S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet - USDA
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S2G Ventures Healing America – A Future Food System for our Farmers, Consumers and Planet © 2021 Seed 2 Growth
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
A Food System that Heals – Our Country, People, and Planet
Everybody eats.
This simple truth positions the food system to solve complicated problems – from bridging the urban and rural divide in the
United States to providing profitable solutions to addressing climate change. It can also help to build a more resilient, hea lth y
population, which is paramount in the times of a public health crisis.
COUNTRY PEOPLE PLANET
Everyone Eats Eating Climate Change Soil Health… and Wealth
800k+ 4x 100m m
Jobs adde d during COVID from groce ry re tail and Rate that sustainability-linke d brands are growing Me tric tons of CO 2 that U.S. cropland could
de live ry platform s (from March through July) com parative ly to othe rs pote ntially se que ste r, com pare d to 8.4m m MT now
Farmers are the Frontline Cheaper Healthcare Water
155 80% ~70%
The am ount of pe ople the ave rage farm e r fe e ds Of consum e rs be lie ve functional foods he lp Of global fre shwate r withdrawals that agriculture
today com pare d to 26 in 1960 pre ve nt or de lay the onse t of som e dise ase s is re sponsible for utilizing
Sou rce (s): S2G Re se a rch , Fa rm Fla vor, Soil He a lth a n d Ca rb on Se q u e stration in US Crop la n d s: A Policy An a lysis b y Léop old Bia rd e a u , Re b e cca Cre b b in -Coa te s, Ritt Ke e ra ti,Sa ra Litke , a n d Horte n cia Rod rígu e z, In stitu te of Food Te ch n ologist
© 2021 Seed 2 Growth 2
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
S2G Ventures
Founded in 2014. Located in Chicago and San Francisco.
We invest holistically We back and support We act as a hub – convening
from soil to shelf. trailblazing entrepreneurs. diverse partners and perspectives.
$700M
Of managed capital across seed, venture, and
50+
Portfolio Companies
5Countries
250+ 250+
Co-investors including Strategic relationships
growth stage companies across the food chain 40 corporates with key players in
food production,
processing, and
$3.0B
Of capital catalyzed and added to the system
retailing
overall outside of direct S2G investments Select Portfolio Companies Se le ct Partne rship s
100%
Focuse d on sustainab le food and ag inve sting as
$125mm partnership between S2G and CDPQ to
invest in climate friendly food and ag
entrepreneurs
one of the large st and m ost active ve nture and
growth fund s in the ind ustry
Sou rce (s): S2G Re se a rch
© 2021 Seed 2 Growth 3S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet A movement already underway … that can be accelerated with policy Consum ers, entrepreneurs, scientists and farm ers are creating the biggest transform ation in the Food System since World War II. Science is transform ing the com putation, biology, physics, and chem istry of food production – helping design a system that is healthier and m ore sustainable for consum er and m ore profitable for farm ers. Across the S2G portfolio, com panies are hard at work to Our build the future of food and agriculture: Portfolio • $9 billion in food and ag tech start-up funding in 2019. at Work This represents 0.5% of risk capital invested as a percentage of Gross Output GDP, com pared to 3.1% in financial services, 3.6% in healthcare, and 12.8% in inform ation technology • S2G challenges private m arkets to join us in catalyzing $10 billion of additional investm ent in Food and AgTech innovation over the next 3 years to close the current funding gap and build a 21st-century global food system that is m ore resilient, healthier, and m ore sustainable Sou rce (s): S2G Re se a rch , Pitch b ook, USDA ERS © 2021 Seed 2 Growth 4
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
The Food System - Growing Transformation
The Farmer The Consumer
Urge nt Ne e d to Incre ase Profitability with Sustainability Younge r, He althie r and m ore Digital
Farm Bankruptcies Data Younger Access
20% 8x Ove r the last de cade , consum e r’s
purchasing be havior with food has
ske we d towards a m ore com ple x se t
of que stions, be yond price and taste ,
72 59%
Incre ase during 2019, this Incre ase in farm -le ve l data to include conce pts such as e thics, Million m ille nnials in the U.S., Ye ar-ove r-year growth in food
num be r has be e n m itigate d by ge ne ration on ave rage in the source , e nvironm e ntal conside rations, the large st consum e r class in and be ve rage sale s through
$37.2bn in Fe de ral dire ct farm ne xt 10 ye ars and the farm e r. U.S. history U.S. re tail e com m e rce
paym e nts (2x> Auto bailout)
Ove r a sim ilar tim e fram e , farm e rs have
continue d to face a tight agricultural
Indoor Ag Soil Health e conom y. Farm e rs are se arching for Clean Label Assurance
stronge r profitability, and while the re
3.5x 75% 6x 90%
has be e n an unpre ce dented growth in
ne w agricultural te chnologie s,
adoption of prom ising ne w
te chnologie s re m ains low.
