Embracing innovation and tracking market trends closely are both crucial to success in investing – and this especially applies to the agriculture sector. It’s no secret that in recent years, food technology as an industry has completely transformed. What used to be a fairly stagnant field is now dominated by companies constantly emerging with new, creative changes to traditional systems.
The biggest new field – indoor farming. Indoor farming is a food growth system that takes place inside an enclosed space, e.g. a converted shipping container or even in a cave. Vertical farming, a common form of indoor farming, is when trays of produce are stacked on top of one another and grow using artificial farming techniques. The stacks of crops can hypothetically be as tall as a structure allows. With this kind of hyper-maximized use of space – comes the potential for exponential returns.
As the world population grows – perhaps by an expected two billion in the next three decades – indoor farming could be one solution to supporting the global food system. It also could be a great way to preserve natural ecosystems and relieve pressure on the environment. In recent years, farmers have already seen the necessity of protecting their crops from changing weather patterns. While outdoor farms continue to develop systems to adapt to climate change – scientists are working on indoor alternatives to increase global food supply to be able to meet future demand.
Farming techniques like hydroponics (growing plants without soil) or aeroponics (growing plants with very little light or soil) use considerably less space, soil, and about 70% less water on average. In spaces with lack of access to fertile land or steady rainfall like deserts, mountain towns, (or one day maybe even on Mars), practicing indoor farming can be a solution to provide access to food that has never been available before.
As the global population increases, so too does pressure on the environment. Indoor farming allows for new food production space in areas where it previously wasn’t possible, ultimately creating new and deeply necessary resources for people and farmers alike. With growing concerns around industrialization, indoor farming shines as a beacon of light in optimizing smaller spaces for larger grows and more bountiful, climate-resistant harvests.
In the last decade, the most lucrative category within the food economy has consistently been food technology like delivery apps, gene editing, and seed splicing. But, last year, meat and dairy alternatives outperformed every competitor in its sector. There seems to be a growing global distaste for genuine meat and dairy products –perhaps because of the growing distrust for animal farming strategies or widening environmental conscientiousness. Accessibility to alternatives is increasingly important to consumers, and the market has started answering that call. Innovative food and agriculture startups, like vertical farming and faux-meat and dairy, had a record year in 2019, raising over $20 billion in funding, twice what it raised in the year prior and more than any other category of food technology.
Companies like Beyond Meat – the plant-based, lab-developed meat alternative that boasts even “bleeds” when you cut into it – are leading the industry. Beyond Meat went public at a $1.5 billion valuation with shares up 84% on opening day, and today shows returns on investments at IPO of about 345%. Part of Beyond Meat’s success is its mass appeal: meat-eaters appreciate that the product mimics the texture of genuine beef, and vegetarians and vegans who avoid meat for ethical or religious reasons finally have an alternative that fulfills their cravings. The widespread consumerist appeal of Beyond Meat applies as well to other innovative animal product alternatives that can be grown in indoor agriculture settings. Ultimately, the consumer wants options when it comes to how their food is produced and how much it costs; investing into those consumer demands with FarmTogether allows you to fund the industry Americans are increasingly turning to for these options.
Reports show there is growing consumer interest in ESG companies— environmental, social, and governance. Investing in companies that have a positive impact as well as show returns is increasingly important. That is, companies with altruistic goals or missions to develop food systems that will withstand or actively combat climate change via technological developments. But beyond sustainability and the potential to feed the hungry, food technology is an incredibly lucrative opportunity for investors.
If you want to invest through a platform embracing beneficial changes to farming, and the overall global landscape, FarmTogether is the answer. The decisions our investment team make are driven by the positive financial, social, environmental and governmental (ESG) impacts on our stakeholders; we consider it our mission to channel funding for the upgrades and transitions that will enable farms to sustainably accommodate our growing population.
While FarmTogether does not directly offer investments in indoor farms, we're heavily invested in offering opportunities that support regenerative agriculture and work towards addressing climate change, improving soil health, and sustaining our farming communities for generations to come.
Learn more about FarmTogether's mission to support sustainable farming, or sign-up to start investing.
Disclaimer: FarmTogether does not intend to provide tax, legal or investment advice. This material has been prepared for informational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.