Food+Tech Connect and The Future Market are hosting Biodiversity: The Intersection of Taste & Sustainability, an editorial series featuring interviews with over 45 leading food industry CEOs, executives, farmers, investors and researchers on the role of biodiversity in the food industry. Read all of the interviews here. 

As we’ve talk about in this series, capital is critical to building a more biodiverse food system. One organization at the forefront of driving capital to this space is Arabella Advisors, an advisory that helps its clients develop food system, conservation and climate change related philanthropic and policy strategies. They also lead Good Food Ventures, an investment club that sources and diligences transformative market-based solutions.

Below, I speak with Eric Kessler, founder, principal and senior managing director, and Cyrus Kharas, associate director, about why we need greater investment in technologies that support transparency, supply chain innovation and connect eaters to the producers of their food.

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Danielle Gould: Why is biodiversity a priority for Arabella Advisors?

Cyrus Kharas & Eric Kessler: Many of our clients dedicate a tremendous amount of attention, effort and resources to making sure our food systems are healthy and sustainable – and biodiversity is a meaningful component of that. For example, some of our projects have involved supporting sustainable biofertilizer development, clean-meat products and policy initiatives that advance a healthy more biodiverse planet.

DG: How does your organization define and think about biodiversity? What does an ideal biodiverse food system look like? How do you measure biodiversity, and when will we know when we’ve arrived at a “good” level of biodiversity?

CK & EK: We believe a more biodiverse food system will be one that provides more diverse and ecologically sensitive food choices. Within Arabella’s food systems work, we see how the variability among animal and plants results in healthier, more sustainable and more resilient food systems that can serve the needs of all communities. We measure biodiversity by the number and range of living beings and how well an ecosystem can withstand shocks, such as those resulting from climate change. It isn’t clear necessarily how we will know when we have reached a sufficient level of biodiversity, but what is certainly clear is that pursuing it needs to be a priority.

DG: What is your organization doing or planning to do to promote biodiversity?

CK & EK: As philanthropic advisors, we help our clients build grant-making portfolios and policy agendas that target specific food system, conservation and climate goals. In addition, we spearhead Good Food Ventures, an investment club that sources, conducts due diligence on and presents transformative market-based solutions to investors who are interested in contributing to a healthy and sustainable food system. The companies in which our clients invest are for-profit companies that aim to achieve strong financial and environmental impacts – often with an explicit focus on biodiversity.

DG: What is the business case for products that promote a more biodiverse food system?

CK & EK: The market has shown that the economic case for healthier foods sourced from sustainable locations via transparent and humane practices is strong and growing. If we think about how niche an organic market was 20 years ago versus the prevalence of organic produce and markets today, the trend is incredible. The markets for organic or local produce, grassfed proteins, fair-trade coffee and chocolate, and other products have emerged and grown is all an investor needs to see to understand the value the market is putting on environmental and social values like biodiversity.

DG: What investments need to be made to create a more biodiverse food system?

CK & EK: Investors need to support the development of the food supply chain and the creation of new technologies that support transparency and connect consumers with producers. It will be critical for entrepreneurs to effectively and efficiently reach the end consumer, which makes supply chain developments for small-scale farmers or innovative clean-protein products essential. Investments in technologies – ranging from biofertilizers to enablement software to get products in front of consumers – will be critical at each juncture of the supply chain to ensure an efficient market that can support businesses that have recognized the importance of biodiversity in their business model.

DG: How might we reinvent capital structures or create incentives to create more investment in biodiversity?

CK & EK: We already see great momentum in the investment world concerning biodiversity and healthy food systems. For one, there is much more money, attention and talent focusing on the sector. Naturally, that activity leads to competition, innovation and creative solutions. Demographic trends also drive more visibility of market opportunities in the broader food system. For example, many people understand that global population growth will require improved efficiency in food production and delivery. Cutting-edge companies are now exploring cost-effective ways to develop proteins to feed the growing population using controlled and sustainable methods, and investors have noticed.

We can also continue to look at technology for ways to reinvent capital or incentives for investment to drive improved biodiversity. With new technology, consumers can track where their food comes from and how it gets to them. This transparency will allow open and efficient markets to determine the supply/demand dynamics for products that build a focus on biodiversity into their model.