Growth in U.S. annual le ttuce Of land is substantially Growth of cle an labe l products Of Top 100 CPG Brands losing
gre e nhouse production in the de grade d with significant com pare d to conve ntional m arke t share
past 5 ye ars contribution from agriculture
Sou rce (s): S2G Re se a rch & An a lysis, Pitch b ook, USDA ERS, USDA Ag Ce n su s 2017, “US Fa rm Ba n kru p tcie s Re a ch Eigh t Ye a r High ” Forb e s, IPBES Glob a l Asse ssm e n t Re p ort on Biod ive rsity, Un ite d Na tion s, Gold m a n Sa ch s, e Ma rke te r
© 2021 Seed 2 Growth 5S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
Post COVID, the Food System is Accelerating this
Transformation
Channel Digitization
~8% online groce ry pe ne tration (as a % of total
groce ry) from COVID-19, up from ~4% from last ye ar
225 m illion farm IOT installm e nts by 2024, up from
~15 m illion in 2017
45% of the global population is
com prise d of Mille nnials and Convergence of Food and Health
Ge n Z 90% of COVID-19 adm issions involve d at le ast one
com orbidity – obe sity, type 2 diabe te s, e t al.
More than 50% of Am e ricans Com putation is a se cular tailwind with a 300,000x
incre ase in big data proce ssing spe e d since 2012
are Mille nnial, Ge n Z or post- Consumers are The The food system
Ge n Z (166 m illion pe ople
are 39 or younge r) driving the change Fe e dback adapts to m e e t
Loop Global Decommodification
in the food syste m the consum e r
Pote ntial le ve ling off in the corn and soybe an supe r
cycle growth that has occurre d ove r the last 20 ye ars
67% of Mille nnials and Ge n Z
During COVID, plant-base d m e ats gre w significantly
have alre ady change d be havior and sale s as of July we re 90% highe r ye ar-ove r-ye ar
to de ce le rate clim ate change
Commingling Climate and Profit
$1 trillion in ESG inve stor asse ts (Q2 2020 flows up
72% ye ar-ove r-ye ar)
6.8x EV / re ve nue m ultiple for ESG e ne rgy com panie s
com pare d to 1.7x for broade r e ne rgy m arke t
Sou rce (s): S2G Re se a rch , Brookin gs, Food Dive , McKin se y, Ga rtn e r, Ce n te rs for Dise a se Con trol a n d Pre ve n tion , “Morb id ity a n d Morta lity We e kly Re p ort”, Ap ril 8, 2020, Op e n AI, Morn in gsta r Re se a rch , YPu lse
© 2021 Seed 2 Growth 6S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
Pillars of a Future Food System
Resilient
Rural 1 Rural Broadband Dark Real Estate 9 Supply
Renaissance Chains
2 Healthy Soil is Controlled Environm ent Ag for 8
Made in Am erica Consum ers and Supply Chains
3 Profit Per Acre Moving Production Closer to 7
Consum ption
A Food Syste m that can se rve as a
Food as an Extension of the
4 bridge by supporting he althy
Hippocratic Oath
Nutrition
pe ople and com m unitie s, foste ring
Food as Preventative Medicine 6 strong, sustainable farm
as National
Security ope rations, and prom oting clim ate
5 Breeding for Health he alth by he lping farm e rs profit by
m oving to the front line of clim ate
© 2021 Seed 2 Growth
change . 7S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet Rural Renaissance © 2021 Seed 2 Growth 8
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
1 Rural Broadband
… im pact rural com m unitie s’ … and e xpose fragility in m any
Gaps in broadband… Policy Considerations
e conom ic pote ntial… parts of Am e rica
1 in 4 2x and 3x 2,300+ By stre ngthe ning rural broadband
infrastructure to e nsure inte rne t conne ction
Rural Am e ricans do not have Digitally-conne cte d busine ss During COVID-19, fre e Wi-Fi for all Am e ricans, the country will be be tte r
rural broadband cove rage , e arn 2x re ve nue pe r e m ploye e locations offe re d by the pre pared to de al with future crise s.
