The food revolution - It's Your Business · July 2019 – The food revolution 5 Food is life. Producing it has reshaped our planet. Today, whole economies and even national security

July 2019Chief Investment Office GWMInvestment Research

The food revolutionThe future of food and the challenges we face

2 July 2019 – The food revolution

Content

8 Chapter 1 – On the cusp of revolution10 Food vs. nutritional security

11 Traditional models are unsustainable

12 Peopleaffectingchange

13 Inclusion,theessentialingredient

14 What will we eat in 20 years?

16 Chapter2–Themega-trendsreshapingfoodunderscarcity18 Trend 1: The political economy under scarcity

20 Trend2:Thenew-ageconsumer

22 Trend 3: Health and wellness

24 Trend4:Digitalcatch-up

25 Trend5:Sustainableliving

26 Waste is everyone’s business

30 Achangingclimate

31 Wateraccessourgreatestchallenge

32 Chapter 3 – Tech unseats tradition34 Farmingturnsurbanandvertical

35 Scientists move into the meat business

36 Organicsenterthemainstream

37 Microalgaecouldaltertheworld

38 Chapter4–Embracinginnovationatthefarm40 Robotsontheground….

41 ….anddronesintheair

42 Bigdataandconnectivity

43 Satellite-enabledsystems

44 Water-savingtechnologyisvital

3July 2019 – The food revolution

48 Chapter 5 – What’s new on the menu?50 Biotechnology:Gene-editedfoodisthenextgiantleap

51 Plant-basedproteinisdisruptingmeatmarkets

54 3Dfoodprintingis(almost)here

55 Personalizednutritiongoesdigital

56 Chapter6–Supply-chaininnovation58 ThreewaystheInternetofThings(IoT)isimpactingfoodsupplychains

59 Howblockchainwillrevolutionizefood

60 Bioplasticscrucialinthefightagainstpollution

61 Digitalchannelsreshapingfoodretail

62 Chapter7–Investinginfoodinnovation64 Agritechfinancingbreaksrecords

64 Two breeds of startups

65 Agritechinnumbers

66 How much could it all be worth?

67 CIOLongerTermInvestments

67 Investment implications

The food revolution This report has been prepared by UBSAGandUBSSwitzerlandAG.Please see the important disclaimer at the end of the document. Past performance is not an indication of futurereturns.Themarketprices providedareclosingpricesontherespectiveprincipalstockexchange.

Editor in ChiefWayneGordon

AuthorsWayneGordonSundeepGantoriJonGordonRudolf LeemannRobert Boer

Project managerSita Chavali

DesignCIOContentDesignRodrigoJiménezElena VendraminettoMargritOppligerCorinne Fedier

EditorsAaron KreuscherMurugesanSuppayyanThomasGundy

LanguageEnglish

[email protected]

Learn more at: www.ubs.com/cio

mailto:ubs-cio-wm%40ubs.com%20?subject=The%20food%20revolution

http://www.ubs.com/cio



The food revolution

5July 2019 – The food revolution

Foodislife.Producingithasreshapedourplanet.Today,wholeeconomiesandeven national security depend on it.

Yetthecurrentagriculturalsystemisunsustainable.Agriculturealreadyaccountsformostofourwaterandahighpercentageofourlanduse,aswellasthebulkofhuman-generatedgreenhousegases.Withresourcesdwindling,thechallengeofhowtofeedagrowing,urbanizingpopulationwithoutfurtherdamagingtheearthisonlyintensifying.

Alastingsolutionwillrequireasubstantialrethinkabouthowweasasocietyliveandgrowourfood.Thetransitiontoanewsystemwillnotbeeasy.Here,thegoodnews isthatanagriculturalrevolutionisathand,poweredbythetechnologiesoftheFourthIndustrialRevolution.Sweepinginnovations,includingtrendsinverticalfarming,aqua-culture,biotech,blockchain,androbotics,aretransformingthewayweproducefoodand will continue to do so for some time.

Buttheprincipaldisruptiveforceistheconsumer.Insomecultures,tastesaremovingawayfromanimaltoplant-basedproteins.Aswehighlight,thismoveisbeingfundedby some of the wealthiest individuals and corporations in the world.

It’sjustthebeginning,butwe’reexcitedaboutthechangeanddisruptionahead.Weenvisionrapidexpansioninareaslikealternativemeat,Farming4.0,onlinefooddelivery,andseedtreatmentandscience.Fortheagricultureindustryasawhole,weseethetechnologysegmentjumpingfromamarketsizeofUSD135bntodaytoaroundUSD700bnby2030,representinga15%compoundannualgrowthrate.

Thefutureoffoodhelpsinvestorscontributetopositivechangewhileseekinglong- termreturns.Instart-upsandthebusinessdivisionsofmajorfoodconglomeratesalike,appealingopportunitiesarearisingasfinanciersofboldnewideasaimtoremakethefoodsystemmodelfromaresource-intensiveoneintoafullysustainableone.Inthe followingpages,weanalyzethecurrentsystemandexaminethesweepingchangesthatlieahead.Inourview,thereisnobettertimetoinvestinfoodandagriculture than now.

Wealsohopethisreportpromptsreaderstoconsidertheincredibleglobaleffortin-volvedinbringingfoodtotheirdinnertableandhowallofthatisabouttochange. WehopeyouenjoyreadingThe food revolutionandwelcomeyourfeedback.

Regards,

Foreword

Min Lan TanMarkHaefele

MarkHaefeleChiefInvestmentOfficer GlobalWealthManagement

Min Lan TanHeadofAPACInvestmentOffice


Executivesummary

of land use40%of greenhousegas emissions30%of freshwaterconsumption70%

Food production globally accounts for

• We need to completely transform our global food pro-duction system tomeetconsumers’evolvingneedforhealthy nutritious food for all, and conserve our planet’s preciousresourcesforfuturegenerations.Foodproductionalreadyaccountsformostofourwaterandahighpercent-ageofourlanduse,aswellasthebulkofhuman-generatedgreenhousegases.

• However,wefacethechallengeofurban populations to feed,fuel,andclothewithincreasinglylimitedresourcesavailable – whether it’s land, soil, water, nutrients, or labor. Also,therapidlychangingclimate–duetoincreasinglyunbridledhumanactivity–isinfluencingthenaturallimita-tions of the planet.

• Thegoodnewsisthatweareonthecuspofanew agri-cultural revolutionthatwilllikelyreshapethewaywefarm,ship,andconsumefood.Changeisbeingdrivenby five megatrends:1)Thepoliticaleconomyunderscarcity;2)thenew-ageconsumer;3)healthandwellness;4)digitalcatch-up;and5)sustainableliving.

• Therearenumerousnewtechnologiesthatcanbeappliedtoraisingagriculturalproductivity,safeguardingenvironmen-talhealth,andsatisfyingevolvingconsumerpreferences.They include biological solutions with improved environ-mental safety and completely new approaches that improve yield and increase natural plant resistance to diseases and pests.Innovationslikevertical farming, lab-grown food, and algae aquaculture, and the components of the Fourth Industrial Revolution (bigdata,InternetofThings,artificialintelligence)arebeingintegratedthroughouttheagriculturesupply chain.

Source:GettyImages

Source: United Nations

July 2019 – The food revolution 7

• Untilrecently,agriculturelaggedallotherindustriesintermsof disruption. Digital penetrationinthefieldwasjust0.3%in2018comparedto2.5%forfinancialsandcloseto12%forretail.Butthisfigureissettospike–investmentinagriculture-relatedtechnologyhitUSD16.9bnlastyear,up43%from2017,accordingtoAgFunder.Giventhevast,untappedmarketandtherapidemergenceofpowerfultechnologies,weexpectfoodinnovationtobecomea USD 700bn market by 2030–afivefoldjumpfromtoday.Tobenefitfromrapidlygrowingsegmentsandthetopic’slong-termpotential,weadviseinvestorstodiversifyexpo-sureamongunlistedandlistedcompanies.

• For investors, notable opportunities can be found in select segments.Theplant-basedproteinsegment,forwhichweexpectaCAGRof28%by2030(fromUSD4.6bnin2018toUSD85bn),holdsvastpotential.Wealsoforecastvibrantgrowthratesforthesmartfarming(16%),onlinefooddeliv-ery(16%),seedtreatment(13%),andseedscience(9%) segmentsoverthistimeperiod.

• Ontheirown,majoragri-corporationscan’tsolvealltheissuesfacedbytheagricultureindustry.Itwilltakeacoali-tionthatincludesnon-traditionalinvestors,entrepreneurs,growers,andgovernmentstomeetthechallengesahead.While the future is promising, it’s not guaranteed.

• Tomoveforward,weneedtobustthelingeringmyththattechnologyistheenemyofnatural,abundant,affordablefood. Small farm owners need to adapt to the times by adoptingnewtechnologies.Thisneedextendsaroundtheworld, and open access to the latest innovations is vital. Toensuretheydo,theentireindustryhastocometogetherandagreeonwaystoachievesetobjectivesliketheUN’s Sustainable Development Goals.Byinvestingforbothprofitsandgood,wecanmakeatangible,positivediffer-ence in how the world farms and eats.

Source:GettyImages

We need to bust the lingeringmyththattechnologyistheenemy of natural, abundant and affordablefood.

Food for thought


On the cusp of revolutionThechallengeishowtofeedagrowingpopulationwithoutdestroyingourplanet.

TheUNpredictstheglobalpopulationwillswellfromlessthaneightbilliontodaytoaround10billioninthenextthreedecades.Overthenext10yearsorso,roughly1billionpeoplewillenterthemiddleclass.Growinghealthyfoodinasustainablewayforsuchavastnumberofpeoplerequiresrethinkingourcurrentap-proachtothefoodsupplychainandapplyingtechnologyintelli-gentlytoenhancewhatnaturealreadyoffers.

Todoso,wefirstneedtobustthelingeringmyththattechnologyistheenemyofnatural,abundant,nutritionalandaffordablefood.Afterall,technologyistheonlywaytosecurethenutritionneededwithoutdestroyingtheplanet.Thegoodnewsisthatweareonthecuspofaglobalfoodrevolution.Transformationalchange,inourview,isabouttooccuracrosseveryaspectofhowthesectorworksandwhatitproduces.

Unlikerevolutionsofthepast,thistimepeople–notcompaniesorgovernments–aredrivingit.Andinvestorsshouldpaycloseat-tention;thefoodindustryneedstofocusonintegratingthebreakthroughsofthe“FourthIndustrialRevolution,”notspendtimere-inventingthewheel.

Chapter 1

Source: Sarah Martin

Chapter 1 – On the cusp of revolution


WayneGordon,oneoftheauthorsofthisreport,shareshispersonalviewonhowfarminghasevolvedovertheyears.

Icomefromalineoffarmerswhotracetheirrootsbackmorethanacentury.MysiblingsandIwereraisedonourfarm,andmychildrenplayinthefieldsandonourtractorsduringsum-mer.Myparents,grandparents,andgreat-grandparentshavestruggledthroughbustandrejoicedinboomyears.Foroveracentury,ouroutlookhasalwaysbeenharvesttoharvest.Butwe’renowbeingforcedtolookmuchlongerterm.Climatechangeisshorteningplantingseasons,subjectingourcropstomountingpressurefromerraticraincycles,andtraditionalfarmingpracticesarelesseffective.

Theseirreversibletrendsofferusasimplechoice:adaptandthrive or carry on and wilt. We’ve chosen the former path. By integratingnewtechnologiesintoourproductionprocess,we’vebeenabletoboostyieldsandwithstandtheincreasingvariabilityoftheweather.Yetthisisjustthebeginning.Theworldisstartingtowakeuptotherealitythatourcurrentfoodsystemisunsustainableandthatactionisurgentlyneeded.

Gordonfamilyfarm,Australia,c.1920s

Gordonfamilyfarm,Australia,2018

Farmer with combined harvesteronfield.



Inrecentdecadestheworldwidepopulationexpansionandtherise of the middle class with its appetite for meat, dairy and high-caloriefoodshavecontinuallyraiseddemandforcrops.Nonetheless,thissustaineddemandgrowthhasn’tspurredanagriculturalsuper-cycleorstructurallyhigherpricesforstaples,as many predicted it would. In fact, in real terms, prices have fallen and many farmers still live at subsistence levels.

Inotherindustries,boomingdemandhasunlockedvastwealthforproducers.Whyhasn’tthisoccurredinagriculture?It’ssimple – the industry has trapped itself in a vicious cycle. To meetdemand,farmershavegreatlyboostedproductionofcropsbyadoptingprecisionagricultureandgeneticallymodi-fiedplants.Furthermore,countriesintheformerSovietUnion

Food vs. nutritional security

andSouthAmericawhichwerepreviouslylost-costsourcesofland and labor have now rapidly industrialized. The result has beenanunimaginablebountyofproduce,butonethathascomeattheexpenseofsmallholdingfarmers’incomesandtheenvironment.

Ofgreaterimportanceisthedistinctionbetweenfoodsecurityandnutritionalsecurityasthechallengeisnolongerjustaboutendinghunger.TheUNestimatesthattheobesenowoutnum-berthechronicallyunderfed,andone-thirdofallfoodgrownisbeingwasted.ALancetCommission(2019)reportestimatesthat,worldwide,unhealthydietsaccountforuptooneinfivepremature deaths every year.

Thechallengeisnolongerjustaboutendinghunger.

Source:GettyImages

Inflation-adjusted grain prices remain near historical lowsIn USD/ton

Source: Bloomberg, UBS

2004 20191974 1984 1994 1999 201420091979 1989

800

600

400

0

200

Corn Wheat

Food for thought



11%oftheworld’sremainingnaturalareas could be lost by 2050 due to the conversionoflandforagriculturaluse.

Thecurrentagriculturalbusinessmodelhastotakesomere-sponsibilityfortheuntenablestateofaffairstoday.Intheirquesttoproduceevermorefood,farmershavebeenincentiv-izedtodisregardenvironmentalcosts,leadingtoadepletionofbiodiversity,pollinators(e.g.bees)andsoilhealth,aswellthesocialcostsassociatedwithscarceresourceslikewaterandenergy.AccordingtotheUN,foodproductionaroundtheworldcurrentlyaccountsfor40%oflanduse,30%of greenhousegas(GHG)emissionsand70%offreshwater consumption.

Moreover,theUN’sFoodandAgricultureOrganization(FAO)believesone-quarteroftheworld’sfarmlandhasbeenratedas

Traditional models are unsustainable

Source:GettyImages

Food for thought

highlydegradedandanother44%ismoderatelyorslightlydegraded.AstudybytheEconomicsofEcosystemsandBiodi-versityestimatesthat11%ofearth’sremainingnaturalareascouldbelostby2050duetotheconversionoflandforagri-cultural use.

Expandingfoodproductionfurthercarrieswithitpotentiallydevastatingcosts.Simplyput,wearenearingtheworld’snat-urallimits.And,accordingtotheFAO,theagriculturallandareawillremainrelativelyunchangedinthecomingdecades.So yield improvements from the same amount of land will need to account for the majority of the productivity increase.

of land use40%

of greenhouse gas emissions30%of freshwaterconsumption70%

Food production globally currently accounts for...




Peopleaffectingchange

Awarenessisspreadingaboutthegraveimpactthecurrentag-ricultural production model has had on the planet and society. Peoplearenowdemandinganewwayofproducingfoodandareforcingtheindustry’shandthroughtheirspendingdeci-sions.Andfarmersarethefirsttoagreethattherulesofthegameneedtochange.Afterall,theyhavethemosttogainfromrevampingtheeconomicsofagricultureandthemosttolose if the current setup endures.

Untilnow,multinationalcorporationshaveexertedtremen-dousinfluenceonwhatpeopleeatandhowstaplefoodandfoodingredientsareprocuredandtransported.Theyhavecon-trolledtheinformationandthebusinessmodel.Butshiftingdemandpatternsaredisruptingtheindustryandforcingbig

food companies and traders to scramble to stay ahead of con-sumers.Companiesarenowfacingthesamechoiceasfarm-ers:adaptorriskbeingleftbehind.

FromthepopularityandstockmarketsuccessofBeyondMeat,theveggieburgermaker,throughthemeteoricriseindemandfororganicproducetothespreadofveganandgluten-freedi-ets, interest in where our food comes from has never been greater.Anotherexampleofconsumer-ledchangeistheshiftawayfromfoodswithaddedsugar.Sugartaxesarebecomingmorefrequent–theUKleviedataxondrinkscontaining8gramsofsugarormoreper100mlin2018,forinstance–anddemandforithasbeenfallingsteadilyinrecentyears.

