The Future of Food is Nutritious, Affordable, and Environmentally Sustainable
AgFunder invests in AgTech and FoodTech companies that are helping to build a better food system
Rob Leclerc was thinking about changing careers in the thick of the 2008 financial crisis. He was about to graduate from Yale with a PhD in computational biology, but had recently decided he didn’t want to pursue a career in academia. He was intrigued by investor and finance writer Jim Rogers’ comments about how decades of underinvestment in the food and agriculture industries were coming to head with population growth, a growing middle class, climate change, and changing diets.
“Food and agriculture are two of the world’s largest, most important industries, and people weren’t paying attention to them,” Leclerc says. He decided he could build a career supporting these two industries that needed to change to suit changing needs globally. While networking, Leclerc met Michael Dean, a former environmental lawyer who was similarly interested in innovative food and agriculture businesses.
“We recognized that there was fundamentally a narrative problem, that people just didn’t care about food and agriculture in 2012,” Leclerc says. “We knew that there was so much potential to bring some of the most interesting technologies— robotics and automation and biotechnology— to these industries.”
Leclerc and Dean launched AgFunder in 2012— a venture capital firm that invests in technologies working to rapidly transform the food and agriculture industries. The first three series of funds were launched in 2017, 2018, and 2020, and the fourth fund of $100 million will launch later this year.
“We’re one of most active investors, we invest globally across the food and agriculture sectors,” Leclerc says. “We believe that the investments we’re making can really have a positive impact in the world, and we have an opportunity to really get behind entrepreneurs their whole lifecycle.”
AgFunder’s investments include everything from plant-based proteins to natural, effective alternatives to chemicals. “There are always stories about businesses being smarter with what nature has given us,” Leclerc says. “When we invest, it comes down to where the opportunities are to have both the biggest impact and the highest probability of being successful in that mission. We choose companies where the founders have a unique insight, because they have knowledge of an industry, and where something’s been made possible. Sometimes it’s just changing consumer trends to make something possible; some of these technologies were certainly possible 20 years ago, but the consumer demand wasn’t there. Some founders help create new markets by showing what’s possible.”
When Leclerc thinks about the future of food that he’s helping support through AgFunder, he envisions a food system with zero or a positive environmental impact that can provide people with nutritious, delicious meals for under $1/day. “We’re thinking about the kinds of changes that you need in the supply chain to get convenient, cost effective, healthy, food that tastes good and is ethically sourced.”
In 2020, there was more than $31 billion invested in FoodTech and AgTech companies— about eight times the amount that was happening when Leclerc and Dean funded the company. With ongoing changes and challenges in the food and agriculture industries, especially during the pandemic, it’s nearly impossible for investors, producers, and consumers ‘not to care about food.’
“There are so many opportunities for innovation across the food system and globally, I don’t sort of see a kind of a near term end to this,” Leclerc says. “I’m just really excited about how we can harness technology to solve some major global issues.”
AgFunder is based in Silicon Valley, but as a born-and-raised Albertan, Leclerc is passionate about supporting Canadian companies. Here are two amazing Canadian FoodTech and AgTech companies that AgFunder has invested in: Chinova [pronounced Kih-no-vah] Bioworks and Future Fields.
The seemingly humble mushroom has grown in popularity in the food industry as a source of protein, especially in plant-based diets. Now, thanks to the Fredericton, New Brunswick-based company Chinova Bioworks, they’re showing up in even more of the foods you eat as a way of reducing food waste.
Chinova’s co-founders Natasha Dhayagude and David Brown met at a Lunch & Learn event and quickly realized that they both wanted to use their science education to commercialize a technology that could help to solve a real-world problem. They discovered a natural, healthy extract in white button mushroom stems that can be used to enhance the freshness, quality, and shelf life of various food and beverage products by inhibiting microorganisms that cause spoilage like bacteria, yeast, and mould. The extract doesn’t affect the taste, texture, smell, or appearance of the product it’s added to; and it can be customized to target the specific spoilage issues that a brand’s products have. They knew that this could be a huge disruptor to the preservative industry by offering an alternative to artificial preservatives in products like dairy and meat.