according to the FCC and are 3x m ore like ly to Am e rican Conne ction Proje ct
Incre ase d funding to bring broadband
cre ate jobs Broadband Coalition conne ctivity to all com m unitie s and im prove
m apping of broadband cove rage , including
im provem ents that are ge are d to m e e t
Top 10? 1 in 5 3x com m unity-level ne e ds and de m and, is a
sound inve stm e nt that will he lp conne ct
By som e analyse s, the U.S. Rural busine sse s only use The digital e conom y is growing com m unities across the country and solidify
the ir e conom ic opportunities.
doe s not e ve n rank am ong the basic digital tools, like ly due to roughly 10% pe r ye ar, ne arly
top te n countrie s with the challe nge s of lim ite d 3x as fast as the ove rall The White House should le ad and im prove
faste st broadband spe e ds broadband cove rage e conom y fe de ral age ncy coordination e fforts to
e nsure robust inve stm e nts in broadband
proje cts and m apping are e ffe ctive for
com m unities.
Access solves for … Resilience Dependability
Sou rce (s): S2G Re se a rch , FCC, Sp e e d Te st, De loitte , “Un lockin g th e Digita l Pote n tia l of Ru ra l Am e rica” b y Am e rica n In n ova tors, Fa rm Bu re a u , “Me a su rin g th e Digita l Econ om y” b y Bu re a u of Econ om ic An a lysis
© 2021 Seed 2 Growth 9S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
1 Rural Broadband – What It Means For Farmers
Data Access to Capital Risk Management
As agriculture goe s from data poor to Re al-tim e de cision m aking has be e n Farm ing is m anaging risk –
data rich, it e nable s pre cision and lim ite d whe n it com e s to addre ssing production, m arke t, financial,
digital agriculture te chnologie s. financial re source s and tools. institutional, and ope rations.
While inte rne t acce ss and conne ctivity issue s Conne ctivity and data would provide the While not all risks can be solve d, conne ctivity
e xte nd far be yond agriculture, it is a ke y te chnology to allow farm e rs the ability to m ay im prove the m anage m e nt of ke y
e nable r of te chnology that allows farm e rs to: provide on-farm , in-se ason transpare ncy to agricultural risks:
Re duce costs through be tte r insights on le nde rs for diffe re ntiated cost of capital acce ss: Data transpare ncy for Fe de ral Crop
ke y are as such as we athe r, crop he alth, and In the U.S., capital acce ss for farm e rs is Insurance provide rs to fore cast the e nd of
dise ase de te ction large ly base d on le ve rage able asse t the se ason risk (loss re se rving value , claim
Ide ntify the ‘how’ and ‘whe n’ for ke y owne rship - the farm or farm e quipm e nt adjustm e nts, yie ld loss e stim ate s, e t al.)
de cisions, such as irrigation and fe rtilize r Enable a m ore e fficie nt m anne r of cash- Innovative risk m anage m e nt tools for
application flow base d le nding on re nte d acre s for farm e rs to be tte r allocate re source s, labor,
Enable on-farm de cisions to im prove m ore productive ope rations and tim e throughout the se ason
profitability and yie ld Support innovative financial te chnology Produce rs be ne fit whe n the re is data
tools available to he lp de te rm ine accurate loan
rate s, disaste r paym e nts, and othe r
financial inform ation
8x+ 54% ~10%
Incre ase in farm -le ve l data ge ne ration Of U.S. cropland is re nte d ve rsus Of corn and soybe an farm e rs trade d
on ave rage ove r the ne xt 10 ye ars owne d, according to the USDA in future s contracts
Sou rce (s): S2G Re se a rch , Gold m a n Sa ch s, USDA ERS, Risk in Agricu ltu re b y USDA ERS
© 2021 Seed 2 Growth 10S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
2 Healthy Soil – Made in America
For most Americans, their house Farmer Wealth Farmer Profitability Policy Considerations
is the most important asset that
they’ll ever own. For farmers, it is From a policy pe rspe ctive, gove rnm ent
Investing in soil health, and should inve st in program s and se rvice s that
the soil. Soil provides a reservoir other long -term conservation Growing soil organic matter m ake it e asie r and m ore profitable for
of water and nutrients and allows practices, may further align and improving other soil farm e rs to practice conse rvation.