Peoplearenowdemandinganewwayofproducingfoodandareforcingtheindustry’shandthroughtheirspendingdecisions.

Food for thought

Source:GettyImages



Investors,bigproducers,andprogressivefarmersaregettingonboardbyadopting“FourthRevolution”technologylikecomputervision,robotics,datascience,andmachinelearning,whichismakingthecriticalleapfromthelabstofields.Butwe’re a far cry from its use by ordinary farmers, which raises thequestion:Whatwillittakeforsmallholderstoembraceit? Strengtheninginnovationuptakeinemergingmarketsises-sentialbecausemuchofthegrowthinsupplyanddemandwillcomefromtheseregions.Successwillrequireexcellentdigitalexecutionasmanyofthesemarketsarecomingofageinthedigitalage.Moreover,companieswillneedtobringtheirnew-est,mostadvancedequipmentandthinking–notlast-genera-

Inclusion,theessentialingredient

tion,lower-qualityproducts–intodevelopingmarkets,whileinvestorsandconsumersalikecaninfluencesuccessorfailurevia their wallets.

It’sevidenttousthataccesstonutritiousfoodwillbeadefin-ingissueofthe21stcentury.TheUN,forone,istakingthischallengeseriously.ItsSustainableDevelopmentGoals(SDGs)put forward not only a vision for sustainable production and consumptionbutforendingpovertyandhungeraswell.

Access to nutritious food willbeadefiningissueof the 21st century.

Food for thought

Source:GettyImages



What will we eat in 20 years?

Therewerefewvegans20yearsago;therearemanymillionstoday,andtheirnumberisrisingworldwide.Mockmeatwasanalmostcomicalfad20yearsago;it’snolaughingmatterto-day,giventheindustry’smeteoricriseinrecentyears.Peoplewillalwaysneedsustenance,buttastesanddietsarechanging.By2030,it’slikelythatthesetrendswillcontinuetodevelopandnewoneswilldominatetheculinaryzeitgeist.

Indeed,thefoodweeatandthebeverageswedrinktodaymaynot be the same as those tomorrow. The World Economic Fo-rum(WEF)envisionsaperiodofrapidinnovationinourabilitytofusephysical,digitalandbiologicaltechnologies.Perhapsin2030we’llbuymeatbasedonlaboratoryoforigininsteadofcountry. The potential to disrupt the foundations of our every-day lives is real, and the food sector will not be immune to it.

The food industry needs to reshape itself to meet the new reali-ties.Asincreasedawarenessofclimatechangehasdrivenacritical mass of conscious consumers to rally for better, environ-

mentallyfriendlieralternativestofossilfuels,thesamethingneeds to happen in food production. All of us will have to em-bracechangeandavoidbuildingwallsaroundtraditionalseg-mentsandtechniquestopreservethestatusquo.

Howwillthenatureoffoodproductionchange?Whatnewtechniqueswillbeusedandwhatnewproductsgrown?Howwillsupplychainsadapt?Thesequestionsarethemainthemesweexploreinthisreport.Whatwedoknowisthatthetech-nologyneededtorevolutionizethefoodsystemalreadyexists.Thetroubleisthatit’sbeingdevelopedinsiloswithlimitedin-tegration.

Theprimarychallengeforanytechnologyistoappealtoendusers – in this case, producers, processors, and consumers. Onlywhendigitalsolutionsprovetobemorepractical,effi-cient,andaffordablethananythingelseonthemarketwillag-riculture enjoy its smartphone moment.

Source:gettyimages

Source:JohnnyFrog Source: Ailine Liefeld



Thesuccessofabuddingindustryisnottheonlythingatstakehere. So is the very health of the planet. The food industry needstothinknearandlongtermatonce,andadoptapracti-cal idealism. As noted broadcaster, writer, and naturalist Sir DavidAttenboroughhasaptlysaid:“Wehavetorecognizethateverybreathofairwetake,everymouthfuloffoodwetake,comesfromthenaturalworld.”

Webeginthereportbybrieflyrecappingtheenduringmega-trendsastheyrelatetofood.Wethenexploresomeoftheemerginginnovationsthatshouldbeoninvestors’radar.Wehighlightnewformsoffoodsuchasalgaeandprinted,cul-tured,andplant-basedproducts.Andweexaminethedifferentwaystheseproductswillbegrown,processed,anddistributed.

“Wehavetorecognizethateverybreathofairwetake,every mouthful of food we take,comesfromthenaturalworld.”DavidAttenborough–Notedbroadcaster,writer, and naturalist

Source: Ailine Liefeld


Chapter 2

Themega-trendsreshapingfoodunder scarcity Changeishappeningacrosstheboard,principallyled by consumers.

Source:GettyImages


Megatrendsareadistinctgroupofpowerfulsocial,demographic,environ-mentalandtechnologicalforcesofchangethatarereshapingourworld.Webelievethefollowingfivetrendswillshapethefoodindustryinthecomingdecades.

Trend 1: The political economy under scarcity

Trend 2: The new-age consumer

Trend 3: Health and wellness

Trend 4: Digital catch-up

Trend 5: Sustainable living

Chapter2–Themega-trendsreshapingfoodunderscarcity


Trend 1: The political economy under scarcity

Ourdemographicfutureiswellknown:about2billionextrapeoplewillliveontheplanetby2050,andglobaldemand forfoodisexpectedtoincreaseroughly60%intheperiod(UN,2019).Amongtheshiftsfromwesttoeastandnorthtosouththatwilloccur,fooddemandisone.Populationgrowthin Asia and Africa will outstrip that of the world as a whole. Africa alone will add another 1 billion people by 2050, while Asia will become vastly more urban (by 2030, Asia will have nearlyhalfoftheworld’surbanresidents). The UN forecasts 2.5 billion more city dwellers in it and in Africa by midcentury.

Ascountriesurbanize,foodproductionchanges,andthedeci-sions about how to allocate resources between urban and ru-ralareasbecomemorecomplexandpolitical.Waterscarcity,forexample,willbecomeakeyissueasnationalinterestsdi-verge.Competitionforlandwillalsoaffecttradeinfoodandvaluechains,andpoorinfrastructureindevelopingcountriesmeansdomesticfoodproductionwillstruggletomeetin-creased domestic demand, while middle class urban residents’ preferencescouldshifttowardsimportedfoodifitischeaperandofhigherquality.

Whilefoodsecurityhasoftenbeendefinedonthegroundsofself-sufficiency,thischaracterizationischangingtoincludere-silience,diversity,andaffordability.InAsia,asacaseinpoint,theriseindemandforfoodhasmadeitdifficultformostcountries,particularlyChina,toremainself-sufficient.What’smore,greaterresourcescarcityaugmentstheneedforavirtualexchangeofwaterandland–theopenandefficientglobalfoodsupplychains.Withrisingtradethreats,alliancesandre-gional-basedtradeagreementsaregaininginimportance;thisexchangebecomesmorecomplexasdoestherisksofamis-match between supply and demand.

Tariffwarsarepoisontothetrade-dependentfoodsector.Butas tensions have risen between the US and several countries/regions,includingChina,Canada,MexicoandtheEU,tit-for-tattariffshavebecomemoreprevalent,alteringlong-estab-lishedagriculturaltraderoutes.Forexample,ChinahasturnedtoBrazilforsoybeansandporkimportsandtoAustraliaforbeef and cotton, all previously sourced from the US. Predict-ably,thesedisruptionserodethebenefitsofglobaltradeintermsoffoodaccess,nutritionandefficiency.

While the outcomes of the current dispute remain uncertain, what’sclearisthatregionalgovernmentswillpaygreaterat-tentiontonationalfoodsecuritystrategiesandthesepolicieswilldefinefoodproductionandsupplychaintrendsinthenextdecadeorso.Thesizeandcompositionofstrategicfoodin-ventoriesareonevisiblewaythiswillmanifestitself;forin-stance,China’sstrategiccornreservesarereportedtocovermore than seven months of consumption. Also, local food pro-ductionlevelsandsubsidies,andlandacquisitionstrategiesareothers;forexample,transactiondatasuggeststhatChinaandSaudiArabiahavemademajoragriculturallandacquisitionsincountrieslikeAustraliainrecentyears.

Part of the US’s trade dispute with China is intellectual prop-ertytheft.Byextension,abreakdownofsystemstosharetech-nologyandalackoftrainedpeopletousetheinformationitgathersaremajorconstraintstofoodsecurity,particularlyindevelopingcountries.Theneedforinternationalcooperationtoshareinformation,innovationandtechnologyismorerele-vant in food production today than in any other industry.

54% of the world’s population now lives in cities% of the population living in urban areas


1990

2014

2050

NorthAmerica

LatinAmerica

Europe Oceania Asia Africa Worldwide

75%

81%

87%

71%

80%

86%

70%

73%

82%

71%

71%

74%

32%

48%

64%

31%

40%

56%

43%

54%

66%

No.1: No poverty.Aboutthree-quartersoftheextremepoorliveinruralareas,withmostdependentonagriculturefortheir livelihoods and food security. An inclusiveagriculturalsectorcancreatejobsandeliminatehungerinruralareas.

No. 16: Peace, Justice and strong insti-tutions. Foodsecurityandahealthyagri-cultural sector can play a critical role in preventingconflictanddistressmigration,andinbuildingpeace.



Major demographic shifts

Source: United Nations, June 2019


Source: United Nations, Worldometers, June 2019

extra people are expected2 billion

1.05 billion+60%

World population today

7.7 billion

increase in global food demand

more people are expected in Africa

By 2050

By 2050

TheUNpredictstheglobalpopulationwill swell from less than 8 billion today to around10billioninthenextthreedecades.Overthenext10yearsorso,roughly1billionpeoplewillenterthemiddle class.

Food for thought



Trend 2: Thenew-ageconsumer

Whatwillmidcenturyconsumerslooklike?Whatwilltheybuyandhowwilltheyconsumeit?Theanswerstothesequestionswillbeshapedbythreedemographicgroups–newAsianur-banites,grayingGenXersandmillennials.Overall,consumers,fromhere,willbeahyper-connectedgroupofindividualswhoinstantlyaccessthelatestsolutionsviavariousdigitalplat-forms. Overall, consumers want to feel closer to their food, whileurbanizationtakesthemfartheraway–technologyandinnovationwillbeincreasinglycalledupontobridgethisgap.

Ifallgoessmoothly,urbanization,incomegrowthandgreaterfoodavailabilitythroughtradeshouldseeabroadeningoutofdiets,particularlyinhigher-valuecategoriesoffood.Butthisisnotwithoutconsequences;forexample,asconsumersmovetowardmoreenergy-densediets,currentresourceswillbe-comeincreasinglystretched.Basically,peopleeatmorecerealsindirectlythroughmeat.

Weacknowledgeonesizedoesn’tfitallasthetrendtowardsincreasedproteinconsumptionmanifestsitselfdifferentlybasedonreligiousbelief,custom,and/orthepresenceofastrongvegetarianculture,asinIndia.But,asageneralrule,likeWesterncountries,Asiawillpivotfurthertowardthedou-ble burden of undernutrition and obesity in the future without adequatecircuitbreakers.

Per capita meat consumptionIn kg/year

GNI Per Capita (current USD at market exchange rates)

Source: FAO, World Bank and Nomura Global Economics

60,000 80,0000 20,000 40,000

160

140

120

80

0

40

100

20

60

India

ChinaJapan

UK

Hong Kong

US Australia

DenmarkBrazil

France

Source:GettyImages



Furthermore,thesedemographicshiftsalsodisrupthowfoodwillbeconsumedinthefuture;designingofproductstoap-pealtodifferentagegroupswillbehalfthebattlefortradi-tionalfoodcompanies.Whetheritisadigitalplatformaimedatprovidingmillennialsimmediateaccesstoproductsand services(likefooddeliveryapps)orsolutionsdesignedto complementthelifestylesofagingbabyboomers(likevitaminsupplementsandwellnessservices),eachnichewillneed carefulplanningandexecution.

Millennialconsumersareadoptingdigitalsolutionsthatpro-vide instant access to products and services they want without beingconfinedtophysicallynearbychoices,suchasapps likeGrubHub,DeliverooandUberEats.AccordingtorecentMcKinseyresearch,unliketheirpredecessors,consumersundertheageof35tendtodifferfundamentallyinwaysthatmakemassbrandsandtraditionalchannelsill-suitedtothem.Theytendtoprefernewbrands,especiallyinfoodproducts;the risingpopularityofBeyondMeatandImpossibleBurgeris oneexample.Infact,accordingtoKPMG(2019),millennialsarealmostfourtimeslikelierthanbabyboomerstoavoid buyingproductsfrommultinationalfoodcompanies.

Aspartofthisshift,thisgroupincreasinglyshowsapreferencetoward“mindfuleating”–thatis,choosingbrandsandfoodsthatcomefromsustainablesources–andaconsciousengage-ment with the food industry, and how food is produced and thewayitisconsumed.AccordingtoDeloitte,by2020millen-nialswillmakeup40%ofallconsumers,influencingaboutUSD 40bn in annual sales.

Agingdemographicpopulationsarealsoaconsiderationofthesupplyside(andnotjustindevelopednations).Urbaniza-tionandaginghaveseriousimplicationsforthecompositionoftherurallaborforce,patternsinagriculturalproduction, thesocialcohesionofruralcommunities,andpropertyrights.Ofthe570millionfarmsintheworld,only4%areinhigh- incomecountrieswhile49%areinlower-incomeones (FAO,2017).

Online food delivery demand driven by young consumers

Mean ordering frequency per week

Source: UBS Evidence Lab, as of 2018

Age

18–24

25–34

35–44

45–54

55+

1.02

1.22

0.81

0.46

0.23

AccordingtoDeloitte,by2020millennialswillmakeup40%ofallconsumers,influencingaboutUSD40bnin annual sales.

No.12: Responsible consumption and production. Wasteminimizationisaglobalchallenge.TheUNestimates1.3billiontonsoffoodislostorwastedannually,equatingtoroughlyone-thirdofglobalfoodproduction.

Food for thought

Source:GettyImages



Trend 3: Health and wellness

AccordingtoKPMG,thehealthandwellnessindustryisal-readyvaluedatalmostUSD769bn,orapproximately30%oftheglobalpackagedfoodmarket.Foryears,consumershavesaid that they wanted to eat healthier foods and live healthier lifestyles,buttheirbehaviordidnotchange-untilnow.TheWorldHealthOrganization(WHO)estimatesthatabout80%ofprematureheartdiseasecases,strokesandincidencesoftype-2diabetes,aswellas40%ofcancers,couldbeavoidedifmajorriskfactorsfornon-communicablediseases,suchasunhealthy diets, were eliminated.

Thecostsassociatedwithpoordietshighinfattyprocessedfoodsareenormous–theWorldObesityFederation(WOF)estimates this to be USD 850bn in direct healthcare costs alone.OneinfiveadultsandoneinsixchildreninOECDcoun-triesareobese.Ifactionisnottakensoon,themedicalbillfortreatingthehealthcomplicationsassociatedwithobesityisex-pectedtoclimbtoUSD1.2trnby2025(WOF,2018).Preven-tionisthefocusasconsumersredefinewhatahealthydietmeans:morenatural,green,organicproductsand/orfoodthatisfreeofsugar,gluten,pesticides,andotheradditives.More-over,thedemandforhighlypersonalizedhealthandthewear-ingoffitnesstrackersetc.isexperiencingrapidadoption.Infact,greaterdataintotheimpactsofone’seatinghabitsver-susnutritionrequirementsarereinforcingthetrendsinperson-alized nutrition.

Likewise,policy-makersareincreasinglyawareofthisstronglinkbetweendiet(alongwiththeenvironment)andhealth.Already,wehearofpolicy-makersreviewingdietaryguidelinesandtheinternationalmedicalcommunity,whichisbuildingacaseforreducingtheamountofredmeateaten,andpromot-ingtheincreaseofplant-basedproteininsociety’sdiet.Foodthatspecificallyaddressespersonalhealthconcerns–suchasfarethatcontainsanti-inflammatorypropertiesornutrient-denseingredientsthatsupportimmunefunctions,andthosethatimproveoverallguthealth–isalsoskyrocketinginpopu-larity.Agreaterdiversificationofdietisanotherdriverofbetterhealth,accordingtotheWHO.Thisisthemainargumentofproducerswhoarerevivingthecultivationofthesetraditionalbutoftenforgottenfoodcrops.Asanexample,TimelessSeedssellsonlyheirloomvarietiesofgrainsandlegumesthataregoodrotationcropsforreplenishingsoil.

