The Re:food Approach
The Re:food Approach
Theory must be applied to actually create an impact. Re:food used the building blocks described in the Research Lab to develop an investment approach for sourcing and investing in innovative food system companies. We look for leverage points in the food system where equity investments can help entrepreneurs scale solutions that will reduce pressure on planetary boundaries while generating strong financial returns and strengthening social foundations. Keep reading to dive deeper into our four themes and the leverage points we found, then visit the Portfolio & Impact section to see the results of using this approach for almost a decade.
The food system is complex, and with so many pressing problems, it can be difficult to know where to start looking for solutions. Rather than blindly investing in innovations that sound like they might work, we asked ourselves: how might we bring the same level of scientific rigor that led to identifying the four themes to our sourcing, due diligence, investing, and holding?
Our approach is to break down each of the four themes into segments, or areas of innovation, to arrive at a Segment Analysis that informs our sourcing and due diligence. While the four themes are fairly static, the segments are dynamic. Regularly, we review our segments to add, condense, remove, or reprioritize segments based on market trends, innovation breakthroughs, regulatory headwinds or tailwinds, and a host of other factors. We then use our Sustainability Framework for evaluating, monitoring, and supporting portfolio companies.
The foundation for this approach is the ABCD Method, an iterative 4-step processing in the Framework for Strategic & Sustainable Development (FSSD) that provides structure to decision-making.
Our Solution
Identify a Future Vision: Inspired by the work of the EAT-Lancet Commission, we created the Re:food circle as a model of the planetary boundaries and the ethical foundation for a sustainable and ethical food system.
Our Solution
Analyze Current Problems: We identified the current system’s most pressing root cause problems that violate the basic sustainability principles by directly or indirectly putting pressure on the planetary and ethical boundaries. We then broke down the biggest direct and harmful problems, picking them apart using the framework of the sustainability principles to understand their root causes and the barriers that are preventing the shift to a more sustainable system.
Our Solution
Identify Alternative Solutions: Instead of looking for bandaids to address the symptoms of these problems, we used systems thinking and the future vision modeled in Step A to identify four shifts, our investment themes, that would design the root cause problems out of the system: the shifts to sustainable proteins & fats, healthy soils, sustainable supply chains, and healthy diets. We then applied the Three Horizons framework to identify segments with the potential for transformative impact. Each segment defines a barrier to a shift and the innovations that could break it down if applied at the right leverage point.
Our Solution
Prioritize Alternative Solutions: Our ultimate goal was to identify the solutions best suited for Re:food to invest in based on their Impact Potential, Financial Potential, and Portfolio Fit. We dig deeper into our methodology in the link below. For the segments with the highest potential for us, we continuously perform Deep Dives to strengthen our understanding of what must become true for the segment to become a sizeable category in a future sustainable food system, what structural competitive advantage a winner in that category must possess, and the current landscape of innovations, companies, and investors in that segment. These deep dives give us a strong foundation when evaluating investment opportunities.
Continues
The ABCD Method ends with prioritization, but finding a high-priority segment is not the end of our work; it is the start of a long journey of sourcing, due diligence, and investing that culminates in a long-term partnership with a company. We are an active partner to the management in our portfolio, helping them with financing, strategy, operational high-stake decisions, and sustainability and impact goals.
Our sustainability and impact support begins with monitoring since it is impossible to manage well what you aren’t measuring. The SFDR Principal Adverse Impacts are the foundation for this monitoring, and we are in the process of building an impact reporting framework that will help us and our portfolio companies understand their contributions to creating a more sustainable food system. At the same time, we have developed an ESG Roadmap that can help entrepreneurs understand how to prioritize sustainability initiatives that will help them scale their companies in a responsible, future-friendly way.
We’ve been using the results of this process to guide our investment decisions for over a year now. Keep reading to learn more about what we’ve learned, how we’ve dug deeper, and the outcomes of this approach.
The Four Themes
Consuming animal-based protein is not an environmental problem per se; in fact, it’s been an essential source of nutrients for thousands of years and will remain a critical component of the food system, especially in developing regions. The root cause problem of animal-based food originates from the inherent inefficiencies in rearing animals for human consumption. As production volumes increase, these inefficiencies result in staggering resource depletion and food safety risks.
If you’re unfamiliar with these challenges or would like a refresher on the history of animal farming, we recommend reading our story: Is Animal-Based Food Really That Bad for the Environment?
Imagine a future where we can produce high-quality meat and dairy without harming a single animal or depleting natural resources. A future where animals continue to be part of the food system but not as machines or commodities. Instead, animals will contribute to the health of our food system by returning to their normal behavior through rotational grazing or by producing daily eggs or milk for a handful of families in developing regions or rural areas.
Actual machines will replace animals for protein and fat production at an industrialized scale. Meat, dairy, and egg will be grown outside of the animal through cellular agriculture, solving the inherent inefficiencies of raising entire animals to extract these nutrients. A future where the paradigm has shifted to optimize the health of farm animals as opposed to the quantity of them. In this future, farmers are incentivized to raise the healthiest animals possible to reap the highest profits, as harmless cell samples are taken from the happiest animals to grow meat and dairy for millions of people. Thanks to the clean production environments, the risk of zoonotic diseases and the need for antibiotics has also been eliminated.
