Innovation Blog

Understanding Sustainable Food System Innovation and Its Importance for Mitigating Climate Change

The food value chain accounts for c. 25- 30% of total Green House Gas emissions, and according to the IPCC, observed climate change is already affecting food security through increasing temperatures, changing rain patterns, and a greater frequency of some extreme events.

Combining supply-side actions such as efficient production, transport, and processing with demand-side interventions such as modification of food choices, and reduction of food loss and waste, can reduce Green House Gas emissions, and help feed the planet’s projected 9 billion population in 2050.

What Is a Sustainable Food System?

Kristin Reynolds, critical food geographer and Lecturer at the Yale School of the Environment, defines a sustainable food system as a system “that is environmentally, economically, and socially sustainable. “Further, we can’t consider a food system – whether it is at a community or global scale – to be sustainable if it doesn’t ensure racial equity, economic justice, and human rights for everybody.”

To be a little more granular, the Food and Agriculture Organization of the United Nations, breaks down Sustainable Food Systems like this:

“A sustainable food system (SFS) is a food system that delivers food security and nutrition for all in such a way that the economic, social and environmental bases to generate food security and nutrition for future generations are not compromised.

This means that:

– It is profitable throughout (economic sustainability);

– It has broad-based benefits for society (social sustainability); and

– It has a positive or neutral impact on the natural environment (environmental sustainability).”

The complexity of food systems in general is difficult to overstate. There are vast entities involved from the technologies used to cultivate land and agriculture, to global supply chain transportation, to food packaging, waste removal, market emphasis and culture diet expectations, these are just to name a few of the big, broad strokes.

The complexity of food systems makes it so not one industry can achieve sustainability for the whole system on its own. Many experts call for a holistic and coordinated approach.

5 Major Challenges for Sustainable Food Systems Innovation

Implementing measures to drastically reduce food losses and waste and make substantial improvements in food production practices necessitates widespread, multi-sectoral, and multi-level efforts.

At high level, innovation in sustainable food systems face the following five major challenges:

Cost and Affordability

One of the primary economic challenges for sustainable food systems innovation is the cost of implementing and adopting sustainable practices. Sustainable farming methods, such as organic farming or regenerative agriculture, often require additional investments in infrastructure, technology, and training.

These upfront costs can be a barrier for farmers and food producers, especially small-scale operators with limited financial resources. Ensuring the economic feasibility of sustainable practices while keeping them affordable for all stakeholders is a significant challenge that needs to be addressed

Market Demand and Consumer Behavior

Shifting consumer preferences towards sustainably produced food is essential for the success of sustainable food systems. However, there may be challenges in creating sufficient market demand and changing consumer behavior.

Sustainable food products often face price premiums due to higher production costs, which can limit their accessibility to a broader consumer base. Educating consumers about the value of sustainable food and addressing perception gaps is necessary to drive demand and incentivize businesses to invest in sustainable practices.

Supply Chain Efficiency and Infrastructure

Building an efficient and resilient supply chain is critical for sustainable food systems innovation. Developing infrastructure for storage, transportation, and processing facilities that support sustainable practices can be costly and require significant investments.

Ensuring efficient logistics, cold chain management, and reducing food waste throughout the supply chain are essential economic challenges that need to be addressed.

Policy and Regulatory Frameworks

Establishing supportive policy and regulatory frameworks is crucial for driving sustainable food systems innovation. Governments play a vital role in incentivizing and facilitating sustainable practices through regulations, subsidies, tax incentives, and research funding.

However, developing comprehensive and coherent policies that balance economic incentives with environmental and social objectives can be a complex challenge, requiring collaboration between various stakeholders and sectors.

Access to Finance and Investment

Access to finance and investment capital is a significant economic challenge for sustainable food systems innovation. Entrepreneurs, farmers, and businesses seeking to adopt sustainable practices often require financial support to invest in new technologies, infrastructure upgrades, and capacity building.

Ensuring the availability of diverse funding mechanisms, such as grants, loans, and venture capital, specifically tailored to support sustainable food systems initiatives, is essential to overcome this challenge and promote innovation in the sector.

Sustainable Food Systems Startup Trends

The sustainable food systems innovation ecosystem has witnessed a surge in startup activity and corporate collaboration in recent years. With the growing recognition of the need for more environmentally friendly and socially responsible food production and consumption, startups have emerged as key drivers of innovation in this space.

In terms of harder metrics, a promising sign is that, despite the decline of Tech VC funding over the past few years, climate and sustainable solutions funding is increasing. Since 2018, climate solutions funding has generated about $260 billion (about $800 per person in the US) in funding and $50 billion (about $150 per person in the US) in 2022 alone. Also, in 2022, startups that targeted sectors that produce 85% of global greenhouse emissions garnered 52% of climate-solutions funding, up from 39% the year before.

