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Investors wake up to a $2.3 trillion opportunity in sustainable food and agriculture

A 2015 report cast the opportunity to secure the world’s food supply by 2030 as a $2.3 trillion annual opportunity that could create 80 million jobs, 90% of them in developing countries. Areas of opportunity included better fertilizers, improved data analysis, sustainable production and aquaculture, innovations in food processing and logistics and reductions in food waste.

The opportunities could be realized with $320 billion in annual investment, estimated the report, from the Business and Sustainable Development Commission and AlphaBeta. The bad news: annual sustainable food and agriculture investment totaled only $4 billion.

Smallholder farmers are investable

There are signs investors took the hint. In the Global Impact Investing Network’s survey of impact investors last year, 63% of respondents — the largest group — reported allocating impact investment assets to food and agriculture. The survey found those allocations have grown 32.5% per year since 2013. Already in 2018, vegetarian hamburger companies Beyond Meatand Impossible Foods, and Memphis Meats, which grows meat in a lab, have each raised tens of millions of dollars from investors.

Food corporations Cargill, Tyson Foods, PHW, and even fast-food chain McDonalds, are investing in alternative proteins. Combating food waste is also getting funded: WISErg, which is tackling the issue through tech innovation, and Australia-based Yume, which is finding new markets for surplus food, have raised early rounds of investor funding.

One thing those investment trends have in common is that they’re almost all targeting solutions for advanced economies. A few investors, like Meloy Fundand ECOTIERRA, are investing in sustainable agriculture and aquaculture in lower-income markets. Many more are focused on improving small farmers’ access to finance.

Investments in food can help in other ways, too, including food security, poverty alleviation, climate resilience and community health. Nearly 800 million people worldwide are still hungry; more than 2 billion lack micronutrients such as vitamin A and iodine. Shifting the food system onto a sustainable development pathway, the Business Commission reports states, “will transform the entire food system, with major impacts throughout the value chain.”

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