The Failing Food System: Collaborative Innovations to Turn This Around

Food is not only essential to our survival but it is also big business. The food industry is the largest sector of the global economy, according to the World Bank, and is valued at roughly US$8 trillion, representing 10 percent of all economic output. The COVID-19 pandemic has brought to light the fragility of our world, no less than the plight of the food supply chain. As a result, safety nets need to be in place to ensure food safety and security. And with a renewed spotlight on how food consumption can impact global and personal health, people have started to look for healthier alternatives to their dietary habits. It’s believed that alternative food sources and technological innovations will be the disruptive solution to reform and build the vulnerable food systems.

Huge food supply chain inefficiencies characterise the existing system even before the 2020 pandemic. About one-third of all our food supplied for consumption is wasted which translates to over a billion tonnes per year, while intensive animal husbandry is one of the largest contributors to greenhouse gas emissions. 

“We are going to reach a world population of about 10 billion by 2050 comprising people who on average are going to live longer,” says Natalie Lung, Programme Manager (Food Tech Accelerator) of Brinc. “Research has pointed out that the current food production will need to almost double to meet this demand. But we are already living in a world where so many people go hungry that the entire food production system can't be scaled to meet the growing demands of an increasing population. We believe that technology and innovation will be the only thing that will enable us to sustainably feed the population.” 

Brinc is a venture capital and accelerator firm that empowers technological development to solve some of the world’s biggest challenges. They launched Asia's first food technology accelerator, and are now extending the platform to Mainland China. Last year they announced a commitment to invest in 1,000 climate-conscious startups in the next five years. 

Julia Dalmadi, Director of Community Programme of Future Food Institute (FFI) explains that what cripples the system and makes it unattainable is the inequality of food distribution, which is the result of a systematic failure throughout the entire supply chain, from farming and agriculture, production and manufacturing, distribution and retail to consumption. Demonstrated in the fact that a large populace suffers from hunger while other parts of the world are battling obesity.

FFI is an Italy-based non-profit organisation that offers educational programmes through their Academy, and foster systemic change around the world with Living Lab partnerships that connect communities with local businesses to further innovations in food. 

Another challenge is climate change, Julia says, with unpredictable weather conditions and land becoming less productive, farmers are in need of other solutions. This brings us to look at sustainable practices in a circular economy. “People should look into regenerative agriculture practices or agroforestry, to restore the health of soils and land, and make more profitable outcomes, which are ecosystems that the planet already has in place. We just use those structures and ecosystems and replicate them in our agriculture.”

The Food & Climate Shaper Boot Camps organized by the Food and Agricultural Organization of the United Nations (FAO) and the Future Food Institute (FFI) aims to equip the future workforce of the food system with the skills, competencies, and tools to design solutions that serve both human and planetary needs. 

Consumers “Vote with Money” 

Before the pandemic, concerns about food security were rife. This was shown in people willing to pay a premium for further awareness of sustainability; from knowing where their food is coming from and its quality to whether the supply is generated from a sustainable source going forward. Sustainable Share Market Index compiled by the Center for Sustainable Business at New York University reveals that sustainability-marketed products are responsible for more than half of the growth in consumer packaged goods from 2015 to 2019.

One would argue that the pandemic became an even more contributing factor pushing mass consumers toward safer and sustainable alternatives. For one, plant-based substitute for meat producer - Impossible Foods, has grown its retail footprint by nearly 100-fold since the start of the pandemic. Research shows that the global market for alternative proteins is expected to reach US$4.7 billion by 2027, which is accelerating at a pace that shows the reformation of the food industry.

“Everybody needs to eat and, fundamentally, access to food should be a right for all, but COVID this year has highlighted, more than anything, the fragility and interconnectedness of our global ecosystems,” says Lung. “The negative drawbacks of intensive animal agriculture, of zoonotic diseases, of the importance of food safety are reflected in consumers being much more conscious of, and willing to spend money on health and well-being.”

The food tech ecosystem in China remains relatively new, which provides a huge opportunity with its growing urban, more affluent middle class. Consumers are actively looking for ways to incorporate safer, healthier foods into their diets and plant-based proteins are a popular choice. “The Chinese government has published guidelines to reduce its citizens’ meat consumption. A lot of Chinese consumers are increasingly aware of the impacts of their dietary choices,” say Lung. “But more than that, they are increasingly conscious of the origin of their food.” 

Traceability, Transparency, Trust

Individuals' concern with food safety has been heightened by COVID-19. More than half of the people surveyed in a recent study believe food safety is a top 3 global issue, according to new research from the Mars Global Food Safety Center (GFSC). Consumers are increasingly worried about exposure risk related to food handling, preparation and transportation.

“There needs to be more traceability and visibility in the supply chain, a trend that is already in the works,” according to Jimmy Sohn, CEO of Techno+, a food value chain consulting company with expertise in the Korean alternative protein sector, who is also the principal consultant at Bright Green Partners, a global consulting firm for leading plant and cell tech strategy, and mentor of Big Idea Ventures, a hybrid venture firm specialising in new protein.

“There are studies about the traceability of food by using big data and blockchain technologies,” Sohn says. “People didn’t realise the urgency until COVID exposed the vulnerability in the system, and digital transformation comes back to the forefront.” Blockchain technology has a structure with the potential to create an open-sourced environment for information about food, and every point of contact along the supply chain, which allows again for greater transparency and traceability.