DG: What are some of the most important things investors, food manufacturers, retailers and other key actors across the supply chain can do to support biodiversity?

CK & EK: Investing and adopting new technologies will be critical, particularly when it comes to creating a supply chain that encourages a more biodiverse food system. Investors can also encourage consumers to make purchasing decisions that account for biodiversity, sustainability, fair treatment of workers and other social and environmental issues by supporting education and messaging. Finally, all of these actors should continue to promote the importance of biodiversity in their business and provide additional momentum for businesses that recognize and incorporate that awareness into their business models.

DG: What exciting products, technologies or services are you seeing that support a more biodiverse food system?

CK & EK: We see hundreds of companies, products, technologies and services that are working to serve communities better, healthier and more environmentally sustainable foods. As mentioned earlier, clean-proteins or plant-based meat alternatives are a huge opportunity for the market. Entrepreneurs are also addressing the food retailers, grocers, restaurants, campuses and even other food-product producers waste and how that food can be repurposed or transformed into useful products. While these products may not directly promote biodiversity, their business models reduce our dependence on products that degrade biodiversity and the environment.

DG: Are there certain products you would like to see more of in the food industry that would help promote a more biodiverse agricultural system?

CK & EK: Clean proteins, local produce, more diversity within food and produce categories and more seasonality are all trends that we would like to see and would immediately contribute to a more biodiverse agriculture system. Part of what will support a more biodiverse agriculture system is a more transparent supply-demand dynamic for new and diverse food.

DG: What is your vision for what a more biodiverse food system looks like in 10-15 years?

CK & EK: In 2030, consumers will know exactly where their local produce comes from and how it is grown and will be able to make informed decisions about what they eat and what types of producers and farmers they purchase it from. And the benefits of each incremental step toward greater biodiversity will cascade. We will experience cleaner air and water. We will have safer food void of contaminants. Our farmers will have more dependable incomes. Food desert communities will be extinct. And on and on.

DG: Anything else you want to share?

CK & EK: We see many equally important channels investors can support to make true biodiversity reality: important nonprofit service providers, critical research endeavors, innovative entrepreneurs, influential advocates and more. At Arabella we will continue to champion these efforts to drive the change we all want to see in our food system and in our communities.

Read all of our biodiversity interviews here and learn more about Biodiversity at The Future Market.

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Cyrus Kharas, Associate Director at Arabella Advisors

Cyrus Kharas is an associate director on the Impact Investing team at Arabella. He works across a broad range of Arabella’s individual, institutional, and corporate clients, and contributes to the firm’s analysis of trends and opportunities in the impact investing field. He has substantial experience in economics, international development, capital markets, and social impact, and brings this expertise to support projects across Arabella. In his time at Arabella, Cyrus has managed several projects ranging in focus from capital markets dynamics for minority and female entrepreneurs to climate change initiatives. Cyrus is driven to find creative ways to unlock philanthropic and private capital to solve global challenges.

Prior to joining Arabella Advisors, Cyrus spent several years at Goldman Sachs in the investment management division, where he focused on cross-asset class allocation and portfolio strategy. His team focused on institutions and the current and retired partners of Goldman Sachs. Previously, he was an analyst at Calvert Impact Capital, where he designed and managed portfolios of impact investments for institutional clients with specific impact goals. He participated in the underwriting and presenting of investments to the clients, as well as ongoing financial and impact monitoring of the portfolio. Cyrus began his career at the US Treasury Department in the Office of International Affairs.

Cyrus serves on the junior board of the New York City-based Advocates for Children, a nonprofit organization dedicated to representing disadvantaged kids in the NYC school system. He has a BA from Tufts University in psychology and economics and an MBA with a concentration in economics from NYU Stern School of Business. Cyrus is an avid soccer player and fan. He lives in Brooklyn with his wife and daughter.

Eric Kessler, Founder, Principal and Senior Managing Director of Arabella Advisors

Eric is a serial entrepreneur who has started, led, and advised organizations pursuing social change across the country and around the globe. As founder of Arabella Advisors, Eric has been at the forefront of innovation and impact in the philanthropic sector during one of its greatest historical expansions.