farmers to understand the health landowners and renters to characteristics may increase De ve loping datase ts that de -risk and
de m onstrate the profitability be nefits of
of their field visibly or through maintain better land the crop yield im ple m e nting ce rtain practice change s can
scientific means (level of stewardship practices ultim ate ly support m ore wide spre ad
nutrients to pH levels). adoption of innovative conse rvation
approache s, practices and syste m s.
At the same time, USDA NRCS Deteriorating soil health
Fully functioning soil has the The U.S. De partm e nt of Agriculture should
has estimated the total cost of maximum crop production at e stablish a clim ate task force and e nsure
accelerates the price disparity
erosion due to agriculture costs the lowest cost, but erosion input from an advisory board re pre senting a
between the underlying asset
impacts compaction, loss of dive rse group of private partne rs, including
$44 billion per year, while globally price of the farm and farmland
soil structure, nutrient stake holde rs re pre se nting ve nture capital
the planet has lost half of its productivity and start-ups working on the se issue s. The
degradation, and soil salinity
private se ctor is a significant drive r whe n
topsoil in the last 150 years. By
de ve loping tools at scale that producers will
building better soil, profitability ne e d to profitably im plem ent im prove d
and wealth can return to the American Made Soil Health conse rvation practices.
American family farmer.
Sou rce (s): S2G Re se a rch , NRCS, World Wild life
© 2021 Seed 2 Growth 11S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
3 Profit Per Acre
By shifting from ‘Yield ’ to ‘Profitability ’, farm e rs m ay focus on be tte r outcom e s that im p rove the
p rofitab ility of the ir b usine sse s, while sim ultane ously yie lding be tte r soil he alth and clim ate outcom e s.
Traditional commodity markets are massive and efficient, but they are not One e xam ple of the profitability opportunity for farm e rs in IP m arke ts:
incentivized by farmer profitability. At the same time, consumers are driving organic m arke ts are growing 12x faste r than conve ntional m arke ts, but U.S.
a significant demand in organic and other identity preserved (“IP”) products organic production is curre ntly unable to m e e t that de m and. Inste ad, a large
(grass-fed, free range, et al) at grocery retail. IP markets lack transparency, pe rce ntage of organic ingre dients are im porte d. The re is a profitability
risk management tools, price discovery, and other tools to help farmers opportunity for U.S. farm e rs to m e e t growing de m and for organic
bring products to market. ingre die nts.
Today, there are only small, niche markets where priced carbon exists as a
revenue stream for farmers; however, carbon has the potential to become With bipartisan support for the Growing Clim ate Solutions Act, the re is
the next cash crop. It would allow farmers to access a new revenue stream m om e ntum building for carbon farm ing at the fe de ral le ve l. Howe ve r, for
that is not currently available to them, provide access to more liquid carbon farm ing to be a scale d practice , it ne e ds to be vie we d as re al and
markets, and incentivize positive land stewardship practices from renters cre dible by the industry, landowne rs, and ope rators.
and owners.
Margin Protection for Federal Crop Insurance was introduced in 2016 and is The private se ctor has incre ase d its focus on profit pe r acre , the re by
one of the first risk management products designed by USDA’s Risk focusing on m argin inste ad of re ve nue (price x yie ld), and is m oving quickly
Management Agency to focus on insuring the farmer’s operating margin. by building ne w financial, digital, and pre cision te chnologie s for farm e rs. This
Federal risk management has historically focused on yield and revenue for ope ns opportunity for the private and public se ctors to work collaborative ly
various very sensible reasons. to im prove ove rall profitability of the Am e rican farm e r.