TheWorldHealthOrganization(WHO)estimatesthatabout80%ofprema-tureheartdiseasecases,strokesandincidencesoftype-2diabetes,aswellas40%ofcancers,couldbeavoidedifmajorriskfactorsfornon-communica-ble diseases, such as unhealthy diets, were eliminated.

No.3: Good health and wellbeing.Goodhealthstartswithnutrition.ALancetCommission(2019)reportestimatesthatworldwide unhealthy diets account for up to oneinfiveprematuredeathseveryyear.

No.2: Zero Hunger. Food production will needtoincreasebyanestimated50%by2050 to meet the needs of almost 10 billion peopleontheplanet.Already,roughly820million people are chronically undernourished.

Food for thought

Source:AnitaAffentranger



Can better diets help the environment?Itdepends.Alteringdietstobemoreplant-basedor“flexitar-ian”anditsrelatedhealthbenefitsaredefinitelyabetterideo-logicalfitintermsofsustainability.Earlierthisyear,theEATLancet Commission released a report on the impact that diet can have on the environment. Based on an analysis of scien-tificevidence,itconcludedthatconsumersneedtotransitiontheirdietfromanimaltoplant-basedproteinstohelpmitigatetheincreaseingreenhousegases(GHG).Manyconsumersbuyorganicfoodscitingreasonsrelatedtohealthandthemethodasbetterfortheenvironmentandbiodiversityoverall.OrganicfoodsalesintheUStellthestory,havingdoubledinthelastdecade,accordingtotheNationalGeographic(2018).

However,aparadoxarises.Whileorganicfoodisseenasthesource of better health, a comprehensive review of 237 studies conductedbyStanfordUniversityfoundnohealthbenefitsoverconventionally-grownfoods.Stirinthevariouscompetinginterestgroupswhoofferconflictingclaimsaboutorganicandnon-organicfood,andit’snotsurprisingthatmanyconsumersareleftfeelingconfusedanddistrustful.

Findingwaystofarmmoresustainablytoprovidesafe,abun-dantandnutritiousfoodstoarapidlygrowingworldisachal-lengethatonlysciencecansolve.Weneedtoeducategroups,particularly millennials. Scientists need to reassure the public thattheyhavenothingtofearabouttoday’sagricultural technologies,andthatignoringthesenewproductscomeswithcoststotheirwellbeingandtotheenvironment.Asanexample,thenextgenerationofseedtechnology is focused on health and functional foods.

Australia’snationalscienceagency(CSIRO)hasdevelopedcanolathatproduceshigh-qualityvegetableoilrichinomega-3docosahexaenoicacid(DHA),fishbeingtheclosestalternative.Avoidingthistechnologypotentiallyreduces theintakeofOmega3andmaintainsourrelianceonfish asasourcewhenaccordingtotheFAO30%oftheworld’sfisheriesareoverfished.

Consumers need to transition their dietfromanimaltoplant-basedproteinstohelpmitigatetheincreaseingreenhousegases.

Food for thought

Source: Nordwood Themes, Unsplash



Trend 4: Digitalcatch-up

Webelievethefoodandagricultureindustryisonthecuspofdigitalrevolution.Asrecentlyas2018foodproductionrankeddeadlastintermsofadoptingdigitaltechnologies–forexam-ple,digitalpenetrationinagricultureis0.3%,versus2.5%forfinancialsandcloseto12%forretail.Buttodayit’sdrawingoutsizedinterestfrominvestorswhoseeaclearandpressingneedtobringfarmingintothefuture.Investmentinagricul-ture-relatedtechnologyreachedUSD16.9bnlastyear,up43%from2017.EvenluminarieslikeJeffBezosandBillGatesaregettinginonthegame,investingandpushingsustainabilitysolutions without compromise.

It’sbeenfrequentlyobservedthatimprovementsincomputingpowerhavelargelykeptpacewithMoore’sLaw,theobserva-tionthatsaysthenumberoftransistorsonachiproughlydou-blesyearlyascostshalve.Theplummetingcostofadvancedtechnologiesmeansthattheworldaroundusisbecomingmoreconnected.AccordingtotheWEF,therewerejust500milliondeviceslinkedtotheInternetin2005;todaythereare8 billion. By 2030, the estimate is for 1 trillion. In fact, no soonerhadtheso-calledThirdPlatformtechnologies(mobile,cloud,bigdata/analytics,andsocialtechnologies)becomepartof our landscape than the innovation accelerators, or Fourth Platform–i.e.,machinelearning,IoT,robotics,3Dprinting,next-generationsecurityandpersonalization¬–arrived.

Intherapidlyscalingdigitalmarketplace,theyhavebecomethekeygrowthdriversformanycompanies.TechhasbecomesoubiquitousinourlivesthatithasredefinedthemeaningofeverydayEnglish.“Cloud”nowreferstocomputingdeliveredthroughanetwork;“tablet”referstoasmartdeviceusedtobrowse;and“stream”referstoplayingvideosontheinternet.Nevertheless, the speed of innovation led the WEF to declare 2016 the start of the Fourth Industrial Revolution, one based ontheconceptofmergingofphysical,digital,andbiologicaltechnologies–orinfoodproduction,“Farming4.0.”What’smore,it’sbecomeclearthattheimpactofdiffusedinnovationandthewideapplicationofdigitaltechnologiesaremorefun-damental and transformational in nature than we could have envisaged.Thevalueofdatagrowsinrelevanceasitbecomeseasier to create and collect data.

What’sneedednowisaplatformthatunifiesthesedisparatetechnologiesintosomethingintuitiveandaffordableforaver-agefarmers.Theywillalsohavetosecurethetalentnecessarytounlockingtheinsightshiddenintheirdata.Knowledge-in-tensivefoodproductiontoolslikeenvironmentsensors,mobilecomputing,satellitesandimaging,drones,wirelesscommuni-cation,andevengeneticswillrequirethatdata-savvytalentbeattractedtothesector.Also,labor-savingtechniques,likero-botics,mightreduceemploymentfortraditionaljobs,makingitcrucialthattheindustryhasagameplanforcopingwiththesideeffectsofautomation.

No.9: Industry, innovation and infrastruc-ture. FAO promotes sustainable development inruralcommunitiesthroughinvestmentsintransportation,storage,irrigationandcom-municationtechnologies.

As recently as 2018 food production rankeddeadlastintermsofadoptingdigitaltechnologies–digitalpenetrationinagricultureis0.3%,versus2.5%forfinancialsandcloseto12%forretail.

Food for thought

Source:GettyImages



Trend 5: Sustainableliving

Severalconvergingtrendshavemovedfoodandagricultureupthesustainablelivingagenda.GovernmentsallovertheworldareincreasinglypayingmoreattentiontotheUnitedNations’17SustainableDevelopmentGoals(SDGs)andtheParisCli-mateChangeaccord.Thisclearlyindicatesanemergingawarenessthatsocietiesneedtotransitiontoalow-carboneconomy,whichwillrequireallindividualstobecomemore efficientintheirenergyandwateruse,aswellaswasteless.

Regenerativeagriculture,forexample,hasthepotentialtose-questercarbondioxidefromtheatmosphereandstoreit.Thisnot only halts the industry’s impact on the environment but alsoreversesit.Asalargerpopulationwithemergingwealthfuels the demand for consumer products, nature’s limits will becomeevermoreapparent.Overall,theglobalcommunityneedstofocusonworkingcollectivelytowardsacircularecon-omy with food at its center.

An inclusive food production system that doesn’t leave behind small landholders, women and youth, minimizes its environ-mentalfootprint,conservesnaturalre-sources,andstrength-enscommunitiesagainstsupply-sideshocksisanothergoal.Wehavenodoubttheimpactofachangingclimateandtheconstraintsofresourcescarcitywillsignificantlyinfluencepol-icy-makers’decisionsinthecomingyearsasinhabitantspres-sure city municipalities to clean the air, and food producers to reduceGHGemissions,rebuildbiodiversity,andreducewaste.Likewise,impactratherthanprofitwillbecomeacorevalueoffoodcompanies.Manyinnovativecompaniesareplottingnewtechnologiestoimprovetheefficiencyoffoodproduction.

AccordingtotheWEF,profitwithpurposeissettobecomethenorm.Unileverisagoodexampleofhowmajorconglomer-atesmightsoonbedevelopingapurpose-ledstrategyfortheircorebusiness.ItsoutgoingCEO,PaulPolman,hasbeenamongthefirstbusinessleaderstogiveanew,moreprofoundmeaningtotheword“sustainability.”Heregardsitnotjustastherightthingtodo,butanessentialcomponentofgrowth.

Weareseeingmanycompaniesalreadygoingbeyondcompli-ance.AccordingtoKPMG,nearly90%oftheworld’sbiggestcompaniesarereportingontheirsustainabilityperformanceusingmetricsestablishedbytheGlobalReportingInitiative(GRI),establishedinOctober2016.Althoughgovernments’engagementhasbeenuneven,theyareseekingpolicyinter-ventionstogreenthefoodindustryaswell.

Let’slookmorecloselynowatthegreatchallengesofwaste,achangingclimateandwateraccessinthecomingpages.

No.17 Partnerships for the goals. It will takeacoalitionthatincludestraditionalandnon-traditionalinvestors,entrepreneurs,growers,andgovernmentstomeetthechal-lengesahead.AccordingtotheBusinessandSustainableDevelopmentCoalition(2016),these opportunities could be worth USD 2.3 trillion annually by 2030.

No.15 Life on the land.Agricultureisthemostsignificantdriversofdeforestation(roughly80%)andbiodiversityloss.Accord-ingtotheFAO,25%ofallfarmlandisalreadydegraded,withdifferentaspectsoffoodpro-ductioncontributingtothisprocess.

No.14: Life below water. Fish accounts for 17%oftheworld’sintakeofanimalprotein.AccordingtotheFAO,over30%oftheworld’sfishstocksarecurrentlybeingover-fished.

No.13: Climate Action. Food production threatenstobethegreatestcasualtyofcli-matechange,butsustainableagriculturecanbe part of the solution. Food production accountsforaround30%ofhuman-gener-atedgreenhousegases.

No.11: Sustainable cities and communi-ties.By2030,two-thirdsoftheglobalpopu-lation will be urban dwellers, and by 2030 Asia will have nearly half of the world’s urban residents.Rapidurbangrowthisplacingenor-mous demands on food systems.

Source: C.J. Wadhwa



Waste is everyone’s business

Wasteminimizationisaglobalchallenge.TheUNestimates1.3billiontonsoffoodislostorwastedannually,equatingtoroughlyone-thirdofglobalfoodproduction.Suchextremewastecomesatasignificantfinancialandenvironmentalcost.Foodiswastedinalmosteverycategory:45%offruitandvegetables,30%ofcerealproducts,35%offishandseafood,20%ofdairyand20%ofmeat.TheWorldResourcesInstituteestimatesthisamountaccountsfor8%ofGHGemissions.Ifwastewereacountry,itwouldbethethird-largestGHGemit-ter. Food waste occurs at every step in the value chain – but it ismostpronouncedatthebeginning(production)andattheend(consumption).

Indevelopingcountries,theproblemislargelyafunctionofthe production and transportation of food from farms. In de-veloped countries, it is most prevalent in the consumption phase,amongbothretailersandconsumers.Forexample,China produces up to 18m tonnes of food waste every year – enoughtofeedupto15millionpeopleandworthanesti-matedUSD32bn(UBS,2019).

Infoodproduction,thistranslatesnotonlyintogreateruseofrenewableenergyonfarms,high-techanimalfeed,andpro-cessingfacilitiesbutalsoincludessoilhealthmanagement.Historically,innovationslikeprecisionagricultureweredevel-oped by businesses purely for commercial reasons. But this timewecanexpecttoseesignificantgrowthinthescaleandimpact of social enterprises on all aspects of daily life, fueled byentrepreneurswithadesiretonotjustmakemoneybuttoalsomakeadifferencebyinvestingforgood.

Five key drivers of food waste

Source: Boston Consulting Group (2018)

1Poor visibility over the extent of the problem, and a lack of consumer awareness.

2Storage, distribution and processing losses.

4Supply chain inefficiencies, including a lack of coordination, and waste in retail and among households.

5Regulation and industry policy isn’t designed for tackling current challenges in the food system.

3Insufficient supply and demand data.

45%Fruits and vegetables

30%Cereal products

20%Dairy products

35%Fish and seafood

20%Meat


Waste is everybody’s business% of food wasted across the value chain

45%offruitsandvegetablesare wasted in production and consumption

Source:NikolaiChernichenko,Unsplash


July 2019 – The food revolution 27Source: United Nations

of global food production is lost or wasted annuallyAnnual global food production

1/3 or 1.3 billion tons




Interview with Marc Zornes

Marc ZornesMarc Zornes is a former McKinsey En-gagementManagerwherehewasaleader in the consumer & sustainability practices.

He founded Winnow to help the hospi-talitysectorcutfoodwasteusingtech-nology.Winnowbuildstechtohelpchefsruntheirkitchensmoreefficientlyfocusingonhelpingthemunderstandand prevent food waste.

Sincelaunchfiveyearsago,Winnowhasbeen deployed in 40 countries and has saved its customers USD 33m by reduc-ingfoodwaste.ThecompanyclaimsthatkitchensusingWinnowtypicallyseefood waste cut in half within 12 months, andchefsusingWinnowarecollectivelysaving23mmealsayearfromthebin.

MarcisoneofUBS’sGlobalvisionaries.Visitwww.ubs.com/globalvisionariestoknowmore.

How much of a problem is food waste?Thereissignificantprogressinpushingenergytowardsalowercarbonfuture.Now,thefoodsystemiscomingintofocusasanareawheresocietyneedstomakesignifi-cantchange.Infact,onethirdofallhuman-causedgreenhousegasemissionscomefrom our food system. One major contributor of the environmental impact of the food system is food loss and food waste.

Foodlossandfoodwasteisamajoreconomicandenvironmentalissue.Globally,~30%ofallfoodiswastedfromfarmtofork.Fromaneconomicperspective,thiswasteisamaterialglobaleconomiccost.BCGrecentlycitedthatUSD1.2trillionayeariswastedandwillgrowtoUSD1.5trillionayearby2030.Toputthatintoper-spective,that’s1.5%ofglobalGDP.Fromanenvironmentalperspective,addressingfood waste is a one of the top issues as well. If food waste were a country, it would bethethirdlargestemitterofgreenhousegassesaftertheUSandChina.ProjectDrawdown,aglobalstudyofactionswecantaketoreduceclimatechange,high-lightedfoodwasteasoneofitstopthreeopportunities.

Inthedevelopedworld,foodwasteoccursmostlyatfarms,homes,andconsumer-facingbusinesses.IntheUS,ReFedestimatesthatthesethreeareascontributeto>90%ofallfoodwasted.Therearemanybusinessessettoaddressfoodwasteacross each of these points in the supply chain.

Where is progress most evident? Setbacks?Governmentsarebeginningtomakeamaterialeffortinreducingfoodwasteandfoodloss.TheUNputhalvingfoodwasteintotheSustainableDevelopmentGoalsfor2030.Asaresult,theEU,US,andmanyorganizationshaveputtargetstohalvetheir food waste by 2030 or even earlier.

InFrance,forinstance,itisillegalforsupermarketstothrowawayediblefood.IntheUS,ReFEDisbuildingactionplansacrosskeypointsinthefoodsupplychaintore-ducefoodwaste.TheUAE’sMinistryofClimateChangehassetanambitiontopre-vent3mmealsayearfrombeingwastedinthehospitalityindustryby2020.

Thesemovementsareexciting.Yet,theyareonlythebeginningofthechangeweneedtosee.It’sclearthatreducingfoodwasteisnotasimpleask.Thatsaid,withanopportunity>USD1trillionp.a.togoafter,thereisagrowingamountofcapitalpouringintofindandscalesolutionsthatareworking.

What emerging technologies look most impactful for reducing food waste?Therearemanyexcitingtechnologiesthatareouttheretoreducefoodwaste.Thenumberofcompaniesaimedatreducingfoodwastehasgrownfromahandfultothousandsgloballyinlessthanadecade.Mostcompaniesfallintothreemaincate-gories:Foodwasteprevention,redistribution,andvalorization.

