk where an investment lens is used However, there may be misdirected time and resources and there is always the potential for an opportunity cost whereby a most cost-effective intervention may exist.

Potential Mitigants

• Thorough due diligence is the primary mitigant to greenwashing concerns.

• Leakage is very difficult to mitigate and requires investment teams and company founders to be taking a systemic view that aligns to the systemic view of the prospective investor.

• Competitiveness within pipelines and competition for capital allocation from investors can help to sift out the most effective use of that capital towards the intervention in the desired context.

The alignment of management teams to food systems transformation goals are paramount in delivering on these outcomes, where prioritisation and potential additional nearterm cost decisions may need to be made. Not all food systems goals will generate short-term returns (as highlighted with regenerative agriculture interventions), so long term vision alignment and a systemic viewpoint are needed to collaborative progress.

• The activity and interest in agrifood impact investing, the convergence of the themes of food and health, and nature and agriculture, all speak to more systemsminded opportunities and progress in investors’ strategies and impact alignment.

Priorities for a better food system

What to consider in practice

Approaching the Landscape

Where interventions meet asset classes

Across these areas, agrifood investments are generally found in four forms. While not a direct correlation, these investable agrifood entities can loosely be affiliated with the private market asset classes, such that different investable channels for addressing the same end goals can be assessed.

Agrifood value chain businesses, already operating at varying sizes across all segments, which are dependant on land and/or infrastructure

Land and infrastructure, which form the pillars of the system

Financial products and offerings to expand infrastructure, operations, or implement new systems and practices.

Technology and innovation companies as interventions and enablers in land/infrastructure management and business operations, from incremental improvement to deep disruption

Approaching the Landscape

Where interventions meet asset classes

All asset classes are expanding, but agrifood private markets’ interest is outpacing listed equities.

Of 890 thematic food and agriculture funds managing cumulatively over $140bn in 2023, tracked by Valoral Advisors , 80% (by AUM) were found in real assets, venture capital and private equity. This highlights the continuation of an increasing private markets trend observed since 2012, at which point less than 40% of food and agriculture funds’ assets were invested in private market or alternative strategies.

At the same time, the market itself has expanded across all asset classes, but the private markets –farmland, private equity and venture – have seen outsized interest.

53% of funds in this database by AUM are found in North America, followed by 13% in Europe, 7% in South America and the remaining spread between other regions.

Investment Funds specialised in food and agriculture by main asset strategy

Source: Adapted from Valoral Advisors , 2023

Investable Landscape

Sourcing food systems investments across asset classes

Investable Landscape | Sourcing food systems investments across asset classes

This broad asset class exposure to the theme allows for multiple access points from an investment perspective, across the value chain and across company life stages. Public markets provide access to global food and beverage, commodity and agricultural companies – some embracing sustainability – while private markets bring together technology and innovation, supply chain disrupters and regenerative farmland opportunities.

companies- some embracingsustainability- while private marketsbringtogethertechnologyandinnovation,supplychain disruptersand regenerative farmlandopportunities.

Scale of change in public markets: Market concentration by

through engagement with the agrifood majors

Depth of change in alternatives: Sustainability goals can be best targeted through the private market asset classes where underlying investment selection can apply a more critical lens, and a more prescriptive strategy, and longer time horizons.

Investable Landscape

Addressing focus themes

Investable Landscape | Addressing focus themes

research)

Same as above, plus connecting the up- and downstream value chain and catalysing new markets.

Managers that are investing in hardware and solutions to tough, capex heavy infrastructure challenges.

Opportunities which can link the downstream, consumer and regulatory pull, to the upstream production operations where nutrient density can be linked to inputs and farming practices.

Enabling the transition with technology across the value chain.

Financing change and bridging near term expenditures.

Early stage opportunities either directly or via fund managers, with the depth of experience to cover more technical areas in deeptech and agbiotech.

Leading in other forms of capital by buffering traditional returns expectations.

Tailored transition finance with flexibility around growing seasons but stringency around practices.

Digitisation solutions for supply chain connectivity, transparency and efficiency – notably those applicable across different supply chains and product types.

Opportunities in consumer products where nutrition meets sustainable consumerism goals, understanding if expanding the product base is responding to validated demand.

Investable Landscape

The Market Map (Europe)

This report reviewed 60+ global venture capital fund managers with either explicit focus or part-focus on the topic of food and agriculture, to assess areas of thematic focus, portfolio concentration and overlap, and differences in strategy.

Investable Landscape |The Market Map (Europe)

Example fund managers investing in food systems (by estimated AUM of most recent fund)

Investable

Of these, 27 are Eurocentric venture and growth equity managers with potential or existing UK exposure, alongside a number of dedicated real asset managers (some following PE-like strategies). Acknowledging that the agrifood tech space particularly has seen a tough few years, there is a resurgence in fund activity and interest indicated by the bread of these strategies. This list is not exhaustive but provides good coverage of the impactfocused manager subset.