An Ingraine d ‘Yie ld ’ Culture Moving towards a ‘Profitability’ Culture
Sou rce (s): S2G Re se a rch , USDA RMA
© 2021 Seed 2 Growth 12S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
3 Profit Pe r Acre (cont.)
“ The principle challenge, to me, is changing the mindset from thriving
on 300 to 500 acres , rathe r than just surviving on 3,000 to 5,000 .
We all gre w up thinking we we re outstanding farm e rs, and we we re
succe ssful be cause I produce 80-bushe l be ans. Now we ne e d to think
about I'm succe ssful be cause I ne t $200 an acre .
Ken Dallmier
Pre side nt of Clarkson Grain
Com pany of Illinois
Sou rce (s): Fa rm Progre ss
© 2021 Seed 2 Growth 13S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet Nutrition as National Security © 2021 Seed 2 Growth 14
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
4 Cheaper Healthcare & Food as an Extension of the Hippocratic Oath
Current State of Affairs Consumer Bankruptcies How Consumers Finance Food as an Extension of the
in Healthcare Spend Caused by Medical Issues their Medical Necessities Hippocratic Oath
$3.5 trillion 66.5% 60% 75%
Spent on health expenditures; Of all bankruptcies were tied Of the U.S. population must Of healthcare budget was
despite higher per capita to medical issues, either in completely drain their savings spent on chronic disease, with
spending the U.S. has relative cost or time away from work in order to pay off medical a majority being nutritionally -
lower life expectancy debt related and preventable
1.5x ~530,000 1 in 10 80x
Growth in healthcare Families across the country Adults delay medical care due ROI (medical savings per
spending compared to the turn to bankruptcy each year to cost, with an average patient / food spend per
growth of the GDP because of medical issues and hospital stay costing $15,734 patient) by prescribing food
bills and education for diabetics (1)
Convergence of food and Redirect to More
Economic Issues
health may help… Productive Spending
Source(s): S2G Research, Committee for a Responsible Budget , Forbes, CNBC, Medical Economics , Fighting Chronic Disease , “Prescribing food as a specialty drug”, New England Journal of Medicine Catalyst, 2018
© 2021 Seed 2 Growth 15S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
4 Food as an Extension of the Hippocratic Oath –
The Healthcare and Food Industries are Coming Together
W almart and H umanaVit al it y Kroger is Testing ‘Food as HCSC and Blue Cross Blue
Partner for F irst- o f- it s- Kin d Medicine’ with Food Shield Institute team up on
H ealthie r F ood Program to Prescriptions for Customers new healthy food delivery
I nc entiviz e W ellness service
Geisinger – Nestle Health Science
Prescribing Food as a acquires personalized
Specialty Drug medicine platform
So u rce (s): Wa lm a rt, Su p e rm a rke t Ne ws, Me d City Ne ws, Ge isin ge r, Nu tra
© 2021 Seed 2 Growth 16S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
4 Food as an Exte nsion of the Hippocratic Oath
“ The concept of food as medicine isn’t new,
but it’s largely anecdotal and under -
delivers. We can actually translate food
into medicine. We know what it takes to
grow things that are clinically proven to be
Food
“ It is unacce ptable for anyone to suffe r
from poor he alth be cause the y can’t ge t
e nough nutritious food to e at.
The association be twe e n good he alth and
more nutritious for a very specific health
he althy food is indisputable , and if we
outcome. Both
Really, the opportunity to bestow health
“
and longevity to billions worldwide is not
industrie s
calling for
collaboration
want to m ake our com m unitie s the
“
he althie st in the nation, it is crucial that we
conne ct pe ople with the re source s the y
ne e d to achie ve total he alth.
in the hands of the healthcare industry, it’s
in the hands of the food industry.
