rethink sustainability

    How can we feed the planet sustainably? 3 interesting sectors for investors

    How can we feed the planet sustainably? 3 interesting sectors for investors

    In recent decades, the food industry has been Wasteful, Idle, Lopsided and Dirty (WILD). We’ve been over-exploiting crops and destroying the earth’s most important resources, including land quality and biodiversity. Today, our food production accounts for around 30% of the world’s energy consumption and 22% of global greenhouse gas emissions, which is more than all transportation emissions combined.1 By 2100, the planet’s population is set to reach 10 billion. Feeding this population a healthy diet within the earth’s boundaries requires an urgent transition to a sustainable model – one that is Circular, Lean, Inclusive and Clean (CLIC®).

    We believe this sustainable agriculture revolution should offer investors cause for excitement

    The war in Ukraine and Covid-19, whilst abruptly devastating millions of lives and disrupting our economies, also highlighted the fragility of our food chains and accelerated the urgency to transition to a sustainable food system. Companies are leading the way by developing game-changing innovations in food production, waste reduction and in promoting dietary choices.

    We believe this sustainable agriculture revolution should offer investors cause for excitement. Transforming our food and land use systems may reduce costs by USD 5.7 trillion per year and create new business opportunities amounting to USD 4.5 trillion per year by 2030.

    So, what are the future trends of food? Here are 3 sectors that offer attractive areas of investment:

    1. Not letting the wells run dry

    Today, agriculture consumes 70 percent of all freshwater withdrawals globally and it can reach as much as 95 percent in some developing countries. By 2050, it’s estimated that agricultural production will need to grow by approximately 60% (from 2005/2007 levels)2 to support the expanding population. Water demand is therefore set to increase. What’s more, climate change, urbanisation, the rising demand for meat and dairy and competition for clear water is putting immense pressure on the sector. Solutions must be found to close the gap and investors have a role to play in developing sustainable agriculture, improving food production whilst conserving and enhancing limited resources.

    Irrigation and improved drainage schemes serve as an investable opportunity to improve the quality of our water cycles. Advanced Drainage Systems builds high performance plastic pipes using a solution that’s lighter and more resistant, meaning less virgin plastic is needed in the process. Also, 60% of the plastic used comes from recycled sources. A leader in the agricultural water management sector, their solutions protect land and improve yields.

    Irrigation and improved drainage schemes serve as investable opportunity to improve the quality of our water cycles

    Another company, Eurofins, collects data and provides soil insights to enhance production processes. They measure clay, silt and organic matter providing key information to farmers on how much water the soil can retain, allowing for more efficient irrigation decisions and strategies.


    2. Picnicking on plants and insects

    Over the past 50 years, meat production has more than quadrupled leading to a global production of 320 million tonnes each year3. Today, the food system is responsible for over a quarter of global greenhouse gas emissions4 and livestock contributes up to 40% of these emissions. Yet, that’s not all. Livestock used for meat production also heavily contributes to land and water degradation, biodiversity loss and deforestation as well as intense energy use. As the global population continues to grow in size and wealth, meat consumption may not necessarily fall. A change in diet behaviour and the development of concrete solutions will be essential in turning the tide.

    Worldwide, demand for healthier alternatives is growing at a startling rate. In the US, self-reported veganism has increased 600% in just three years, a trend mirrored in other markets5. A study finds that more than 50% of millennials are trying to incorporate plant-based alternatives into their diet6. Companies have taken actions to answer the demand.

    Today, food emissions contributes to over a quarter of global greenhouse gas emissions and livestock is responsible for up to 40% of these emissions

    In 2019, the largest food maker, Nestlé, followed Impossible Food and Beyond Meat in developing plant-based burgers. Its Awesome Burger, first launched in Europe, is the company’s answer to the growing plant-based trend. For Wayne England, head of Nestlé’s food business: “This trend is here to stay as consumers look at different ways to enjoy and balance their protein intake and lower the environmental footprint of their diets.”7The company is also looking to create a tuna imitation and announced the launch of a plant-based tuna salad later this year.

    Another issue is animal feed. According to French company Ÿnsect, “Livestock consume 20% of global proteins, in direct competition with human consumption.” Ynsect have come up with a simple solution: turning insects into natural ingredients for aquaculture, agriculture and pet nutrition. Emitting less greenhouse gases than conventional livestock and consuming up to six times less feed than cattle8, insects provide a sustainable way to increase protein production and bridge the gap.

    We’re at the very start of a seismic industry shift. The global plant-based food market is booming and it’s estimated to reach USD 40.6 billion by 2025.9

    3. What goes around comes around

    Producing food that goes to waste results in unnecessary CO2 emissions, biodiversity loss and land and water consumption. The Food and Agriculture Organization (FAO) of the United Nations estimates that if food waste was a country, it would be the third highest emitter of greenhouse gases after the US and China.10 At a time of increased food insecurity and the rise in food supply issues exposed by the crisis in Ukraine, developing sustainable food practices has become vital.

    Smart and active packaging, for one, can increase the shelf life of food considerably and improve product safety and food storage. US food science start-up Apeel has developed an edible plant-derived coating product that keeps food fresh for two to three times longer. How does it work? Apeel keeps moisture inside the produce and oxygen out, which dramatically slows the rate that produce spoils.11 It helps reduce waste along the value chain, from the suppliers to the household. So far, their solution is commercially available for avocados, organic apples and citrus fruits. But it’s expected to grow fast. US Supermarket Kroger has entered into a partnership with Apeel as a part of its Zero Waste Zero Hunger Innovation Fund and is selling Apeel avocados in 1,100 stores.

    At a time of increased food insecurity and the rise in food supply issues exposed by the crisis in Ukraine, developing sustainable food practices has become vital 

    Reducing waste by extending the life expectancy of food is key to reaching a CLIC® economy. Yet this is just one solution in a sea of possibilities. Tackling waste circularity is another and companies innovating in this field are gaining ground.

    What if food waste could be converted into green energy? As innovative as this might seem, humans have been using biomass (organic waste) energy since the dawn of time. Biofuels or biogas are the result of the anaerobic digestion12 of organic waste (biomass) into renewable energy. Swiss energy company Romande Energie13 has built two plants, one using dry biomass and the other one using wet biomass. They say that this energy source now represents 29 million kWh at the heart of their energy mix, which corresponds to the annual consumption of more than 8,300 households.

    A global shift

    The food industry is on the right track with game-changing solutions and committed companies aiming at building a safer and greener tomorrow. Yet, in order to achieve the SDGs and the Paris Agreement goals, the shift must be systemic. Change is required in every sector. Mobility, energy, healthcare, construction, plastic and many more sectors require global attention and support to secure a sustainable future. Opportunities are clear.

    We believe transitioning to a CLIC® economy is the biggest opportunity of a generation. And this is only the beginning.  Policy makers, investors, government and consumers all play a critical role in defining future trends and developing concrete and scalable solutions. 

    1 UN (2015). Sustainable Development Goals: Responsible and Consumption. Accessed at:
    5 Global Data (2017). Top Trends in prepared Foods 2017. Accessed at
    12 Anaerobic digestion is a sequence of processes by which microorganisms break down biodegradable material in the absence of oxygen. 

    Important information

    This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.

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