Of these, 27 are Eurocentric venture and growth equitymanagerswith potential or existingUKexposure,alongside anumberof dedicated realassetmanagers (somefollowing PE-like strategies).Acknowledgingthat the agrifood techspaceparticularly has seena tough few years,there isaresurgence in fundactivity andinterest indicatedbythe breadof these strategies.This list is not exhaustive but provides good coverageoftheimpact-focused manager subset.

Pelican

Bramble

Gullspång Re:food

Investable Landscape

The Market Map (Europe)

Among the 44 managers in the venture, growth and private equity stage, thematic alignment was qualitatively mapped based on highlighted verticals and focus areas in fundraising documents, websites and conversations.

Least addressed areas are a potential gap

• Nutrition and health were acknowledged as a priority across almost all fund managers, although this is most often seen in CPG products rather that food-as-medicine solutions.

•Strong interest in agbiotech and inputs, and alternative proteins (combining novel food production with novel / alternative food product offering), which aligns to historical interest in the space.

• Enablers such as data, monitoring and management, supply chain innovation and circularity / waste management also featured in fund priorities.

Most acknowledged areas are an underwritten investable trend

• Aquaculture and fisheries were not often noted explicitly, as this sector is both under-addressed or an explicit focus of “ocean” funds.

• Innovation in transition finance was not often mentioned, highlighting a potential gap in agri-fintech.

• Climate risk and weather technologies feature in fund portfolios but are not a common focus vertical, although some coverage is observed within digital farm technologies (farmtech and data, monitoring and management).

• Consumer behaviour and education, knowledge dissemination and exchange are more often observed as overarching impact goals as opposed to explicitly investable areas.

Real Assets

Natural resources, farmland and infrastructure

Real assets are tangible physical assets or infrastructure which are the backbone of the global food production system – most commonly in traditional farmland investments in row crops, permanent crops, or pasture land.

These investments are characterised by high upfront capital requirements and inherent physical value, providing basic utility functions to society. Historically, farmland assets have been attractive to investors due to:

• Predictable yield or stable income component , typically based on contractual revenues or in the case of farmland, actual production yields.

• Capital appreciation in the underlying asset which has equity-like potential, albeit very long term.

• Low historic correlation to other asset classes as well as lower volatility, particularly in farmland assets due to consistent demand for food, thus considered a natural inflation hedge.

• High barriers to entry (lower capital substitution risk) due to the assets permanent and physical nature, high upfront capex requirement and often informal networks of sale.

Performance variation across product type and geography: Investors have looked to farmland investments as a hedge in an inflationary environment due to the attributes described. This increased interest combined with geopolitical instability has boosted developed market farmland prices by 10–20% since 2020. However, results all differ immensely by region and by crop or product type, requiring deep contextual knowledge and networks.

Real Assets

Natural resources, farmland and infrastructure

Farmland and production infrastructure are the most commonly discussed asset types through a thematic lens as many other asset types are generic, serving multiple sectors. Agricultural assets – focused on farmland and other primary production – have unique characteristics and require specialist expertise, and consequently will be found grouped in thematic portfolios, while general industrial and commercial assets are difficult to find with only an agricultural lens.

• Commercial or industrial real estate for inputs machinery retail and distribution

• Agricultural/forestry land

• Water infrastructure

• Fisheries, aquaculture

• Production infrastructure (indoor ag, controlled environment agriculture)

• Energy and renewables

• Storage

• Transportation and ports

• Processing (industrial or biobased)

• Warehousing

• Distribution centres

• Commercial real estate for food retail and service

• Waste management

Consumption

Sustainable Agriculture and Food Production Supply Chain Resilience and Traceability Nutrition and Health-Focused Food Innovation

Sustainable Agriculture Supply Chain Infrastructure

Novel Production Systems

Sustainable Aquaculture and Fisheries

Natural Capital and Ecosystem Services Food Service and Retail

Real Assets

Soil, natural capital and biodiversity as tangible assets

Many real asset managers are looking to use carbon or biodiversity credits, alongside farmland management for additional revenue streams, and for the preservation/rehabilitation of fallow land. These natural capital markets are still nascent in most geographies, so realistic expectations should be set in terms of returns potential, but natural capital exposure for existing agrifood managers can also be a potential hedge against a rising carbon price environment where agrifood supply chains will be required to inset/offset.

Real assets, consisting of physical land assets, has the most potential for direct and rapid protection and restoration of soils and biodiversity, where emerging technology can enable more sustainable practices and the ability to measure and monitor progress.

Soil Wealth (2019) by the Croatan Institute identified $47.5 billion in investable strategies with regenerative agricultural features, including $5.3 billion in public debt and $8.4 billion in public equity. The bulk of this funding lies with $22.8 billion in farmland and real assets. The report highlights that regenerative agriculture, which focuses on improving soil health, can increase the long-term value of farmland. Healthier soils lead to better crop yields, resilience against climate change, and reduced input costs, making the underlying real asset more valuable over time.