While guiding Arabella from a small startup to a company with more than 160 employees that advises on several billion dollars of philanthropic resources annually, Eric has focused on helping clients achieve their philanthropic goals by devising grant-making strategies, mounting effective advocacy campaigns, evaluating impact, and managing their foundation’s operations. In addition to serving a broad range of family, institutional, and corporate clients, Eric leads the firm’s work with clients who are working to improve our food system through policies and business investments that promote nutritious, sustainable, and affordable food.

Eric’s interest in the food sector extends well beyond his work at Arabella. He chairs the committee at the James Beard Foundation that oversees efforts to engage the culinary community in advocacy on food policy, and he created the foundation’s Chefs Boot Camp for Policy and Change. Eric also co-founded the Chef Action Network and has a personal private equity portfolio invested in businesses at the forefront of improving our food system. And, he proudly serves as an appointed member of Washington, DC’s Food Policy Council.

In addition to his work at Arabella, Eric founded and serves as secretary of the New Venture Fund, a nonprofit that incubates new social sector innovations, and co-founded the Center for Disaster Philanthropy.

Eric is on the boards of the James Beard Foundation and the National Democratic Institute. He is a member of the Young Presidents’ Organization and Summit Series. He also serves as a trustee of his own family’s foundation, which holds assets generated by the sale of a fifth-generation family-owned business.

Eric holds an Executive MBA from Georgetown University and a BA from the University of Colorado.

The post Arabella Advisors on Transformative Food System Investment Opportunities appeared first on Food+Tech Connect.

Food+Tech Connect and The Future Market are hosting Biodiversity: The Intersection of Taste & Sustainability, an editorial series featuring interviews with over 45 leading food industry CEOs, executives, farmers, investors and researchers on the role of biodiversity in the food industry. Read all of the interviews here. 

Creating a regenerative and more biodiverse food system will requires significant investment. FoodShot Global is doing just that by helping innovators tackle some of our greatest food system challenges through its integrated capital platform of non-dilutive, equity and debt funding. Below, I speak with founder and chairman Victor Friedberg about white space opportunities  and capital structures that can help us transition to a regenerative and biodiverse food system at scale.

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Danielle Gould: Is biodiversity a priority for FoodShot Global? If so, how and why?

Victor Friedberg: Yes, biodiversity is a priority for every organization I’ve built in the food sector. While I could argue for biodiversity as an end in itself, I would rather make the case that striving for biodiversity is an opportunity to create a new generation of flavorful, nutrient-dense and sustainable food products — and the agricultural systems that can support them. Consumers will drive the growth of this new biodiverse food system by voting for policies and practices that support its development, and, over time, businesses and organizations will reap the benefits of this biodiverse system by reducing risk (climate, supply, economic) and generating growth.

DG: What is FoodShot Global doing or planning to do to promote biodiversity?

VF: I founded FoodShot Global to identify global food system challenges and invest in groundbreaking solutions. With Sara Eckhouse, the Executive Director, and a world-class consortium of Founding Partners – including Rabobank, Generation Investment Management, MARS, the Innovation Institute for Food and Health at UC Davis, The Rockefeller Foundation, The Builders Initiative, Armonia and the Stone Barns Center for Food and Agriculture – we’ve built a capital continuum of non-dilutive, equity and debt funding to address global food system challenges.

In our inaugural year, we are focusing on healthy soil because it is the foundation of agriculture. Rich, biodiverse soils are essential to achieving the healthy, sustainable and equitable food system that will feed 10 billion people. In order to catalyze innovation to build a regenerative and sustainable soil system, FoodShot Global established the $525,000 GroundBreaker Prize for research, social enterprise and policy advocacy. We have also aggregated up to $10 million a year in equity investments and $20 million in debt financing. With our Founding Partners – and additional supporting partners ACRE Ventures, The Soil Health Institute, The Nature Conservancy, the Foundation for Food and Agriculture Research and Activant Capital – we leverage our collective thought leadership, networks, market access, pathways to commercialization and convening capacities to accelerate the development, deployment and impact of new techniques, technologies and breakthrough science that will enable soil to be the engine for a 21st century regenerative, biodiverse, nutrient-rich food system.