Some of the land used to grow animal feed has been replaced with nutrient-dense and diverse sets of crops used for human consumption, and the rest has been restored to natural, biodiverse habitats. The aquatic plant industry is booming, generating high-quality sources of protein and essential fats for food producers, while the health of our oceans is slowly increasing as production volumes rise. Mycelium and fungi have become their own protein category, with cost-efficient, modular production installed worldwide.
This future may sound far-reaching and abstract, but it’s not. In fact, we’re currently on the verge of the most significant shift in animal-based food production in 10,000 years when we went from hunting to domesticating livestock. Thanks to advancements in areas such as precision biology and metabolic engineering, it’s now possible to produce animal-based proteins and fats directly via microorganisms and animal cells as opposed to raising the entire animal to access these nutrients. We’re also seeing a rise in novel technologies that can produce tasty and nutritious protein and fat alternatives using inputs further down the food chain (e.g., novel plants, fungi, mycelium, and insects).
Combined, these trends are rapidly powering a shift in protein and fat production in a way that benefits the health of humans, animals, and our planet alike. However, no silver bullet will shift us into this future state of sustainable protein and fat production. To produce the scale of proteins and fats needed to feed a growing population will require a portfolio of different solutions. And what’s most impactful will vary greatly from one region to another.
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Shifting to sustainable protein and fat production and consumption at scale is currently hindered by several barriers, including:
Tools & technology barrier → Throughout history, the only way to eat meat has been to take the life of an animal. Now for the first time, we can cultivate meat as well as dairy and egg products without the animal, but only at smaller scales. A shift away from animal agriculture will require further investment to advance today’s tools and technologies used in cellular agriculture to enable commercial production scale.
Infrastructure barrier → The infrastructure to scale novel protein production today is virtually non-existent, representing a major bottleneck for scaling the production of sustainable proteins and fats. Existing manufacturing providers are both overrun by rising demand (currently outpacing capacity by 1,000x) while lacking custom-built equipment for novel proteins and fats. Thus, finding a manufacturing partner with capacity is challenging, and one specializing in novel protein production even more so. Many startups are currently left with no option but to build their own manufacturing plants before generating a single dollar in revenue, which is highly CAPEX-intensive and time-consuming.
Regulatory barrier → Most countries have rigorous food safety standards that require lengthy and expensive approval processes before selling novel ingredients, such as sustainable protein and fat alternatives. It can take years to obtain regulatory approval to launch a novel ingredient, for which the companies must find ways to finance R&D and production before being able to sell their product and start generating revenue. The lack of regulatory harmonization across countries further slows down new product launches and related revenue generation while driving cost and complexity to introduce novel ingredients globally.
Policy barrier → Many countries have policies that subsidize traditional animal agriculture, artificially lowering costs and giving these products a competitive edge over more sustainable alternatives. Trade policies also limit the import or export of plant-based or cell-based alternatives, limiting distribution and market growth. Deep-rooted political interests and lobbying by the animal agriculture sector also pose significant obstacles to policy changes aimed at promoting a shift toward sustainable production of protein and fat.
Price & product parity barrier → To shift consumer behavior towards sustainable protein and fat alternatives, the cost must be equal to, and eventually, undercut the price of, animal-based food. In addition, sustainable alternatives must demonstrate equivalent - or better - taste, texture, versatility, and nutritional qualities.
Consumer acceptance barrier → Growing animal-based food products in bioreactors presents a new paradigm for producing food. The unfamiliarity of this concept could create a widespread consumer acceptance barrier despite its many health and environmental benefits. Widespread education and information about the safety of the production process will be critical to overcome this barrier, which likely will be targeted by meat and dairy lobbyists to drive fear and uncertainty.
We’ve focused on barriers with potential technological leverage points that need venture capital investments to scale. Although breaking down regulatory and public policy barriers is equally important, there are better-suited players able to address these directly. When thinking about opportunities for Re:food to drive positive impact and positive financial returns, we thought about three main categories of innovation:
Replacing animal factory farming with cellular agriculture. Instead of raising an entire animal to extract proteins and fats, we can now grow meat, dairy, and eggs in bioreactors that replicate the natural growing conditions of the animal to feed microbes and mammalian cells with nutrients directly, akin to brewing beer or making cheese. This drastically improves resource efficiency in industrialized animal agriculture while solving the inherent inefficiency of raising animals to extract protein and fat (along with a wide range of related environmental and societal challenges).
Introducing novel plant-based food categories to reduce our dependency on animal-based protein. There are endless opportunities for expanding and improving plant-based options with several emerging product categories, ranging from mycelium and fungi-based products to aquatic plants and potentially more we have yet to hear of. Optimization of crops and improved protein extraction and formulation processes will continue to improve the taste, texture, and nutritional quality of plant-based alternatives until it soon surpasses their animal-based counterparts to break down the consumer acceptance barrier. We consider improvements in taste and texture as a leverage point in itself, with the potential to unlock the growth of plant-based alternatives.
Developing new technologies to scale up the production of sustainable proteins and fats. To break down the infrastructure barrier of scaling cellular agriculture and plant-based alternatives profitably, access to purpose-built infrastructure, bioreactors, software, and specialized service providers must drastically increase. This will significantly improve production efficiencies while reducing CAPEX, scale-up risk, and speed to market for companies, and ultimately break down the price-parity barrier.
Keeping the three horizons framework in mind, we’ve categorized cellular agriculture as a horizon three innovation with transformational impact as it’s directly solving the root cause problem of animal agriculture (i.e., the inefficiency of raising animals for protein and fats) and leading the way towards a new future. We’ve focused on innovations seeking to replace meat and dairy since these categories have an outsized environmental footprint compared to other animal-based food products.
