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As R.F. Kennedy Jr. pushes forward at lightning speed on Make America Healthy Again (MAHA), corporations, investors, and policymakers are under mounting pressure to take meaningful action toward food systems transformation. But the real question is—will 2025 be the year capital flows into the sector at scale?
In a recent Upside & Impact: Investing for Change podcast episode, Elysabeth Alfano, the CEO of VegTech™ Invest, an advisory with an ETF focused on the intersection of food innovation and financial upside, explored the urgency of food system transformation with Ertharin Cousin, CEO of Food Systems for the Future and former Executive Director of the World Food Programme. The discussion highlighted the need for smart capital, policy alignment, and a patient investment approach.
Food System Transformation: A $650 Billion Opportunity
Food and agriculture remain significantly underfunded compared to other climate tech investments. The World Bank estimates that only 2.5%–4% of global climate finance is directed toward food systems, despite the sector accounting for 30% of global greenhouse gas emissions. The Food and Agricultural Organization of the United Nations, FAO, calls for $650 billion per year in food system investments over the next decade— a fraction of the $2 trillion currently flowing into renewable energy.
Investors looking for opportunities with financial upside potential impacting the environment and food resiliency may want to take note that food system innovation is on the brink of rapid expansion.
Why Smart Capital, Not Just More Capital, Is the Key
Unlike fintech or software, food system innovations—whether diversified proteins, AgTech, or regenerative agriculture—require patient capital and long-term commitments. While food system investment may have a longer innovation curve than say the tech world, this hasn’t stopped the Department of Defense from investing 35% of its R&D budget for the first round of Distributed Bioindustrial Manufacturing Program (DBIMP) on food innovation.
Unlike venture capital that can rush in, expecting fintech-speed returns, biotech and food production operate on different timelines. To paraphrase Cousin, "The investments need to wait for the time it takes for the science to play out.”
Instead of chasing short-term gains, longer-term, critical investments such as infrastructure buildout, supply chain development, and scalable production capacity can have meaningful returns. Alfano noted that at VegTech™ Invest, the firm focuses on public market investments in AI-impacted AgTech, biotech, fermentation technologies, sustainable ingredient production and diversified supply chain innovation for system resiliency and long-term growth opportunity.
Blended Capital & Policy: The Missing Piece
For food system transformation to accelerate, government intervention and blended capital strategies must match investor interest. The Inflation Reduction Act (IRA) funneled billions into clean energy, but food and agriculture received little attention.
While the Bezos Earth Fund has committed $1 billion to the food system transformation, including $60 million for diversified protein research divided among a European and an American institution, these isolated efforts need government backing similar to what the energy sector received for renewable infrastructure.
Cousin argues that blended finance—public, private, and philanthropic capital working together—is the only way to de-risk food system investments and encourage institutional capital flow. Tools like off-take agreements, price supports, and first-loss capital could mitigate perceived risks and drive large-scale deployment.
Cousin explains this further in a clip from the interview here: https://www.youtube.com/watch?v=onoQ3L22E5o&t=1s
Consumer Demand & Economic Resilience: The Final Hurdle
Of course, the key to rapid growth is consumer adoption of end products for the pull through of the supply chain technologies to take hold. Prices coming down is a function of scaling the novel technologies, and again this means patient capital and sizeable inflows. To scale food innovation and system transformation, food tech must bring costs in line with conventional products—something that requires sustained capital infusion into manufacturing, R&D, and distribution efficiencies.
"Consumers buy first on taste, second on price," Cousin noted. Alfano was even more succinct. “I think it is price, price, and price.”
2025: A Pivotal Year for Food System Investment
As MAHA rages forward with RFK putting pressure on companies to clean up their supply chains and innovate for a more resilient system to avoid COVID-era supply chain interruptions, food system investments are likely to scale up in 2025. Key drivers include:
- Corporate demand shifts (e.g., companies incorporating healthier ingredients and more efficient technologies to meet MAHA goals)
- Institutional investor interest in food as a climate, health, and resiliency solution
- Policy momentum driving public-private partnerships
- Emerging technologies that lower production costs
With MAHA in place and global food security becoming a growing issue of national security, 2025 could mark the beginning of a serious capital shift. Investors who recognize the patient, infrastructure-driven nature of food innovation stand to benefit from long-term secular growth.
Listen to the full audio podcast here. Watch the full video interview here.
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