Better ways to feed the world
Surging food prices and supply problems – exacerbated by Russia’s invasion of Ukraine – have cast the spotlight on to what was already a major global problem: food security.
Food demand is expected to increase by 60 per cent by 2050.1 Yet supply will struggle to keep up given that arable land and water resources are shrinking, and that even at today’s levels of demand, some two billion people have insufficient nutrition.
It has been estimated that the war – having led to shortages of grains and fertiliser and adding to already high inflation – will have pushed back progress on food security by 10 years. A growing number of people in populations across South Asia and Africa are likely to spend more than 20 per cent of income on food expenditure, exacerbating problems caused by the Covid pandemic.
These are huge, complex social and environmental challenges for which there is no silver bullet. Solving them requires a variety of solutions across the food value chain. The crisis should however focus minds and accelerate both the adoption of alternatives to grains and less efficient animal proteins and the development of efficient food production and shorter and more secure supply chains. That, in turn, presents an opportunity for innovative businesses and for investors who can work together to improve the sustainability, accessibility and quality of the food we need for health and growth.
One promising solution is ag tech – technology which makes it possible to improve crop yields with fewer resources. There will likely be a greater focus across the agricultural industry on reducing reliance on fertiliser given the current supply disruptions (Russia and Ukraine together account for circa 20 per cent of global exports of nitrogen fertilizer and 30 per cent of potash). That can be addressed by vertical farms and precision farming, both of which come with the added benefit of lower pollution.
In the wake of grain shortages, livestock farming, meanwhile, can be made more efficient through better diagnostics and preventative animal health measures including vitamins, eubiotics (which promote gut health), enzymes and vaccines which improve feed absorption and yields.
Another way of easing shortages is making the most of the what we already have. Here, the priority is reducing waste, which currently swallows up a third of all food produced – some 1.3 billion tonnes a year.2 Cutting the waste mountain requires better logistics, better distribution networks and better food safety. All of which can be improved by technology. Promising innovations include aseptic packaging – where high temperatures are used to sterilise food prior to packaging it, thus extending shelf-life without chemicals or refrigeration. Another approach, known as natural bio protection, draws on traditional fermentation principles and uses specially-developed food cultures to better preserve yoghurt and cheese.
Food left to go waste, meanwhile, is itself being increasingly repurposed, whether through converting excess oil and animal fat into animal feed or biofuels, or (on a smaller scale) using whey from cheese-making to create packaging for more food.
Then there's the production of food. A burning issue for food producers is how to make food more nutritious, affordable and, ideally, also more sustainable. Food companies are scrambling to develop lab-grown meat, find plant-based alternatives to milk (such as oats or potatoes) and improve affordability. There is also strong demand for natural ingredients, which, unlike synthetic ones, are less dependent on petrol.
Producing more food locally is another solution that has multiple benefits: it offers more reliable supply, reduces waste, and has a smaller carbon footprint and improved traceability. Locally-produced food also eases the pressure on shrinking resources, such as freshwater supply and arable land. Indoor, vertical farms, meanwhile, are also expanding rapidly, offering the prospect of quality local food to areas where there is little space or challenging climate conditions. The companies operating such farms are investing heavily. Vertical farming company Kalera, for example, is set to build a new mega farm in Singapore this year, aiming to grow some 500,000 kg of leafy greens per annum as part of the island nation’s plans to provide for 30 per cent of its nutritional needs by 2030 (up from around 10 per cent currently).
Traditional farms are also embracing the latest scientific advances, which allow farmers to apply water and fertiliser precisely where they are required, resulting in up to 80 per cent reduction in freshwater and fertilizer use.Such techniques can also improve yields, preserve scarce resources, and reduce nitrogen oxide emissions.
Food logistics is also undergoing a makeover.
There is growing appetite for direct-to-consumer food services (such as farm-to-fork meal kits) and indeed almost any new generation food production and logistics model, which can shorten the complex global supply chains and reduce the risk of logistics issues, spoilage and contamination.
For the first time ever we see a scenario in which governments and consumers are aligned on the development of better quality, more sustainable food products and agricultural methods. It is also a future in which companies operating across the food value chain use the technology they already have at their disposal to meet these demands.
The Pictet Nutrition strategy takes a long-term, bottom-up approach to identify and invest in companies that are crucial to building a sustainable food system.