Foodwastepreventionhasthebiggesteconomicbenefitsasitsavesthecostofthefoodbeingwasted.Mybusiness,Winnow,isfocusedonpreventingtheUSD100bnoffoodwasteinthehospitalityindustry.Winnowsavesclients2%to8%oftheirfoodspendwhereitapplied.Weworkwithmajorglobalfoodoperatorsincluding

For UBS marketing purposesThis interview contains views which originate from outside Chief Investment Office GlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovisionsgoverningtheindependence of financial research. It is therefore possible that the interview does not fully reflecttheviewsofCIOGWM.

http://www.ubs.com/globalvisionaries



IKEA,CompassGroup,AccorHotels,IHG,andCarnivalCruiseLines.ApeelSciencesisanotherexcitingexample.ApeelSciencesproducesplant-derivedprotectiononthesurfaceoffreshproducetoextenditsshelflife.

Redistribution-focusedbusinessesarebeginningtoscaleaswell.TooGoodtoGoandKarmaarecreatingsecondarymarketstosellfoodthatwouldotherwisebewasted.FoodCloudisdoingasimilarprogramfortheretailsector.Olioisanapp thatallowspeer-to-peerfoodsharingwithasimilaranglebutwithmoreemphasison the home.

Valorizationisthetechnologytocreatemorevalueoutoffoodthatwouldbewasted.Treasure8preservesfoodthatwouldbewastedtocreatewhole-foodinputsintotheconsumergoodsector.ToastAleisabeermadefrombreadthatwouldbewasted.

Theabovecompaniesarenotanexclusivelist.Remember,it’saUSD1.2trnproblemthatisgrowing.It’sclearthattherewillbeamassivesetofsolutionsoutthereneededtocapturetheopportunityofminimisingfoodwastearoundtheworld.

What has AI taught you about the problem, and solutions?AndrewNg,oneoftheglobalthoughtleadersonAI,describesdeeplearningandar-tificialintelligenceas“thenewelectricity”.AIisapowerfultooltoallowustodothingsthathavepreviouslynotbeenpossible.Weapplydeeplearninginthefieldofcomputervision.Ourlatesttechnology,WinnowVision,usesacameratoidentifythefoodthat’sbeingwasted,makingitseamlessincollectingfoodwastedata.Thisin-novationdramaticallyreducestheadoptioncostsoffoodwastemonitoringandpre-vention.Italsoincreasesthepotentialthistechnologycanhaveonimpactingtheproblem.

WehaveplanstogowellbeyondtheidentificationoffoodwasteviaAI.We’reex-ploringhowwecanapplyAItoanalyzeconsumptionpatternsinkitchensandim-proveoverallhowthekitchenoperates.Whilemanycompaniesarelookingatro-boticautomationinthekitchen,wefocusonhowAIcanimprovetheefficiencyofthekitchenstaff.Weaimtodrivemassiveperformanceimprovementsinanenviron-mentwhichhavehistoricallyappliedlittledigitalinnovation.

How can investors benefit from better food waste prevention and efficiency?Ifyouownoroperateanassetthathasafoodserviceoffer,thebenefitsoffoodwaste prevention will be direct to the bottom line. In addition, as you reduce waste, youalsoarebettermanagingproductionrelativetocustomerdemand.Thishasthebenefitofimprovingcustomersatisfaction.

Ifyouhaveanappetitetoinvestinemergingtechnologytosolvethisproblem,thenthereisabroadspectrumofopportunitiesoutthere.Therewillbemultiplebillion-dollarcompaniesbuiltfocusedonaddressingtheissueoffoodwaste.Theeconomiccaseisclear,mostopportunitieshaveapaybackoflessthan1year.Bothgovern-mentsandnon-governmentarecreatingadditionaltailwindstogrowthesemarkets.Thequestionwillbehowquicklylargecorporateswilladoptthetechnology.Then,whoofthethousandsoforganizationstryingtosolvetheproblemwillreachthescaletodrivemeaningfulchange?

For UBS marketing purposesThis interview contains views which originate from outside Chief Investment Office GlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovisionsgoverningtheindependence of financial research. It is therefore possible that the interview does not fully reflecttheviewsofCIOGWM.



Achangingclimate

Changingweatherconditionswillhaveamajorimpactandconstitutethechiefchallengethefoodsupplychainneedstoaddress.Theireffectonsoilandproducequalityandthesec-ond-ordereffectsonthenaturalsystemarelikelytobeconsid-erable.

Morecorporationsareplacingagreateremphasisonenviron-mentalconsiderationswhensettingtheirstrategiesrelatedtofoodproductionandthewidersupplychain.Thisheightenedimportanceisreflectedintherapidadoptionofreportingonenvironmental,social,andgovernance(ESG)matters,wheretargetsarebeingset,published,andmonitored.Attheinstitu-tionallevelgoodenvironmentalpracticeisforminganincreas-inglyintegralpartoffarmpolicy.Forexample,farmsubsidiesintheEUarebeingmadeconditionalmoreandmoreongoodagriculturalpractice.

Theimpactofglobalwarmingonfoodproductionisthesub-jectofmuchresearchanddebate.Assessingthetimingandimpactofglobalwarmingonagricultureisstillverymuchadevelopingfield.Currentconventionalwisdom(accordingtotheUN)isthatcropproductionwillmovetowardtheearth’spolesandthegreatestnegativeimpactsfromclimatechangewillbefeltbycountriesandpopulationsclosesttotheequator.TheBrazilianstateofMatoGrosso,oneofthemostimportantagriculturalregionsworldwide,mightfaceclimate-relatedchangesthatreducesoybeanandcornoutputby18%to

23%by2050,accordingtotheUN.TheMidwestUSandEast-ernAustralia–twoothergloballyimportantregions–mightalsoexperienceasubstantialdeclineinagriculturaloutputduetoextremeheat(note:theUSandBrazilarethebiggestpro-ducersofsoybeans,and80%ofthesesoybeansgoestofeed-inganimals).

Paradoxically,thereareyieldbenefits(intheshortrun)tohigherconcentrationsofCO2andpotentialproductivitygainsathigherlatitudes – mainly in China, Canada, and Russia, certain areas of whichareexpectedtoexperiencelongerandwarmergrowingseasons,althoughsoilstendtobepoorerthere.

Source:GettyImages



Water access our greatestchallenge

Risingglobaltemperaturescouldincreasewaterscarcity.And,as discussed earlier, scientists warn that the climate may be-come less predictable, which could strain the water supply and worsenthewaterqualityinaquifersandstreams,compound-ingthechallenge.

Water use has tripled since the 1950s and demand continues tosoar.By2030,theworldmayfacea40%watersupply-de-mandgap.Thiscoulddoubleto80%ifwastewaterisn’ttreatedproperly.WorldBankresearchshowsclimate-drivenchangesinwaterrunoffwillhaveuneveneffectsaroundtheworld,withthoseareasalreadysufferingfromwatershortageslikelytobehithardest.Reducedrunoffincreasesdemandforgroundwater,especiallyforirrigation,whichisresponsiblefor70%ofglobalgroundwaterwithdrawals(WWAP,2012).

Lesstalkedabout,butequallyasdevastating,isthedeclineinwatertablesandaquiferwaterquality.Asaconsequence,groundwatersalinitywillriseduetohighertemperaturesandrisingsealevels.Thiscouldculminatenotjustinreducedsup-plyandloweryieldsbutpoorerfoodqualityandconsumerhealth.Theleastdevelopedcountries,wherewater-consumingactivitiessuchasagricultureandenergygenerationarepartic-ularlyimportant,arelikelytosuffermost.

Indeed,thelackofclarityabouthowtheclimateisevolvingisincreasinguncertaintyabouthowtomanagewater,addingtotheriskthatcountries’investmentsmightproveinsufficientand/orineffective.

By 2030, the world may facea40%watersupply-demandgap.

Climate-driven drops in runoff* hit least-developed, agriculture-dependent countries mostProjected fall in millimeter per square meter by 2050

Source: World Bank (High and dry: Climate change, water, and the economy) as of 2016

* Definition of runoffPart of water cycle that flows over land as surface water instead of being absorbed into groundwater. This is a key and easily accessible water source for man, animals and particularly the agricultural sector in the least-developed regions worldwide

Below –200

–200 to –100

–100 to 0

0 to 100

100 to 200

Above 200

No data

Food for thought

Source:GettyImages

Chapter 3 – Tech unseats tradition


Chapter 3

Tech unseats traditionBustingthemyththattechnologyisthe enemy of natural, abundant and affordablefood.

ShippingcontainerwithinstalledaquaponicssysteminCzechRepublic.Source:GettyImages



Urban / Vertical farming

Organic food becomes mainstream

Lab-grownfood

Algae acquaculture a game center

IncontrasttostereotypicalimagesofWesternfarming,mostfarmsgloballyaresmall,with72%lessthanonehectareandonly6%exceedingfivehectares(UN,2016).Mostareoper-atedbyafamilylargelytoprovidefoodforsubsistenceanduseminimal,primitivetechnologies.

Conventional wisdom has been that more food is produced by increasingscale,consolidatingfamilyfarmsintobroad-acrefarmsorlarge-scalepastoraloperations,orbyutilizingfeed-lots,orbyhousinganimalsinsheds.Theseintensivesystems,whichdiffergreatlyfromourimageofapastoralidyll,haveraised consumer concerns about the impact on the environ-mentandwaterquality;onthewelfareofanimals;andonthenutritionalqualityofthefoodbeingproduced.

These worries arise even before we consider the impact these systemshaveonruralcommunities,therisksofconsolidatingproductioninasinglearea,ortheenvironmentalfootprintas-sociatedwithdistributingtheproduct.Asaconsequence,thesearchisonfornewfarmingmodelsthatfocusonmeetingthenutritionalneedsofthepopulationwhilebetterutilizingnaturalresourcesandembeddingfoodproductionclosertothose who will ultimately eat the food.

Whilepredictionsareuseful,wearestillalongwayfrom2050,andawholenewgenerationofgrowerswillbefarmingby midcentury. Much will happen between now and then that wecannotpredict,butifthepastisanyguide,therewillbewidespreadadoptionofprecisiontechnology,whichwillbetrulyautomatedandfactory-likewithrobotsonthegroundaswell as in the air.

Ready-to-goshippingcontainerwithinstalledaquaponics,systemcombinesfishaquaculturewithhydroponics,cultivatingplantsinwaterunderartificiallighting.



Farmingturnsurbanandvertical

Urbanfarmingandverticalfarmingareamongtheinnovativesolutionsstartingtogaintractionaroundtheworld.Theycantaketheformofcommercialproductioninskyfarmsontopofofficesorsupermarkets,communalallotmentareas(locatedongrassvergesduetolackofspace),ediblebordersinparksandgardens,livingwallsonbuildings,andsocialfoodprojectssetuptosupportdisadvantagedcommunities.

Coretothesetechnologiesisinnovationintheuseoflightingsystemsthatenableplantstogrowquicklyandwithenhancednutritionalproperties.Verticalfarmingisespeciallyvaluableinurbanareaswherelandisscarceandexpensive.Therangeofcropsthatcanbeeconomicallygrowninthesesystemsisin-creasing,whilethecostsassociatedwithdevelopingafacilityaredecreasing–makingthemmoreandmorecommonplaceinmanycitiesaroundtheworld.Forexample,CropOneHold-inginJune2018partneredwithEmiratesFlightCateringtocreatetheworld’slargestverticalfarm–130thousandsquarefeet – which is due to open in Dubai by the end of 2019.

Overall,theconceptappearstoustocheckseveralwaste-miti-gationboxes,amountingtosubstantialenvironmentalbenefitsversustraditionalagriculture.Theseinclude:

• 95–99%lesswaterrequiredversusconventionalfieldgrownproduce,noagriculturalrunoff(weweretoldwastewaterispotable);

• Considerablylessacreagerequired(thefarmsarestackedverticallywithinpodsinindustrialbuildings);

• Zerouseofpesticides,herbicidesorfungicides(sealedenvi-ronmentwithnosoil),andlessfertilizeruse(plantsare“micro-dosed”withnoexcessorwastedfertilizer).

Energyuse,andspecificallyitscarbonfootprint,isregularlycitedbythosewhoopposeverticalfarming-roughly70%ofthecostofgoodssoldislinkedtoelectricityuse.Butourun-derstandingisthatadvancesinLEDtechnologyareexpectedtocontinuetoreducecostsinthecomingyears.Moreover,thesecostsmustbeconsideredalongsidethebenefitsofpeo-pleeatingas“local”aspossible:Lessfoodmiles(thedistancefresh-grownproduceistransported)equalsurbanpopulationsgettingthefreshestfoodpossible,whichencouragesustoeatinseasonandreducestheoveruseofharmfulpackaging.

Source:GettyImages



Scientists move into the meat business

Theabilitytocreatefoodthatreplicatesmeat,fish,eggsanddairy products – with a lower carbon footprint and without theneedtoslaughteranimals–islikelytobecomeacommer-ciallyviableoptioninthenextdecade.Forexample,growingmeatinalabcouldcutGHGemissionscausedbyagricultureby78–96%whileusing99%lessland,accordingtothejour-nalEnvironmentalScience&Technology(2011).

Andlab-grownor“culturedmeat”couldbeabridgebetweenrealmeatandplant-basedproducts.Netherlands-basedMosaMeatusesself-reproducingcellstoproducemeatthatisan“animal-based”productwhileavoidingtheneedtobreed,raise,andslaughterhugenumbersofanimals.Scientiststakestemcellsfromananimal–cow,pig,chicken,andseacrea-tures–andplacetheminagrowingmediuminabioreactortoproduce“culturedmeat.”

Whilesciencecan’tyetcreatethetextureofafinesteak,pro-cessedmeatsuchasburgers,chickennuggets,andmeatballsaregettinggoodreviewsandareexpectedtobeavailableonsuper-marketshelveswithinfiveyears.OthercompanieslikeSinga-pore’sShiokMeatsarefocusingoncell-basedseafoodwheresci-entists replicate shrimp stem cells in a lab to create edible tissue. Ultimately, the idea is for these cells to be cultivated until they

growlargesheetsofwholemuscletissue.Thisvisionisnotyetreality,withseveralfirmshighlightingtechnicalchallengesrepli-catingthetextureandshapeofrealmeat.

Also,fornow,priceisthebarrier;intheUS,groundbeefthatcomesfromlivestockinthecountrycostsaroundUSD5/pound(USDA,June2019)whilethepriceisroughlyUSD100/poundforlab-grownbeef(versusBeyondBurgeratUSD12/pound;June2019,WashingtonPost).Thisgapwillundoubtedlycloseaspri-vateinvestmentanddemandincrease;inMarch2017,MemphisMeatstoldtheWallStreetJournalthatithadgottenthepriceofapoundofcell-culturedchickendowntoUSD9,000/pound,andjust a year later its CEO announced the price had dropped to be-lowUSD1,000/pound(WashingtonPost,2019).

The other battle over these new meat alternatives, aimed at preventingcompaniesfromusingtheterm“meat”forany-thingotherthanconventionallyraisedmeat,hasalreadyturnedpolitical,withlegislationbeingproposedorhasalreadybeenpassedinanumberofjurisdictions.Still,bigcorporationsinvolvedinthemeatindustryarethemselvesalsoinvestingheavilyinmeatinnovationasaformofoutsourcedR&D;anexampleisSwissmeat-processinggiantBellFoodGroup,which has invested in Mosa Meat.

Source:GettyImages



Organicsenterthemainstream

The local food movement has become a notable component ofthepremiumfoodsectorthathasemergedaroundtheworld in recent years. It was born of the desire to assess the integrityofthepersonwhogrowsyourfoodandregardsthisprocessasintegraltoensuringhealthier,safer,moreenviron-mentally sustainable food.

Smallfarmers’marketssproutingupinurbanareasconstituteaseparatemovementinitself,butorganicsareseenaspartandparcelofthisbroadertrend.Nevertheless,organicfarmingtendstopolarizethinking.Onecamparguesthatwidespreadadoptionoforganicpracticeswillstarvehalftheworld,whiletheotherseesitascrucialtohealthiereating.Thekeyques-tioniswhetherorganicproducerepresentsanecessityoritisjust a desirable option for consumers.

Asweunderstandmoreaboutthetoxinsandcarcinogensthatpermeate our daily lives, the commitment of many consumers toorganicandbiologicalproductsappearstobebuilding.