Related read: Agricultural Innovation: 10 Trends to Watch

The technologies and methods, as already touched on, are broad and numerous in the sustainable food innovation space. However, below are a handful of powerful new focus areas that are helping to advance global solutions in food sustainability.

Plant-Based and Alternative Proteins

One prominent trend in the sustainable food systems industry is the rise of plant-based and alternative protein startups. These startups aim to address the environmental and ethical concerns associated with conventional animal agriculture by developing innovative protein sources.

Companies like Beyond Meat and Impossible Foods have gained significant traction by creating plant-based meat substitutes that closely mimic the taste and texture of traditional meat. This trend has attracted the attention of established food corporations, leading to strategic partnerships and investments to accelerate the development and distribution of plant-based products.

Food Waste Reduction and Upcycling

Startups addressing food waste reduction and upcycling have gained significant attention in recent years. These innovative companies tackle the global challenge of food waste by finding creative solutions to repurpose and transform surplus food and by-products into valuable products.

Examples include ReGrained, which upcycles spent grain from breweries into nutritious snacks, and Imperfect Foods, which sources and delivers “ugly” produce that would otherwise go to waste. Established corporations have recognized the potential of these startups and have engaged in partnerships to incorporate upcycled ingredients into their products or optimize their supply chain to reduce waste.

Precision Agriculture and Data Analytics

The adoption of precision agriculture techniques and data analytics is on the rise within the sustainable food systems industry. Startups are leveraging technologies such as sensors, drones, and machine learning algorithms to optimize crop production, reduce resource inputs, and enhance overall farm efficiency. One example of such a company is Agrosmart, a Brazilian company founded in 2014 that serves more than 100,000 producers and 48 million hectares in 9 countries in Latin America.

By collecting and analyzing data on soil health, weather patterns, and plant growth, these startups enable farmers to make data-driven decisions and improve their yields sustainably. Corporate collaborations involve the integration of precision agriculture technologies into existing farming operations and the development of digital platforms for farm management.

Vertical Farming and Indoor Agriculture

Another notable trend is the emergence of startups focused on vertical farming and indoor agriculture. These companies leverage technology and controlled environments to grow crops in vertically stacked layers or indoor facilities, reducing the need for large land areas and minimizing water usage.

Startups such as Plenty and Bowery Farming have pioneered this approach, producing fresh and locally grown produce year-round. Corporate collaboration in this sector involves partnerships with technology companies and investment from agricultural giants to scale up production and distribution capabilities.

Sustainable Packaging and Delivery Solutions

Startups focusing on sustainable packaging and delivery solutions are also making a significant impact in the industry. With the rise of e-commerce and food delivery services, there is a growing need for eco-friendly packaging materials and efficient last-mile delivery systems.

Startups like Loop and DeliverZero offer reusable packaging options, reducing single-use plastic waste. Additionally, companies like Zume and Starship Technologies are developing autonomous delivery robots and drones to optimize delivery routes and minimize carbon emissions. Collaboration between established corporations has been essential for experimentation at scale. Implement new sustainable packaging solutions across supply chains is a huge task and can’t be done a without thorough testing in large numbers.

The Role of Corporate Collaboration

The increasing collaboration between startups and established corporations in the sustainable food system industries is driven by mutual benefits. Startups bring agility, innovation, and disruptive ideas, while corporations offer resources, scale, and market reach. Partnerships can take various forms, including investment, joint product development, distribution agreements, and mentorship programs. Through collaboration, startups gain access to funding, distribution networks, and industry expertise, while corporations gain access to cutting-edge technology, market insights, and sustainability methods.

Additionally, corporate collaboration helps startups navigate complex regulatory landscapes, overcome scalability challenges, and validate their products or services in the market. By leveraging the established brands and market presence of corporations, startups can reach a broader customer base and gain credibility.

Scale and Reach

Established corporations have the advantage of scale and extensive distribution networks, allowing them to reach a broader customer base. Collaborating with these corporations provides startups with access to established supply chains, marketing channels, and production capabilities, enabling them to bring their sustainable food innovations to market more quickly and on a larger scale. This scalability is essential for creating meaningful impact and driving widespread adoption of sustainable food practices.

Resources and Expertise

Corporations bring valuable resources and expertise to collaborations, including financial capital, research and development capabilities, and market knowledge. Startups often face resource constraints and may lack the necessary expertise to navigate complex regulatory frameworks or effectively market their products.

By collaborating with corporations, startups can tap into these resources and leverage the existing infrastructure, knowledge, and networks of corporations to accelerate their innovation process. This collaboration allows startups to focus on their core strengths while accessing the resources needed to drive sustainable food system innovation.