“Consumers today are demanding transparency when it comes to ingredients and they’re looking for natural, healthy, sustainable ingredients,” Dhayagude says. “They’re looking for ingredients that serve some kind of purpose in their food or beverage products. In the food and beverage industry this is known as the Clean Label Movement, and brands are under a lot of pressure to start reformulating their ingredients. But preservation is a very traditional industry that hasn’t really been disrupted. Brands and consumers were really looking for a new innovation.”
Chinova is helping to build a better food system by reducing food waste for both producers and consumers. Since the company was founded in 2016, Chinova has worked with mushroom farmers in New Brunswick and Ontario to obtain mushroom stems that otherwise would go to waste. When brands use the extract in their products, they stay fresher longer which results in less spoilage, food waste, and costs for both the brand and the consumer. “We want to be a solution that adds value throughout a transparent food supply chain,” Dhayagude says.
“Ultimately, we are trying to bring better ingredients into our food system,” Leclerc says. “As we invest across the food and agriculture industries, there are just so many problems. When we met the team at Chinova, we just fell in love with their mission, the passion for what they’re doing, and ultimately the impact they could have on health and food waste.”
Chinova’s mushroom extract is now commonly used in dairy products, dairy alternatives, meats, dips, sauces, and spreads. If you’ve purchased a food preserved with Chinova’s product, you’ll see “mushroom extract” listed as an ingredient.
Chinova isn’t just building a better product, they’re also building a better workplace that prioritizes women in STEM. “From a personal point of view, I really strive to make sure my company is giving opportunities to women not just at the employee level, but in executive level roles,” Dhayadude says. “I’m a woman minority in an executive role, and 90% of our team is women in STEM. We’re very proud to do that as we continue to grow and scale our company.”
Over the past few decades, there has been increased consumer demand for food and beverages that address concerns with animal products, including environmental concerns. A relatively new industry in this space is cellular agriculture: the production of animal products like milk using cultured cells instead of raising an animal. However, due to an expensive production process, it remains an emerging industry.
“One of the longstanding challenges in the cellular agriculture space is that you need an enormous amount of cell culture media to produce even a kilogram of meat,” Leclerc says. “So producers need their cell cultures to be cost-effective, but also healthy— consumers don’t want unhealthy chemicals or hormones in their food. Every cellular agriculture company has this dependency on solving this fundamental problem. Future Fields has a way to solve this.”
The Edmonton, Alberta-based biotech company Future Fields was founded in 2018 by Dr. Matthew Anderson-Baron while he was working on a PhD in cell biology. When Anderson-Baron founded the company he quickly realized, like others in the industry, that producing animal products from cultured cells was prohibitively expensive because of growth factors— the nutrient broth that feeds the cells. The Future Fields team shifted their focus to developing cost-effective growth factors that they could sell to other companies in the space. Today, Future Fields is a B2B company providing cellular agriculture companies with cost-effective ways to develop their products.
Anderson-Baron says that, while they are currently focused on addressing the cost of the growth factors, there are other challenges associated with making the cellular agriculture industry work. “We want to expand and be a technology-enabling platform for this industry, regardless of the technology itself.”
Future Fields’ solution has global appeal, and they are shipping products around the world including to Israel, Australia, Europe, and South Africa. When cellular agriculture products do become available for consumers, Anderson-Baron suspects that, like any new product, consumer acceptance may be a challenge. “I can appreciate that there’s going to be some apprehension, but the way these products are produced will face all the same regulatory hurdles that any new food product would, and only when they are deemed safe will they be made available to the public,” Anderson-Baron says. “We’re using a lot of techniques that have already been done— beer brewing uses cell culture, yogurt production uses bacterial cultures.” Ultimately, cellular agriculture will offer consumers animal products that are better for the environment, better for animal wellbeing and, with modifications to fat and cholesterol levels, better for the consumer.
“This is going to be a massive industry, and there’s an opportunity for this to be a big market in Canada, and for Canada to be a leader in this space because there’s already an established agriculture industry here,” Anderson-Baron says. “Alberta especially is an agricultural hub, and I think there’s an opportunity to diversify and develop a cellular agriculture industry here.”
The Future of Food