Further, we’ve looked for the functional components driving most of the flavor, nutrition, and texture in meat and dairy products. Examples of these include fat, casein, and lactoferrin. Unlocking cellular production of such ingredients (as opposed to the entire product) could be a leverage point to transition away from animal farming, while the remainder of the product could be replaced with plant-based ingredients to keep costs down.
Another prioritized leverage point for us to scale sustainable alternatives and break down the cost-parity and infrastructure barrier is enabling technologies. We look for new technologies that can drastically reduce production costs while ramping up the scale of sustainable protein and fats. The success of these innovations is equally critical for a shift away from animal agriculture ever to reach a material scale.
Biotechnology advances have unlocked our ability to make animal-based products using microorganisms and cells instead of whole animals. However, sustainably producing enough of these products to feed the world requires more than just biology – it requires physical infrastructure and equipment for bioprocessing. Today, there’s just not enough tank space to scalably produce ingredients, proteins, and fats through precision fermentation. High demand and low supply are driving up the cost of production, which makes it challenging for companies to price their goods at or below conventionally produced products.
Addressing the infrastructure barrier (and related price parity barrier) requires not only adding more tank space but also finding ways to use it as efficiently as possible. Unfortunately, the status quo in the novel food industry is batch fermentation, which has limited opportunities to improve efficiency. In this process, microbes produce the compounds of interest but also grow and evolve.
Eventually, they become unstable, the risk of contamination rises, and the process is stopped. This is laborious and expensive and means that batch fermentation capacity scales linearly – you need more tanks to produce more.
An alternative exists in other industries: continuous fermentation. Long viewed as the “holy grail” of Synthetic Biology (SynBio) for food, this process is run… continuously. By stabilizing the microbes and reducing the risk of contamination, production runs can be lengthened, costs can be lowered, and output can scale exponentially.
This is an enabling technology that can reduce costs and speed up process optimization, resulting in cheaper, more sustainable production of proteins and functional ingredients.
We set out to find a company developing a continuous fermentation technology that could be used to produce novel foods and found Bay Area-based Pow.bio. The company’s novel technology is driving changes in our food system that will increase the odds of several of Re:food’s other prioritized segments succeeding.
We partnered with Pow because of the strength of this technology, but also the quality of the team and their commitment and vision for a more sustainable SynBio future. We are excited to support the company in bringing its innovative technology to as many companies as possible in this industry.
Healthy soils – specifically, healthy topsoils high in organic matter with a thriving soil microbiome – are an essential cornerstone of the food system. In fact, the FAO estimates that 95% of the food we eat is directly or indirectly dependent on soil. But 90% of our soils are at risk of erosion by 2050 if we don’t change our growing practices. Re:food made Healthy Soils a prioritized investment theme because four of the food system shifts identified by EAT-Lancet directly or indirectly connect to improving soil health. Keep reading to learn how we applied the ABCD Method to identify and invest in high-potential solutions to improve soil health.
New to the concept of soil health and the current state of soils? Read our story on the topic:
Picture the sustainable farm of the future. A wide range of crops, interspersed with trees, are planted in deep, rich topsoil. Pollinators thrive, along with birds and animals that control pests and return nutrients to the soil. These nutrients are rapidly delivered to crops by a thriving soil food web. Growers have deep, timely insights into what is going on at the microscopic level and can easily make small changes to achieve the outcomes they want — proactively addressing a pest or fungal issue, watering just the right amount, or applying targeted doses of sustainably produced nutrients when necessary.
The system is more complex, but nature does more of the work, enhanced by innovative technologies. The grower acts as a steward of soil health to grow nutrient-dense food for people to eat. The grower knows that their contribution to fighting climate change is valued and supported by the wider system.
If we were to succeed at redesigning the agricultural system to preserve and regenerate soil health, we would see some radical shifts:
A shift in carbon flows: Currently, agricultural production is a net emitter of carbon. However, through sustainable agricultural practices, it could be possible for this same system to become not just net zero but a net carbon sink, sequestering carbon to help fight climate change. Sequestering carbon in our soils is essential to regulating the earth’s temperature and mitigating and reversing the impacts of climate change. Re:food circle impact: Greenhouse gas emissions
A shift in biodiversity: Currently, agricultural production is increasingly concentrated on a few staple crops and is expanding in a way that is incredibly harmful to natural biodiversity. Sustainable agricultural practices could bring diversity back into our agricultural system while also preserving biodiversity in natural ecosystems. Re:food circle impact: biodiversity, cropland use, ocean use
A shift in nutrient sources and nutrient density: Currently, we add nutrients in the form of synthetic fertilizers, but fewer and fewer of these nutrients actually make it into the food we consume, and the geopolitics of fertilizer production negatively impact the resilience of the food system. Sustainable agricultural practices could decrease our dependence on fossil-fuel-based and mined synthetic fertilizers while increasing the concentration of nutrients that end up in our food. Re:food circle impact: nitrogen use, phosphorus use, ocean use, nutritious diets
There are several barriers that need to be addressed in order to achieve this future agricultural system.
Complexity Barrier: The biggest barrier to a sustainable agricultural system, we believe, is that it is inherently more complex than the current system. There is more to pay attention to, more to manage. But complexity, or diversity, is a driving force for resilience which is what we need more of in our food system. We need innovations that can help our farmers manage this complexity and work with it, not against it.
