investment viewpoints

What are the key themes of the food transformation?

What are the key themes of the food transformation?
Conor Walsh, CFA - Lead Portfolio Manager, New Food Systems and Co-Portfolio Manager, Circular Economy

Conor Walsh, CFA

Lead Portfolio Manager, New Food Systems and Co-Portfolio Manager, Circular Economy
Michael Urban, PhD - Chief Sustainability Strategist

Michael Urban, PhD

Chief Sustainability Strategist


Global food systems are in urgent need of an overhaul. In their current form, these are responsible for USD 12 trillion a year in damage to people and the planet. A new approach is required, and this represents a significant investment opportunity.


Need to know:

  • We need to return 1 billion hectares of land to nature by 2030 to fulfil global climate and nature policy targets
  • Change is required in terms of how we produce, distribute and consume foods so that food systems can nourish 25% more people with 20% less land
  • New food systems will generate new revenue pools worth USD 1.5 trillion annually by 2030


Producing more with less

Food systems must undergo major transformations so that they do not cause a collapse of the earth systems that support them. They are currently the dominant force of land-use change and account for the majority of freshwater use.

However, global food and agriculture systems also need to accommodate the needs of a growing population that is set to rise from 8 billion currently towards 10 billion by 2050. Total food demand is on course to rise by 98% over this same period.

The challenge then is to transition to new food systems that can both feed a growing populace while operating within, or helping to restore, planetary boundaries. This transition is fundamental to achieving global climate and nature goals, and stands to unlock new revenue pools worth an estimated USD 1.5tn annually by 2030.


New ways of producing, consuming and distributing food

This transition will be characterised by new ways of producing, consuming and distributing food. This means shifting towards regenerative agriculture, sustainable aquaculture and technological solutions; transforming demand via healthier diets with more plant-based food and alternative proteins; and rethinking operational design, which implies embedding circularity in production, distribution and consumption.


What are the key themes underpinning the transition to new food systems?

  Planetary boundaries

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Breaching boundaries

50% of global food production relies on planetary boundaries transgression, harming the productivity and resilience of food systems.

For instance, current food systems:

  • Drive almost 90% of global deforestation
  • Degrade more than 50% of our soils
  • Cause 80% of land-use change
  • Account for 70% of freshwater use1

Key to restoring balance

To achieve current climate and nature goals, food systems must return 1 billion hectares to nature by 2030.  This represents a 20% reduction in agricultural land, which equates to an area roughly the same size as China




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Livestock and land use

Sourcing nutrition from animals is highly inefficient: 80% of agricultural land is used to feed and graze livestock, which produce only 20% of global calories


Wasteful distribution

One-third of foods produced is lost or wasted, resulting in 1 billion people worldwide still lacking adequate, stable supply

Sustainable food production

Conventional agriculture needs to transition to a model combining regenerative and precision agriculture

Today, 36% of crops produced are used for animal feed, and only 55% of the global total is eaten directly by people. We are using many of our crops to feed livestock: to increase the efficiency of food systems, we need to cut out the middle-cow


Sustainable food distribution

Transforming distribution systems and developing packaging solutions to better preserve food will help eliminate waste


Human health

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Deadly diets

Poor diets cause up to 10 million premature deaths each year, while also increasing the risk of chronic disease.

Overuse of antibiotics in livestock farming is strengthening antimicrobial resistance, compromising the success of modern medicine in treating infections.

Healthy habits

We need to produce more plant-based foods and fewer animal-based foods.

For animal health interventions, strong demand exists for antimicrobial alternatives. In 2021, the global animal vaccines market was worth USD 9 billion and is estimated to reach USD 14 billion by 2030.2



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Vulnerable to shocks

The Ukraine conflict, and its disruption to the global grain and fertiliser trade, have exposed vulnerabilities in food systems.

Climate shocks are inevitable and will expose further vulnerabilities.

Embedding resilience

Instead of relying on a few large producers, diversifying supply chains will improve the resilience of food systems.

Regenerative agricultural practices can increase the resilience of crops to climate shocks. Cover crops also minimise erosion and provide wind cover.


Consumer and policy forces are aligning to drive the transition to new food systems. The EU and North America are expected to reach ‘peak-meat’ by 2035 as consumer attitudes shift in favour of plant-based diets. At the same time, 90% of global GDP and USD 130 trn in AUM now target net zero. It is clear that new food systems will look very different to old food systems, and this change will involve substantial commercial changes – and therefore investment opportunities.

How are we investing in this transition? Click here to learn more


1 Source: LOIM analysis, based on Rockstrom et al (2015) and Randers, Rockstrom et al. “Transformation is Feasible” (2018)
2 (Wadekar, Manjrekar, & Sumant, 2021).

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