Food Innovation & Agriculture Trust

Food trust

“Over the next 40 years, we need to produce more food than in the last 8000 years combined!”

Josette Sheeran, Vice Chairman of the World Economic Forum

Most experts estimate that the planet will see an additional 2 billion people by 2050. Demand for one of our most basic needs – food – will increase proportionally over the coming years. It yet remains unclear how this demand will be met given the already overstretched food supply chain under which nearly 1 billion people already suffer hunger or malnourishment.

Although the situation seems very challenging, this is actually a great opportunity for investors. We are in need of no less than a revolution in our global food supply system to meet this demand, which will require investments in new companies that are capable of reinventing the future food supply system.

As stated in a report by the Food and Agriculture Organization of the UN (FAO) “continuing business-as-usual is not an option.” New and innovative technologies, services and products will be needed over the coming years. We are at the brink of a new era in food production, the likes of which will be as revolutionary as the introduction of modern mechanized farming more than a hundred years ago. The growth potential, combined with the fact that everyone needs food, makes this one of the most attractive places to invest.

Even legendary investor Jim Rogers agrees that one key component of food production, namely agriculture “is set for a boom”.

The UNO Food Innovation & Agriculture Trust will yield excellent returns for investors through capital investments in opportunities poised to revolutionize our global food supply chain by riding on the inevitable growth curve in food demand.
 

Changing How, Where and What We Grow

trust_food_education_textThanks to advances in agricultural technology, a hectare of land today can produce roughly five times more food than it did only 20 years ago. Yet, crop yields will have to increase another 70% on top of this staggering gain to feed the world in 2050.

The problem is that we are approaching yield limits with traditional farming practices. In the coming decades, with the ever shrinking amount of arable land per capita, the existing practices are not effective enough, besides not being sustainable.

In addition, there is a rising demand for organically grown products, where yields are reduced by up to 30% compared to those of conventional farming, which puts further stress on the supply chain.

Another key challenge is the question of where we grow our produce. Farms are typically located far from city centers and are limited in the range of suitable crops due to climate. This, combined with the year round demand for certain foods, is crucial to why produce travels enormous distances from the field to the plate: An often cited figure for the United States is a travel distance of on average 2400 km per good, based on a study by Rich Pirog in 2001.
 

The Hidden Cost of Food

Roughly 30% of our global energy consumption is linked to food production. Of greater significance is how strongly food production is coupled with fossil fuels, starting with diesel powered tractors on the farm to semi-trucks hauling produce across the country. It was calculated that an average diet in the developed world uses 1600 liters of fossil fuel per year per person.

All in all, an estimated 22% of all greenhouse gases are released through fossil fuels used in the context of the global food supply chain – a critical environmental component. Given the dwindling supply of fossil fuels and increasing energy prices, vertical farming will become a necessity in the coming years. Another issue will be the resource water: around 50% of the global population will live in water-scarce areas by 2050.
 

Grow It Where You Sell It

One solution to these key issues is to grow more food indoors and to move production closer to the point of sale.

Examples of innovative companies in this field are Bright Farms (www.brightfarms.com), co-funded by the well-known investor Ali Partovi (Dropbox, Facebook etc.) or Urban Farmers AG (http://urbanfarmers.com). They have developed a growing system that not only allows fresh food to be grown in the city, but it grows right by the point of sale (e.g. on top of a grocery store). Bright Farms also enables pricing to remain at or below current values through long-term contracts with the store. Their model achieves this with zero upfront costs to the retailer.
 

Vertical Farming

By shifting farming practices from growing strictly horizontally to also growing vertically (especially indoor growing systems), one can dramatically increase the amount of food produced on a given plot of land. This can move food production closer to the point of sale and/or consumption. There are several new companies driving this emerging change, for example Omega Garden (www.omegagarden.com). They are developing a robust, compact indoor growing system that can turn any indoor space into a “farm”. Systems like those developed by companies like Plantagon International (www.plantagon.com) make it possible to use an entire building to grow produce. Plantagon is poised to become an industry leading vertical farming/urban agriculture company. This concept of “urban agriculture” or growing food amidst an urban center will become more commonplace in the coming years.

The UNO Food Innovation & Agriculture Trust will invest in companies developing food production technologies that will maximize the crop per square meter, whilst reducing its transportation.
 

The Solution May Be on Our Plate

Most environmental scientists agree that one effective way to reduce water, energy and land usage in the food industry is by reducing meat consumption, particularly that of red meat. The production of beef has been estimated to require 15,000 liters of water per kg compared to more than 100 times less for most field crops/vegetables. The key problem is that cattle are extremely inefficient at converting feed into protein compared to other animals, and certainly when compared to plant-based foods like vegetables. Because of this, roughly 70% of all agricultural land is being used for livestock feed while only 8% is used to grow food for direct human consumption.

With beef production needing to double by 2020 to keep up with demand from a growing world population rapidly stepping up in development, there is a critical need to develop more sustainable protein sources.

Innovative companies like Beyond Meat (www.beyondmeat.com) have developed a plant-based replacement for chicken that looks, tastes and cooks just like the real thing. In addition, it contains no cholesterol and has only 3% fat compared to roughly 20% when serving real chicken.
 

It’s a Great Time to Invest

It is the need for a fundamental change in what, how and where we grow our food that makes this sector so attractive for investors. The opportunities to capitalize on the inevitable population growth by investing in innovative food solutions are tremendous and without limits. A new era in food production is just beginning and will change the face of our food supply chain as we know it. Now is the best time to invest in the future of food production.

The UNO Food Innovation & Agriculture Trust provides investors good returns besides giving them the personal satisfaction of knowing that they are contributing to much needed innovations to an industry that serves every single person on the planet.

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