Real Assets

Soil, natural capital and biodiversity as tangible assets

Regenerative criteria identified in stategies by asset class, by assets

Source: Soil Wealth (2019) by the Croatan Institute

Real Assets Fund managers in focus

Considerations and

manager Insights

• Physical risk: More so than other asset classes, physical assets are materially at risk from extreme climate events. while infrastructure (such as roads) is critical to farm operations, bringing peripheral physical risk.

• Land use restrictions: Existing conservation structures such as easements (USA) can restrict land use conversion, for better or worse, and should be carefully understood.

• Different models, different levels of transformation ability: Owner-operators will have more direct control over what happens at each property, while buy-andlease models open up more opportunity to work with aligned, experienced and sustainablyminded operators.

€139.3 billion (August 2024) (asofdate)

$610 million (April 2024)

Geographic Focus Europe (Iberia)

Strategy

SLM have an agrifood fund focused on permanent crops (orchards) in Portugal and Spain. The strategy targets areas with suitable climate and water availability for the production of high-value tree nuts and olives, with 80% irrigated production.

Impact Attributes

Unique Insights

The fund will implement regenerative management across all properties and organic certification where possible, aiming for a carbon neutral portfolio. 10% of land will also be set aside for managed biodiversity improvements. The fund will target 50% EU certified organic products.

Longstanding experience in regenerative ag has provided SLM with an expansive on-farm data set, whereby the hypothesis of lower input costs, higher yields and higher prices has been validated over time. (Discussed in their 2024 Whitepaper)

Van Lanschot Kempen have a fund that invests in global core+ farmland in both annual and permanent crops, balanced between owner- operated and leased properties. This strategy seeks to provide diversification with a long time horizon, embedding regenerative practices into all assets.

The fund will embed regenerative or nature inclusive farming techniques that contribute to the Sustainable Development Goals (SDGs) with KPIs to map progress, including property level carbon reporting. The fund will also allocate 10% of all fund-level land area to biodiversity.

Highlighted the opportunity for repositioning land purchased from other land use (i.e. mining) with high carbon potential, especially where public finance or government involvement can incentivise repositioning.

Private Equity

The developers and operators

Private equity invests in value chain companies either supplying regenerative farms or sourcing from them, but can also include direct farmland investments through owner-operator and buyout-type strategies. Private equity leans towards financing upstream companies focused on production or inputs, and downstream processors, handlers, aggregators and food brands. The lack of processing and manufacturing infrastructure dedicated to “regeneratively” produced commodities is often cited as a barrier to growing the market for regenerative end products.

Common attributes of PE agrifood managers

• Technology interventions (through farmtech such as robotics, or a transition to biological inputs) towards both sustainability and higher productivity commonly form part of the fund’s value-add in agrifood.

•Managers may also pursue more typical PE value creation strategies such as upgrading management teams, geographic, area or export market expansion, and vertical integration.

•Long-term but with focused exit pathways, as opposed to venture which may pursue less established exit expectations. In PE, this may comes from strategic sales, IPO and recapitalisations, and in all cases require a strong team and correspondingly strong network.

Trends

• A shift in focus, downstream to upstream: from 2021 to 2022, downstream PE investment activity at a global level dropped by 65%, compared to the 4% decline in upstream businesses (according to Campbell Lutyens 2023 report). This is due to high valuations, crowding in the downstream market, and high capex requirements to reach production scale on new products.

• Higher value permanent crops (such as almonds) have garnered PE favour in recent years, over lower value annual row crops (such as wheat).

• Vertical integration is one way to circumvent the midstream barrier, aligning midstream and downstream incentives, capacity, and scale to promote regenerative production upstream.

Private Equity

The developers and operators

Multi-asset class managers leverage private equity strategies in hard assets, alongside venture exposure and learning from early-stage technologies.

Cibus Capital, founded in 2016, is a dedicated food and agriculture investor based in the UK. Cibus' strategy spans three areas:

1.The original strategy in agrifood buyout and growth equity focused on the mid-market.

2. The “Enterprise” venture strategy, investing early-stage technologies

3. A "Natural Capital” (new launch) strategy investing in real asset ecosystem restoration, through agriculture and forestry.

Through this, the team has full value chain as well as full capital stack visibility on this theme, allowing innovation from the venture strategy to penetrate operating agribusiness companies, and similar hedging again venture-only valuation hype and follow-on capital constraints faced by other managers.

Private Equity

Fund managers in focus

Considerations and Manager Insights

• With specialisation comes concentration. As the sector grows, managers are becoming more specialised, targeting fastgrowing niches which are largely linked to global shifts towards healthier food, resource efficiency and meeting growing food demand. This is increasing competition in the space and extra scrutiny is required on valuations as well as the intention and execution of impact within the strategy, and also risk awareness for concentration around product type or supply chain.

