S2G Ventures, a multi-stage investment firm focused on food, agriculture, ocean, and clean energy markets, has released its second annual report, highlighting the Food and AgTech trends of 2023. The report explores the trends driving the transition to a climate-smart, healthy food system, which S2G Ventures believes is necessary to work with nature instead of against it and leverage the power of science, technology, and entrepreneurship to move forward.
The future of food is being pushed by the significant advancements in biology, chemistry, and physics of food production. However, due to continuous volatile shifts in externalities, such as the pandemic, the war in Ukraine, and an increase in climate-related events, the risk inherent in our food systems are increasing and getting more entangled. If left unchecked, these risks will intensify, impacting our most valued resources.
To address these risks, S2G Ventures has identified three category trends that will drive the transition to a climate-smart, healthy food system:
- Farmers Scale Climate-Smart Practices,
- Supply Chain Resilience Improves Food Security,
- Consumers Demand Healthy, Sustainable Food Choices.
Farmers are adopting automation, digital technologies, and alternative inputs to address external pressures from labor shortages, environmental degradation, climate change, and consumer demand for sustainable products. Robotics will be used on farms at a commercial scale, and digital technologies will enable profitable, climate-smart farming on land and at sea. Budding input technologies will become mainstream.
Optimization and decentralization of supply chains and food waste solutions can help solve food system inefficiencies and build greater resiliency in society and the economy in the face of future shocks.
Supply chain optimization technologies can reduce costs, emissions, and risk. Controlled production will improve food security and system resilience. The adoption of food waste solutions will be recognized as a good business practice and an essential tool for feeding the world.
Consumer expectations for foods that can deliver excellent flavor, meet sustainability standards, and support their health goals are driving an evolution in plant-based and cultivated proteins, wellness products and technologies, and packaging. Innovative packaging and closed-loop recycling will begin to address our plastics problem. Novel ingredients will enable the next generation of plant-based foods.
S2G Ventures’ report highlights the trends shaping the future of food in 2023. The future of food will require a shift to working with nature instead of against it. The food system transition will not be easy. The companies that can execute this well and maintain the funding levels needed to ride out the downturn may emerge even stronger and well-positioned to bring significant positive change to the food system.
Image provided by S2G Ventures