Knowledge Barrier: It can be challenging to know what is going on at the microscopic level on a farm, what changes to try, and how to make them in a way that won’t destroy a farm’s yield and profitability. Each farmer experimenting on their own land is inefficient - instead, we need tools that can provide real-time, decision-useful information and agronomic resources that can support farmers in transitioning to regenerative practices.
Economic Barrier: Today, shifting to sustainable agricultural practices is risky. It involves experimentation and guesswork and may include reduced yields in the initial years of the transition. And there are few economic or market mechanisms that will reward farmers for taking on this risk or support them through the transition. Crop insurance programs, lack of regenerative price premiums, and global supply chains all encourage farmers to stick with the status quo. We need novel financial solutions and market signals that tell farmers that sustainable agriculture is valued.
Tools & Inputs Barrier: The seeds we plant, fertilizers we apply, and tools we use on farms have all been optimized for the current system. To move forward into a sustainable future, we need to be planting seeds that are resilient to a changing climate and can thrive in a lower input system. We need to be providing fertility to these crops through biological or recycled nutrients rather than chemical nutrients. And we need machinery that preserves the structure of the soil and enables growers to apply inputs in as targeted a manner as possible.
Regulatory / Policy Barrier: Farm policy is incredibly influential and today often consists of siloed agricultural decision-making and antiquated crop subsidy programs that don’t take into account the negative impacts of the agricultural system. For example, the Renewable Fuel Standard (RFS), which requires blending the United States fuel supply with biofuels such as corn-based ethanol, increased demand for corn and caused corn prices to rise by 30%. This created an incentive for farmers to devote more acres to corn production, with no benefit to the food system and negative environmental consequences. To truly accelerate the transition, we need an agricultural policy that recognizes the farm’s position in the fight against climate change and takes the long-term view of preserving soil health for the future.
Breaking down these barriers will require multi-stakeholder groups to come together to invest all forms of capital at multiple innovations and leverage points simultaneously. Re:food has access to a few types of capital - first and foremost, financial capital in the form of venture investments. Keep reading to learn how we identified leverage points to invest in in order to address these barriers to Healthy Soils and prioritized innovations for investment.
The first step to identifying creative solutions was to narrow our focus to the barriers best suited to venture-backed innovations. This includes the Complexity Barrier, the Knowledge Barrier, the Tools & Inputs Barrier, and the Economic Barrier. The Policy and Regulatory barrier is outside of the scope of Re:food’s financial investments, but we’re always on the outlook for opportunities to engage there in other ways. With these barriers in mind, we came up with as many potential solutions as possible, which we then grouped into segments. These segments fell into three main categories:
Tools & Technologies for Sustainable Agriculture: The current agricultural paradigm arose because of innovations in seeds, fertilizers and other inputs, and farm machinery. To move into a new, regenerative paradigm we need to rethink these tools, technologies, and inputs. What this looks like will vary across regions, but will include greater integration of biological systems, more precision, and more mitigation of harmful downstream impacts.
Measurement and Monitoring for Decision Making: We are still in the early days of building our understanding of soil biology and how to manage a more complex sustainable agricultural system. And it's difficult to manage what you can’t measure. New innovations are emerging that can measure what can’t be seen, sift through huge amounts of data, and support growers in making informed decisions to maintain and improve yields while minimizing negative impacts and creating co-benefits.
Market-based Incentives for Sustainable Agriculture: We know there are numerous incentives that keep the current paradigm in place. Agricultural policy and regulation will have a huge role in shifting these incentives to promote regenerative and sustainable practices. But our current market system places a myopic focus on growers maintaining and increasing yields, at the expense of the environment, health of the soil, and the quality of the food. We’re interested in finding market-based opportunities to change this incentive structure, to give growers a compelling reason to make the transition to sustainable practices.
After developing a list of ten segments, we applied Re:food’s segment scoring methodology to understand where to focus our sourcing and investing efforts. The complexity of the agricultural system means that we’re interested in a portfolio of solutions, and see promise in numerous areas. We can also see how the various segments need to scale simultaneously to maximize impact.
To address the tools & inputs barrier, we’re interested in companies leveraging the power of biology to improve agricultural sustainability. This includes new genetic tools that identify and promote beneficial seed traits to make the crops we grow more resilient. It also includes biotech platforms that identify promising biological alternatives to conventional synthetic fertilizers and pesticides for integrated nutrition and pest management. These upstream innovations may also require new information systems that help farmers know what to apply or plant and when to maximize yield and environmental benefits, minimizing the knowledge barrier. And they may require new agriculture machinery that can improve the precision of how inputs are applied while minimizing the impact on soil health and structure.
We’re also interested in the downstream shifts that can signal to growers that they will be rewarded financially for implementing these new practices. This includes the emerging ecosystem services marketplaces and the tools and technologies that support the measurement, verification, and reporting of positive environmental outcomes. We want growers to be rewarded for their environmental stewardship and the quality of the food they produce, not just how much they produce. Prioritizing these segments was enormously helpful in focusing our investment sourcing and due diligence efforts on the highest potential opportunities. Keep reading to learn more about how we went from a prioritized segment to an investment in a Healthy Soils company.
The economic barrier to regenerative agriculture is complex, and closely linked to the policy barrier – in many regions, crop insurance programs and government subsidies incentivize the status quo. But we could clearly see the power of providing both financial incentives and financial innovations to support farmers with funding and navigating multi-year regenerative transitions. While reviewing investment opportunities that were well-suited for a venture investor and that could meaningfully address this economic barrier, we identified ecosystem services marketplaces as an area of promise.
