Shaping the future of sustainable nutrition
The food industry is undergoing a transformation. This is due on one hand to the changing values of consumers, and on the other hand to the need for sustainable food due to climate change. However, the road to greener agriculture is long and we've only just begun. For investors, this shift offers new opportunities.
Producing food sustainably is more important than ever
"The question of nutrition was never more important than today," explained Thomas Gottstein, CEO of Credit Suisse, at the start of the event. Population growth to ten billion people by 2050, the problem of hunger, skyrocketing healthcare costs, and climate change require us to "rethink what we eat, how much we eat, and how we produce food."
The question of nutrition was never more important than today.
Thomas Gottstein, CEO of Credit Suisse
But how do we establish a sustainable food system? What measures are necessary for this? What solutions are truly effective and also realistic? And what opportunities does the oncoming food revolution create for companies and investors?
These questions were discussed by our high-profile panel participants Mark Schneider (CEO of Nestlé), Doris Leuthard (former Federal Councilor, Vice President of Coop and Bell), and Michael Strobaek (Global CIO of Credit Suisse). They offered valuable insights and a lot of food for thought on the future of nutrition.
Shift to regenerative agriculture
The most effective measure to improve the CO2 balance sheet of the food industry is to advance climate-friendly agriculture, stresses Mark Schneider. At Nestlé, the sourcing of ingredients is responsible for about two-thirds of the company's greenhouse gas emissions. Over the next four years, the company is investing CHF 1.2 billion in the transition toward regenerative agriculture, which includes the promotion of biodiversity, soil conservation, and the restoration of water cycles. However, this shift doesn't work by decree, but only in cooperation with farmers, as Schneider underscores: "In the spirit of a just transition, it is important to offer technical and financial support to farmers around the world in switching to regenerative agriculture.”
Digitalization of agriculture
Doris Leuthard pointed out that organic food is more expensive and, particularly for people in developing countries, hardly affordable. This is compounded by global population growth: "Going forward, we must increase productivity without damaging the environment; to this end, agriculture urgently requires innovations."
The speakers agreed: Research and development are more important than ever, in order to make agriculture simultaneously more efficient and more sustainable. In this context, plant protection and modern cultivation are not the only things playing an important role; the economic potential of digital agricultural products and services is enormous. With the help of artificial intelligence, drones, autonomous devices, and intelligent irrigation systems, productivity can be massively increased.
Reducing waste in the food industry
Michael Strobaek pointed out the potentially devastating impact of food waste. "According to our latest study, over 30% of the world's food is simply wasted.” If food loss and waste were a country, it would be the third largest greenhouse gas emitter in the world according to the same Credit Suisse study.
Food waste occurs during production and transportation, but also largely due to consumer attitudes and behaviour. How can we counter this? “Raising awareness for and framing the issue of food waste alongside a sustainable food system is important.” explained Strobaek. Another way to address unnecessary food waste is through an adaptation of cosmetic standards for fruit and vegetables. Estimates suggest that a third of farm production is lost due to fruits and vegetables that do not meet the esthetic standards in the EU.
Switch to a plant based diet
Also unavoidable for a more sustainable global food system, according to Michael Strobaek, is the switch to a more plant-based diet, given that it generates significantly fewer emissions. However, Doris Leuthard warned against the illusion of a purely vegan world. "We do not have nearly enough vegetables to fully switch to plant-based nutrition. And if we no longer eat any meat at all, we will have a protein problem and therefore a health problem."
Nonetheless, the speakers agreed that meat and milk alternatives would experience a significant boom by 2050 and would also be produced by major food manufacturers in the future. "We see strong growth potential for plant based and alternative foods and cultivated meat products. This makes the sector very interesting for capital providers and investors," says Michael Strobaek.
Generally speaking, there is great interest in long-term investment opportunities resulting from the global need for health and wellbeing. Therefore, this year the bank launched the "Credit Suisse JPMorgan Sustainable Nutrition Fund" as well as a private equity impact fund with a focus on health and wellbeing together with Blackrock.
New health awareness and personalized nutrition
All panel participants agreed: The speed and radicality of the transition to more sustainable nutrition will be decided not by government regulations or providers, but primarily by consumers. In this context, Mark Schneider was optimistic that today's youth is creating new momentum: "Never has a generation been better informed on nutrition than millennials. Never has a generation spent so much money on healthy, sustainable food."
Michael Strobaek stated his conviction that technological progress will increase health awareness even more in the future, "I am convinced that the age of personalized nutrition has a bright future. Perhaps soon digital devices will be able to calibrate our diets to our needs and wellbeing."
Finally, Doris Leuthard made an appeal to people to not just consider the topic of nutrition as a burden, despite all the problems, but to remember to enjoy food: "Food and drink are an important part of our culture – something beautiful that brings people together."
I am convinced: Personalized nutrition has a bright future.
Michael Strobaek, Global CIO of Credit Suisse
Credit Suisse JPMorgan Sustainable Nutrition Fund: This fund is domiciled in Luxembourg. The representative in Switzerland is Credit Suisse Funds AG, Zurich. The paying agent in Switzerland is Credit Suisse (Switzerland) Ltd, Zurich. The full offering documentation including, the prospectus or offering memorandum, the key investor information document (KIID), the basic information document (Basisinformationsblatt) for Swiss products, the fund rules, as well as the annual and bi-annual reports ("Full offering documentation"), if any, may be obtained free of charge from Credit Suisse Funds AG, Zurich.
Private equity is the private investment of assets in companies that are not publicly traded (i.e. they are not traded on a stock exchange). Private equity investments are generally illiquid and are considered long-term investments. Private equity investments, including the investment opportunity described herein, may involve the following additional risks: (i) loss of all or most of the investment; (ii) incentive for investment managers to make investments that are riskier or more speculative due to performance-based compensation; (iii) lack of liquidity, as there may be no secondary market; (iv) volatility of returns; (v) restrictions on transfer; (vi) possible lack of diversification; (vii) higher fees and costs; (viii) very limited or no requirement to provide periodic pricing or valuation information to investors; and (ix) complex tax structures and delays in providing important tax information to investors.