Are you a mission-driven founder leveraging technology to remove animals from the global food system? Apply for funding here! We are Purple Orange Ventures, an early stage impact fund based in Berlin.

A few months ago, I started to explore AI and other tech opportunities in Food/Agriculture and wrote this post. At that time, Food and Agriculture was only one of the many impact topics we were exploring at Purple Orange Ventures. Since then, we not only decided to look exclusively at Food and Agriculture but also to narrow our focus even more with our newly defined mission:

Back mission-driven founders leveraging technology to remove animals from the global food system.

The problems we try to address as an impact investor are incredibly complex. Just think about ending poverty or making the food system sustainable. A mission-based approach therefore seems to be the best to achieve bigger impact as it allows us to (i) have a deeper understanding of the problem we want to solve and therefore identify better solutions (ii) drive interesting synergies between our portfolio companies, (iii) play a more significant role in building the ecosystem.

But why this mission? Here are the three main reasons that pushed us towards this topic:

  • Shifting the global food system from its dependence on animals towards better alternatives is one of the best solutions to make it more sustainable
  • The timing is right considering the fast-growing demand for sustainable alternatives and accelerated innovation in food technology and biotech
  • The topic personally resonates with the whole team

Shifting the global food system from its dependence on animals towards better alternatives is one of the best solutions to make it more sustainable

I explained some of this in my last post already but let me share again here why finding alternatives to animal foods is important.

The population is growing exponentially and the increasing GDP per capita drives global demand for animal source foods. This shift is especially significant in Asia. Based on projected income and population growth, the Food and Agriculture Organization (FAO) estimates a 70 percent increase in total caloric consumption of animal products by 2050. [1]

But animal products are not sustainable and here is why:

  • Environmental degradationLivestock emit methane, require land clearing and fertilisers that release large quantities of carbon and convert huge quantities of fresh water in wastewater. An estimated 14.5% of the planet’s global warming emissions come from the keeping and eating of livestock i.e. more than from the entire transport sector [2] and 8% of global human water usage is estimated to be consumed by livestock [3]. Overfishing and harmful fishing practices have depleted ocean wildlife, damaged marine habitats and destabilized ocean ecosystems. Over 90% of wild fisheries are now classified as overfished or harvested at maximal capacity. [4] Aquaculture emergence reduced wild harvests but still relies heavily on fishmeal and fish oil from wild fish and poses the threat of releasing non-native species into wild ecosystem. Today, 12% of harvested wild fish is consumed as feed by aquaculture.[4]
  • Food security Animal agriculture is a very inefficient way to convert resources to nutrients. Indeed, the most efficient source of meat — chicken — converts only around 11% of gross feed energy into human food. [5] As a result, one-third of global grain production i.e. enough to feed 4 billion people is fed to livestock [6] while 821 million people still suffer from hunger [7]. Millions of fishers rely on a daily catch for food and income and 800 million people are now at risk of malnutrition if fish populations continue to decline.[4]
  • Public healthDrug-resistant pathogen strains due to the uncontrolled use of antibiotics and zoonotic disease outbreaks are two major threats associated with animal agriculture. High intakes of meat also increase the risk of heart disease, stroke, diabetes, obesity and cancer while many commercial fish contain toxic concentrations of heavy metals, pollutants and plastic.
  • Animal crueltyAnimal agriculture involves inhumane practices like extreme confinement, painful mutilations and slaughter of billions of animals

It is therefore quite clear that we cannot just intensify animal agriculture to cope with population growth and changing diets and need to find more sustainable alternatives.

The timing is right considering the fast-growing demand for sustainable alternatives and accelerated innovation in food technology and biotech

Demand for alternatives to animal products has been already showing some promising growth in the last decade. In fact, annual global sales of plant-based meat alternatives have grown on average 8% a year since 2010 i.e. about twice the rate of processed meat, with annual sales of about $2bn. It is expected to reach $5.2 billion by 2020 and making up a third of the market by 2050. [8]. Worldwide sales of non-dairy milk alternatives more than doubled between 2009 and 2015 to $21bn [9] and plant-based milks already account or c. 13% of the fluid milk category in the US.[10]

Even if the total market share of alternatives to animal products is still relatively quite small — the US meat category alone is $270bn — this growing trend is a major driver for the shift towards better alternatives. Indeed, the increasing demand for plant-based products is attracting more and more investments and innovation in the space expanding the opportunity beyond the vegan niche.

Some promising innovations in the space that attracted significant investment so far include:

  • cell culture to recreate a whole piece of meat or fish without animals like Memphis Meat (raised $20M up to date)
  • the use of novel ingredients and processes to create tasty and nutritious plant-based meat/seafood/dairies analogs like Impossible Foods (raised $387.5M up to date) and Beyond Meat that just filed for IPO
  • the use of recombinant technology to recreate specific animal proteins like Perfect Day (raised $26.8M up to date).

We closed 3 deals since we defined our new mission couple months ago and will announce these soon — stay tuned. The objective is to do 10 deals related to this mission over the next 12/18 months and hopefully drive significant impact through our portfolio!

Our focus changed but we kept the initial investment strategy. We are still looking for projects at the intersection of deep tech and impact that can generate top tier VC return potential and invest up to EUR 500k at pre-Seed to Series A. Our first deals are in the US but we are very keen on supporting the European ecosystem. We will continue to look for transformative projects all around the world but feel Europe is ripe with talent and drive to help achieve this mission.

If you are a mission-driven founder leveraging technology to remove animals from the global food system and feel that your project would be a fit, apply here!

Beyond doing investments, we also want to help to build the ecosystem and connect the dots in the space. If you are just interested to share thoughts, doing some academic work in the space or already active in the ecosystem, we would love to hear from you. Feel free to shoot me an email!

Sources

[1]https://www.wri.org/sites/default/files/wri13_report_4c_wrr_online.pdf

[2]https://www.independent.co.uk/news/science/clean-meat-lab-grown-available-restaurants-2018-global-warming-greenhouse-emissions-a8236676.html

[3]https://tifac.org.in/images/pdf/pub/Cellular%20Agriculture.pdf

[4]https://www.gfi.org/seafood

[5]https://www.wri.org/sites/default/files/wri13_report_4c_wrr_online.pdf

[6]https://www.weforum.org/agenda/2018/11/how-a-new-approach-to-meat-can-help-end-hunger/

[7]http://www.fao.org/state-of-food-security-nutrition/en/

[8]https://static1.squarespace.com/static/59d1440029f1874f709cc95b/t/5a8c7f30f9619a3b63e36945/1519157050945/FAIRR+Report.pdf

[9]https://www.ft.com/content/7df72c04-491a-11e6-8d68-72e9211e86ab

[10]https://www.foodnavigator-usa.com/Article/2018/11/19/Beyond-Meat-files-for-IPO-There-is-a-significant-international-market-opportunity-for-our-products?utm_source=newsletter_daily&utm_medium=email&utm_campaign=26-Nov-2018&c=Cr%2BXpJTwTHyB8FkaFyHK1cvOB7ZWTaOZ&p2=

Savina van der Straten

Written by

Impact Investor @POV, previously @Point Nine Capital — Interested in AI for good

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