Ecosystem services marketplaces financially incentivize growers to increase positive ecosystem benefits, through the sale of credits tied to sustainable practices and outcomes. Although we recognize that carbon credits are an imperfect solution to harmful greenhouse gas emissions, we believe that high-quality credits that command a high price in ecosystem services markets can be a useful tool. These credits can help offset impossible-to-reduce emissions or inset emissions in a company’s supply chain, while financially supporting farmers to improve both operational practices and overall agricultural sustainability.
We had previously met Agreena, an international AgTech platform scaling sustainable agriculture through finance and technology, and we were able to pick up the conversation as the company was launching its carbon credit marketplace and raising its Series A. We invested in Agreena because of its alignment with our prioritized segment and its clear structural advantage due to the quality of its platform, existing partnerships, and hectares already under management, and because we believe the team has the values, skills, and drive to deliver on its ambitious vision.
Today, Agreena is the European leader in soil carbon credits. Via the platform, farmers can plan, track, validate, and finance improvements for their regenerative journey. By providing technical and financial support, Agreena is accelerating the transition of hectares from conventional to sustainable and regenerative farming, using carbon markets as a mechanism for this shift. The company’s solution not only reverses the unsustainable status quo but also, by sequestering carbon in our soil, addresses the adverse impacts caused by other industries. We are committed to supporting Agreena in reaching even more farmers, transitioning even more hectares, and continuing to develop a fintech platform that can support growers with improving soil health.
Malnutrition is a global paradox: there’s more than enough food to feed everyone on this planet, yet hundreds of millions of people are starving, while billions are overweight or obese. Members of both groups are micronutrient deficient, and all forms of malnutrition (obesity, hunger, and micronutrient deficiency) are rising. On the flip side, a healthy diet transformation could prevent one in five deaths and is the strongest lever to improve both human and planetary health. What does a healthy diet look like? Each of us is unique, and a variety of factors from environment to genetics influence our nutritional needs. At the same time, no food is so unhealthy that it can’t be enjoyed in moderation, and many nutrients can come from more than one source. Rather than focusing on specific food items that are deemed “healthy”, we focus on healthy diets that promote optimal health while protecting against malnutrition and diet-related diseases.
Read more about how we think about healthy diets and the current state of nutrition worldwide in our Healthy Diets story.
Imagine a future where access to a nutritious diet is seen as a human right instead of a privilege. Where we’ve established a deep scientific understanding of nutrition that can be tailored based on the unique metabolic profile of each individual. Where incentives have changed throughout the value chain and in related systems, to prioritize nutrition and improve healthy food access. Achieving this future would mean a few things would change.
Food production would maximize nutrition, not just yield. Today we face challenges in producing nutrient-dense food because we are destroying our soils. Increasing crop diversity and implementing regenerative practices would lead to more nutritious foods while making the agricultural system more resilient to extreme weather changes, pests, and diseases, all of which are contributing to hunger today. A win-win-win.
Affordable, nutrient-dense, better-for-you food options would be easily accessible. Today’s food supply is enough to feed everyone, even as the population grows. We don’t have a lack of food problem, we have a food distribution problem. In the future, every person on the planet would be able to access and afford healthy food options, and retailers would be incentivized to reach as many of these people as possible and provide them with food options that maximize health.
Consumers would easily make informed diet-related decisions. Today there is still so much we don’t understand about nutrition, both how to measure it and how to assess a given individual’s unique nutritional needs. In the healthy diets future, nutrition information would be readily available to all consumers, helping them make informed decisions to maximize their own well-being.
Food would be a driver of health instead of disease. Today diets are one of the leading causes of diseases from heart conditions to diabetes to cancer. In the future, nutritious food would be seen as a cheap and reliable preventative medicine, saving insurance companies and governments trillions of dollars in avoided healthcare costs.
Diets are incredibly complex, and the factors that lead to a diet being healthy and unhealthy are as well. There are numerous barriers to the aforementioned healthy diet transformation, and we won’t be able to list all of them here. Below are some of the major barriers that we believe innovation and technology might be able to break down:
Information Barrier: There is a lot we don’t know about what makes a diet “healthy”, and even what we do know can be unreliable or incomplete. Public nutritional guidelines are often influenced by lobbying efforts from the meat and dairy industry, and nutritional labels fail to provide key pieces of information, such as the long-term health effects of a particular food item, or the presence of certain additives and processing methods. Many countries lack regulations around marketing, allowing aggressive advertising strategies for high-calorie, low-nutrient foods. Finally, the feedback loop between how our daily diet is impacting our long-term health is inherently delayed; it can take decades for poor dietary habits to manifest as heart disease or diabetes, making it difficult to drive behavioral change that promotes long-term health.
Incentives Barrier: The current system does little to incentivize the production and sale of high-quality, nutrient-dense food. Agricultural subsidies favor commodity crops such as corn, soy, and wheat, which are used heavily in processed foods. These crops tend to be produced using harmful agricultural practices which deplete the soil of nutrients and lead to less nutrient-dense crops. These subsidies also make healthier, fresh produce relatively more expensive for consumers because diversifying into a wider range of nutrient-dense crops may mean leaving money on the table for the grower. Meanwhile, processed foods, which tend to have higher profit margins than fresh fruits and vegetables, further deplete the nutritional composition of the raw ingredients, while adding sugars, unhealthy fats, and artificial additives.