Concernsthathigh-valuecustomershaveaboutthesafetyandnutritionalqualityoftheirfoodaswellasaboutinnovationsinhowproductsarebrandedandmarketedtoconsumersarecreatingalesselasticdemandprofilefortheseproducts.Onemainargumentagainstorganicsistheloweryieldsachieved with them. This issue appears less relevant in the contextoftheorganicsectorasitisincreasinglybenefitingfromthesamedigitalandprecisiontechnologiesasnon-or-ganicfarmers.Anotherworry,aswementionedinTrend3,isthatconsumerswhoselectonlyorganicproducewouldmissoutonmanyofthebenefitsofthenewgenerationofinnova-tion by seed scientists.

Thekeyquestioniswhetherorganicproducerepresents a necessity to or a desirable option for con-sumers.

Food for thought

Source:GettyImages



Microalgaecouldaltertheworld

AccordingtotheFAO(2016),50%oftheseafoodconsumedeachyearcomesfromaquaculture.What’smore,itpredictstheaquacultureindustrywillcontinuetoboom–productionisseenincreasingby34%by2026.Inthemidstofeverything,this has put enormous pressure on feed supplies, which are mostlymadeupofforagefish,soyandothergrains.Infact,about90%ofthe20milliontonsofforagefishpulledfromthewildeachyeararegroundintomealoroiltonurturefishfarmedforhumanconsumption(TimCashion,FrédéricLeManach,DirkZeller,DanielPauly,2017).

This problem has spurred researchers to try to manufacture a stand-inthatwillprovidethenutrientsfoundinforagefish,beeconomicallyviable,yetnotdepleteresourcessuchasgrainsthathumansdirectlydependonforfood.Algaecouldbeavi-ablereplacementfishfattyacidsourceforthisspeciesoffarmedfish.Industryresearchrevealsthatalgaegrowsasmuch as 10 times faster than terrestrial plants, and less than one-tenthofthelandisneededtoproduceanequivalentamount of biomass.

However,scalinguppresentsthebiggesthurdleasreplacingthe22milliontonsofwildaquaculturefishusedeveryyearwillrequiremassivevolumesofmicroalgaeproduction.Produc-tioncostswouldalsoberequiredtodrop,asfarmerswilloth-erwiseoptfortheadequateandcheapergrain.AccordingtoanarticlebyLeslieNemointheScientificAmerican(2019),otherinherenthurdlestorampingupproductionarenailingtherightratiosoffattyacids,suchasomega-3s,andsimulat-ingthenaturalbalancefoundinfishoil.

Researchersmusteitherfindtheperfectalgaloryeaststrainsandfeedthemtherightstarter,soassociatedmicrobesproduceeverythinginproportion—ortheymustcombinefattyacidsfromvarioussources,whichmakescoordinatingproductionevenmoredifficult.Aswell,questionsremainabouthowmuchgreenhousegastheimitationfeedrefineryprocesseswillemit.

Inouropinion,theovercomingofthesehurdleswillbecrucialtomeetinghumanneedswithoutaddingtothemountingpressuresonmarineecosystemsfromoverfishingandclimatechange.

Source:GettyImages


Chapter 4

Embracinginnovation at the farmChallengingthefundamentalsofhow,where,andwhichfoodwegrow.

FarmfieldinBulgariaSource:GettyImages

Chapter4–Embracinginnovationatthefarm


Weappeartobeonthecuspofamajorstepchange,notonlyinproductivity,butinchallengingtheveryfundamentalsofhow,where,andwhenwegrowfood.Start-upsandcorpora-tionshavearangeoftechnologicalinnovationsthat,byinte-gratingdigitalsolutionsintofarmingsystems,increasethepre-cisionapplicationofnutrientsandotherinputs–i.e.,“Farming4.0.”Theydosowhileminimizingdamagetosoil,takingad-vantageofunmannedvehicleadvancesbothonlandandintheair,andenhancinganimalandplantgenetics,nutrition,and health to improve productivity.

Themagnitudeoftheopportunityisbestillustratedbythein-creaseininvestmentinthesetechnologiesoverthelastde-cade.In2008,agritechinvestmentsamountedtoanestimatedUSD100m.ThisfigurerosetoUSD4.2bnby2018,accordingtoKPMG(2019).Data-drivenagricultureisalreadyhelpingfarmersandfoodproducersdiscoverinnovativewaystogrowmore with less. As urbanization reduces the rural labor force, newtechnologieswillbevitalineasingtheworkloadontheremainingfarmers.Operationswillbedoneremotely,processeswillbeautomated,riskswillbeidentifiedbymachine,andis-sueswillberesolvedbykeyingordersintoacentralcommandcenter.Inthefuture,afarmer’sskillsetwillincreasinglybeamixoftechnologyandbiologyabilitiesratherthanpureagri-culturalknowhow.

Thegoodnewsisthatfarmersarealreadycomfortablewithtechnology.Yet,accordingAdrianPercy(2018)adisconnectre-mains.Hebelievesthatuntilwefindavaluepropositionforfarmerstogetinvolvedinagritech,theywill(rightly)remainlargelyskepticalofthenewproducts.Theonusisontechnol-ogytoprovedigitaladvancesaren’tjusteco-friendlybellsandwhistles.Theyneedtomakeitpossibletoproducemore,higher-qualityfoodwithlessmanpower.Andentrepreneursbringingthoseproductstomarketwillneedtoactivelygatherfeedbackfromtheusersthey’retryingtohelp.

Poorconnectivityandthelackofintegratedpracticalsolutionsareotherreasonsdigitizationhaslagged.Also,roboticmachin-eryremainsprohibitivelyexpensiveandpointsolutionslikedronesandIoT-enabledfieldsarecostlyandcomewithasteeplearningcurve.

We’renotquitethereyet,butthelandscapeischanging andbetteroptionsareemerging(wediscussexampleson thefollowingpages).

Farmerflyingdroneoverfarmfield.



Robotsontheground…

Tractorguidanceandauto-steerarewell-establishedtechnolo-gies;butunmannedautonomoustractorswilltakelongertobecomeconventional.Regulation,highsensorcosts,andthelackoffarmers’trustarethelimitingfactors,notthetechnol-ogyitself.Theriseofsmartimplements,however,isgatheringpace.Indeed,advancedvisiontechnologyhasbeenenabledbymachinelearning(i.e.,deeplearning).Here,machineslearntodistinguishbetweencropsandweedsastheimplementispulledalongthefield,enablingthemtotakesite-specificweedingorsprayingaction.Weanticipatethatsuchimple-mentswillbecomeincreasinglycommon.Theyarestillintheirearlyinfancyandthesoftwareisstillbeingworkedon.AjointventurebetweenBoschandBayertodevelopintelligentspray-ersisnearingmajorcommercialization.

Outsideofbroad-acreagriculture,theapplicationofagbotshasbeenlimited;inhorticulture,particularly,smarttechnologyhasbeenlargelyconfinedtoirrigation.Butafewfresh-straw-berryharvestershavebeentrialedandsomearetransitioningintocommercialmode.Thetaskremainstechnicallychalleng-

ingthough:thevisionsystemneedstodetectfruitsinsideacomplexcanopywhileroboticarmsmustrapidly,cheaply,andgentlypickthefruit.Novelend-effectors,includingthosebasedonsoftroboticsthatpassivelyadapttothefruit’sshape,haveimprovedgraspingalgorithmsunderpinnedbyAIlearn-ingprocesses.Low-cost,good-enoughroboticarmsarework-inginparallel,andbettervisionsystemsareallhelpingpushthistechnologytowardcommercialviability.

Indairy,thousandsofroboticmilkingmachineshavealreadybeeninstalledworld-wide.Forexample,thereare3,959auto-matedmilkingsystemsintheNetherlands,ofthetotalof17,667milkinginstallations(DairyGlobal,2018).Thismeansthatroughly22%ofDutchfarmershavearobot,andthein-dustrywillcontinuetoexpandastheirviabilityisestablished.

Source:GettyImages



...and drones in the air

Dronesarenowbeingusedateverystageofthegrowingcy-cle.Theyproduceprecise3Dmapsforearly-soilanalysis,assistintheplanningofseedplanting,andgatherdatatohelpman-ageirrigationandnitrogenlevels.

Agricultureisemergingasoneofthemainaddressablemarketsfor drones as the industry pivots away from consumer models thathavebecomecommoditizedinrecentyears.Newstart-upshavecreateddrone-basedplantingsystemsthatde-creaseoverallplantingcosts.Thesesystemsshootpodswithseedsandnutrientsintothesoil,providingeverythingneededforcropstogrow.Also,intheapplicationofcrop-protectionchemicals,dronescanscanthegroundforpotentialissues(e.g.,pests,fungalbreakouts,etc.).Infact,aerialsprayingcanbefivetimesfaster with drones than with traditional machinery.

Inefficientcropmonitoringisahugeobstacletohigherpro-duction.Withdrones,time-seriesanimationscanshowthede-velopmentofacropandrevealproductioninefficiencies,en-ablingbettermanagement.Byscanningacropusingbothvisibleandnear-infraredlight,drone-carrieddevicescanhelptrackchangesinplants,andanalyzetheirhealthandalertfarmers to disease.

Source:GettyImages



Bigdataandconnectivity

InourLongTermInvestmenttheme“Enablingtechnologies,”weidentifycloudandbigdataastwoofthefiveenablingtechnologiessettoempowertechnologicaldisruptionacrossmany industries and potentially even displace incumbent in-dustryleaders.TheriseofcloudtechnologyisademocratizingIT,inourview.Itenablessmallerbusinessestouseenterprise-classapplications,whilebigdatacanhelpextractsignificantvaluefromlargeanduntappedpoolsofdatatoocomplextomanipulate with standard methods and tools.

Infoodproduction,connecteddeviceslikeIoTandsensorsmakeitpossibletogathervastamountsofdataforanalysisbycloudandbigdatatechnologies.Theresultisin-depthknowl-edgeofagriculturalfactors,suchashumidity,localrainfallrates, and temperature variations, which can be used to opti-mize many processes.

In South America, for instance, the FAO ran a project on water efficiencyusingIoTdevices,cloudstorage,andbigdatatech-nologies.Afteranalyzingthedata,thebodymadepracticalrec-ommendationstohelpfarmersmakebetterdecisions.Like-wise,CargillhastakenastakeinCainthus,anIrishstartupthatusesfacialrecognitionsoftwaretoidentifyindividualcowsandtrackherdhealthaimedatincreasingproductivityindairyfarms.

In food production, connected devices likeIoTandsensorsmakeitpossibletogathervastamountsofdataforanaly-sisbycloudandbigdatatechnologies.

IoTisoneofthefastest-growingtechnologydevicemarkets(unitsinbn)

IoT 2018 2024 CAGR

Wide-areaIoT 1.1 4.5 27%

Short-rangeIoT 7.5 17.8 15%

Total 8.6 22.3 17%

Sources: Ericsson, UBS, as of November 2018

TheIoThasbeenconstrainedbyinadequateaccesstoconnec-tivity, especially in rural areas. Investment in communication networksintheoutlyingareasofmanycountriesandthetransformationalpotentialof5Gtechnologiesandotherlow-powerednetworksolutionsaremakingdigitalizationofthesector more feasible for many remote rural producers. As the economicandsocialpotentialofhigh-speedbroadbandisrec-ognized,suchruralconnectivityisincreasing.Andresistancetochangeisfallingastheindustrynotonlyentersaperiodofgenerationalsuccessionbutthefinancialandenvironmentalbenefitsofdigitallyaugmentedfarmingbecomemoreappar-ent.Theshortageofsolutionsdiminishesasdemandgrows.

Food for thought

Source:GettyImages



Satellite-enabledsystems

AccordingtoKPMG(2019),precisionagriculturethatutilizessatellite-enabledfarmingisbecomingmoreavailableasthecostdropsandthecapabilityrisestoregularlycollectlarge-scaleimagesoflandareasfromsmall,relativelylow-costorbit-ingsatellitesystems.Theseimagesareanalyzedwithbiologicalalgorithmsandothertoolstoobserve,measure,understand,andrespondtointer-andintra-fieldvariabilityincrops.

AccordingtotheWEF,rapidgrowthintheapplicationofpreci-sionfarmingtechnologiesisoccurring.Byenablingtheprecisequantificationofaninput(water,fertilizer,orcrop-protectionchemical)tobeappliedtospecificareas,farmerscansimulta-neously reduce costs and enhance production yields. Data fromvarioussources–includinghigh-resolutionsatelliteimag-ery,meteorologicalrecords,soilnutrientsensors,waterflowgauges,andproductionreports–canbeintegratedandana-lyzedbyalgorithmstoproducehighlyspecificrecommenda-tionsthatnotonlyraiseproductionbuttakeaccountoftheenvironment.

Byenablingtheprecisequantificationofaninput(water,fertilizer,orcrop-protectionchemical)tobeappliedtospecificareas,farmerscansimultane-ously reduce costs and enhance pro-duction yields.

Themostsignificantbenefitswillbegainedbyintegratingdif-ferenttypesoftechnology.Bigdata,IoT,andsatellitesworkinginconjunctionwithsensorswillbeagamechangerwhenap-plied across production systems – whether pastoral, horticul-tural,oranyotherformofbiologicalproduction–inmaximiz-ingtheproductionpotentialoflandwhileminimizingtheenvironmentalimpactonit.Deliveringwhatispossiblereliesonrecruitingskilledpeople,combingdatatoderiveinsightsthatcanimproveoutcomes,andbuildingthealgorithmsabletoaugmenttheintuitionofthoseoperatingthesystem.

Food for thought

Source:GettyImages



Water-savingtechnologyisvital

AccordingtotheUN,2.3billionpeopledonothaveaccesstoadequatesanitation.Morethan650millionhavenoaccesstosafedrinkingwater.Theglobalfoodproductionsystemisthelargestwateruserworldwide.Itconsumes70%oftheplanet’sfreshwater.Waterscarcitynotonlyaffectssocialandeco-nomic stability, it also undermines the sustainability of natural environmentsandecosystems.UNresearchsuggeststhat43countriesarealreadyexperiencingseverewatershortages,andestimatesthathalftheglobalpopulationcouldbelivinginar-easofhighwaterstressby2030.

Oneresultofurbanizationwillbehigherindustrializationandwateruse,whichwillplacegreaterpressureonagricultural,freshwater,andcoastalaquacultureresources.TheInterna-tional Union for Conservation of Nature estimates that, by 2050,demandsforwater,energy,andfoodwillriseby55%,80%,and60%,respectively.Asaconsequence,thereisagrowingfocusonhowthefoodindustryuseswaterandontheproductionfootprintitleaves.Designingsystemsandde-ployingdigitalandanalytictechnologiesthatenableproducerstounderstandtheirwateravailabilityandutilizingthemwithprecision are critical.

AccordingtotheUN,morethan650million people have no access to safe drinkingwater.

Food for thought

Source:GettyImages

Fourth Industrial Revolution capabilities can play a major role inmitigatingdemandacrosswater-intensiveindustries.Intheagriculturesector,forexample,companieslikeMicrosoftaredemonstratinghowprecisionirrigationtechniquescanemploysmartsensorsimplementedincropfieldsandsatelliteimagestogleaninformationaboutsoilconditions.DronestakeimagesoffieldsandAIinterpretsthedatatomodelaheatmapofthecrop area.

Distributedledgertechnologiesofferopportunitiestofurtherinfluencethebehavioroftradersandend-usersbyenablingpeer-to-peertradingofwaterallocationsamongusersinanopenandtransparentmanner(discussedfurtherintheSupply-chainInnovationchapter).




people without access to sanitation

Currently

2.3 billion

650 millionpeople have no accessto freshwater

By 2050 global demand will rise:

of the planets’s freshwater is used for global food production

Currently

70% +55%

for water

+80% for energy

+60% for food


Currently


Source: The international Union for Conservation of Nature, June 2019

Source:GettyImages


For UBS marketing purposesThisinterviewcontainsviewswhichoriginatefromoutsideChiefInvestmentOfficeGlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovi-sionsgoverningtheindependenceoffinancialresearch.ItisthereforepossiblethattheinterviewdoesnotfullyreflecttheviewsofCIOGWM.

Interview with Adrian Percy, PhD

Adrian PercyAdrian Percy, who has more than 25 yearsofexperienceintheagriculturalin-dustry, is an advocate of the need for andbenefitsoftechnologyinmodernagriculture.HecurrentlyservesastheCTOofFinistereVentures,aglobaltech-nologyandlifesciencesventurecapitalinvestor.Inaddition,hefrequentlyactsasanagriculturalindustryrepresentativeand advisor or independent director to companiesthroughhisownconsultancycompany,NomadTechnologyConsult-ing.Previously,Adrianservedasthehead of research and development for the Crop Science division of Bayer as partofitsexecutivecommittee.

