As Thanksgiving approaches with the pandemic still raging, we can be grateful that at least one of our basic support systems has operated better than expected: the food supply. When Covid-19 first hit the U.S., fears spread that the meat supply in particular would be severely disrupted. Because of the hard work of farmers and food suppliers, however, plenty of protein is available for everyone’s Thanksgiving dinner. The pandemic has nonetheless left its imprint on how and what we eat.
Fears of shortages have reflected a broad misunderstanding of the food supply chain. Agribusiness and nutrition form a global industry, built on billions of dollars’ worth of complex infrastructure. Yet the process by which food is produced and moved around the world has been little understood by most consumers. This year, as a result of Covid-19, Americans — many for the first time — will question where their turkey, mashed potatoes and pumpkin pie were produced and how they reached their table.
The pandemic has also accelerated a shift in the type of food that consumers demand. Months of lockdown and quarantine have brought greater focus on personal health and wellness. Restaurants closed, grocery orders exploded, and many households reentered the bygone era when families shared daily home-cooked meals around the dining room table. Sales of plant-based protein, nutritional supplements focused on gut health and immunity, and other better-for-you products skyrocketed.
Even after the pandemic ends, these consumers, led by the millennial generation, can be expected to continue to seek more foods with clean and authentic ingredients, from supply chains that align with their values. They are demanding food from local sources, traceable to the farms of origin, and produced in ways that sustain nature, support the farmer and treat animals humanely. Importantly, growing numbers of consumers are demonstrating that they are willing to pay a premium for these products.
Taking note of these trends, investors have homed in on environmental, social and governance challenges and opportunities across the food value chain. Covid-19 has led consumers and investors to push for faster progress on ESG, and companies with better-for-you and ESG-centric stories have seen their value rise.
This is not a wholly new phenomenon. From 2015 to 2019, $72 billion was invested in agri-food technology companies, plus a projected $10.5 billion in the first half of 2020, according to AgFunder — money aimed toward transforming the global food system. Agri-food technology investors are hoping that the pandemic spotlight on the food system, along with enhanced public market focus on ESG issues, will pave the way for even greater access to capital.
Going forward, this investment will help speed new food industry technologies to farms and consumers. Advanced biological science and CRISPR gene-editing tools enable us to design plants with maximum protein and oil content, better defenses against pests, and a greater ability to capture nutrients from the air, sun and soil. Sensors, robotics, precision irrigation systems, farm-centric software and data analytics tools — all increasingly powered by machine learning — are enabling food production and distribution systems that minimize waste and maximize farmers’ earnings. Clean, natural and more nutrient-dense foods are increasingly being produced in efficient and sustainable ways.
This progress is more important than ever in the face of climate change, a steady loss of arable land, and a global population that’s expected to grow by more than 2 billion people by 2050. According to a 2011 report from the United Nations Food and Agriculture Organization, nearly one-third of food (approximately 1.3 billion metric tons) goes to waste between farm and table each year — enough to feed as many as 2 billion people. The technological advances in food production and distribution accelerated by the pandemic can help us address these problems.
This year will be an unusual Thanksgiving, with dinners shared virtually by family members across the country. By Thanksgiving 2021, vaccines should be widely available, so families can once again come together. In the meantime, we should take a moment during our Zoom dinners to appreciate the crisis that didn’t happen in the food supply chain, and the opportunities ahead to make that chain even more robust.
Peter R. Orszag is a Bloomberg Opinion columnist. He is the chief executive officer of financial advisory at Lazard. He was director of the Office of Management and Budget from 2009 to 2010, and director of the Congressional Budget Office from 2007 to 2008.