Access Barrier: Even for foods we know are healthy, financial and geographic factors can greatly limit access to fresh and nutritious foods in many lower-income, rural, and even urban communities. The high cost of healthy foods (due in part to the subsidies mentioned above) combined with high levels of income inequality put healthy diets out of reach for billions of people worldwide. Factors such as proximity to supermarkets, density of convenience stores, school meal programs, and worksite food availability all contribute to malnutrition prevalence.
Temptation Barrier: There’s no denying it: foods high in fat, sugar, and salt are generally delicious. The reasons for this may be hardwired into our genes: our distant ancestors lacked easy access to high-calorie foods, and our bodies may have adapted over time to seek out these compounds. But in today's environment of easy access to processed foods rich in fat, sugar, and salt, these same signals no longer serve us and can lead to overconsumption, obesity, and diet-related diseases. But these temptations are hard to break: fat and salt improve flavor, while sugar triggers our brains to release dopamine, the pleasure compound – so the more we eat these foods, the more we crave them. Add in environmental triggers like stress and fatigue, and the lack of equally craveable low-fat and low-sugar alternatives and it’s all too easy to succumb to temptation.
We are mindful that a healthy diet is not one-size-fits-all, and that foods can play important roles in our lives beyond fueling our bodies, such as connecting us to a cultural heritage or a particular community. We want a food system where food can still play this role, but also where the act of fueling our bodies leaves everyone feeling healthy and fulfilled.
The food system will need a wide range of solutions to break down the barriers to a healthy diet transformation. We’ll need to incentivize farmers and food brands to produce and sell nutrient-rich food as opposed to empty calories; to finally win the fight against hunger, and to reduce the factors contributing to obesity and diet-related diseases. Below are some of the leverage points and related innovations we’ve identified on this quest so far.
Upstream Technologies: Diet health starts before foods even reach consumers with the seeds we plant and grow, and we see opportunities to breed or engineer crops to have higher nutrient density. Once these crops are harvested, they are often processed in a way that maximizes shelf life and food safety at the expense of nutrients. But new and improved processing methods and infrastructure can provide these benefits while retaining nutrients more efficiently, unlocking improved versions of traditional processed foods.
Information and Access: There are numerous opportunities to improve diet health at the point of sale. The first step is expanding access to affordable and nutritious foods in underserved regions. Entrepreneurs could also develop and scale technologies that can make nutrient density more transparent and easier for consumers to understand, helping us make informed decisions rather than choosing blindly.
Food Science: Given how difficult it is to resist temptation, we should be using food science to replace salt, sugar, and saturated fats in comfort food such as ice cream, candies, and snacks while keeping the same sweet, salty, and rich taste profile. Food science can also be leveraged to help our bodies better metabolize and react to nutrients, for example through supplements that help unlock hard-to-digest protein.
Personalized Nutrition: We see opportunities to use cutting-edge biotechnology to help consumers better understand how their diets are connected to gut health, genetics, and related diseases, often called personalized nutrition. Greater information on an individual level and faster feedback loops can lead to more demand for nutritious foods and a decline in diet-related diseases.
Institutional Spending: Public and private insurers and healthcare providers increasingly see the potential to use Food as Medicine to reduce diet-related diseases and associated healthcare costs, creating more demand for nutrient-dense foods. Outside of healthcare, purchasers for institutions such as schools and eldercare have the power to direct these food service dollars towards nutrient-dense foods.
Food Redistribution: Creating secondary markets for edible food, both peer-to-peer redistribution and B2B solutions, is a huge untapped opportunity. We globally waste $1 trillion worth of edible food every year, and these solutions could have a dramatic impact on malnutrition if we can address logistical barriers by improving redistribution infrastructure.
The malnutrition challenges of developing and developed countries require vastly different solutions, and health and nutrition are not just influenced by the food system but by a host of other systems from healthcare to government and regulatory to social. In order for entrepreneurship to solve the hunger challenge we need public policy changes to create the right conditions. Even in the food system, solutions that could meaningfully impact food security and nutrient density are complex: some, like addressing food waste and crop engineering, are already covered under our Sustainable Supply Chains and Healthy Soils themes respectively.
For our Healthy Diets priorities, we focused on the opportunities for entrepreneurs to meaningfully change how food is processed and purchased and put tools into the hands of consumers to make better decisions about their diets. We prioritized business models and technologies that can improve healthy food access for underserved populations because everybody deserves access to nutritious, affordable foods. We look for tools and technologies that can track the nutrient density of the foods we purchase, and help us understand how it impacts our own bodies in real-time. And we look for companies that are significantly improving the nutritional composition of staple food products especially, through better processing technologies or enhanced bioavailability.
Transforming diets to improve nutrition and address diet-related diseases will require consumer patterns to shift, but the physical, social, and economic realities of the food system play a huge role in consumer choices. One such reality is that consumers today, especially in the United States, are not empowered or enabled to make healthier diet choices because of the access barrier: in many areas, nutrient-dense healthy foods are less accessible and more expensive than calorie-dense junk foods because of transportation gaps, agricultural subsidies, lack of grocery infrastructure, and the prevalence of unhealthy fast food restaurants.
To break down this barrier, we looked for innovations that specifically aimed to improve healthy food access by improving the affordability of healthy options and making them accessible to currently underserved populations. When we met the team at Everytable, we could immediately see the alignment between this goal and the company’s social mission to transform the food system to make fresh, nutritious food accessible to everyone, everywhere.