• Greenfield expansion often forms part of a fund strategy, which warrants consideration on what the prior use of the greenfield site was, and whether sufficient productivity gains are being achieved to justify any further footprint (i.e. is sustainable intensification effective, as opposed to just scaling land area).

• Europe is catching up.

Agrifood-focused PE is not common in the European ecosystem, although there are later stage managers with some focus on the theme – which makes sense from a sector diversification perspective. However, with growth equity opportunities emerging in Europe, the market is developing for private equity with specialist expertise to focus on resulting M&A opportunities.

• Benchmark returns for agrifood will largely be based on longstanding US private equity data which may not accurately reflect the European opportunity, especially with an altered view on extractive, intensive processes of the past few decades.

• Real Assets + Private Equity can result in a lower, but potentially favourable, riskadjusted return. Private equity managers (such as Regenerate Asset Management) pursue a real-asset based strategy, which incorporates an income component to the potential return profile, albeit with a lower overall target than traditional or technology-backed PE.

Private Equity

Fund managers in focus

Fund Name Regenerate Asset Management

Primary

Investable Area Sustainable Agriculture

€150 million (August 2024)

Geographic Focus Europe (incl. UK)

Strategy Regenerate Asset Management have an agrifood fund, which has an active private equity strategy based on an owneroperator model, combining primary farmland ownership with vertically integrated agribusiness operations. The fund will seek out sub-scale farms where specialist value-add across farming types and bespoke regeneration strategies drive expansion and development of these farming assets.

Impact At tributes Integration of regenerative practices is supported by Regenerate Outcomes (affiliate business) on each asset. RESA also prioritises local management team buildout and regenerative training, embedding these practice changes at the farm and community level.

Unique Insights Regeneration plans are holistic, and bespoke to each asset, crop, soil type, and local context. These can differ significantly between brittle and non-brittle environments, dependent on water availability and climate in that geography. For example: brittle soils are better for permanent cropping vs non-brittle which lend themselves better to livestock and agroforestry.

AUM (asofdate)

Venture Capital

The innovation driver

Venture capital exists to provide equity capital to early-stage companies which are channeling innovation into food systems. Venture investments can be done directly into early enterprises, or via a plethora of venture-stage managers focused on the agrifood value chain, across almost all investable areas.

Characteristics of Venture investments

• High Growth Potential: Venture investments in agrifood target earlyto growth stage companies with innovative technologies and business models that can disrupt traditional agriculture and food at any point in the value chain. These areas include precision farming, alternative proteins, and novel foods, with the potential for very high returns (with equivalent risk of failure).

• Active Engagement: VC firms often take an active role in the management of portfolio companies, providing strategic guidance, resources, and industry connections to scale. In agrifood industries, these networks and regulatory know-how can be particularly valuable, where the usual path to exit is acquisition by a large agrifood corporate.

• Technical, scientific or engineering expertise: Many firms invest in deeptech, where the underlying biotechnological or hardware-based technologies involve complex IP, technical analysis and route to market, needing expert context and background knowledge.

Venture Capital

The innovation driver

In other asset classes, thematic investment in agrifood tends to strongly favour the USA, but according to AgFunder’s 2024 Agrifoodtech Report , Europe’s total venture capital contribution to the space was $5.1 billion last year, vs. $6.1 billion in the US.

Venture Capital

Reviving agrifoodtech in the wake of valuation corrections

Venture in both agtech and foodtech market has seen a tough couple of years, and deal activity in the space still shows an overall stagnation or decline. This is the result of a correction off the back of a few years of hugely inflated valuations – during which companies were focused on growth, rather than profitability, in order to continue to raise capital. This is viewed as symptomatic of the early stage market not solely the sector, and does pave the way for a pool of startups with strong fundamentals who have survived this market to now progress into growth stage funding.

Pitchbook’s Q3 forecast still shows a decline in both agrifoodtech deal value and deal count, now equivalent to a 40% decline in deal value year-on-year (YoY).

According to AgFunder’s investments by category, Bioenergy & Biomaterials saw meaningful YoY growth (+20%), alongside Farm Robotics, Mechanization & Equipment (+9%), while Innovative Food Startups funding declined by 50%, Ag Biotech by 34% and Ag Marketplaces/Fintech by 22%.

The AgFunder chart on the next page shows the relative investment in each category in 2023.

Venture Capital

Reviving agrifoodtech in the wake of valuation corrections

Upstream

Agbiotech and farmtech are still receiving relatively greater attention, while novel production systems are facing skepticism.

Midstream

The midstream is undercapitalised with little visibility into the nature of the underlying technologies.

Downstream

Downstream investment is focused on convenience, food service and retail, rather than a dedicated health- or food alternatives lens.