Market Validation and Credibility

Collaborating with established corporations provides startups with market validation and credibility. Startups often face skepticism and uncertainty from consumers, retailers, and investors due to their relative novelty and unproven track records.

By partnering with trusted and recognized brands, startups can enhance their credibility and build trust with stakeholders. Corporations’ endorsement and support can help startups overcome barriers to market entry and gain acceptance among consumers, leading to increased adoption of sustainable food products and practices.

Risk Mitigation

Collaboration with corporations can help startups mitigate risks associated with scaling up sustainable food innovations. Startups often face challenges related to production capacity, supply chain management, and distribution logistics.

By leveraging the operational expertise of corporations, startups can overcome these challenges and reduce the risks associated with scaling up their operations. Additionally, corporations can provide financial stability and support during the early stages of a startup’s growth, enabling them to focus on innovation without being burdened by financial constraints.

Holistic System Change

Addressing the complex challenges of the food system requires a holistic and systemic approach. Corporations have a significant influence on the food system due to their market power, supply chain relationships, and policy influence.

By collaborating with startups, corporations can drive systemic change by incorporating sustainable food innovations into their operations, products, and policies. This collaboration can lead to the adoption of more sustainable agricultural practices, reduced environmental impact, improved animal welfare, and enhanced food safety standards. Together, corporations and startups can transform the entire food system by working collaboratively across the value chain.

How MassChallenge Drives Sustainable Food Systems Innovation

Global Sustainable Food Vertical

Early-stage startups can apply to the Global Sustainable Food track.  This accelerator track is operated by MassChallenge Switzerland, and run as part of the Swiss early-stage accelerator program.

Startups are accepted from any location in the world and will benefit from unrivaled access to the world’s leading food companies, access to 400+ experts, a tailored food specific curriculum, and the opportunity to compete for up to CHF 1M in non-dilutive cash prizes. 

Related read: Bloom and Barry Callebaut Lead the Biomass Revolution

“Turning waste streams from our production processes into valuable ingredients is a unique story that resonates loudly with our Forever Chocolate sustainability program, and especially with our target to be carbon positive by 2025.” – Massimo Selmo, Global Head of Sourcing at Barry Callebaut

Sustainable Food Solutions Challenge

In 2020 a group of leading global food manufacturers and producers partnered with MassChallenge for the Sustainable Food Solutions Challenge to find and collaborate with startups so that together, they could help feed the planet sustainably. Over 1,200 startups have applied to the challenge, 175 being connected to our partners. Of these, over half were involved in follow-up with our partners – check the success stories segment.

In 2023, the Challenge partners—Bühler Group, Givaudan, Nestlé, DSM, Louis Dreyfus Company, and Südzucker—are looking for startups or scaleups, with proven solutions or technologies in the areas of Sustainable Food & Feed Solutions, Sustainable Supply Chain & Manufacturing, Sustainable Packaging, and Agri Tech.

Related read: How the Startup PlantJammer Teamed with Südzucker to Produce Customer Engagement and Fight Food Waste

“Expanding to a B2B market was something we did have in our product roadmap,” said Michael Hasse, CEO and Founder of PlantJammer. “We knew that we had a product we believed in and one that could make a real impact in fighting food waste, but in order achieve that impact, we’d need to get the product in front many more millions of people than we could as a downloadable app.” – Michael Hasse, CEO and Founder of PlantJammer, MassChallenge 2021

The Better Plate Track – Alternative Protein (Israel Early Stage)

Housed in the Israel Early Stage accelerator, this industry-focused track is for startups with technologies that are used to provide sustainable alternative proteins, including plant-based meat-like foods, cultured meats, fermentation products and land-based aquaculture as a means of protein intake.

The Next Big Step

Supporting the broad investment in these new technologies and methods is the biggest next step. However, “broad investment” doesn’t just mean venture capital, it means embracing the necessity for a whole new wave of disruptive tech and creating innovation ecosystems to drive this embrace.

The challenges facing global sustainable food systems are complex and interconnected. But, innovative solutions are emerging to address these challenges and pave the way for a more sustainable future.

Startups are at the forefront of innovation, developing solutions that address various challenges, including plant-based proteins, vertical farming, and sustainable packaging, to name just a few.

Collaboration with established corporations provides startups with resources, expertise, and market access, while corporations benefit from the agility and disruptive ideas of startups. This collaboration is crucial for accelerating the transformation of the food system towards greater sustainability, and it holds the promise of a more resilient and environmentally friendly future for food production and consumption.

New to MassChallenge?

Visit the Join section of our site to learn more about the organization and how you may benefit by getting involved.

Upcoming events