Healthcare
Sofia Elizondo Bernard J. Tyson
Co-found e r & COO, Brightse e d Chairm an & CEO, Kaise r Pe rm ane nte
Sou rce (s): S2G Re se a rch , BioSp a ce
© 2021 Seed 2 Growth 17S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
5 Food as Preventative Medicine
While drugs are focused on Key Considerations Key Considerations
treatment of specific human Policy Considerations
in Healthcare in Nutrition
health conditions, food and
medical foods have proven to be ‘Food as m e dicine ’ would be ne fit from
effective means of managing 90% 1 in 10 furthe r re se arch and analysis to be tte r
inform the Die tary Guide line s for Am e ricans
and preventing specific issues – Of COVID-19 admissions Adults meet U.S. federal fruit as it de ve lops nutritional re com me ndations
during its ne xt proce ss.
most prevalently nutrition - involved at least one or vegetable daily serving
related chronic health conditions comorbidity – obesity, recommendations A stronge r body of re se arch could also be
type 2 diabetes, et al. use d to im prove training for m e dical
such as type 2 diabetes, obesity, profe ssionals, including nutrition training in
and congestive heart failure. m e dical school, as doctors are ke y truste d
advisors whe n patie nts are se e king die tary
There is significant opportunity 75% +0.35 servings and nutritional advice .
for Congressional engagement Of the healthcare budget was Of produce consumed per Enhance d coordination be twe e n fe de ral
nutrition re se arch age ncie s and re ne wing a
to promote policies that support spent on chronic diseases, the resident per day for each
priority for nutrition at USDA’s pre m ie r
the use of food as a prophylactic majority being nutritionally - additional meter of shelf space com pe titive re se arch arm , the Agriculture
treatment of extensive, nearly related diseases devoted to fresh vegetables (1) and Food Re se arch Initiative , would signal its
im portance and e ncourage pote ntial
ubiquitous human health applicants to think cre ative ly about
conditions. Healthcare Nutrition innovation in this fie ld of work.
So u rce (s): S2G Re se a rch , Ce n te rs for Dise a se Con trol a n d Pre ve n tion , “Morb id ity a n d Mo rta lity We e kly Re p o rt”, Ap ril 8, 2020, Figh tin g Ch ro n ic Dise a se , CDC, Ca m b rid ge Un ive rsity Pre ss
© 2021 Seed 2 Growth 18S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
6 Breeding for Health
Current State of Affairs Policy Considerations
Consumer preferences are changing rapidly and are By creating a policy and regulatory environment that
increasingly uncompromising around nutrition, fosters innovation and new agricultural technologies,
price, flavor, and other attributes, which has led to the U.S. food system will continue to be a leader
an uplift in more conscious consumption. However, among the world in ag innovation.
the current food system needs to keep up in its
Congress and the executive branch must re -
ability to meet these demands, including new
prioritize investments in the government’s food and
agricultural and ingredient innovation.
agricultural research agencies. Additionally,
Historically, breeding has been centered around developing opportunities focused on ag
input traits, such as making a crop more resilient to technologies will push us towards future
drought or pests. The next generation of breeding is innovations.
beginning and will continue to focus efforts on
The U.S. regulatory system should not impede the
output traits – nutrition, flavor, functionality,
investment in and development of new technologies,
affordability, and other attributes of growing
such as gene editing, that will likely improve crop
importance to consumers.
breeding for next generation traits by a magnitude
Source(s): S2G Research
© 2021 Seed 2 Growth 19S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
6 Breeding for Health (for People and Planet)
Consumers CPG and Food Companies
7 of 10 73% 98% 70%
Consum e rs are Consum e rs are Of companies are Of companies have
incre asing the ir paying m ore for reformulating at least reformulated products
consum ption of plant- he alth and we llne ss Innovation in some of their products to reduce salt
base d prote ins food attribute s and/or sugar
agriculture can
suit the ne e ds of
65% 7% both partie s 50% 50%
Of consum e rs want Expe cte d growth Loss in profits from Of CPG growth is
functional be ne fits from be twe e n 2018 and grocers between 2012 expected to come from
the ir food and drink 2023 in global and 2017, sparking the sustainability-marketed
‘cle an labe l’ m arke t hunt for differentiation products
Equity through affordable Address food insecurity Improve challenged farm Increase production for
health and wellness traits and malnutrition economics growth in population
Benefits from consumers, agriculture, and CPGs coming together
So u rce (s): S2G Re se a rch , Food Na viga tor, Food In d u stry Exe cu tive , Food Dive , Bu sin e ss Wire , PR Ne ws Wire , McKin se y, Re frige ra te d a n d Fro ze n Fo o d s
© 2021 Seed 2 Growth 20S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet Resilient Supply Chains © 2021 Seed 2 Growth 21
S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
7 Moving Production Closer to Consumption
COVID-19 meaningfully impacted the Policy Considerations
key pressure points in the food supply The Supply Chain The Consum e r
chain and caused fear across the
supply chain – from agriculture COVID-19 e xpose d risks in local, re gional, and
companies to the consumer. It caused 1,300 to 1,500 40-50% global food syste m that would be ne fit from
furthe r re se arch into pre ssure points along
large food and agriculture companies
Ave rage m ile s food trave ls De cre ase in distribution in the food supply chain.
