Growing appetite for plant solutions

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Population growth, dwindling arable land resources and the need to tackle climate change all point to an increasing need for more efficient food production. Here Newton responsible investment analyst Rebecca White considers where our future food needs might be heading.

With the world’s population set to pass eight billion people this year – after increasing by a third in just two decades1 – and with available agricultural land and soil fertility declining at a worrying rate, how can humankind continue to satisfy its growing demand for food?

With organisations such as the global Food and Agriculture Organisation (FAO) forecasting food demand could rise exponentially by 20502 , both public bodies and private companies are exploring new ways to maximise food yields while maintaining precious natural resources, according to Newton.

Rebecca White, a responsible analyst at Newton, says some major advances in agricultural practises have already been made – with indoor and vertical farming, precision agriculture and regenerative farming just some of the areas potentially ripe for investment.

However, she adds even this may not be enough to preserve land and feed our growing global population and a wider shift in our diet might be required to help support wider sustainability efforts.

There is a growing need for efficient food production. By 2050 we estimate there could be up to two billion more people – a 26% increase on our current population – and yet at the same time we are seeing a decline in the amount of arable land we need to produce food,” she says.

Effectively the solution is to use technology where we can to increase efficiency. That said, we also need to make changes to what we eat, as well as how we produce it, to bridge that gap and make sure we are producing sufficient food for our growing population.”

Beyond meat?

While acknowledging the recent growth in demand for plant-based foods, meat and dairy alternatives, White points out demand for meat continues to grow.

China is just one example of a country which has dramatically increased its meat consumption as incomes have increased. In the 30 years to 2027, per capita meat consumption will have almost doubled,” she adds.

Despite this rise, White says animal agriculture is still largely inefficient and natural resource intensive and is increasingly being pinpointed as a source of environmental pollution and greenhouse gas emissions3 . Indeed, some research suggests that if everyone shifted to a plant-based diet humankind could reduce global land use for agriculture by 75% 4.

The nutrition we get from meat protein can come from other sources and there is a far broader range of protein we could be potentially thinking about in order to get the nutrients we need,” she adds.

All of this points to more future focus on plant-based sources of protein and White adds strong growth is forecast across these products, creating potential opportunities for investors.

While food security and environmentally sustainable food production are both critical, White adds that markets face a complex web of underlying challenges closely connected to these challenges.

Policymakers face an increasingly stark contrast between food problems in less developed markets, where malnutrition and hunger form an important part of public health crises, to wealthier developed nations where different health and nutrition problems arise. In more developed western countries, government efforts to educate the population on ways to improve their diets appear to have had minimal effect, White adds.

Health concerns

Indeed, markets such as the US and UK have seen soaring obesity levels in recent decades. The global prevalence of diabetes has also nearly doubled since 1980, rising from 4.7% to 8.5% in the adult population.5 This in turn is fuelling a rise in associated and potentially lethal conditions such as strokes and heart attacks.

“While we need protein in all our diets, we do need to think very carefully about where this comes from. A shift from animal agriculture-based proteins which can hold significant health implications to some of the more plant-based proteins and greater consumption of whole grain foods could be beneficial for both our diets and the wider food and farming industry.

Unfortunately, emerging market food trends suggest rising wealth in Asian countries is leading to the adoption of a more westernised diet which isn’t really where we should be heading in terms of health. Ultimately and globally, we need to think more about the types of food we eat and how our diet looks and work to adjust our consumption, farming methods and production to enable us all to enjoy a healthier lifestyle,” she concludes.

1 Guardian. By 2050, a quarter of the world’s people will be African – this will shape our future. 20 January 2022.
2 Nature.com. A meta-analysis of projected global food demand and population at risk of hunger for the period 2010-2050. 21 July 2021.
3 Guardian. Meat accounts for nearly 60% of all greenhouse gases from food production, study funds. 13 September 2021.
4 Our world in data. If the world adopted a plant-based diet we would reduce global agricultural land use from 4 to 1 billion hectares. 04 March 2021.
5 United Nations. World Diabetes Day. 14 November 2021.

860179 Exp: 18 August 2022

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