Technologywillplayanincreasingroleinfoodandsustainabilityinitiatives.Itsemer-gencehasoccurredatahighlyopportunetime.Wefacethechallengeofanexpand-ingpopulationtofeed,fuel,andclothewithincreasinglylimitedresourcesavailabletous–whetherwe’retalkingaboutland,soil,water,nutrients,orlabor.Also,ourchangingclimateisinfluencingthenaturallimitationsoftheplanet.

SowespokewithAdrianPercy,PhD,aluminaryinthefieldofagricultureandfoodscience.Wequestionedhimabouthowtechnologycansupportglobalfoodsecuritywhileconservingtheenvironment.

What kind of investment opportunities are there in agritech?Weneedtocompletelytransformouragriculturalandfoodproductionsystemstoensurefoodsecurityforall,meetevolvingconsumerdemands,andconserveourplanet’spreciousresourcesforgenerationstocome.Therearenumerousnewexcit-ingtechnologiesthatcanbeappliedtoraisingagriculturalproductivity,safeguardingenvironmentalhealth,andsatisfyingevolvingconsumerpreferences.

Forinstance,bringingeffectivenewtechnologytogrowerstoreplace,complement,orsimplyincreasetheefficiencyofexistingcrop-protectionmethodsoffersmajorop-portunities.Theyincludebio-solutionswithimprovedenvironmentalsafetyandcom-pletely new approaches that improve yield and increase natural plant resistance to diseaseandpests,suchastheUVtechnologybeingdevelopedbyBioLumic.

Iamalsoexcitedaboutadvancedbreedingtools,suchasthosebeingdevelopedbyHiFidelityGenetics.Theapplicationofcomputationalbreedingapproachescanhelpidentifynewagronomicandqualitytraitsinamuchmoreprecisemanner.Itspeedsuptheworkofplantbreedersandcreatesmoreefficientseedvarietiesthatbenefitgrowersandconsumersalike.Allofthesetechnologiescanbeappliedmoreeffec-tivelyandefficientlyonthefarmthroughtheuseofbetterabove-andbelow-groundsensors,applicationtools,andenablingdigitalplatforms.

Who will drive this transformation?Thistime,inmyview,majoragri-corporationscan’tsolveallthechallengesontheirown.Itwilltakeacoalitionthatincludesnewentrants,growers,andgovernmentstomeetthechallengesaheadofus.

Weneedtofocusonopeninnovationandcollaboration;Ihopeandexpecttoseethissectorandecosystemmatureasinvestmentinterestinitdeepensanddiversifies.Ithinknewandexcitingtechnologieswillemergefromwithinagriandascrossoversfrom other sectors, such as pharma.

Thefoodchainappearstobeshortening.Consumerpreferences,includingade-mandformoretransparencyandtraceabilityinit,willincreasinglydrivebehavioron



For UBS marketing purposesThisinterviewcontainsviewswhichoriginatefromoutsideChiefInvestmentOfficeGlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovi-sionsgoverningtheindependenceoffinancialresearch.ItisthereforepossiblethattheinterviewdoesnotfullyreflecttheviewsofCIOGWM.

thefarm.Infact,oneofthemostexcitingdevelopmentsistheemergenceofagri-techhubsandfood-techinnovationaroundtheworld.

Growerswillbeabletocustomizetheiroperationstoadegreeunimaginableevenafewyearsago.Still,thesetechnologieswillnotbesuccessfulunlesstheyarewidelyadoptedonthefarm.Thecompaniesthatofferthemneedtointelligentlynegotiateregulatoryrequirements,gainmarketaccess,andofferaclearreturnoninvestmenttogrowers.

So,eventhoughinnovationistheonlypathtosustainablefarming,technologyalonewillnotsolvethemanyissuesconfrontingmodernagriculture.I’vetalkedoftenabouthowthelossoftrustamongproducersandconsumersdiminishesourabilitytocopewithevolvingpests,limitednaturalresources,volatilemarkets,shiftingcon-sumerpreferences,andachangingclimate.

You mention trust. Why do we embrace technological advances in virtually all other fields while expecting farmers to continue employing agrarian practices first used more than a century ago? Modernagriculture,byanymeaningfulmeasure,isanunqualifiedsuccess.Farmersproducemorefoodonlesslandandfeedmorepeoplecost-effectivelythaneverbe-fore.Butinsteadofcelebratingtheadvancesthathavemadethispossible,manyconsumers are fearful of them.

ThisfearstemspartlyfromwhatIseeasan“innovationdisconnect.”Manyconsum-ersnolongerhaveanyassociationwithfarmsanddonotunderstandtherealitiesoffarming.Thatsaid,acknowledgingthissituationisnotenough.It’suptousinagri-culturetohelpbridgethatdisconnectandbuildtrust.

Afterall,it’simpossibletosustainabusinesswithouttrust.Whilediscussingscientificinformationwiththepublicmaybedifficult,it’salsoimportant.Wecanstartbylis-teningtoconsumerconcernsandfindingcommongroundonwhereweallagree.Weknowconsumerscaredeeplyaboutfoodsafety,biodiversity,waterquality,soilhealth,andenvironmentalsustainability.Thesesameconsiderationsaredrivingthenextgenerationofagriculturalinnovations.Wemustdrawaclearconnectionbe-tweentheseinnovationsandthedirectbenefitsthattheydelivertopeoplewithintheir families and communities.

Findingwaystofarmmoresustainablyandprovidesafe,abundant,nutritiousfoodstoarapidlygrowingworldisachallengethatonlysciencecansolve.Ithinkit’stimethatwesharedourknowledge,conviction,andpassionwithanyonewhowilllisten.Andevenwiththosewhowon’t.Wecanstartthisprocessbytalkingplainlyandopenly.


Chapter 5

What’s new on the menu?Gene-editedveggies,plant-basedburgers,3Dfoodprinting,andpersonalizednutrition.

Source: Ailine Liefeld

Chapter 5 – What’s new on the menu?


Astheworld’spopulationgrowsinsizeandwealthandurban-izes,thefoodindustrywillneedtocontinuouslyre-inventitself.Itmustdealwiththepracticalimplicationsofclimatechange,naturalresourceconstraints,growinghealthconcernsandthelatest fashion and lifestyle trends. What and how we eat now differsfromwhatandhowweateonlyagenerationagoandwilldifferfromwhatandhowweeatinadecade’stime.Tech-nologicalinnovationalsoshapesdemandforfoodproducts,fromitsingredientsandflavorstoitsfunction.

Today’sfoodproducersandprocessorswillneedstrategiesthathelpenablethemtostayrelevant.Andwhilethefollowingtechnologiesandthediscussionaregeneralinnature,thesearethemainbucketsatthecuttingedgeofhowandwhatwewill eat in the decade, in our view. However, a word of cau-tion,thistransitionwillbenotbealwaysseamless.AccordingtoForbes,thereisnewresearchofferingawarningtocompa-nieslookingtosellculturedmeat.ThisnewtypeofproteincouldendupsufferingthesamefateasGMOsifproducersandproponentsaren’tabletoshiftthepublicnarrative.

Backthen,newsreportsonGMOstendedtohighlightthe scientificoreconomicaspectsoverotherfeatureslikeyieldbenefitstofarmers,reducedapplicationsofpesticidesormorerecently,theenhancedbenefitsofomega-3fattyacids.Likeplantbreeders,producersofplant-basedandnovelfoodswillfaceskepticismasadvocatescharacterizeartificial-proteinproductsasun-natural,artificial,orsyntheticbecomemore vocal.

Recent worldwide surveys tell us that while most consumers supportinnovationsthathelpfightglobalhunger,theyarealsoconcernedthatsciencetodaymaybeharmingpeopleandtheplanet. Innovators need to be attentive to their concerns and responsive to their needs. That doesn’t mean we abandon theirideas,butratherimprovethequalityoftheseconversa-tions,andengagenow.



Biotechnology:Gene-editedfoodisthenextgiantleap

Biotech,includingviatheuseofgenemodifiedorganisms(GMOs)andCRISPRgeneediting,isamajoradvancementforfoodproductionandsecurity.CRISPRtechnologyinparticularcouldmakesignificantinroadstofeedingthecurrentandgrowingworldpopulation.Alreadywestruggletonourishthecurrentpopulationofsevenbillionpeople,andclimatechangewillonlycreatenewchallengesincomingdecades.Ultimately,weneedtoincreaseagriculturalproductivityandpreventtheloss of biodiversity simultaneously. As such, science will be calledupontohelpovercomeobstaclesandmeetglobalfooddemand.

CRISPRengineeredcropswouldhavebuilt-inresistancetodrought,pests,anddisease,whichmeanslesschemicalinter-vention,leadingtobetterenvironmentaloutcomes.Besides,producecouldbedesignedtohavegreaterfunctionalbenefits,suchasahighervitaminandmineralcontentwhichisbenefi-cial to human health.

R&Dcostsshouldalsodecline.AccordingtoRabobank(2019),eachnewseedvarietyinvolvesanaveragetotalcostofroughlyUSD136millionanddependingonthebreedingmethodcantakebetweeneightand10yearstodevelop.However,theuseofnewmarker-assistedbreedingtechnologiessuchasCRISPRcouldreducetheR&Dspendandtimelineto3-5years.

Though,manyconsumersreactednegativelytopreviousagri-culturalapplicationsderivedfrombiotechnology(Shewetal,2017),namelyGMOsandputgene-editinginthesamebucket,particularlyintheEuropeanUnion.AsarguedbyShewandPercy,withoutincreasedconsumeracceptance–likelyachieved by improved methods of education and public en-gagement–CRISPRagriculturalapplicationsmayfacethesameregulationsandchallengesoftraditionalGMOs,hamper-ingCRISPR’scontributiontosustainableagriculture.

AccordingtoPercy(2017),futureproducers,togrowandpro-tectourfood,willneedthesenewanddiverseintegratedtechnologiesthatworkinconcertwiththenaturalenviron-mentcoupledwithreal-timediagnosticinformation–thisin-cludesCRISPRtechnology.Weneedtobustthelingeringmyththattechnologyistheenemyofnatural,abundant,nutritionalandaffordablefood.Advocatesofbiotechnologybelievecon-sumersarenotbeawarethatGMcropshaveoutperformednon-GMformorethan20yearsintermsofproductivityandaddedtobiodiversity–twoofthekeysustainabilityindicators.

Source:GettyImages



Suspicionabouttheabilityofplant-basedmeatsubstitutestoprovideagenuinelylike-for-likeexperienceasmeathasputoffmanyconsumersfromswitchingtotheseproductsenmasse.Nonetheless,theirpopularityisgrowing.Akeychallengetheseproductsfaceisreplicatingthefatbalanceofmeat,althoughnew alternative proteins represent a vast improvement in terms oftasteovertheirpredecessorsandarebecomingestablished.

Perceptionwillbethekeychallengewhenitcomestoalterna-tiveprotein.Plant-basedburgershaverecentlybecomeafix-tureofbackyardgrillinginmanycountries.Startupsandestab-lishedmeatprocessorsareproducingthem,targetingconsumerswhohaveplant-andmeat-baseddietsalikebyin-creasingoptionsforvegetariansandveganswhileenticingcar-nivorestoconsumeanenvironmentallyfriendlyproductwith-outcompromisingontaste.

Thisyearthestockpriceofplant-basedunicornBeyondMeatsurgedmorethanfivefoldinlessthantwomonthsafteritIP-OedontheNASDAQ.TheCalifornia-basedstartupisoneofseveralsecond-wavefoodproducersdevelopinginnovativeprocesses to more closely replicate the structure and taste of realmeatusingonlyplant-basedingredients.

Thisdecade-longpathfromobscuretomainstreamcanbetracedinpartbacktothedairyaisle,wheresoy-,almond-,andcoconut-basedmilkshaveclaimedspotsalongsidecow’smilk.That“sameshelf”strategyhelpedtheUSnon-dairymilkmar-ketgrows60%,toUSD21.bn,inthefiveyearsto2017,ac-cordingtoMintel.Itnowclaimsa12.6%marketsharefromtraditional dairy producers.

BeyondMeathasadoptedthesametactic.Itrequestsmeat-aisleplacementforitsburgerandsausagereplacements insteadofrelegatingthemtothespecialtyvegetarianshelforfreezer.ImpossibleFoods,anothersecond-waveplant-basedmeatmaker,hasspentyearsstrivingtonaturallyreplicatethetaste,texture,andlookofaburgermeatpatty.

Likewise,thealternative-to-dairymarkethasseenrapidgrowthandisbeingpoweredby,inpart,familiarmarketing levers – healthiness, humaneness, and sustainability. Another strategywastopushproductsthroughhigh-endpartners.Swedishoat-milkmaker“Oatly”turneditsUScapacitycon-straintsintostrength,directingearlydistributiontohigh-endespressobarsinNewYork.Scarcityandthebaristahaloeffecthelpedestablishpent-upconsumerdemand,andsetapricepointinlineorabovethatofregulardairyproducts.Anothercompany,PerfectDay,isapplyinggenesequencingand3Dprintingtocreatemilkwithoutthecow.

ThatstrategyhasbeenechoedinearlydistributiondealsstruckbyImpossibleFoods.Itsburgers,whichtakeonablood-redhuefromafermentedyeastprocess,firstdebutedinlimitedquantitiesatNewYork’shigh-endrestaurants.Ithassince expandedtoover5,000USoutlets,accordingtothefirm, includingamassmarketplayvianation-widedistributioninfastfoodgiantBurgerKing.BothBeyondandImpossiblehavemadeinroadsintoHongKongandSingapore,tappinghigh-endrestaurantsinthetrend-settingAsianworldcities.Capac-ityconstraintsonproduction,whichbothhavecitedaskeyspendingareasintheirlatestfund-raisingrounds,haveled to limited availability.

Notsurprisingly,plant-basedproductshavefacedpushbackandregulatorylobbyingfrommeatanddairyindustry.Canada,severalUSstatesandtheEUareintheprocessofpassing,orlookingtopass,legislationthatwouldpreventthesealterna-tivesfrombeingcalled“hamburgers”or“groundbeef.”Othermembersoftheagriculturalsector,however,aremoresupportiveofplant-basedprotein.Forexample,Canada’sAGTFoodandIngredients,theworld’slargestmanufacturerofpulseingredients(peas,chickpeas,mungbeans,lentilsetc.),expectsdemandforflourandconcentratesderivedfromthegrainsitproducestoskyrocket.

Plant-basedproteinisdisruptingmeatmarkets

Source:GettyImages

Chapter 5 – What’s new on the menu? For UBS marketing purposesThis interview contains views which originate from outside Chief Investment Office GlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovisionsgoverningtheindependence of financial research. It is therefore possible that the interview does not fully reflecttheviewsofCIOGWM.


Interview with MichaelGreger,MD

Michael Greger, MDAfoundingmemberandfellowoftheAmericanCollegeofLifestyleMedicine,MichaelGreger,MD,isaphysician,best-sellingauthor(“HowNottoDie”),andfounderofthenon-profit,science-basedpublicserviceNutritionFacts.org.HeisagraduateofCornellUniversitySchoolofAgricultureandTuftsUniversitySchoolof Medicine. There are more than a thousand videos on nearly every aspect ofhealthyeatingfreelyavailableatNu-tritionFacts.org.

Themarketingofplant-basedmeathasmostlyfocusedonitsadvantagesoverbeefand other types of animal meat, be it from the standpoint of animal welfare, sustain-abilityorhealth.Evidenceforthefirstclaimisobvious.Thesustainabilityimpactofswitchingfrombeeftoplant-basedmeatiscleartoo,withsignificantadvantages intermsofgreenhousegas(GHG)emissions,landusageandwaterconsumption(seeFig.1).

Butthenutritionalvalueofnewhighlyprocessedplant-basedburgershaspersis-tentlybeenquestionedinpopularmedia,leavingmanyconsumersalarmedorcau-tious.Atfirstglance,aside-by-sideanalysisofatypicalbeefburgeragainstthesenextgenerationplant-basedalternativessuggestssomethingofanutritionaldraw.SowespokewithDrMichaelGreger,along-timeadvocateofplant-basednutrition,tofindoutmore:

Is plant-based meat unhealthy?Thebiggestinsightfromthiscomparison(seeFig.2)isthatfastfoodisnotparticu-larlyhealthy,whetherit’smeat-basedornot.Awholefoodplant-basedoption,suchasabeanburger,remainsthemostnutritional.Butthisnewgenerationofplant-basedmeatappearstoleanalittletooheavilyonsalt,withtheBeyondBurgercon-tainingabout50%moresodiumthanatypicalbeefpatty.That’saboutaquarterofthedailyintakelimitrecommendedbytheAmericanHeartAssociation.Sometypesofplant-basedmeathavecomparablesaturatedfatcontent,buttheplant-basedal-ternatives clearly outperform in terms of transfat and cholesterol.