to start rethinking their supply chain in
from farm to fork – the syste m re tail be twe e n whe n the During COVID-19, produce rs that sold into
an effort of improved resiliency.
is de pe nde nt on transportation pande m ic be gan and the re staurant and food se rvice locations face d a
The global food system has many ove r long distance s m iddle of the ye ar significant drop in de m and whe n those
perishable products, but it functions as e stablishm e nts we re force d to te m porarily
close . A m ore agile food syste m could be ne fit
a just-in-time economy where food both produce rs and food se rvice , by having
inventories are intentionally kept at low
levels. It causes vulnerability to
25% 5% the fle xibility to re dire ct the ir product into
groce ry re tail syste m s.
unanticipated variations in demands. Labor shortage would cause Ne gative im pact on the U.S. pork
Policym ake rs should continue to incre ase
49% re duction in food supply from a single shut down financial support and ince ntive s for local and
With transportation system shutting production, according to from a m ajor pork supplie r’s re gional produce rs, including those at FSA
down in the early days of COVID, three NISAC’s (1) m ode l facility during COVID-19 and Farm Cre dit. Exam ple s include
vulnerabilities that were exposed were: supporting barn finance for local e gg
Food to re tail distribution produce rs or supply chains for local
produce rs to se ll into groce ry or food se rvice .
Agricultural inputs to farm s (e .g., se e ds, Resilience Dependability
anim al fe e d, fe rtilize r)
Farm products to proce ssors, package rs, spot
m arke ts, and e xporte rs
Note (s): (1) Na tion a l In fra stru ctu re Sim u la tion & An a lysis Ce n te r; Sou rce (s): S2G Re se a rch , ATTRA, NISAC, Re u te rs
© 2021 Seed 2 Growth 22S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
8 Controlled Environment Ag for Consumers and Supply Chains
Controlle d e nvironm e nt agriculture can work alongside conve ntional m e thods to offe r consum e rs and sup p ly chain
constitue nts m ore re silie nt, sustainab le , local, high-quality products. By utilizing diffe re nt m e thod s and form ats, ind oor and
gre e nhouse p rod uce rs can alle viate syste m ic nutrition and food acce ss challe nge s, while m itigating clim ate and othe r
p roduction risks. Furthe r, controlle d e nvironm e nt m ay alle viate logistical constraints of today’s syste m .
In the future , controlle d e nvironm e nts m ay de m onstrably im prove m arke t acce ss to affordab le , high-q uality, and nutritious
p roduce . Howe ve r, scaling controlle d p rod uction will re quire collaboration and partne rship across e ntre p re ne urs,
policym ake rs, scie ntists, and othe rs critical in he lping CEA re ach a viable scale .
Policy Considerations Cumulative impact if vegetables and herbs
shifted to ~13% CEA by 2025
Controlle d e nvironm e nt agriculture would be ne fit from furthe r U.S. food stake holde rs large ly stand to be ne fit, with notable
re se arch, analysis, and focus from the USDA to he lp guid e its traje ctory positive e xte rnalitie s achie ve d ove r a five -ye ar pe riod.
and de ve lop m e nt in the future . A stronge r body of re se arch could also
be use d to inform crop advance m e nt, e ne rgy and input cost,
sustainab ility m e asure m e nt, and othe r attribute s of CEA. Shift to Greater Localization Reduced Resource Use + Waste
Enhance d coord ination and com m unication with spe cific fe d e ral
age ncie s, such as the De p artm e nt of Ene rgy for lighting te chnology in
controlle d e nvironm e nt agriculture facilitie s.
