Funding the Future of Food: Consumer Trends Signal a Shift Toward Healthier, More Sustainable Food
Empty grocery shelves and refrigerator aisles as farmers dumped milk. People experimented with sourdough bread-baking when bread was hard to find, then yeast was in short supply. Restaurants closed, waitstaff were sent home, and distilleries switched to making hand sanitizer. These scenes are just a few snapshots of how COVID-19 impacted food systems and more clearly revealed the fissures and inequities throughout the system.
Food production, distribution, and consumption worldwide impact the environment, human health, and treatment of marginalized communities. As we continue to face the ever-increasing effects of climate change and the ongoing impacts of COVID-19 (and Delta), it is time to evaluate the full lifecycle of food — from the time a crop is planted to the moment those ingredients end up on someone’s plate and the way that food affects a person’s health.
The UNEP reports, “Food systems are responsible for 70% of the water extracted from nature, cause 60% of biodiversity loss, and generate up to a third of human greenhouse gas emissions.” And while, as the Rockefeller Foundation reports, the estimated costs of food for Americans are $1.1 trillion, the real costs are at least $3.2 trillion when factoring in health care and environmental costs. Agricultural and restaurant labor remains perilously underpaid work at the same time the pandemic has exposed the risk to the frontline workers who grow, process, prepare, and deliver our food. These statistics highlight some of the critical pitfalls of the current global food system.
For the system to evolve, private companies must change their practices, and as consumer trends over the last year and a half seem to indicate, shifting toward a regenerative, nutrient-dense, and health-oriented food system is gaining momentum. In 2020, food and beverage startups saw a 75% year-over-year increase in investments, primarily driven by alternative proteins, which at scale may reduce resource intensity of cultivation and offer improved nutritional profile. More than half of U.S. and European consumers purchased plant-based foods since the pandemic, with 63% planning to continue buying these alternatives.
One of the key challenges facing the global food system is feeding a growing population while decoupling consumption from resource intensity. The World Resources Institute has proposed five “Courses” of action to accommodate increasing food demands while reducing the current environmental and social harm caused by the global food system. The “menu” includes reducing food waste, shifting to healthier plant-based diets, improving yields while reducing water usage, raising the environmental performance of aquaculture, and enhancing sustainable livestock management. Builders Fund sees investable opportunities across all of these sectors.
For our part, the Builders Fund invests in companies working to catalyze the shift to healthier, more accessible, and more regenerative food and beverage alternatives. These companies include MIXT, Traditional Medicinals, and Urban Remedy. Manna Tree recently joined us and Obvious Ventures in funding Urban Remedy, and we are excited to partner with values-aligned co-investors to further scale the company’s “food is healing” mission. With this increased funding, Urban Remedy can expand its operations to make its healthy food options more accessible to a wider customer base nationwide, extending access to healthy and convenient food and adding new meal options to its existing lineup of cold-pressed juices, salads, and bars.
As noted in our 2021 Impact report, Builders Fund’s portfolio companies purchased a combined 13 million pounds of organic, fair trade, and ethical herbs and produce in fiscal year 2020, strengthening the sustainable food production supply chain and helping to support jobs in regenerative agriculture. They used these ingredients to make and serve more than 6.3 million healthy meals and, for Traditional Medicinals, more than 685 million bags of medicinal tea.
Furthermore, Traditional Medicinals diverted more than 90% of its waste from landfills while MIXT diverted 99% of its waste. And through its operations, Traditional Medicinals produced more than 1.1 million kWh of renewable energy. These figures highlight the holistic commitment from these companies to advance environmentally friendly business practices as part of the transition toward a healthier, less extractive food system.
With consumer momentum supporting the shift toward healthy and sustainable food, companies like Urban Remedy, MIXT, and Traditional Medicinals are leading a revolution in how our food is grown, prepared, and consumed. We are honored to partner with these teams to accelerate a better food future.