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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is a fellow at the University of Cambridge Institute for Sustainability Leadership
We are easily distracted by the short-term fluctuations in political and business trends in the corporate sustainability world. But beyond the noise, it’s the science and the economics that matter.
The science tells us that industrial agriculture, and the food system built on it, is unsustainable. Between climate change, water scarcity, soil degradation and land use, the industry cannot expand food production by the 50 per cent or so required to meet the forecast demand driven by population growth, rising incomes and changing consumption patterns.
This is not a theoretical question of whether we can produce enough food. We need the global food system to deliver the right food, at the right price, in the right place, at the right time. And do so amid increasing geopolitical instability and decreasing global co-operation. Given this, as climate and other impacts accelerate, there is a reasonable likelihood of supply shocks and a global food crisis. Or at the very least, a series of rolling, regional crises that make supply instability the new normal. This will create geopolitical upheaval, conflict and disorder — with major global economic impacts.
Without change, food and agriculture will be the next climate domino to fall.
There is a solution. Markets are showing the path to a renewable food system. There are a range of new approaches to food production that are in widespread use today and are now growing rapidly across the market. The most promising are leveraging age-old fermentation techniques, adapted with modern technologies like AI and biotech, to produce protein and other food ingredients using biological processes and bypassing traditional agriculture.
There are some cutting edge innovations, like protein flour being made from renewable energy, air and water by Finnish tech company Solar Foods. Not just animal free, but virtually land free. More significant in market terms is the replacement of animal agriculture products with fermented protein and dairy, producing the same food but more efficiently and cleanly. Studies show these methods can slash water consumption, greenhouse gas emissions and land use by upwards of 90 per cent.
Consider also Veramaris, a company producing fish oil from algae, for input into aquaculture and human supplements. There are no price fluctuations due to bad seasons, no pollutants to extract, just a reliable source of an essential, healthy ingredient.
The threat to industry incumbents is that market acceleration is unlikely to be driven by a moral or social imperative, nor by consumer choice. It will be driven by economics. The new industry is creating food ingredients that are simply more competitive — cheaper, healthier and safer.
Our experience in renewable energy and electric vehicles is relevant to which countries may win and lose in the coming disruption. China and Singapore are already working together and have the most aggressive policy to capture opportunities in renewable food. The US and EU are at risk of falling behind. We know how “drill, baby, drill” ends.
It’s early days but the market certainly thinks this could transform the global food system. The Good Food Institute lists over 2,000 active businesses in the alternative protein space. Some are start-ups with disruptive ideas, but many are major global companies like Unilever, Danone and Nestlé focused on building resilient, affordable supply chains. Their motivation is not social responsibility but maintaining competitiveness in an increasingly unstable world.
A renewable food industry is now a clear possibility. Will it happen? We can’t be sure. We can, however, be sure that the current food system won’t deliver what we need. When things are unsustainable, they stop. When the food supply stops, things gets ugly. Markets will deliver the needed change — or the damage, if we fail to act.