2.3bn 9 1.3 330
Additional Trillion-m ile Billion of Billion fe we r
We also sup p ort im p roving acce ss to capital within USDA le nd ing and
production re duction in food produce gallons of wate r
risk program s for CEA.
capacity (in lbs.) m ile s save d use d
Sou rce (s): S2G Re se a rch (Ba se d on S2G An a lysis a n d Ma rke t Assu m p tion s)
© 2021 Seed 2 Growth 23S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
9 Dark Real Estate
Tailwinds from COVID-19 include greater interest in While the hype of controlled environment agriculture continues
controlled environment agriculture development and an to accelerate, greenhouse is an existing, large market
increased focus on repurposing commercial real estate. At opportunity with significant room to grow
the same time, commercially, these technologies are
Crops grown under glass or other protection Number of Farms Square Footage
becoming more viable and there is an opportunity to
reimagine vacant real estate across urban centers as food Aquatic plants 331 1,308,064
production facilities. Bulbs, corms, rhizomes, and tubes - dry 347 1,682,858
Cutting, seedings, liners and plugs 1,356 37,173,863
Repurposing commercial real estate such as legacy
Floriculture 17,051 869,496,529
manufacturing facilities and warehouses is an opportunity to
promote jobs in urban areas, redefine “local” food systems, Flower seeds 294 495,223
and optimize resource efficiencies. Creative approaches that Greenhouse fruits and berries 846 11,708,439
leverage opportunity zones, private market participants and Greenhouse tomatoes 7,974 63,929,576
government bodies can help manage the infrastructure cost Other greenhouse vegetables 7,198 48,634,529
and deliver value across stakeholder groups. Mushrooms 1,261 36,281,409
Expanding commercial-scale agriculture production to urban Nursery stock crops 4,302 308,879,616
and suburban areas is also additive to traditional, outdoor Tobacco transplants 267 3,259,696
agricultural production. As discussed in the prior slides, it Vegetable seeds 599 8,972,753
supports stronger controlled environment agricultural Vegetable transplants 2,058 29,859,523
economics and offers a viable alternative to imports. Total 43,884 1,421,682,078
Average sq ft/farm 32,396
Sou rce (s): S2G Re se a rch , USDA Ag Ce n su s 2017
© 2021 Seed 2 Growth 24S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
9 Dark Re al Estate
“ Producing food without arable land constraints would provide
numerous benefits including increased food production, particularly of
fresh and local food; employment opportunities for urban
populations , e stim ate d to account for up to 75 pe rce nt of the global
population by 2050; and the strate gic use of soil re source s for food
production that is m ost suitable or ne ce ssarily m ust be soil-base d.
Ariel Kagan and
Jenna Riemenschneider ,
Authors of Opportunitie s in Controlle d Environm e nt
Agriculture b y the Food Institute at Swe tte Ce nte r for
Sustainable Food Syste m s at Arizona State Unive rsity
© 2021 Seed 2 Growth 25S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
A Future Food Systems That Doesn’t Just Feed but Heals
Resilient
Rural 1 Rural Broadband Dark Real Estate 9 Supply
Renaissance Chains
2 Healthy Soil is Controlled Environm ent Ag for 8
Made in Am erica Consum ers and Supply Chains
3 Profit Per Acre Moving Production Closer to 7
Consum ption
A Food Syste m that can se rve as a
Food as an Extension of the
4 bridge by supporting he althy
Hippocratic Oath
Nutrition
pe ople and com m unitie s, foste ring
Food as Preventative Medicine 6 strong, sustainable farm
as National
Security ope rations, and prom oting clim ate
5 Breeding for Health he alth by he lping farm e rs profit by
m oving to the front line of clim ate
© 2021 Seed 2 Growth
change . 26S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet
Meet S2G Ventures
At S2G Ventures, we’re harnessing the power of food innovation to create
better outcomes for people and the planet. We believe food needs to be
produced in a way that considers human and environmental health just as
much as taste and profit – and we back trailblazing entrepreneurs across the
food supply chain with the big ideas to make that dream a reality.
Contact Us
Sanjeev Krishnan Dan Ripma
Managing Director & Senior Associate
Chief Investment Officer
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© 2021 Seed 2 Growth 27S2G Ventures Healing America - A Future Food System for our Farmers, Consumers and Planet Thank you. © 2021 Seed 2 Growth 28
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