Is processed food unhealthy?TheTrueHealthInitiative,aglobalcoalitionofworldrenownexperts,hasestablishedaconsensusviewthatthehealthiestdietisoneconsisting“mostlyofminimallypro-cessed,generallyplant-basedfoods.”Giventheimpactheartdiseasehasonourso-ciety, the lower levels of saturated fat and the absence of transfat and cholesterol in mostplant-basedoptionsarewelcome.AndIwouldliketoaddthatifplant-basedmeat successfully redirects public consumption patterns away from beef and other typesofmeat,thatcouldimpactrelatedcancer,diabetes,andstrokerisks.

Fig.1.Environmentalimpactofswitchingfrombeeftoplant-ba-sed meat

Compared to beef Impossible Burger Beyond burger

GHGemissions(kgCO2-eq/kg) -89% -89%

Landuse(m2/y.kg) -96% -92%

Waterfootprint(liters) -87% -99%

Sources:BeyondMeat’sBeyondBurgerLifeCycleAssessment,September2012,Foodpolicy,December2012,LCAUpdate, 2019, Value of water research report series no. 48, 2010

http://css.umich.edu/sites/default/files/publication/CSS18-10.pdf

https://www.sciencedirect.com/science/article/abs/pii/S0306919212000942

https://research.utwente.nl/files/5146067/Report 48 Water Footprint-Animal Products-Vol1.pdf

https://research.utwente.nl/files/5146067/Report 48 Water Footprint-Animal Products-Vol1.pdf

Chapter 5 – What’s new on the menu?For UBS marketing purposesThis interview contains views which originate from outside Chief Investment Office GlobalWealthManagement(CIOGWM).Thisentityisnotsubjecttothelegalprovisionsgoverningtheindependence of financial research. It is therefore possible that the interview does not fully reflecttheviewsofCIOGWM.


What do the nutrition charts not tell us?Themostsignificantadvantagenotfoundonthenutritionalchartsisfoodsafety.Plant-basedfoodhasnoissueswithintestinalbugs,suchasE.coliorSalmonella,asthefoodneverhadintestines.Therearealsolargerzoonoticdiseaserisks,suchasbirdflu,thatwouldbelessenedbytheswitch.Thescaleandspeedofmodernani-malfarminghaveledtoheavyusageofantibioticscriticaltohumanmedicine.Ifde-mandformeatcontinuestogrow,wecouldseemorerampantusageofantibioticsandmoreantibiotic-resistantbacteriaenteringthefoodchain.

Should I avoid GMO plant-based food?No.ImpossibleFoods’mosthigh-profileGMOcontentisagene-editedyeastde-signedtoproduce“heme.”Thiseditallowsforvat-basedproduction,significantlyrampingupproductionefficiency.TheUSFDAhasgiventhisingredientits“generallyapprovedassafe”label.TheotherGMOcontentcomesfromstandardGMOsoy,whichpresentsitsowndownsides,includingheavyusageoftheherbicideglypho-sate.Broadly,ifyouarefocusedonsustainabilitygoals,thismoreeffectiveprocessrepresentsanenvironmentalgain.

Fig.2.Nutritioncomparisonbetweenbeefandotherplant-ba-sed meat pattyBasedon(113g)patty

Beef Impossible Beyond Black Bean

Saturatedfat(g) 8 8 6 1.5

Transfat(g) 1.5 0 0 0

Cholesterol(mg) 80 0 0 0

Calories(kcal) 240 240 280 270

Sodium(mg) 230 370 390 96

Protein(g) 20 19 20 11

Iron(mg) 2.8 4.2 4.2 3.6

VitaminB12(mcg) 3 3 0 0

Fiber(g) 0 3 2 7.3

Potassium(mcg) 345 610 300 420

Sources:Beyondburgerproductdetail,Blackbeanburger,BurgerKingnutrientinformation,ImpossibleFoodsFAQ,Mijn Eetmeter, USDA database, 13317, USDA database, 16015.

https://www.beyondmeat.com/products/the-beyond-burger/

https://nutritionfacts.org/recipe/black-bean-burger/

https://www.bk.com/menu-item/whopper

https://faq.impossiblefoods.com/hc/en-us/articles/360018939274

https://faq.impossiblefoods.com/hc/en-us/articles/360018939274



3Dfoodprintingis(almost)here

Whilenext-generationingredients,roboticappliances,novelcookingmethods,andothertechnologypromisetoremakeourcuisine,3Dfoodprintinghasalreadymadeitswayintoex-perimentalkitchens.NASA-spinoffBeeHex’s3Dprinterprintspizzasforamusementparks,sporting-eventvenues,large-scalerestaurants,andevengovernment/militarycanteens.Bymakingpizzaingredientsinpowderformanddehydratingthem, their printer has even made pizzas in space.

Buttherealvalueof3Dfoodprintingliesincustomization.Aspeople’s dietary restrictions have increased, the trend toward personalizationinfoodhasalreadygainedtraction.3Dfoodhomeprintingwouldenablepeopletoexertmorecontroloverwhattheychoosetoeatandtheingredientsincludedinit,butthechallengeistocreatefoodsthattaste,feel,andlooklikewhatconsumersexpect.Theresultsaregettingbetter.Inmorefuturistic applications, 3D printers will even support specialized dietsbasedonnovelfoodsandingredientsalignedwithyournutritionalneedsorpreferences–rangingfromirondeficiencytovegetarianismtogluten-freedieting.

Source:GettyImages

3Dfoodhomeprintingwouldenablepeopletoexertmorecontroloverwhattheychoosetoeatandtheingredientsincluded in it.

Food for thought



Personalized nutrition goesdigital

As consumers become more intricately aware of how their di-etsaffecttheirhealth,theywillseekproductsandservicesthatmeet their needs and lifestyle. Nutritional advice is fast evolv-ingfromalargelystaticmassmarkettoreal-timepersonalizedsolutions. In fact, the separation between medicine and nutri-tionisblurringasdietisbeingincreasinglytargetedtoprevent-ingandmanagingchronicdisease.Researchislinkingintesti-nalhealthandmicrobiometooverallwell-beingandistranslatingintocommercialopportunitiesandrapidgrowth.

AccordingtotheCSIRO(2019),thevalueofpersonalizedmedicineworldwideisexpectedtoballoon:healthandwell-nessisforecasttorise5%y/yfrom2018to2022.Themarketopportunityislarge,andalreadylargecorporationsarejoiningforces,i.e.,NestleandSamsungarecollaboratingtodevelopadigitalhealthplatform.KPMGandothersseethesepartner-shipsincreasing,particularlywithmajorinternetplatformssuch as Amazon, Alibaba, and JD.com.

ThepromiseofstartupslikeHabit,anutritiontechcompanypartneringwithAmazonFreshandFitbittodeliverpersonal-izedevidence-basednutrition,stemsfromadvancedpredictiveanalytics,affordablediagnostickits,andrapidupdatesinwearabletechnologyandIoT.Usingbloodtestresultsandreal-time data such as blood pressure etc., it provides daily food guides,rankingsineachfoodgroup,andpersonalizedrecipesand menus.

Source:GettyImages

Nutritionaladviceisfastevolvingfromalargelystaticmassmarkettoreal-timepersonalized solutions.

Food for thought


Chapter 6

Supply-chaininnovation Foodproductionhaslaggedallotherindustriesintermsofdigitization,butnotanymore.

Source:GettyImages

Chapter6–Supply-chaininnovation


Mostconsumersareinthedarkabouthowthefoodtheyeatgetstothetable.Numerousscandalsandincidentsinvolvingthe contamination of food within supply chains have shattered consumerconfidenceinthemandcausedconsiderablefinan-cial, political, and health costs. The WHO estimates that almost onein10peoplefallilleveryyearfromeatingcontaminatedfood.

Manygovernmentshavepassedlawstoforcefirmstoimple-menttraceabilitysystemsthatidentifyweakspotsandenablehazardousproductstobewithdrawnfromthemarketeffi-ciently.Butrebuildingconsumertrusttakestime,andclimatechangeincreasesthechallenge.Warmer,morehumidcondi-tionsacceleratethegrowthandspreadoffungiintheenviron-ment.Thisposesanexistentialthreattothefoodsystem.Foodslikeapplesandcoffeebeanssusceptibletocarryingthemycotoxinsproducedbyfungalmoldsareparticularlyatrisk.

So the reliability and dependability of the traceability system are largelyatthemercyoftheaccuracyandefficiencyofidentifica-tionandauthenticationtechnologies.Theyenablecustomerstotakeintoaccountproductqualityandconformitywithsafetyandenvironmentalstandardswhenmakingpurchases.Devel-opingproductidentificationandlocalizationtechnologies advancesthetraceabilitysystem.Innovationslikedistributedledgertechnologies(blockchain)andtheIoTshouldboostcom-panies’capabilitytotrackfood,fightfraud,andreducehealthrisksbyincreasingthevolumeandavailabilityofdata.

Notonlythat,buttheyshouldhelporganizationsachievetheSDGsofnopoverty,zerohunger,andbetterhealthandwell-ness.Goalslikedevelopingsustainablecitiesandimprovinglifebelowwaterrequirearedesignoftheglobalsupplychain,awholesaleshiftfromtoday’s“take-make-dispose”economytoa circular one. The estimates of the amount of food wasted worldwidearewellknown;roughlyone-thirdofwhat’spro-ducedislostthroughspoilageinthesupplychainandneverreachesintendedconsumersinanediblestate.Likewise,theWEFhasforecastthatifwekeepproducing(andfailingtoproperlydisposeof)plasticsatpredictedrates,thevolumeofsyntheticsintheoceanwilloutweighthefishinit,poundforpound,bymidcentury(wediscussthistopicfurtherinthechapterLivingSustainably).

Supervisortakinginventoryofmerchanidise in a modern ware-housewithsackscontainingdryproduce such as beans and rice.



Three ways the Internet of Things(IoT)isimpactingfoodsupply chains

TheIoTischangingthewaytheworldthinksaboutfood.Aside from its crucial role as an interface between data pro-cessingandproducer-basedhardwaresuchasdrones,self-drivingtractors,andcropmonitors,itcontributesequallyviadownstream innovation.

Smartthermostatsreducetheriskofbreakdownsinthecoldchainduringtransportanddelivery,andinventorysensorsforwarehousemanagementandsmartapplianceskeeptrackofnearly every food item in the monitored environment. Smart applianceswiththesesensorswillenablehomestoberuneffi-cientlyandfamilymemberstokeepsuppliesstocked.Thedatatheygeneratecanalsobeusedtobetterpredictcustomeror-ders, so retailers and manufacturers can anticipate consumer needseitheratthegrocerystoreoronline.Smartconsumerappliances will even alert their owners when they have a con-taminated product in their home.

AgoodexampleofthisinpracticeisDNAbarcoding.Whiletherearemanydifferentphysicaltechnologiesto“connect”products,includingbarcodes,QRcodes,andNFCtags,DNAtechnologycanencodeanddecodedigitalinformationfromDNAstrands.Creatingandapplyingunique,edible,flavorlessDNAbarcodesdirectlytofoodisaninnovativenext-generationanalyticaltechnique.Itcanenableconsumerstogainfulltransparencyintotheoriginofproductswhileprotectingcom-panybrands,reducingfoodfraud,andcuttingrecallcosts.



Whatisblockchainandhowdoesithelp?

Blockchainisadistributeddatabasethatholdsrecordsofdigi-taldataoreventsinawaythatmakesthemtamper-resistant.Whileparticipantsinablockchainmayaccess,inspect,oraddtothedata,theycannotalterordeletewhatalreadyexists.Theoriginalinformationstaysputandleavesapermanentandpublicinformationtrailoftransactions,providingaverifiablerecordoftransactionsandactivitiesoccurringacrosscomplexsupply chains.

Thekeyadvantagesofablockchainnetworkinclude:• Disintermediation:Blockchainmakesthecentralizedserverlessrelevant.Peer-to-peertransactionscantakeplacewith-outoversightorthird-partyintermediationyetremainpro-tectedfromcounterpartyrisks.

• Security: Thecryptographicnatureofblockchaintransac-tionsmakesthenetworkmoresecurethantraditionaldata-basesbecausehashvaluespreventanymalignuserfromalteringthetransactions.

• Resilience:Inadditiontoitsimmutability,blockchainnet-worksareresilientastheydonothaveacentralpointoffail-ure.Also,giventheencryptedandchain-likenatureofthedatablocks,anypotentialdamagetothedatawouldnotaffectrecordsofhistoricaltransactions.

• Lower costs: Byeliminatingorreducingtheneedforinter-mediatesandthecostsassociatedwiththem,blockchainnetworkscangreatlyreducetransactioncosts.Theabilitytomonitortransactionsinrealtime,forexample,canreducetheeffortneededtoreconciledisputeresolutions.

How blockchain will revolutionize food Inagriculture,blockchaincanhelpfixinefficaciesthroughap-plicationslikesmartcontractsinsuchareasasinsurance,trace-ability,andpayments.Agriculture-basedinsurancebuiltonblockchainwithkeyweatherincidentsandrelatedpayoutslinkedtosmartcontractscanbehighlyeffective,markedlyre-ducingtimetomarket.

Safety is another major food industry issue, with the ability to traceproductsthroughablockchainledgerrepresentingan-otherlong-termopportunity.SuccessfulpilotshavebeenlaunchedthroughIBM’sHyperledgerprojecttotrackporkandotheragriculturalproductsinChina.Theimmutablenatureoftransactionsontheblockchainledgeralsoopensupapplica-tionsinrelatedhigh-valueindustrieslikethewinetrade,aswellasagriculture-relatedlandregistrations.

ChinesecommercegiantsAlibaba(parentofTaobao)andJD.comexemplifyhowblockchain-backedtraceabilityinthesupplychaincanimproveconsumerconfidenceintheauthen-ticityoffoodproducts.Beijing-basedJD.comstartedbytrack-ingbeeffromKerchin,acompanyinInnerMongolia(aprov-inceinnorthernChina),tocustomersinBeijing,Shanghai,andGuangzhou.

Smallholderfarmersaroundtheworldfacegapsintraditionalfinanceandthusstruggletoaccessfunding.Alackofpropercredithistories,insufficientlandownershipdocumentation,andotherissuesblocktheiraccesstobankloans,andtheyareoftenforcedtoborrowfundsfrommoneylendersatmuchhigherrates,ifthisoptionisevenavailable.Tech-savvyagricul-turalentrepreneursnowuseblockchaintocreateinvestmenttokensandraisefundsfortheiragriculturalbusinesses.

Source:GettyImages



Bioplastics crucial in the fight against pollutionAstheneedtocreatesustainableeco-friendlyproductsin-creases,howconsumergoodsarepackaged(anddisposedof)mustbere-engineeredaswell.Biodegradableplasticscouldlowerthevolumeoftrashinlandfills,reduceGHGs,andcutdown on the plastic debris in the ocean, which causes numer-ousproblems,fromkillingfishandmarinemammalswhenmistakenlyingestedtoreleasingtoxiccompounds.Smartpack-agingcouldalsoincreasetheshelflifeoffreshfoodandre-duce waste.

Arecentbreakthroughinproducingplasticsfromcelluloseorlignin(thedrymatterinplants)isonesuchpromisinginnova-tion. These materials can be derived from nonfood plants such asgiantreedandgrownonmarginallandnotsuitableforfoodcropsorfromwastewoodandagriculturalby-productsthatotherwiseservenofunction.Algaeandmushroom-basedalter-nativeshavealsogainedinpopularitywiththelikesofIkea.

Aswithallnewtechnologies,manyhurdlesmustbeovercomebeforethenewplasticscanbecommercialized.Costisabigobstacle.Anotherisminimizingtheamountoflandandwaterusedtoproducethem–evenifthelignincomesfromwaste,waterisneededtoconvertitintoplastic.Thesolutionswillre-quireacombinationofmeasures,fromregulatorytovoluntarychangesinthewayssocietyusesanddisposesofplastics.Still,theemergingmethodsforproducingbiodegradableplasticof-feraperfectexampleofhowgreenersolventsandmoreeffec-tivebiocatalystscancontributetogeneratingacircularecon-omy in a major industry.