Upstream

Venture Capital

Reviving agrifoodtech in the wake of valuation corrections

Considerations and insights from managers

• Capital Availability/Exit Strategies: VC investments typically require a clear exit strategy, such as an initial public offering (IPO) or acquisition by a larger company, and the timing and success of these exits can significantly impact overall investment performance. Several managers noted onward funding constraints, especially from Series C and later.

• Hardware vs. Software: The longstanding hesitancy around hardware-based solutions still stands, with most managers noting a preference for hardwarelight companies, unless hardware was a specialist focus.

• Is the end customer the farmer?

Many managers noted a preference for solutions that do not require selling to farmers, either due to 1) consideration of pricing distribution and not loading all costs on the primary producers, and 2) observations that adoption of new innovations by farmers continues to be problematic, so it is preferable to focus products and ser can be scaled through existing infrastructure and sales channels –such as biological input alternatives.

• New food segments: Beyond the traditional categories, niche categories such as pet food and coffee replacements emerged in conversations, highlighting the breadth of offerings and also the need for deep market knowledge in due diligence to understand market adoption.

• Technologies for SMEs: Most technologies are intended for large scale adoption, and are designed and priced as such. Managers highlighted the need for technologies and innovation which are accessible to small producers or small and medium-sized enterprises (SMEs), such that local, smaller food systems can keep pace with large-scale efficiency improvements.

Venture Capital

The "hype" cycle separates enduring themes from temporary excitement

Understanding where technologies stand within the adoption and “hype” cycle – whether at the nascent stage of innovation, the peak of market excitement, or the threshold of widespread adoption – is crucial for assessing their potential impact, associated risks, and long-term viability.

The adoption and hype cycle follows several distinct phases

• Future Trends: Gains attention and becomes a recognised trend.

• Excitement: Promising results attract heightened attention, often inflating expectations.

• Disillusion: Excitement fades as scaling challenges emerge, causing scrutiny.

• Rising Stars: Overcomes challenges, becoming more sustainable.

• Disruption: The trend matures into mainstream technology, widely adopted in the industry.

A technology’s position in the hype cycle does not necessarily predict the speed of its evolution. Moreover, it is essential to acknowledge that hype doesn’t always translate into traction and adoption, particularly in sectors like farmtech. For example, alternative meat products have faced significant consumer resistance, despite early excitement.

All three themes are wellrepresented in trending food technologies, underscoring their significance within the broader industry landscape.

Venture Capital

The "hype" cycle separates enduring themes from temporary excitement

Digital Food Labs 2024 State of Food tech has identified 28 trends, grouped in 6 megatrends, which collectively shape the future of food.

Sustainable Agriculture and Food Production

“ Resilient Farm” technologies are distributed. Emerging interest in bio-inputs. Precision agriculture and farm robotics are maturing. “Sustainable proteins” development aligns with manager insights in terms of “hype” stagnation.

Supply Chain Resilience and Traceability

“ Smart Supply Chain” and food waste innovation show surprising maturity, highlighting the often-unseen advancements in supply chain logistics.

Nutrition and Health-Focused Food Innovation

“ Food as medicine” is comparatively underserved, reflecting investment challenges despite potential. Untapped opportunities in healthfocused food innovation. Tough to draw any linkages between Instant retail/Automation and health.

Venture Capital Emerging venture managers in focus

Fund Name

Geographic Focus UK and Europe (US opportunistic)

Strategy

Impact Attributes

Pelican Ag focus on soil building to restore climate, biodiversity and human health, investing across agrifood-tech, nature restoration, supply chain tech and founders driving regenerative consumption.

Pelican Ag looks from ‘farm to flush’ into regenerative food and farming startup, that demonstrate ‘outsized’ impact and return potential, strong growth prospects, and a sustainable competitive advantage.

Fully focused on a regenerative and sustainable food system, with a deep proprietary screening tool (the “Holistic Context”) which exemplifies deep regenerative thinking in a VC process.

Unique Insights Pelican Ag highlighted that water cycle/hydrology are critical to understanding natural systems, as is nutrition as it relates to soils, evolution and human health – both topics often left out of the agricultural transition discussion.

Global (European focus)

TFT invests in naturetech that connects soil (planetary) health with human health to unlock nature’s value, focusing on the food system where the team sees the greatest opportunity for impact, with returns. TFT takes a systems approach to portfolio construction to ensure synergies that accelerate industry change. TFT invests in AI-driven applications, digital infrastructure and data generators to drive intelligence for solutions development.

With a unique focus on soil, TFT puts the ability to quantify and visualise nature as core to the strategy, with a target coverage of 30m hectares of land regeneration during the fund life.

Capturing economic value from outside the current food system is crucial, with a focus on human health as the major commercial opportunity, requiring aggregated solutions or a collaborative portfolio approach to solutions.