Other not-for-profit organizations share this goal and play an important role in healthy food access, but what really excited us was Everytable’s business model, which we believe will enable it to scale this impact. Through centralized production and point-of-sale innovations, Everytable has drastically reduced the cost of the standard restaurant model. This enables the company to offer fresh, wholesome meals at affordable prices in affluent and middle-income neighborhoods and even lower prices in lower-income areas.
Today, nearly 18% of the US population lacks reliable access to healthy foods. Everytable’s approach has the potential to reduce diet-related diseases, and improve quality of life and even lifespans, for some (and maybe someday all) of this underserved population. The company doesn’t stop there, though. It is deeply committed to embedding its mission into every part of what it does and is prioritizing justice and equity for all its stakeholders. Everytable is truly seeking to transform the food system, and we are committed to working alongside it toward this goal.
Modern food supply chains are long, linear, and wasteful. They depend on numerous stakeholders and middlemen, with little transparency or ability to track the flow of goods, emissions, and financial returns through the system. These supply chains have enabled urbanization and introduced new foods and flavors to our palates. But they have also decreased visibility into where our food comes from, increased food, nutrient, and plastic waste, and yet fail to ensure that nutritious foods are available to all people around the world. And the growth of these depletive supply chains is unsustainable. The alternative is short, circular supply chains that help us stay within our planetary boundaries while still moving food and resources to where they need to be, even as our population and economy continue to grow. Investing in this alternative is a key focus for us.
Need a refresher on what a supply chain is and why it matters? Read our story on the topic here.
What could these supply chains of the future look like? One often-proposed solution is to rebuild local food systems. We see huge potential in diversified local food systems to improve food security and food system resilience while reconnecting consumers with food production and helping them reinvest their money back into their communities. But just eating local won’t reach the efficiency and scale needed to reverse the problems in food supply chains while feeding the growing population. The food system will always be global to some extent, and we envision food supply chains that operate efficiently to move food products to the geographic location where they can best be used, and reduces waste along the way. Any waste that does occur is efficiently recycled back into the system in some form.
What would we need to do to build these supply chains? First, we build digital tools to see where waste, pollution, and emissions ocurr in real-time. Then we work to reduce waste every step of the way, starting with the biggest problems first.
We give manufacturers, retailers, restaurants and consumers tools to prevent overpurchasing and overstocking, and to easily divert any excess food before it spoils to its highest value potential use. This means fewer food sidestreams and food waste ending up in landfills, and more eaten, upcycled, and composted.
Re:food circle impacts: Greenhouse gas emissions, No hunger
We give food manufacturers, packagers, retailers, and distributors sustainable and circular packaging alternatives that integrate into existing processes. This means less plastic produced, and less plastic entering our landfills and oceans.
Re:food circle impacts: Greenhouse gas emissions, ocean use
We give cities tools and technologies to recapture phosphorus and other nutrients from waste streams, instead of letting them run off into our lakes and oceans. This creates a more efficient, reliable, and sustainable source of phosphorus for growers in all regions of the world, which improves food security.
Re:food circle impacts: Phosphorus use, Nitrogen use, No hunger, Ocean use
We give stakeholders digital tools to create more transparent food supply chains, so they can holistically understand their entire environmental footprint and take measures to address the biggest sources of waste and emissions. This transparency helps align incentives and empowers stakeholders throughout these supply chains to meet environmental targets.
Re:food circle impacts: Greenhouse gas emissions
We give communities around the world the tools they need to sustainably produce nutritious foods close to where they’re consumed, in part through renewable-energy-powered controlled environment agriculture. Supply chains are immediately shorter, more transparent, and more reliable, and the production of ecologically harmful goods can be moved indoors, allowing ecosystems to rewild.
Re:food circle impacts: Greenhouse gas emissions, No hunger, Biodiversity
The result is cleaner, more circular global food supply chains. That distribute food equitably instead of incentivizing one region to waste food while other regions experience malnutrition and hunger. That rethink packaging instead of continuing to pollute our planet. That recycle valuable inputs to reduce both the climate footprint and the cost for stakeholders, instead of wasting these precious resources. These are the supply chains of the future.
In order to achieve this future, we need to overcome a number of barriers that have been built into our current food system
Behavioral Barriers: On the consumer side, we need to overcome purchasing habits that lead to households in developed countries being the biggest source of food waste going to landfills. Changing the purchasing patterns of these consumers to buy only the food they need, thereby reducing food spoilage and wasted leftovers, is a huge challenge because there are so many individual purchasers. We need innovations that can help consumers optimize purchasing, fully consume what they buy before it spoils, and divert any waste to its highest and best use.
Technological Barriers: For all of its harmful environmental impacts, plastic is an amazing packaging technology – it's cheap, lightweight, and an excellent barrier that helps extend food shelf life. We need alternative packaging technologies that can match or exceed these attributes, and easily drop into existing supply chain infrastructure, while also being circular or biodegradable.
Infrastructure Barriers: Modern infrastructure, from our sewage system to our landfill system to our food labeling system, contributes to our linear, wasteful supply chains. To prevent valuable resources like food and phosphorus from leaving our food system and going into our waste system, we need to update this infrastructure.
Logistical Barriers: The complexity of food supply chains creates logistical barriers to sustainability. Food is produced far away from where its consumed, redistribution is challenging, and it's difficult for downstream purchasers to accurately forecast demand and supply. We need to leverage technology to grow more food closer to where it's consumed, and more efficiently move foods to where they are most needed.
