In the first blog, we provided an overview of the activities involved in the necessary food transition. This second blog focuses on how investors can participate in this transition without buying a farm themselves or becoming a direct co-owner of a start-up.
Listed equities in the food transition: pay close attention to the impact label
Which companies in the MSCI World contribute to the food transition? If you apply strict criteria and require 100% alignment, there are hardly any companies in the MSCI World whose entire business model contributes to the food transition. The strongest contributions come from enabling companies in bio‑ingredients, fermentation, and precision technology. One example is Novonesis, which provides products and services to the regenerative agriculture, agritech, and agroforestry sectors. Other companies with a partial contribution include Deere & Company and Ecolab. Deere contributes to the food transition by enabling precision agriculture and efficient use of inputs, which increases food production per hectare and reduces waste.
Companies in the MSCI World are often large and diversified, with historical legacy activities. Their contribution is therefore quickly partial and mixed. For a diversified ETF or equity fund with larger companies that claims to focus on the food transition, it is advisable to critically assess the actual contribution in this light.
A good example is the VanEck Sustainable Future of Food UCITS ETF, which has a clear thematic focus and relatively more mid- and small-cap companies that are genuinely building solutions.
Smaller publicly listed companies with a clear positive contribution are easier to find in the category of listed equities, with examples such as Revyve, MyForest Foods, and Indigo Agriculture. Revyve produces yeast proteins as an alternative to animal proteins. MyForest Foods markets plant-based products made from fungal mycelium. Indigo Agriculture develops microbes that help seeds grow more efficiently.
Bonds in the food transition: limited in contribution, risk, and return
A few companies, such as Danone and Nestlé, have issued sustainability-linked bonds with KPIs aligned with the food transition. Danone, for example, has KPIs focused on regenerative agriculture, sustainable sourcing, and farmer income. However, the number of bonds aligned with the food transition is limited; most sustainability-linked bonds in the broader market focus on CO₂ intensity, energy consumption, and general ESG scores.
An alternative is to invest in use‑of‑proceeds bonds issued by multilateral and national development banks. These bonds finance projects related to sustainable agriculture, water, and food security. As an investor, you have limited influence, but you help enable projects that might otherwise not get off the ground.
Examples include IFAD Sustainability/Climate Bonds. These are AA+‑rated bonds issued by the International Fund for Agricultural Development (IFAD) on the capital markets, often as private placements. They are intended to finance projects that help combat poverty and hunger, particularly in rural areas, with clear social and environmental components such as climate adaptation and sustainable agriculture.
The World Bank (IBRD) issues sustainable bonds with an Aaa/AAA rating, with proceeds that can be used for agriculture, irrigation, and food‑resilience projects. The African Development Bank, the European Investment Bank, and FMO have also issued sustainable bonds that relate to the food transition.
The spread offered at issuance by World Bank bonds, for example, above the US Treasury curve is very low (<20 bps) due to the high credit quality and strong demand.
Private markets in the food transition: plenty of choice in risk levels
With listed equities, it is difficult to argue that the impactful activity would not occur without your capital. Investments in listed equities mostly take place on the secondary market, where no direct capital is provided to companies. The influence you have as an investor on corporate decisions is often limited and not easily demonstrated.
In private markets, however, capital is usually primary and timing matters. The money goes directly to the company to enable the impactful activity. In addition, as a capital provider you can generally exert targeted influence on a company’s strategy and operational execution.
What types of food‑transition‑oriented solutions do we encounter in private markets? The three main categories are: regenerative agriculture, private debt, and private equity/venture capital. An example in the Netherlands within regenerative agriculture is the Kempen SDG Farmland Fund, which invests globally in farmland with tangible results such as improved production (fewer pesticides, more efficient irrigation, etc.), CO₂ sequestration, and enhanced biodiversity.
According to an analysis by, for example, Boston Consulting Group, commercial investors in active regenerative agriculture can achieve annual returns of 15–25% over a 10‑year horizon. Historically, traditional farmland has delivered fairly stable returns of 7–12% with few negative years. The NCREIF Total Farmland Index, a broad benchmark for agricultural real estate in the US, showed a negative total return in 2024 (around −1%) — the first negative figure in more than 30 years. This was due to lower income and valuation declines caused by higher costs and market pressures.
Within private debt, a good example is the Climate‑Smart Agriculture & Food Systems fund managed by ResponsAbility. This open‑ended fund uses private debt to make agricultural and food supply chains more climate‑resilient. It does so by financing farmers and agrifood companies with the aim of mitigating climate change, reducing food loss, and strengthening food security.
According to the Private Asset Impact Fund Report 2024, the median return of food & agriculture private debt funds in 2023 was around 4.6%. The yield of these funds over the period 2019–2023 was around 7–8% per year. It is difficult to present returns over a longer period.
Within private equity/venture capital, there appears to be the most choice. These are often closed‑end funds that invest in young companies with new technologies. This can involve both land‑based and ocean‑based solutions. The Healthy Food Systems Impact Fund II by Pymwymic focuses on early‑stage agrifood scale‑ups offering breakthrough solutions in reducing food waste and promoting sustainable and regenerative agriculture. There are also funds such as Katapult Ocean, which focus on aquaculture. Companies in the fund work on activities such as seaweed cultivation, removing plastic from the ocean, and restoring damaged coral reefs.
Innovation‑ or growth‑oriented VC funds in alternative proteins or sustainable agriculture often have internal targets around 15% IRR, but actual returns can vary widely. In venture capital, 60–70% of companies fail economically, and 10–20% must generate the entire return — including in food and impact VC.
A recent example is the shutdown of Meatable, a Dutch food‑tech start‑up specializing in cultivated meat. The company was unable to attract sufficient capital to continue growing due to production costs that were higher than expected and regulatory barriers that prevented commercial sales.
What should you choose?
From an impact perspective, our view is to focus on smaller companies within listed equities. Larger companies often have mixed activities with varying levels of contribution.
Within private equity/venture capital, there is a wide range of options and experienced general partners (GPs) can be found. It is important to maintain sufficient diversification and ensure that no single investment (or cluster) becomes too large within a fund.
Debt instruments generally carry lower risk and can be an attractive first investment in this impact category. Private debt and bonds from multilateral and national development banks are interesting options. Private debt investments often include substantial structural protections to enable responsible contribution to the food transition, even in emerging markets.
A table can schematically summarize return, risk, and impact as follows.
