The Change

The world is in the early stages of a food transformation.

The world is in the early stages of a protein transformation.

As global food production continues to climb, it faces a 56% food gap in calories produced versus calories required for the projected 10 billion population by 2050. Strong and steady shifts in consumer concerns, government policies, and natural resource constraints are driving a fundamental shift in the way food is created and consumed.

The Addressable Market

Environmental and health problems present a $15 trillion opportunity in the food system.

The negative impacts of the current food industry highlight the need for sustainable solutions. With human health costs estimated at $11 trillion and planetary harm accounting for $4 trillion, there is a pressing need to invest in transformative food technologies.

With poor diets contributing to a quarter of all adult deaths and food production generating over a third of global greenhouse gas emissions, there is a critical need for transformative solutions.

The FSEC estimates that $200-500 billion spent transforming the food system could unlock $5-10 trillion of economic benefits. This creates considerable opportunities for companies and capital allocators, as alongside shifting consumer behavior and legislative action, private markets will play a fundamental role in addressing these challenges.

The Drivers

Government regulations, climate instability, and consumer demand for better foods are reshaping the food system.

An increasing number of governments—including the U.S., China, the U.K., India, Singapore, Germany, and the Netherlands—have begun to directly support the sustainable food production in order to boost food security, advance technological development and reduce GHG emissions.

New technologies are emerging in response to consumer and policy changes. Companies are developing innovative solutions to meet new regulations, such as the European Union Deforestation Regulation (EUDR). Advances in seed innovation, precision agriculture, and regenerative farming are transforming the agriculture sector.

These changes are driven by rising consumer health consciousness and the preference for sustainable and ethical food choices, particularly among younger generations. This shift is creating a market for sustainable products that align with evolving consumer values and regulatory demands.

The Protein Problem

The global animal protein and dairy markets represent a $3 trillion and expanding addressable market ripe for disruption.

The increasing protein demand coupled with growing consumer discomfort around the health and sustainability impacts of conventional animal protein represents a massive opportunity for both alternative protein sources, as well as upgraded animal protein.

The alternative protein category has already reached $120 billion, and is growing at 7% p.a., driven by categories as diverse as flavorings, ingredients & inputs and plant based milk and protein powders.

With similar goals, companies are developing a range of technologies throughout the animal protein and dairy value chains in response to increased sustainability and economic pressure. These include advancements in feed inputs, such as incorporating additives and implementing methane reduction technologies. Additionally, there are developments in animal genetics and sexing technologies, alongside veterinary and health products that offer alternatives to traditional vaccines or disease testing. Farm technology and AI solutions are also evolving, covering a broad spectrum from biosecurity and disease management to feed and biomass monitoring, as well as milking technologies for dairy cows.

The landscape is further enriched by novel production systems, such as Recirculating Aquaculture Systems (RAS) for fish and elevated welfare systems. Supply chain optimization technologies play a pivotal role, encompassing input sourcing, data accessibility, traceability technologies, and demand prediction algorithms. Moreover, advancements extend to improved processing techniques, enhanced raw material valorization, and innovations in packaging and quality control.

Lever VC believes that the years ahead represent a unique opportunity for early-mover investors to take meaningful equity positions in the future winners in those categories

The Opportunity

In short, the world is in the early stages of a total food transformation.

The shift towards sustainable food systems presents a significant economic opportunity. Addressing the environmental and health challenges of the current food system is driving innovation and investment in food and ag tech sectors. By focusing on sustainability, we can unlock economic benefits and create a resilient food system.

The pressing need for new technologies, such as novel input ingredients, food waste solutions, alternative proteins, and animal agriculture emissions reducers, will transform the food industry, making it a critical area for long-term investment and growth. With substantial economic and environmental benefits at stake, the future of food is ripe for transformation.

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