From daily bread to daily headline, food is a hot topic. Pasta shortages panicked shoppers during the pandemic, while today’s high inflation has fueled steep increases in the cost of the weekly shop.

But what’s going on behind the scenes where consumers don’t usually see? After years of operating on outdated technology and production methods, the global agrifood system – which produces what’s on the world’s plate – has reached breaking point.

Today’s agrifood systems are responsible for 30% of global greenhouse gas emissions and 70% of freshwater use, yet a third of all food produced is wasted. Current food production methods are also responsible for 80% of deforestation; are the primary driver of biodiversity loss; and have devastated soil quality. In Europe, 60-70% of all agricultural soils are degraded as a direct result of unsustainable management practices (United Nations Development Programme, 2022).

With the global population expected to grow to 10 billion by 2050, and food demand to rise by 60% in this time, the stresses on our food systems are set to hugely increase.

Is there hope? Yes, but our agri and aqua-culture practices require urgent and profound transformation to reduce their harmful environmental impacts, provide a growing population with a sustainable diet and adapt to the evolving pressures of climate change. This necessary transformation is creating unprecedented investment opportunities across the global food value chain.

Drivers of change: Regenerative practices, technology & consumer demand

At the heart of the solution are regenerative agricultural practices. These are systems of producing food that don’t just limit harm, but actively restore nature and reverse environmental damage at each stage of the process. More importantly, regenerative practices offer a way to bolster food production while meeting climate goals through carbon sequestration and responding to the biodiversity targets set out in the Global Biodiversity Framework agreed at the COP15 last year.

Technology has a huge role to play in accelerating the transition towards sustainability. Satellites, drones, robots and machine-learning technology are finding their place in fields to aid farmers in understanding their soil, improving its quality and refining the use of chemicals. Traditional farming practices, like raising cattle for beef, can be remodeled into less resource-depleting approaches, such as high-protein, low-carbon insect farming. Closer to the consumer end of the process, blockchains and IoT can support more efficient supply chains and reduce food waste.

A cornucopia of opportunity

The agrifood tech innovation market has grown sixfold since 2012 and is forecast to reach USD700bn by 2030 (UBS, 2021). Three sectors are driving change around resilience and sustainability.

1. Precision Farming – the shift to ‘agriculture 4.0’. Using technologies like drones and AI to improve resource efficiency, pesticide use, carbon sequestration and productivity in food production.

2. Alternative nutrition – creating new food sources that are as attractive as today’s mainstream animal proteins.

3. Food waste – targeting operational efficiency from sourcing through to warehousing and distribution, as well as upcycling traditionally wasted food elements into desirable products.

Source: AgFunder Global AgriFoodTech Investment Report, 2023

The amount of investment needed to transform our food systems is estimated by the Good Food Finance Network to total USD300-350 billion a year from now until 2030. This is a huge standalone figure, but for context, it seems relatively modest in comparison to the amount pledged to the Covid-19 recovery. More importantly, it is dwarfed by the enormous potential business opportunities we expect to see in sustainable, healthy, equitable food investments and the societal value that these investments can unleash.

Guest contribution by Fabio Sofia, Co-Manager of the Regenerative Growth I strategy offered by Z Impact Ventures in partnership with Mirabaud Asset Management. This strategy invests in companies that are creating solutions to our broken food systems.

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