Transparency Barriers: The scale of most supply chains makes it difficult to identify the biggest problems and address them in a timely manner. Pollution and emissions can be hidden in the complexity, and tracking a raw ingredient from farm to fork is challenging when it passes through so many hands and processing facilities along the way. We need digital solutions to help stakeholders throughout the chain connect with their upstream and downstream partners to improve transparency.
Fixing these complex and challenging supply chains will require digital and biological innovation, policy and infrastructure changes, and a mindset shift from stakeholders. Keep reading to learn where Re:food sees opportunities to invest in the circular and sustainable supply chain technologies of the future.
Supply chains are complex, and it’s challenging and maybe even impossible to find an innovation category that addresses all of the problems at once. We took each issue individually and brainstormed creative solutions for each, which we then grouped into a few segment categories.
Food Rescue: Since most of the food waste ending up in landfills comes from households, we focused on innovations addressing this specifically. This includes minimizing food waste from already stocked and purchased products through shelf-life extension, smart labeling, and food redistribution. But also preventing over-purchasing and overstocking at its root through demand planning optimization and meal kits. And tools to divert food from landfills and redistribute it to its highest and best use.
Nutrient Recovery: We’re interested in investing in technologies that can integrate into existing infrastructure and rescue and recycle phosphorus and other nutrients before they can be lost to landfills or oceans.
Vertical Farming: Controlled Environment Agriculture, Indoor Agriculture, Vertical Farms – whatever you call them, they can be compelling alternatives to long supply chains and allow localized production of nutrient-dense foods in all regions in all seasons, with lower ecological and environmental impact.
Plastic Alternatives: Sustainable packaging alternatives to single-use plastics could take many forms, and we’re interested in all of them! This includes novel, biodegradable materials produced through microbial technologies or naturally occurring substances like seaweed. It includes reusable consumer-facing packaging and digital tools to solve the logistical challenges of integrating this into existing systems. It even includes edible coatings that eliminate the need for plastic while still keeping foods fresh.
Data Transparency: Technologies and tools that can improve supply chain transparency and give stakeholders visibility into where there is high risk and high negative impact in their value chain. This visibility is the first step to addressing these issues and mitigating risks, to improve the resilience and sustainability of entire supply chains.
After developing and understanding these segment categories, we applied Re:food’s segment scoring methodology to identify those most promising for investment.
We’ve focused on platforms that can divert food from landfills back to consumers’ hands and plates, by redistributing edible food and repurposing spoiled food. We’re also interested in tools and technologies that can integrate into households and provide behavioral nudges and alternatives to disposing of food waste in trash cans.
We’ve focused on novel biomaterials that mimic the positive attributes of plastic while also being fully biodegradable and compostable. Of highest priority is finding alternatives that can drop into existing packaging infrastructure, while matching the price point of plastics. To maximize the positive potential of these alternatives, we know there also needs to be a scale-up in composting infrastructure, and potentially also regulations and policy that incentivize a shift to these sustainable alternatives.
We’re also interested in solutions that can recycle phosphorus and other nutrients from human waste streams, and redirect it back to farms. We see significant overlap with our Healthy Soils theme, but we are looking for innovative technologies that can plug into existing infrastructure to recapture these precious resources.
We’re interested in SaaS platforms that can help stakeholders visualize their supply chains and collect and process data on greenhouse gas emissions, food waste, pollution, and climate change vulnerability. Collecting information is the first step – the second and more important step is to give these stakeholders the tools and incentives to reduce these negative impacts and risks.
And finally, we’re interested in vertical farming technologies that can reduce the impact of especially ecologically harmful supply chains, such as vanilla, and improve the reliability of nutritious food production in areas limited by seasonality or threatened by climate change.
Keep reading to learn more about how we’re supporting companies in these prioritized segments to scale and maximize their impact.
Food waste at the retail level is responsible for approximately 13% of food sent to landfills, primarily because of products approaching best-before dates but also due to overproduction, faulty packaging, and seasonal trends. These wasted products represent hundreds of billions of dollars of value, but diverting this food from landfills to more valuable uses can be challenging, due largely to logistical and behavioral barriers. Not only is retailer infrastructure often set up for landfilling but also consumers may be hesitant to purchase food that is labeled as waste due to quality concerns. We saw the potential for both value capture and positive impact by investing in a platform that could address these barriers to strengthen food rescue at the retail level.
Surplus inventory may be inevitable, but food waste doesn’t have to be. Matsmart/Motatos is saving products from food producers and wholesalers that would otherwise be thrown away, and selling them online to eager consumers at significant discounts. Matsmart was founded in Sweden in 2013, and today the company also saves food in Finland, Germany, Denmark, the UK, and Austria under the Motatos brand.
By building strong relationships with key fast-moving consumer goods (FMCG) companies and providing an efficient assortment of products, Motatos has solidified its position as the leading European discount food store. And thanks to its ever-expanding grocery assortment, sustainability focus, and dynamic pricing model that means the customer always wins relative to traditional retail, Motatos has built significant brand equity and loyalty.
Re:food has been an active partner to the company since we first invested in 2021. We’ve supported management with key strategic initiatives, including launching in new countries and setting up an automatic warehouse, and optimizing operational excellence so the company can efficiently execute on its mission. We look forward to continuing to work with Motatos on building a world in which all consumers can effortlessly contribute to a more sustainable food system and a better planet.