DG: What is the business case for products that promote a more biodiverse food system?

VF: The business case for healthy, biodiverse soil is simple: without it, eventually the economics of the planet will degenerate with the soil. We’ve set up an economic agricultural system in which we make massive withdrawals (nutrients, water, organic matter) with meager deposits. Nature is already starting to make its margin call, and the ripple effects of that on our agricultural system and for farmers has been profound – reduced yields, entire crop seasons wiped out, floods, drought and wildfires.

But beyond this macro frame for soil, there is a market case for building biodiversity into our food system. Food brands, whether CPG, food service or ingredient, will be seeking out unique and powerful flavors and new functionalities that differentiate them from their competitors and provide customers with unique food experiences. And just like investors diversity their portfolios to mitigate risk in the face of market volatility, we need to diversify our food system to reduce vulnerability to pests and disease that could lead to catastrophic crop failures.

DG: What investments need to be made to create a more biodiverse food system?

VF: Investments that prioritize biodiversity need to be made throughout the entire food system. When it comes to soil, these could include capital investments into soil analysis systems that measure soil fertility, nutrient content and compaction; soil inputs including bio-pesticides, inoculants and microbial seed coatings; intelligent farm management systems that offer predictive analytics; market innovations that increase the profitability of cover crops and crop rotations; and seed varieties that prioritize flavor and resiliency. At a systemic level, we need to invest in genetics that allow more diverse crops to compete in the marketplace, new ingredients that efficiently integrate biodiverse, nutrient-dense crops into food at a large scale, infrastructure to distribute fresher food that delivers to consumers the flavor and functional benefits of biodiverse crops, research that links the functionality of biodiverse crops and efficacy around human health, and support for the rural and indigenous communities that can grow biodiverse crops.

DG: How might we reinvent capital structures or create incentives to create more investment in biodiversity?

VF: There are existing capital structures that will continue to be effective at investing into brands, ingredients, agricultural products, services and land. A broad range of venture funds, including S2G Ventures, the one I co-founded, are doing incredible work in the sector. An increasing number of investors share common values around a more healthy, sustainable and equitable food system, and they see the opportunities to generate both financial returns and impact.

But shifting the food system and bending it back towards biodiversity will be difficult. Doing so at the needed speed and scale will require innovative models, including permanent capital, evergreen funds, land funds and real estate investment trusts that can provide time and resources for transition. This will allow the creation of virtual vertically integrated supply chains that are not owned by the brand/manufacturer but are so tightly bound by the specifications, agreements and incentives that they function as vertically integrated systems (with the potential for biodiverse and regenerative crops). We also need debt instruments that can be made accessible to farmers or structures that provide farmers with upside ownership for taking on the difficult work of transitioning to a biodiverse system.

DG: What are some of the most important things investors, food manufacturers, retailers and other key actors across the supply chain can do to support biodiversity?

VF: Identify, adopt and promote .

DG: What, if any, exciting products, technologies or services are you seeing that support a more biodiverse food system?

VF: One example is Dan Barber’s work at Row 7 Seed Company, an innovative, system-level start-up that is naturally breeding seeds for flavor and functionality rather than for yield and other efficiencies. Row 7 is using creative partnerships, such as the collaboration to incorporate the Koginut squash into SweetGreen salads, to market these crops. Another company I’m a co-founder of, Alpha Food Labs, is building biodiversity into the product development processes by leveraging the insights and early-adopter power of the Alpha community to create food products that use functional ingredients from various geographies and cultures.

There are also CPG companies with “hero” ingredients that are bringing biodiversity to grocery stores. Lavva, a best-of-class non-dairy yogurt, which I am the executive chair of, is a great example of the benefits of a biodiverse mindset. Lavva’s hero ingredient is the Pili nut, a tree nut with amazing emulsification properties and high mineral content from the volcanic soils in which it grows. Kuli Kuli is another company that is using a hero ingredient by building a product line based on the mainstreaming of Moringa.

Finally, Patagonia Provisions and the Land Institute have developed an interesting project to build a market for Kernza, a perennial long root grain. On the soil biodiversity systems perspective, there is a tremendous amount of innovative work being done to create biological soil inputs, inoculants, and microbial seed coatings, as well as new models and techniques for larger-scale farms that are implementing rotational farming.

