Clean Food Needs Clean Money
A Twinkie in Maine has not decayed since 1976, neither has a burger in Utah since 1999
Grass-fed beef has up to 5x the omega-3s as CAFO (aka industrial) beef
China has the fastest growing rate of childhood obesity, 1 in 6 boys and 1 in 11 girls
The food & agriculture industry grosses over $9 trillion a year, over 20 times the size of the entire software industry. Food from the “industrialized” food system is less nutritionally dense than organic, sustainably-grown food. The crops grown today in poor soil with the aid of synthetic chemicals are more sugary and less nutrient rich than crops from 50 years ago. Meanwhile, the rise of highly processed, high-calorie, low-nutrient foods is making the Western population overweight, sick, and nutrition-hungry at the same time. Low-nutrient foods grown with synthetic chemicals have spread across the world, often targeted to the poor segment of the population in developed and emerging nations alike.
This food and agriculture problem is too big to fix solely with philanthropic donations or government policy — even assuming a fully favorable policy environment and the effective deployment of philanthropic dollars. Modern lives are shaped to a very large extent by large-scale businesses and new technologies fueled by capital. Brands owned by the top ten Big Food groups — which accounts for over 90% of all our food supply — are not just household names: they are actively shaping behavior patterns and lifestyles down to the very core of our modern consciousness and our daily vocabularies. For over half a century, overabundant fast food and processed food brands have delivered sterilized food calories while fresh food from conventional agriculture decreases steadily in its nutrition and antioxidants. This ease of food access has been the envy of developing and poor countries. But the majority of this food is developed in food labs, and processed by industrial scale manufacturers with additives, and preservatives. This process has led to the empty calorie epidemic.
Here’s the good news: after decades of effective storytelling, public education, and advocacy by activists, we have a generation of Millennials embracing a broad-based behavioral shift toward healthy, sustainable food options. Just a few years ago, it would have been difficult to imagine the mainstream social consciousness that has emerged today: consumers are demanding local food, food hubs, plant-based proteins and meat alternatives, traditional fermented foods, ancient grains, a reduction in food waste, and DIY meal boxes. Food is the new black. The list goes on. In fact, there has been such a groundswell of new and revived innovations and promising solutions that we are truly looking toward systemic change in our food system. These solutions are not coming from governments or foundations — not even university researchers or labs. They are coming from innovative entrepreneurs who, through their dedication and willingness to take on huge personal risks, are solving global problems and shaping major behavioral shifts. These startup founders are working hard to create the food & agriculture equivalents of Amazon, Google, Apple, and Facebook. They are building scalable solutions to make unsustainable industrial food obsolete. And they are helped by a rapidly growing ecosystem of friends, family, advisors, mentors, early stage investors, and business accelerators. Food is the new Internet.
How can we better support and fuel the growth of these entrepreneurs? As strange as it may sound the capital market is a good place to start. Clean food needs clean money.
The largest value creation by capital markets in this sea change is not coming from incremental changes to food and ag; but coming from value-based investing: those morally-responsible, socially-responsible, and environmentally-responsible investments more commonly known in recent years as Impact Investing. Not only is this the right thing to do, it is necessary to fix our food system. Yet, impact investing will not become the investor norm by relying on its moral imperative. History is riddled with examples of societally beneficial innovations falling to the wayside or suffering from significant delays in adoption (just think about electric cars). Impact investing will escape this fate because of the younger generations that are demanding sustainability and quality of life in their personal lives and in their workplace, and developing brand loyalty to impact conscious companies.
The sustainable car sharing company Zipcar was financed in part by impact investors, as was Honest Tea — bottled tea with an ethical supply chain. Pioneers such as Ben & Jerry’s, Chipotle and Patagonia have demonstrated above-market returns thanks to their authentic concern for impact on communities and the environment. For this emerging generation of ethical businesses, social impact is not separable from profit-generating activities, not an afterthought. Impact is not a charitable act that is nice to have in addition to the financial bottom line of profit making. Tomorrow’s businesses are forces for good. Truly innovative emerging businesses in food and agriculture, in health, and in the environment will become the norm, rather than outliers.
This ethical future of food is today. The food movement has inherently smarter foundations to build upon. The most promising new food and agriculture solutions will not come from more chemicals, more ingredient engineering, ever increasing shelf-life, or a more efficient global distribution system. These solutions will blossom from efforts to leverage the resiliency and biodiversity found in nature as well as the rich variety of global cultural and culinary traditions. When comparing nature and culture to industrial agriculture and industrial food, nature and culture are simply smarter and more proven systems than the industrial alternatives.
Hunger, lack of drinkable water, and obesity are massive food problems, as are such negative food-related health outcomes including heart disease and cancer. The existing food and ag system has created and contributed to nutrient-poor diets, global warming, gender inequality, income inequality, learning disadvantages for hungry and malnourished children, and many other global systemic problems.
If we look at the sheer scale of the problem and the current policy environment, it’s discouraging. It may seem that in order to fix food, we have to fix everything. But we can learn from the history of social change movements and disruptions. If we turn the food problem on its head through conscious consumerism and responsible investment decisions, then systemic change will follow. We can fix everything by fixing food. In the wake of the cultural shift led by Millennials, highly-scalable purpose-driven businesses will now lead the way in solving today’s biggest societal threats and in creating a better tomorrow. And all that fueled by impact investing.
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