VilCap Offers 3 Pieces of Advice on Approaching Innovation for a Sustainable Food Future in New Report

The report is the culmination of research and analysis that Village Capital has completed through its cohort of training and developing entrepreneurs in foodtech and agtech. VilCap has been running an agtech accelerator since 2012, the first group to do so, and has supported 50 companies through it, making 14 investments. Through this process, the report identifies how three categories of innovation are primed to make a beneficial impact on our food system.

Precision Agriculture tools assist producers with preserving resources while promoting better stewardship of the land through a reduction in the amount of chemical inputs used to grow large-scale commodity harvests and wiser water use. Supply chain technologies present several opportunities to make our food system more efficient, particularly when it comes to mitigating food waste. As the global supply chain grows more and more complex, technology can play a key role in optimizing systems locally, nationally, and abroad.

Leading international food producer Nestle sources elements for its products from 80 countries, the report notes, underscoring the ripple effects that applying technology at such a large-scale could have further down the food chain. Functional Foods is as a category of products including probiotics and coconut oil that provide health benefits but can as well have a positive environmental impact.

The continuously climbing global per capita meat consumption puts added strain on our environment, going to the report, and increases the need for food products that offset the impact. Buyers are already keen on the new functional food categories, which is apparent by many major CPG players new product lines offering more sustainable and health-focused products.

In addition to identifying these innovation-ready sectors, Village Capital identified the three main areas that participants in this market should think about if they’re to reduce the barriers or challenges impeding innovation despite the readily available technologies that could alleviate food system pressure: Geographic focus, policy, and the obsession with disruption. 1. Backers Should Look to the Heartland Silicon Valley is the epicenter of the venture capital backing world, but hardly a hotspot for agricultural production.

The report suggests that agtech backers would do well to look beyond New York City, Boston. San Francisco to find startups that are innovating close to the root of growers’ worlds and the real-life problems that makers face on a daily basis. To that end, 88% of the startups that Village Capital interviewed were located outside these three venture capital epicenters. 2. Policymakers Should Consider Ag Innovation Regulation and policy need to be a bigger focus of agrifood tech VCs playbooks.

While most focus on innovation and ROI, it’s weighty to keep in mind that cutting-edge technologies don’t always fit into existing regulatory frameworks, which can severely hamstring a technology’s ability to commercialize. Promoting rural broadband and the widespread adoption of precision agriculture are two cornerstones of any successful agtech-focused policy platform, per to the report. “It’s key to consider how policymakers take agriculture into consideration as part of the conversation around a ‘new green transaction.’ Oftentimes, ag innovation doesn’t make it into the mainstream conversation about climate change. There are also other ways of encouraging the adoption of new technology like creating incentives,” Burns explains. 3.

Considering that agriculture is one of the most heavily regulated industries worldwide, leapfrogging into the future doesn’t always get new and useful technology into producers hands in a timely manner. “This report is about how about how innovating can augment what exists. We have a huge opportunity to augment what is happening and that’s how we will get to innovation at scale. There’s room for things like lab-grown meat and vertical holdings to disrupt global food, but what is the near term opportunity to innovate at scale?” explains Burns.