“If we look at how machine learning and artificial intelligence can be used for personalisation and dynamic pricing of food based on expiry date, technology as such can be used to make informed choices regarding dietary or nutrition requirements, and reduce the significant amount of food being wasted nowadays,” says Dalmadi. “Nearly 40 percent of the global population has access to the Internet, and among the bottom fifth of the poor, 7 out of 10 households have a mobile phone, so people are connected off the bat, meaning they have access to readily available information and services.”

A growing number of companies are leveraging AI technology and Machine Learning to help eaters with these day-to-day food choices. Empowering eaters’ choice has the power to positively affect two of the main challenges of our time: obesity and malnutrition. This ranges from finding the origin of the food you consume to accessing your AI-powered mobile app assistant for daily health and wellness regulation to tackle obesity.

Navigating the Valley of Death

Advancement in food technology can allow us to completely rethink how and where we can cultivate our food sources. One of the more revolutionary developments in this area is that of ‘cultured meat’. “If you think about being able to grow meat for consumption without slaughtering animals, it’s really something,” says Lung. “It’s groundbreaking and it will fundamentally disrupt the way we produce and consume animal products. Five or ten years ago, this would have been unheard of. Hopefully this space continues to move toward wider adoption and accessibility, but this will rely on us overcoming current barriers to scalability and reaching price parity with conventional animal products.”

There remains obviously huge barriers to food licensing and regulations, scalability to reaching price parity with normal meat products but strides are being made. San Francisco-based startup, Eat Just has now made the world’s first-ever commercial sale of cultured meat for human consumption in Singapore. 

Dalmadi encourages government’s incentives for entrepreneurs who can also provide corporates with opportunities to prototyping and adopting technology in their operations. “Living labs are uniquely designed spaces for community engagement to various food innovations,” she says. “Early adopters and innovators can test out new ideas and launch their prototypes while receiving feedback from future consumers who also have access to these labs and on-site F&B facilities. We have three living labs present in Bologna, New York, and Tokyo with one more on the pipeline in Singapore where there exists a vast population, advanced technology and rich food culture as good testing beds.”

FFI is cooperating with local food partners in locations with fast growing food-tech ecosystems. These locations offer an interesting juxtaposition in food supply systems and priorities in the region. The Lion City, for example, imports 90 per cent of its food, as such the government has rolled out subsidies to help increase homegrown food production. The Singapore Food Agency (SFA) has enhanced their Agriculture Productivity Fund (by ways of two schemes and a cash advancement) to support local farmers with valid SFA farm licence. Whereas Japan already has a rich agriculture industry and is focusing their efforts on decarbonisation and climate change.

Yet, there is a disconnect between consumer sentiment and those seated behind desks looking at numbers to increase profit or those holed up in their labs with little understanding of what consumers really want. Bridging the gap between R&D and commercialisation, for one, requires a deep cultural understanding of the place of business. “The more I study about proteins and food is that it is all about experience and culture,” says Sohn, who was formerly a chef and restaurateur for over two decades. “I have a lot of respect for food tech startups, PhD food scientists and so on, but they tend to stay in their labs trying to make their product to sell.”

Here is where people turn their attention to the plant-based food space, especially toward niche, localised, white-label products. “These include alternative protein products catered towards Asian consumer taste profiles, such as plant-based or cultured seafood. We have two China-based portfolio companies, New Singularity and Avant Meats, that are examples of each respectively,” says Lung.

While funding a new food tech startup can be very capital intensive for entrepreneurs, established corporations are perfectly positioned to take on this mantle in food innovation. Lung points out that these are larger companies with the resources and insights to look for innovation externally and integrate novel technology into their businesses. It encourages big businesses to seek out partnerships with start-ups and creates potential M&A opportunities, and this is how synergies and ecosystem connectivity can be achieved between large corporations and earlier stage ventures.

Sohn concurs, “Innovation and sustainability-wise, startups fill the big gap between large and small-sized companies, while large companies can only launch new products after a long lead time, startups can be very quick in pushing their products onto the market,”

“Big companies are usually reactionary. You can tell from their sustainability reports every year, they all have similar stories because they first and foremost react to consumers or some sort of government policy. But startups need to survive at least five years before their business becomes truly viable and go into ventures with large companies.”  

Synergy and Connectivity across Ecosystem

The interdependencies of the food system are extremely complex with many actors having the right to intervene at any stage. In order to continue to add value to the product and have that value returned on investment, it is important to pursue engagement with the whole community, and work toward the same goal. Government and legislative bodies are instrumental to taking actionable steps to move the industry forward, from subsidies and lowering market entry barriers for new technologies to revising food licensing for alternative protein foods such as the cell-based variant. 

On the other hand, a greater emphasis needs to be placed upon transparency and traceability, which is why innovation in food technologies has to be prioritised. Technologies from artificial intelligence (AI), blockchain to alternative protein development will help bring efficiency to the food supply chain, while reducing wastage into animal husbandry, in order to achieve balanced distribution of food and optimise resources in our ecosystem. At the same time, big producers in the conventional food industry can look toward acquiring new technology and incorporate it for a more sustainable way of manufacturing and operations. New business models can be implemented through partnering or M&A transactions with startups who are responsible for bringing new technology to the market.

It is important to remember that the system needs to become more holistic where synergy and connectivity within the whole ecosystem is key.