UK and Europe (US opportunistic)

Bramble Partners have a fund investing in “innovators that are changing the food system and moving us closer to a nourishing and regenerative world” through minority co-investments. The fund is looking to support companies through the growth stage, with a directed strategy based off of Founding Partner Henry Dimbleby’s insights and success with The National Food Strategy and subsequent book, Ravenous.

Unique team positioning allows strong regulatory and policy support to portfolio companies – import/ export, environment etc., which in many cases is existential to the company.

The integration of enhanced production (regenerative, precise and/or alternative) with better packaging solutions of food that improves human health is the ultimate goal. This requires multiple different systems to be brought together and incentives aligned from farm to fork.

The First Thirty (TFT)

Bramble Partners

Growth Equity Fund managers in focus investing at later venture stages

€5.7 billion (end of 2023)

Geographic Focus Europe

Strategy

Impact Attributes

Triodos has a fund investing in European companies in the transition towards sustainable agrifood systems. The fund started as an organic food fund, reflected by the current portfolio, now with a broader thesis across the agrifood value chain. The fund targets a minimum annual 8-10% IRR over the long run with a blend of late venture, growth and private equity investments, taking strong minority positions with active engagement and company support.

As an open ended fund structure with regular liquidity the fund offers a different risk return model to a typical closed end structure, widening the opportunity for investors, as well as patient capital to potential investee companies.

Unique Insights Looking at the European workforce transition and political movements to where agtech can solve for bottlenecks, and simultaneously how to “bring new people to farming”.

$1.5 billion (end of 2023)

€800 million (end of 2023)

Global Europe and USA (global opportunistic)

Just Climate has a fund designed to decarbonise the high-emitting agricultural sector and abate emissions through nature-based business models. Focus sectors are agrifood (60%) and ecosystem restoration (40%), across 3 archetypes: 1) platform companies with strong IP (e.g. specialist agroforestry), 2) leaders in emerging sectors such as bio-based fertilisers and pesticides, and 3) mature growth companies in innovation or production.

Focus on nature positive solutions that can support the delivery of net zero through carbon sequestration and reduced GHG emissions. Carry 100% impact-linked.

Growth requires flexibility, hence the firm’s multi-archetype model – primarily due to avoiding dependance on later stage capital which is hard to find, and also due to the nature of climate investing which may not “fit any bucket”.

Astanor has a fund Investing in growth stage businesses across the full agrifood value chain, looking for “bioeconomy” investments which look to both built and benefit from new profit pools as sustainable agrifood pathways emerge. This fund is being launched following two successful venture strategies, based on the acknowledgement of the “missing middle” in the growth stage.

Firm measures impact creation using 6 impact KPIs: biodiversity, water, GHG emissions, social, health and impact intelligence and also aggregates all the net positive impacts into a single metric (based on monetary value).

Growth stage in agrifood is deeply contingent on operational expertise in the larger industrial food system, and supporting companies in operating within, alongside, or even against these value chains.

AUM (asofdate)

Esmée Fairbairn Foundation Sustainable Food Portfolio to date

Investing in Our Natural World

Esmée Fairbairn Foundation has three strategic aims: to improve Our Natural World; secure A Fairer Future; and nurture Creative, Confident Communities. The focus of our work in Our Natural World is on restoring and protecting nature and ensuring people benefit from that recovery. We want to contribute to sustainable and ethical food, and Nature Friendly Farming is a key funding priority – due to its immense value, not just for nature and wildlife recovery, but also for our health.

This page shows our approach to investing in sustainable food and agriculture using our Spectrum of Capital, with more detail on example investments on the following pages.

Enhanced Sustainability

Impact Investing

Allocation

Market rate returns whilst targetting leaders in ESG and sustainability

Returns and impact in lockstep through themes

Impact First Investing (Social Investment)

Innovative and impactled, financial returns are secondary Philanthropy

High impact towards our aims and priorities

Sustainable Food portfolio examples

We publish all our grants, social investments and impact investments to 360Giving, as well as yearly in our Annual Report. Learn

about our funding data.

to enable growth of the organisation for nature friendly farming and support of the Loans for Enlightened Agriculture Programme (LEAP), which offers funding and mentoring to small agroecological businesses producing good food for their local communities.

support Kindling Farm to find a site and to run a number of projects related to the sustainable food system.

Sustainable Food portfolio examples

Real Farming Trust Follow-on investment in the Loans for Enlightened Agriculture Programme.

Existing portfolio exposure to food systems

Venture Capital

Green Generation Fund

Geography: Europe and N.America

Fund Vintage: 2021

Early-stage investments, from pre-seed to Series A, grounded in supporting founders in Green Tech and FoodTech.

11 of 16 investments fall into food systems directly, with one indirectly linked (pet food).

Enablers Consumption Processing

Alternative/Novel Food

Product Offering

Protein Distillery (Germany)

Upcycling of spent yeast from beer brewing process into a versatile, high-quality protein ingredient that is covering all functionalities of animal protein.

