Make America Healthy Again & Fixing Food Fast

As both sides of Congress attack the FDA and RFK plans to Make America Healthy Again, we see the food system transformation has become a central topic. However, personal health isn't the only reason that the current food system is underdelivering. The food system's role in negative planetary health is also an issue...and a silver lining.

Let's dive in.

Fixing Food Fast.

According to the United Nations Environment Programme (UNEP), the food system contributes 30% of the World's Greenhouse Gas Emissions (GhGE), with 60% of that attributable to animal agriculture (thus, 18% of GhGE total). Further, 32% of the world's methane, one of the more potent gasses, comes from animal agriculture.

The good news is that, per the Boston Consulting Group (BCG) chart below, diversified proteins can be 3x-40x more impactful at reducing GhGE than novel energy, transportation and building materials (AKA other green technologies).

Why?

Elevating the food system is less costly than other green technologies.

For example, the capital expenditure needed to scale complementary proteins from say fermented microbes is much less than say, revamping the global electric grid to accommodate electric vehicles. Fermenting is an age-old process already used for beer, bread, tea and many other products. While the process has advanced to now include proteins - note that ABinBev, the largest fermenter in the world and a VegTech? investment company, is now fermenting proteins -, the money to configure the fermentation tanks, as one example, from beer to protein isn't all that considerable.

Specifically, both the Food and Agriculture Organization of the United Nations (FAO) and the World Bank expect $450-$650 billion yearly to be spent on food tech. This is less tan the $2-$3 trillion that is invested yearly in the energy transition, per Senior Energy Analyst Rob Barnett on an Upside & Impact podcast.

Since $650 billion is less than $3 trillion, the money needed in R&D to create an efficient food system shift won't take as long to acquire. Needing less capital to create a more resilient and less damaging food system means four things: 1) the money needed for innovation is less, 2) thus the innovation will happen faster 3) allowing the adoption to happen faster 4) thereby impacting the environment faster than more expensive green technologies.

How will financing happen?

Even if less capital is needed on a relative basis than other green technologies, how will the capital become available to innovate for a more nutritious, less damaging and less resource intensive food system?

Welcome to 2025: Food's Five-Year Plan.

2025: Food's Five-Year Plan

It is our understanding that not much has been done by companies and countries to achieve 2030 environmental targets. We believe, however, that 2030 targets remain important to both as pressure to disclose emissions along supply chains continues to increase.

When five-year plans are created in 2025 (and implemented in late 2025 and into 2026), we believe that food systems innovation spending for more resilient, efficient and nutritious system will be a significant part of those plans. Why? Because, as discussed, you can spend less to get a faster environmental impact.

Even companies that seemingly aren't in the food business, like sporting and entertainment arenas, for example, can quickly and inexpensively better their environmental impact by changing the type of food they serve to both employees and customers. This is just one example of how food innovation will make its way into many companies' five-year plans.

This increased food innovation spending will give way to bringing down the cost of novel protein innovations and provide a means, in part, for adoption. As adoption of complimentary proteins and more efficient technologies increases, price isn't the only thing that comes down. So, too, does food insecurity risk and environmental damage.

Given the growing global food insecurity risk, food innovation won't be driven by the US alone. China (with 1.4 billion people it is easy to understand why China made food/protein systems innovation part of their 2020 five-year plan), Israel, Singapore, the UAE, Denmark, the Netherlands, Germany, and Canada will all play major roles in financing a food fix.

This is a path that we see could begin the great food systems shift, truly just in time innovation.

Why Investors Care.

The graph above from PeakBridge VC illustrates the relationship of funding to Greenhouse Gas Emissions (GhGE), depicting that food and agriculture are underfunded proportionately to their climate impact. As funding to ameliorate the global food system increases due to necessity, there is a high-potential growth opportunity for investors.

For more information on investing opportunities in food innovation and food system transformation, visit the VegTech? Invest website.

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