These Food Technologies Are Ripe For Innovation
3.5 billion people are impacted by malnutrition around the world – about half of the global population. This is just one of the harsh realities in today’s food systems. At the same time, there is enormous untapped potential for tech-enabled companies to address such challenges. Investments in this area have lagged significantly behind sectors such as health, but innovation is beginning to flourish and business accelerators are multiplying, signaling a new era for ag and food tech.
What opportunities are ripe for innovation in the food and agriculture sector, and which young companies are demonstrating what’s possible? I spoke with Allie Burns, CEO of Village Capital, about promising and impactful startups, why “disruption” isn’t always the answer, and how the Green New Deal could be part of the solution.
Lorin Fries: Could you describe Village Capital?
Allie Burns: Village Capital helps entrepreneurs bring big ideas from vision to scale. We identify and support early-stage companies that are solving some of the world’s hardest challenges, like expanding economic opportunity and improving environmental sustainability. We are driven by a belief that business can and should play a critical role in creating equity and long-term prosperity. Entrepreneurs working on these challenges face significant barriers to accessing resources to grow; we’re focused on reducing those barriers.
Fries: Your team recently published a report on technologies that could strengthen food security and sustainability. Why is this a priority topic for you?
Burns: The way that we farm, transport and consume food globally is putting us on a track that will destabilize our ecosystems, as reported recently in Nature. For us, finding innovative solutions driven by startups key. We’ve made 14 investments in the US alone in the agriculture space since 2012, as the longest-running accelerator program focused on food and agriculture in the US.
Fries: You describe the Green New Deal as “a rare opportunity for Congress to jumpstart agriculture innovation”. Could you say more?
Burns: The Green New Deal has done an incredible job of sparking discussion on how to address climate change and income inequality. But it’s missing a focus on the incentives to enable sustainable innovation in agriculture. Right now, many farmers can’t afford new technologies, especially given the economic downturn. Through the Green New Deal, Congress can create a fund that covers a portion of the cost for farmers to adopt these new technologies. As a parallel example, the 2009 American Recovery and Reinvestment Act for electronic medical records was successful at driving the adoption of new technologies in the health space.
Fries: Your report highlighted the potential of precision agriculture. What technologies do you see, and what innovative companies, accelerating farm-level productivity and profitability in the US?
Burns: We use precision agriculture as a catch-all term for the use of information technology to improve accuracy and efficiency on the farm – including tools ranging from AI to regulate greenhouse temperatures, to indoor farming, to robotic devices that help pick berries and supplement labor shortages on farms. One inspiring company is Wexus Technologies, which has a system of sensors that allow farmers to remotely monitor their water and energy usage. They were inspired by the recent California drought to help conserve water and energy usage, which is a competitive advantage for farmers — whether or not there’s a drought.
Fries: You have spotlighted innovations that reduce food waste. What sorts of technologies can help us with this challenge, and which companies are making an impact?
Burns: We look at food waste innovation in two categories: data and logistics companies who are improving supply chain efficiency, and biotech companies that are extending the shelf life of perishable goods. One example on the supply chain is Vega Coffee, which is reducing the need for a middleman in the coffee supply chain, allowing farmers to roast on site and then ship directly to the consumer. A company on the biotech side is Cambridge Crops. They created an edible biomaterial coating that’s derived from silk, and which acts as a protective shield against spoilage. It’s quite an interesting and innovative technology.
Fries: You focus on food that provides both health and environmental benefits. Why are such products of interest to you?
Burns: We use the term “earth-functional foods” to mean food that provides environmental benefits that go beyond health. We talk a lot about healthy diets and their impact on our bodies, but such diets can often also be better for the environment. The growing global middle class is demanding more red meat, yet if we don’t change diets, the livestock sector alone could be consuming 80% of the annual global greenhouse gas budget by 2050. That’s a stunning statistic. We have to encourage the creation of a broader set of innovations in this category to offer alternatives for folks who want healthy diets and good protein.
One interesting trend at the intersection of food waste and earth-functional foods is the use of recycled and upcycled ingredients, such that new food products have a lower carbon footprint. One of our cohort companies, Pulp Pantry, was inspired by the founders’ observation that juicing is becoming an ever bigger craze, and that there is plenty of usable byproduct from the juicing process that is being thrown away. They have created a way to upcycle leftover pulp and turn it into snacks like granola.
Fries: Your report found that disruption isn’t always the answer to fueling positive change for our food systems. Could you explain?
Burns: I used to work for Steve Case, an active early stage investor, who wrote an Op-Ed when Soylent came out called The Future of Food is Food. That article encapsulates my point: agriculture is the sort of real-world industry that impacts our everyday lives, and disruption isn’t always the right mindset for success. We’re definitely in need of innovation, but this is a heavily interconnected and regulated industry with implications for health and safety. The idea of asking for forgiveness, not permission, may not be the best approach.
Fries: What are some of the challenges and risks associated with new technologies in the agri-food sector?
Burns: One of the big risks is companies taking a “go it alone” approach, a common instinct in tech. We should make sure that investors aren’t overly pushing companies for a growth-as-quickly-as-possible mindset. Another risk is the growing disconnect between those who have access to tech, and those who don’t. If we’re building a bunch of technologies for farmers with broadband internet, but we’re not thinking about basic infrastructure needs elsewhere and advocating for policies to expand access to those technologies, we’re going to leave a lot of people behind.
Data presents opportunities to empower and include consumers and small businesses; at the same time, there’s also a huge risk in putting so much data in the hands of tech companies. It’s important to make sure they are keeping the best of intentions in how the data is used and monetized. There are no simple answers, but that’s a conversation that is needed.
Fries: Could you share some of your recent findings on today’s predominant venture capital model?
Burns: There are a lot of people sitting in investors’ blind spots. The amount of investment that goes to women varies depending on whether you look at firms that are solely founded solely by women, which get less than 2% of venture capital, or firms that have gender-diverse founding teams, which receive about 12%. The data points on people of color are abysmal: they receive less than 1% of total venture capital in the US.
Overall, 75% of all venture capital in the US goes to New York, California and Massachusetts. Those states have lots of innovation, but they have not cornered the market on great ideas. We think investors are not looking wide or far enough. That’s what drives our work at Village Capital.
Fries: Do you have any closing reflections?
Burns: Changing the way that we produce and consume food is critically important if we’re going to address climate change. There is an important role for new, younger companies to play in pushing the boundaries of what is possible. I’m really excited to see how the space evolves, including the growing body of investors helping to enable this innovation.
This interview is part of a series on how technology and innovation are transforming food and ecological systems – and how to get it right for people and planet. The conversation has been edited for clarity and length.