Lipid (USA)

PhytoFat from Lypid is the first heat-resistant ingredient that is capable to fully replace animal fats; innovative technology based on a patented microencapsulation- and fatto-protein-gluing process.

Biomilq (USA)

Cultivated, nutritionally equivalent alternative to mother’s milk; health-superior to traditional dairy and formula-based products.

Change Foods (USA)

Development and scaling of casein, the key protein for cheese-making through precision fermentation.

Neggst (Germany)

First plant-based egg matching chicken eggs in flavour, texture, and appearance; spin-off from Fraunhofer Institute, Germany’s leading publicprivate research partnership.

Koralo (Germany)

Unique co-fermentation process of algae and mycelium, able to mimic all common types of seafood at a cost-competitive level; achieved filet texture that matches real cod- and white fish.

Libre Foods (Spain)

European pioneer commercialising myceliumbased meat by utilising the full fungal fruiting body to create a full range of products (chicken filet, bacon stripes and whole-cut steaks).

Climate Risk and Weather

Jua.ai (Switzerland)

Innovative AI-based weather forecasting system, with a 1,000x improvement in computational efficiency compared to traditional numerical weather forecasting models.

Data, Measurement and Monitoring

House of Change (Germany)

Natural Capital and Ecosystem Services

Klim (Germany)

Enables food industry to reduce scope-3 emissions and inset carbon by assisting farmers to transition into regenerative practices, using a a workflow app for farmers to execute and report.

Supply Chain

Innovation

One Point Five (Germany)

SaaS solution aiding firms in communicating environmental impact , avoiding greenwashing via standardized QR codes. Sustainable CPG

AI-driven platform developing paper-based plastic packaging alternatives for toiletries, food supplements and confectionary; proprietary patent research engine expedites development processes by screening global databases.

(pet products out of scope)

VegDog (Germany)

First 100% needs-covering, plant-based, grain-free dog food that has been fully developed by veterinarians.

Existing portfolio exposure to food systems

Five Seasons Fund II

Geography: Europe

(and opportunistic USA)

Fund Vintage: 2021

Five Seasons invests in early-stage companies developing innovations in food. These span healthier food, to shorter supply chains, to quantified and personalised nutrition, to alternative proteins, both B2C and D2C.

Alternative/Novel

Food Product Offering

Vly (Germany)

A plant-based milk alternative brand made from peas, offering a protein-rich and sustainable dairy alternative.

Food Service and Retail

KoRo (Germany)

An online retailer that offers a wide range of healthy and sustainably sourced food products in bulk at affordable prices.

Nutrition and Health

Dash Water (UK)

A beverage company that produces sparkling water infused with wonky (imperfect) fruits, aiming to reduce food waste.

Spacegoods (Germany)

Produces performanceenhancing supplements designed to boost mental clarity, energy levels, and physical endurance, supporting productivity and wellbeing.

Her1 (Germany)

Creates natural supplements specifically for women, addressing key areas such as gut health, beauty, and overall wellbeing through science-backed, plant-based formulations.

NuCo (Netherlands)

Creates better-for-you chocolate and snacks, addressing issues like sugar content, single-use plastics, and CO2 emissions.

Nutrition and Health

Sustainable CPG

(pet products out of scope)

Mammaly (Germany)

Provides functional snacks and supplements designed to improve the health and wellbeing of dogs.

Untamed (Belgium)

A pet food company focused on producing high-quality, natural cat food with human-grade ingredients.

Barkyn (Portugal)

A personalized pet food subscription service offering custom kibble recipes and a tele-vet via chat, video, or voice.

Existing portfolio exposure to food systems

Growth Capital

Blume Equity

Geography: Europe Fund Vintage: 2021

Blume is a European growth stage climate tech investor, providing scale-up and sustainability support to the portfolio.

1 of 5 investments to date is in food systems. Enablers

Circularity and (Food) Waste Management

Matsmart Motatos (Sweden)

Series C Extension

Matsmart-Motatos sells surplus FMCG online by selling overstock and ear-to-best-before products that would otherwise go to waste, at 20-90% discounts to the consumer.

Existing portfolio exposure to food systems

Vision Ridge Saf II/III

Geography: Global Fund Vintage: 2018 and 2021

Vision Ridge is focused on the sustainable transition, developing and transforming complex assets in energy, transportation and agriculture.

4 of 12 Fund II and Fund II investments are in food systems.

Natural Capital and Ecosystem Services

Homer (SAF II)

A collection of strategic water assets in California. The asset base includes water in storage, water rights, and water storage infrastructure. Homer is managed by the Renewable Resources Group, Inc. (RRG)

Sustainable Aquaculture and Fisheries

Loch Duart (SAF II)

An independent salmon farm based in Scotland, Loch Duart produces premium branded salmon with a unique focus on low-density farming, natural and sustainable feed sourcing and husbandry.