DG: What is your vision for what a more biodiverse food system looks like in 10-15 years?

VF: The vision for the next 10-15 years is dependent on three macro frameworks:

1. First, that renewable energy becomes both politically and economically massive so that crops are no longer used for biofuels.

2. Second, that meat consumption continues to reduce in the Western world (partly through scaling of meat alternatives), that developing countries do not drastically increase meat consumption, and that large-scale regenerative meat farming becomes viable.  These conditions must be met so that the massive, industrialized mono-cropped acreage currently dedicated to biofuels and animal feed can be reclaimed for agriculture that embraces biodiversity and meets consumer demand for biodiverse products.

3. Third, that agriculture is able to adapt to climate change and associated GHG levels. A recent Harvard report found that levels of carbon dioxide from human activity are making staple crops such as rice and wheat less nutritious and could result in 175 million people becoming zinc deficient and 122 million people becoming protein deficient by 2050.

The demand for biodiversity in food will come from both the ability of science to discover new ingredients and from the ability of innovative brands and chefs to promote the health and wellness benefits of the widest range of crops and flavors. In the world, scientists have identified about 1.75 million different species, including 950,000 species of insects, 270,000 species of plants, 19,000 species of fish, 9,000 species of birds, and 4,000 species of mammals. This is only a small portion of the total number of species on Earth. There are millions more species yet to be discovered and named. About 25 percent of the medicines used today are taken from or modeled on chemicals found in plants, animals, or other living things. We are just beginning to realize the human benefits of biodiversity.

We need to de-commodify commodities. We have built a food system that is designed to extract and discard identity, diversity and value from our crops.  In the future, corn, soybean and wheat will be a smaller percentage of overall acreage in the world. Instead the future is our ability to be able to efficiently. And the enabling driver assumption is that soil biodiversity, through a broad range of solutions, whether low tech farm management best practices or high tech regenerative soil interventions have regenerated soil ecosystem diversity and organic matter.

Read all of our biodiversity interviews here and learn more about Biodiversity at The Future Market.

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Victor E. Friedberg,  Co-Founder, Seed 2 Growth Ventures (S2G); Founder and Chairman of FoodShot — MoonShots for Better Food ; Executive Chairman of Lavva ; Co-Founder of Alpha Food Labs

Victor has been at the forefront of innovation, global development and sustainability for over 20 years. As Co-Founder of S2G Ventures he has been a principal force in developing the S2G mission, culture, strategy and team.  Through his work, he has pioneered system investing as a strategy for investing into food and agriculture and applied this approach in building the S2G portfolio.  As Managing Director, Victor lead the S2G investments into Beyond Meat, sweetgreen, Ripple, Maple Hill Creamery, Apeel Science, Ataraxis. FishPeople and Lavva.

He is Founder and Chairman of FoodShot Global — Moonshots For Better Food an innovative investment platform to accelerate global food system transformation with partners Rabobank, Armonia, Generation Investment Management, MARS, The Rockefeller Foundation, The Builders Initiative, FFAR, The Innovation Institute for Food and Health at UC Davis and The Stone Barns Center For Food and Agriculture.

As Executive Chairman at Lavva, Victor guides forward-looking business strategy to establish pathways to brand aligned sourcing, manufacturing and new product development. He works collaboratively with the management team at Lavva to provide support for key opportunities and needs for the day-to-day execution of the business as needed.

He was named by Forbes Magazine one of the Top 25 deal makers and influencers in Consumer Products in 2016.

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From January 7 – February 16, Food+Tech Connect and The Future Market are hosting Biodiversity: The Intersection of Taste & Sustainability, an editorial series featuring interviews with over 45 leading food industry CEOs, executives, farmers, investors and researchers on the role of biodiversity in the food industry. Read all of the interviews here. 

Smart capital that is willing to invest in and support farmers is a critical piece of building a biodiverse food system. rePlant Capital, a new financial services firm dedicated to reversing climate change, is doing just that. The firm is “replanting” integrated capital into companies operating from soil to shelf. Below, I speak with vice president Robyn O’Brien about how the impact investment firm supports American farmers and companies tackling some of the greatest challenges created by climate change.