Distribution and Logistics

Novel Production Systems

Sustainable Agriculture

Vegpro International (SAF III)

Vertically integrated grower, packer, and distributor of leafy greens and other vegetables It is one of the largest vegetable producers in Canada, with operations in Florida, allowing delivery of fresher, locally grown products to markets typically served from thousands of miles away.

Yumi Dates (SAF III)

Owns and operates a 4,000 + acre portfolio of ranches across the southwestern USA, producing medjool dates and other varietals, focusing on those driven by strong sustainability credentials, premium health benefits and flavor profiles. Headquartered in Yuma, Arizona, and managed by RRG.

Production

Existing portfolio exposure to food systems

Venture Capital

At One Ventures

Geography: Europe and US Fund Vintage: 2020

At One Ventures invests in early-stage disruptive deeptech that can reduce the negative impacts of established industries across the four focus areas of Water, Air, Soil and Biodiversity.

Agbiotech and Inputs

Miraterra (Canada) Novel sensing technology, computational chemistry and ML that allows farmers and agronomists to self-test and analyze soil composition, including NPK and Carbon.

Avalo (USA)

novel AI platform to predict genes coding for climateresilient traits, with high speed and confidence. It holds the promise of improving crop genetic diversity while preparing for a world with increasing climate destabilisation.

Puna Bio (Argentina)

Biological (non-GMO) seed treatments based on the unique capabilities of 3.5 billion-year-old extremophiles from the highest and driest desert on Earth. This enables growing in degraded soils (acidic, UV-irradiated, salinated).

FarmTech

Monarch Tractor (USA)

Autonomous electric tractors that collect rich field data and can interface with smart implements to enable lower cost and higher efficacy farming.

Inevitable Tech (USA)

Fully robotic agriculture from seed to harvest at unit economics radically competitive to outdoor agriculture, enabling. low-input, local, and resilient food production.

Precision

AI (USA/Canada)

Has developed a drone-based identification/application system that identifies crops and weeds and performs targeted herbicide application, resulting in reduction in input costs, while significantly reducing chemical runoff.

Alternative/Novel Food Product Offering

Finless Foods (USA) Using cellular agriculture to grow bluefin tuna holds the promise of creating a delicious, pollutantfree, and cost-competitive alternative to our current practice of overfishing this apex species.

Orbillion Bio (USA)

Developing cell-based lines for heritage meats such as Wagyu beef, lamb, elk, and bison. This has the potential to both address the higher end of the marketplace and lessen pressure on game animals.

Climax Foods (USA) The team has developed algorithms to quickly match the taste/ texture of animal-based foods with plant-based formulations – reducing reliance on animal agriculture.

Acknowledgements

We would like to thank the following people who contributed time to providing insights and discussion for this report, and for their various contributions to the transformation of the food system towards sustainable and impact outcomes.

Jack Bobo

University of Nottingham

Chris Ramsa

Simon Evill

Pelican Ag

Henry Dimbleby

Anya Claxton

Anu Shetty

Bramble Partners

Antony Yousefian

Naeem Lakhani

The First Thirty

Madeleine Evans,

Lucía Keijer-Palau

Generation Investment

Management

Gaia De Battista

Sidd Shrikanth

Just Climate

Claire Murray

Blume Equity

Leslie Kapin

Astanor

Adam Kybird Triodos

Addy Windsor-Clive

Nicholas Burlington Regenerate Asset Management

Paul McMahon

SLM Partners

Erin Feger

David Leon

Biome Capital Partners

Tristan Berne Aliment Capital

Nick Schroer

Trailhead Capital

Guilherme Teixeira

Sustainable Capital Group

Lara Nuchowicz

LNL Consulting

Tosca Griffin

Planet First Partners

Gaetan Kerloc’h

Five Seasons Ventures

Peter Dorfner

Janna Ensthaler

Green Generation Fund

Alistair Cooper

Kristen Weldon

Katie Hughes

Cibus Capital

Caitriona Dickenson

Tikehau Capital

Chris Windeatt

Tim van den Pol

Van Lanschot Kempen

Maxime Walter Capagro

Peter Herz

1st Course Capital

Acknowledgements

Brandon Welch

Mad Capital

Emma Steele

Ascension Partners

Helen Lin At One Ventures

Rosie Wardle Synthesis Capital

Edward Arthy Gullspang Re:food

Tijl Hoefnagels

Rubio Impact Ventures

Marie Ang

David Gowenlock Cambridge Associates

Sue Pritchard Food, Farming and Countryside Commission

Tessa Etkin-Silver Mission Kitchen

Robert Fraser Real Farming Trust

Christelle Perera Skagen Conscience Capital

Gautham Radhakrishnan

Professor David Hill CBE Trustees, Esmée Fairbairn Foundation

Special thanks goes to Veronica White (PhD, Exeter University) for her input on visualisations for food systems investing