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Danielle Gould: How do you define and think about biodiversity?

Robyn O’Brien: Biodiversity is a system that restores more than it extracts, healing the soil, saving the planet.

DG: What are you doing or planning to do to promote biodiversity?

RO: I have recently joined an impact investment firm, rePlant Capital, that is investing integrated capital from soil to shelf. Our goal is to reverse climate change while supporting the American farmer by investing and replanting capital into privately held opportunities that are tackling some of the greatest challenges created by climate change.

DG: How do we get eaters to care about biodiversity?

RO: They already do. Every consumer that purchases organic is mindful that these products are made without the use of toxic pesticides. This is better for the soil, it helps it to maintain its vitality and serve as a more effective tool to capture carbon. We have created a food awakening in the last decade that is fundamentally changing the landscape of our food system. We can all make an impact with what we choose to put in our shopping carts.

DG: What does an ideal biodiverse food system look like? How might we measure biodiversity, and when will we know when we’ve arrived at a “good” level of biodiversity?

RO: Let’s start with the opposite: what does the worst system look like? We built that at the end of the 20th century when companies like Monsanto introduced genetically engineered corn and soy. Our farmers went from polyculture farming and planting many different crops, to planting just a few. We lost our diversity. So let’s flip that: by reinvigorating a food economy that is diverse and polycultural, supporting the regeneration of specialty crops and produce, not only are we healing the soil, but we can also heal ourselves.

DG: What are some of the most important things food manufacturers, chefs, retailers, farmers, and other key parts of the supply chain can do to support biodiversity?

RO: Listen to the consumer. We are all staring down a host of conditions and diseases in the health of our families and loved ones like never before. We are seeking out new foods, avoiding certain ingredients and learning to ask better questions. The 21st century consumer is a compass. Follow her lead.

DG:What investments need to be made to create a more biodiverse food system?

RO: Our farmers are suffering from several epidemics: suicides, bankruptcies and an opioid epidemic. We need to value and invest in our farmers for our food system to be sustainable. They need to have access to capital to restructure loans, refinance equipment and take advantage of new opportunities. At rePlant, we are investing soil to shelf and part of our work is to work directly with farmers to help them with their financial needs.

DG: How might we reinvent capital structures or create incentives to increase investment in biodiversity?

RO: Financial benefits should accrue to farmers and companies who are mindful of the future: B corp certification, organic certification and those demonstrating best practices. Loans should be more affordable to those building biodiversity.

DG: Are there certifications or other signals that can help the average consumer determine what kinds of foods are helping promote biodiversity?

RO: Yes, bring this knowledge into our school systems. Teach food economics and biodiversity to grade school children, high school kids and in colleges.

DG: What is your vision for what a more biodiverse food system looks like in 10-15 years?

RO: We have refinanced our farm economy, creating polycultural cropping systems and removing the middle man, so that farmers can have transparency into market trends and demands and access directly to buyers.

Read all of the interviews here and learn more about Biodiversity at The Future Market.

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Robyn O’Brien, Vice President of rePlant Capital

Robyn O’Brien is the Vice President of rePlant Capital, a new financial services firm, with funds focused on reversing climate change. The rePlant team is replanting integrated capital into privately held, deep impact opportunities from soil to shelf, while supporting American farmers.

Robyn was a founding team member of of AIM/Invesco’s first hedge fund of $100+ million and a team member on their $20 billion Constellation Fund. She was an advisor to Paul Hawken’s “Drawdown”(published in April 2017) and has advised startups, banks and multinationals, while working with global CEOs and management teams in the food industry. Robyn is also the founder of Do Good, a strategic advisory firm, and AllergyKids Foundation, which serves the 1 in 3 children with allergies, asthma, ADHD and autism. Random House published Robyn’s book, The Unhealthy Truth, in 2009, and her TEDx talk has been viewed by millions and translated into multiple languages. She received her BA from Washington and Lee University, her MBA from Rice University on a full scholarship and also received a Fulbright fellowship.  She is named after a farmer in New Zealand.

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