Source:GettyImages



Digital channels reshaping food retailEntirelynewbusinessmodelshaveemergedinrecentyears.Theydemonstratethatconsumers,inparticularinyoungergenerations,placegreatervalueoninstantaneousaccesstoproductsandservices.Thison-demandprinciplewillcontinuetoreshapefoodretaildramatically.Buyingaweek’sworthofgroceriesatonetimeisbecomingathingofthepast;futureconsumers will demand fresh produce and want it delivered now in the format in which they will consume it.

Thefooddeliveryindustryhasexistedforafewdecades,viayellowpagesandtelephones;theadventofmobilephoneappshastransformedtheindustryintoalargelyonlinemarket.Thankstothesuccessofride-hailingplatformslikeUberandGrab,andtheemergenceoflogisticsplatforms,onlinefooddeliveryhaschangedthewayfoodiseaten.Consumersnowhavemorefoodoptionsthaneverbefore,allattheirfingertips.

Millennialsandyoungconsumersareclearlydrivingthetrend.Theyordertwotofourtimesasmuchfoodonlineperweekasthoseover40yearsold.Theshifttowardsingle-personhouse-holdsisalsofuelingthistrend;China,wherefooddeliveryhascaughtfire,hasalmost80msingle-personhouseholdsalone.Giventhebenefitsofcentralizedkitchensandincreasedauto-mation,orderingdinnerthroughfooddeliveryappsmightsoonbeacheaperoptionthanpreparingfoodathome–whichcouldsuperchargetheindustry’sgrowthrates.

Inthelongrun,theemergenceofinnovativelogisticssolutionslikeautonomousdroidsanddronesmayfurtherboostthein-dustry’slast-milecoverage.Onlinefooddeliveryisthelargestsegmentwithinthefoodinnovationthemetoday,bothintermsofrevenuesandfunding.Weexpectthesegmenttocontinuegrowingthankstoongoingconsumerizationofdigi-talservicesandlargerordersizes.

Source:GettyImages


Chapter 7

InvestinginfoodinnovationWhetheryou’reafarmerlookingforthelatesttools to boost crop production sustainably, or a professionalinvestorlookingforthenextleapininnovation, we believe there is no better time to investinfoodandagriculture.

VegetableprocessingplantinCanadaSource:GettyImages

Chapter7–Investinginfoodinnovation


While the food supply chain has been around for centuries the needforinnovationremainsasgreatasever.Whetheryou’reafarmerlookingforthelatesttoolstoboostcropproductionsustainably,oraprofessionalinvestorlookingforthenextleapin innovation, we believe there is no better time to invest in foodandagriculture.Asdigitaltransformationtakesholdandthesupplychainintegratesvertically,opportunitiesforinvest-mentinthesectorbynon-traditionalinvestorsincrease.

Traditionalinvestmentinagricultureconsistedofrealassets,orafundthatinvestedinthem.Thehybridnatureofagriculturalassets(whichhavethecharacteristicsofbothpropertyandin-frastructureinvestments)makesthemdifficulttoassessandmanage,exacerbatingtheirhit-or-missnature.

Unlikeinpreviousphasesoftechnologicaldevelopmentthough,innovationthistimeisbeingintroducedprincipallythroughsoftwareanddatachannels,anareafewerindustryin-cumbentshaveexperiencein.Asyouconsiderinvestinginthefood supply chain, a tech startup, or the launch of your own, it’simportanttounderstandsomemarketidiosyncrasies.

Factoryworkeroperatingacon-veyorbeltinavegetableprocess-ingplant.



Agritechfinancingbreaksrecords

Historically,95%ofagritechinnovationhasbeencommercial-izedviaM&Aastechnologieswereincorporatedintothein-dustrybyestablishedcompanieslikeJohnDeere,CaseNH,etc.Thesefirmshavebeenmarketmakersforinnovators,butthismodelisswiftlychanging.

Agritechstartupsenjoyedanotherrecordyearoffinancingin2018.AccordingtoresearchbyequitycrowdfundingplatformAgfunder,dealscompletedroseby43%y/ytoUSD16.9bnfromUSD11.8bnin2017.Upstreamanddownstreamseg-mentsgrewatasimilar43–44%y/ypacethatwasbroadbased.

Theagritechecosystemisbeginningtoscaleup.Inboth2017and2018,late-stagetransactionvolumesrose.Unlikeotherin-dustries,wherelate-stagefundinghasbeenontheriseandearly-stagefundingactivityhasbeenindecline,interestinseed-stagedealsintheagritechindustryremainssolid.Activity

roseatamid-teenpercentageratein2018,accountingfor803outof1,450dealsintheagritechindustry,accordingtoAgFunder,withdealvolumerisingby50%y/ytoUSD685m.

Byregion,theUS,China,andIndiaarethetopthreemarkets,respectively.Theyaccountforalmost80%ofglobalagritechfunding.Bysegment,thedownstreamonlinefooddeliverysegmentis,unsurprisingly,thelargestsegmentbyvalue;withinupstreamsegments,Farming4.0andplant-basedpro-tein companies continue to draw plenty of interest.

Asagritechcontinuestomatureasasector,Agfunderbelievesmorenine-figurevaluationsarelikelyattheearlystageforthemostpromisingapplications.Asinvestorsexplorecapital-lightsubsegmentswithinagritech,dealflowshavealsobeensolidin plant sciences and animal health startups.

Two breeds of startups

Onthestartupside,twoagritechtypeshaveemerged;thosethatdisruptandthosethatbuildonexistingtechnologies,forexample,whatJohnDeere,CaseNH,andothercorporationsaredoing.Theroleofcorporateventurecapitalinagritechre-mainscrucial,andagritechM&Ahascertainlypickedup,lead-ingtoincreasedinterest.

Mostcompaniesinagritecharestillquiteearlystageanddon’thavesignificantcashflowyet.Evenestablishedagri-corpora-tionsarejustbeginningtomakeacquisitionsratherthanpur-suein-houseR&D.Theeducationalcomponentofagritechisimportantforinvestorsingeneral,asthefielddoesn’tfitneatlyintotraditionalindustrysegmentslikebiotechorfin-tech, etc., where some investors feel more comfortable.

Beyond Meat and other nontraditional protein companies are benefitingfromaboomintheconsumptionofplant-basedproducts,primarilyindevelopednations.Industriesarebeingforcedtoevolvealongsideopportunisticinvestorswhocancapitalizeongrowthinthoseareas.Tyson’sannouncementthatitwillofferplant-basedburgersofitsownillustratesthattraditionalindustriesarebeingdisrupted.



Agritechinnumbers

US7,900

China3,500

India2,400

Brazil700

UK285

Fran

ce 2

22

Isra

el 1

85.5

Sing

apor

e 84

Aus

tral

ia 2

9

Irela

nd 7

9

Global agritech investments by regionInvestment in USD mn

2017 20182013 2014 20162015

18

14

12

8

0

4

16

10

2

6

Global funding to agritech startupsIn USD bn

2017 20182013 2014 20162015

12

8

0

4

2

6

Global funding to downstream agritech startupsIn USD bn

2017 20182013 2014 20162015

18

14

12

8

0

4

16

10

2

6

Global funding to upstream agritech startupsIn USD bn

Late DebtSeed A B C D

5,000

6,000

4,000

0

2,000

1,000

3,000

700

800

600

0

200

100

300

400

500

Financing in USD mn (le hand side) Deals (right hand side)

685

2,300

1,700

2,600

3,600

5,700

412

Overall 2018 agritech deal volume and activity by stage

Source:AgFunder,UBS,asofApril2019



How much could it all be worth?

Overall, we estimate the food innovation opportunity repre-sentsaUSD700bnmarketby2030.Weexpectittogrowmorethanfivefold,ata15%CAGR,fromUSD135bnin2018.Wedividedtheaddressablemarketintofivemajorsegments.Weexpecttheplant-basedmeatmarkettoexpandfromUSD4.6bnin2018toUSD85bnattheendofthenextdecadeaspenetrationratesincreasefrom0.4%to6%.Ourestimatesmayproveconservativeifplant-basedmeatadoptionacceler-atesthankstoinnovationandincreasingconsumerawareness.

Farming4.0isanotherpromisingsegmentwithinthattime-frame.WeanticipateitexpandingfromaUSD15bnmarketin2018toUSD90bn.Despiteamid-teenCAGR,itspenetrationrates,whichweexpecttoincreasefrom0.3%to1.5%,arelikelytoremainmuchlowerthanthoseoftheotherdigitaltransformationtrendslikefintechande-commerce.

Onlinefooddeliveryissettobethelargestsegment,expand-ingfromamarketworthUSD60bnin2018toUSD365bn,amid-teenCAGR,accordingtoourforecasts.Emergingmarkets,

improvinglogistics,andastructuralshiftfromofflinetoonlinefooddeliveryarelikelytodrivethisgrowth.

Ourcombinedindustryforecastsassumeamid-teenCAGRthatweconsiderreasonable.Thekeydownsideriskstoour estimatesincludeslower-than-expectedadoptionofplant-basedmeatinemergingmarketsandlogisticalsetbacks, unfavorable economics in food delivery, and data security risksforFarming4.0.

Upsiderisksincludewidespreadadoptionofplant-basedmeatsparkedbymillennialsandEMconsumers,greaternetworkef-fectsinthefooddeliveryindustryresultingingreater-than-ex-pectedrepeatorders,andhigher-than-anticipatedefficiencygainsinFarming4.0.resultinginmoreorders.

Investinginsustainablefoodandagriculture

We see the investment community, particularly within the fieldsofsustainable,responsible,andimpactinvesting,isdemonstratinganincreasingappetiteforinvestinginsus-tainableagricultureandfoodsystemsacrossassetclasses.Sustainableagriculturereferstoadiversearrayoffarmingsystemsthatenhancethebiodiversityoffarmingland-scapes, improve soil health and the water cycle, and strengthentheresilienceofruralagrariancommunities.

TheseoutcomesalsoalignwithUNSustainableDevelop-mentGoals,whichsustainable,responsible,andimpactin-vestorsareincreasinglyintegratingintoinvestmentdecision-makingframeworks.Furthermore,whentakingatotalportfolioapproachtosustainableagriculture,itprovidesin-

vestorswithaconstructivewaytograpplewiththewidestarray of investment opportunities because each asset class presentsitsownspecificopportunityset–whetherfinan-cingsmall-scalelocalfoodsystemsorinterveninginlarge-scaleglobalsupplychains.

Investinginsustainablefoodandagriculturecanbenar-rowlyfocused,sayinafarmlandfundorafood-focuseddebtfund.Likewise,itcanbepartofamoreholisticap-proach:integratingenvironmental,social,andgovernancethemesintoinvestmentsthatrelatestoclimate,waterrisk,laborandhumanrights,andthathasdirectimpactsonpeople and places.



CIOLongerTermInvestmentsUBSCIOLongerTermInvestments(LTI)seriescontainsthematicinvestmentideasbasedonlong-termstruc-tural developments. Secular trends such as popula-tiongrowth,aging,andincreaseurbanizationcreateavarietyoflonger-terminvestmentopportunities.Theseinvestmentopportunitiesareinfluencedbytheinterplayoftechnologicaladvancement,resourcescarcity,andsocietalchanges.Investorswillingtoin-vestovermultiplebusinesscyclescanbenefitfrompotentialmispricingscreatedbythetypicallyshorter-termfocusofstockmarkets.

Visit ubs.com/lti to know more.

Agricultural yield

Consumer experience

Protein consumption

Water scarcity

Investment implicationsUnlikeothermegatrends,thefoodinnovationindustryismostly represented by startups, business units that are part of majorfoodcompanies,andrecentlylistedcompaniesinfast-growingindustrieslikefooddeliveryandplant-basedmeat.Asaresult,tobenefitfromthetrend,investorsshoulddiversify

theirexposureandownlistedandunlistedcompaniesalike.Theindustryislikelytoconsolidateinthenextthreetofiveyears,inourview,whichalsoprovidesinterestingopportunitiesfrom an M&A perspective.

2018 (in bn) 2030 (in bn)

CAGR (%)

How big is the addressable market?Revenue opportunity

Sources: Company reports, Bloomberg Intelligence, UBS estimates, as of June 2019

Seed treatment 13%

Total 135700 15%

Plant-based meat 28%4.6

6

85

25

Online food delivery 16%49.4

365

Farming 4.0 16%15

90

Seed science 9%60

135

UBSChiefInvestmentOffice’s(“CIO”)investmentviewsarepreparedandpublishedbytheGlobalWealthManagementbusinessofUBSSwitzer-landAG(regulatedbyFINMAinSwitzerland)oritsaffiliates(“UBS”).The investment views have been prepared in accordance with legal requirements designed to promote the independence of investment research.

Generic investment research – Risk information:This publication is for your information onlyandisnotintendedasanoffer,orasolicitationofanoffer,tobuyorsellanyinvestmentorotherspecificproduct.Theanalysiscontainedhereindoesnotconstituteapersonal recommendationortake intoaccounttheparticular investmentobjectives,investmentstrategies,financialsituationandneedsofanyspecificrecipient.Itisbasedonnumerousassumptions.Differentassumptionscouldresultinmateriallydifferentresults.Certainservicesandproductsaresubjecttolegalrestrictionsandcannotbeofferedworldwideonanunrestrictedbasisand/ormaynotbeeligibleforsaletoallinvestors.Allinformationandopinionsexpressedinthisdocumentwereobtainedfromsourcesbelievedtobereliableandingoodfaith,butnorepresentationorwarranty,expressorimplied,ismadeastoitsaccuracyorcompleteness(otherthandisclosuresrelatingtoUBS).Allinformationandopinionsaswellasanyforecasts,estimatesandmarketpricesindicatedarecurrentasofthedateofthisreport,andaresubjecttochangewithoutnotice.OpinionsexpressedhereinmaydifferorbecontrarytothoseexpressedbyotherbusinessareasordivisionsofUBSasaresultofusingdifferentassumptionsand/orcriteria.

Innocircumstancesmaythisdocumentoranyoftheinformation(includinganyforecast,value,indexorothercalculatedamount(“Values”))beusedforanyofthefollowingpurposes(i)valuationoraccountingpurposes;(ii)todeterminetheamountsdueorpayable,thepriceorthevalueofanyfinancialinstrumentorfinancialcontract;or(iii)tomeasuretheperformanceofanyfinancialinstrumentincluding,withoutlimitation,forthepurposeoftrackingthereturnorperformanceofanyValueorofdefiningtheassetallocationofportfolioorofcomputingperformancefees.ByreceivingthisdocumentandtheinformationyouwillbedeemedtorepresentandwarranttoUBSthatyouwillnotusethisdocumentorotherwiserelyonanyoftheinformationforanyoftheabovepurposes.UBSandanyofitsdirectorsoremployeesmaybeentitledatanytimetoholdlongorshortpositionsininvestmentinstrumentsreferredtoherein,carryouttransactionsinvolvingrelevantinvestmentinstrumentsinthecapacityofprincipaloragent,orprovideanyotherservicesorhaveofficers,whoserveasdirectors,eitherto/fortheissuer,theinvestmentinstrumentitselforto/foranycompanycommerciallyorfinanciallyaffiliatedtosuchissuers.Atanytime,investmentdecisions(includingwhethertobuy,sellorholdsecurities)madebyUBSanditsemployeesmaydifferfromorbecontrarytotheopinionsexpressedinUBSresearchpublications.Someinvestmentsmaynotbereadilyrealizablesincethemarketinthesecuritiesisilliquidandthereforevaluingtheinvestmentandidentifyingtherisktowhichyouareexposedmaybedifficulttoquantify.UBSreliesoninformationbarrierstocontroltheflowofinformationcontainedinoneormoreareaswithinUBS,intootherareas,units,divisionsoraffiliatesofUBS.Futuresandoptionstradingisnotsuitableforeveryinvestorasthereisasubstantialriskofloss,andlossesinexcessofaninitial investmentmayoccur.Pastperformanceofaninvestmentisnoguaranteeforitsfutureperformance.Additionalinformationwillbemadeavailableuponrequest.Someinvestmentsmaybesubjecttosuddenandlargefallsinvalueandonrealizationyoumayreceivebacklessthanyouinvestedormayberequiredtopaymore.Changesinforeignexchangeratesmayhaveanadverseeffectontheprice,valueorincomeofaninvestment.Theanalyst(s)responsibleforthepreparationofthisreportmayinteractwithtradingdeskpersonnel,salespersonnelandotherconstituenciesforthepurposeofgathering,synthesizingandinterpretingmarketinformation.

Taxtreatmentdependsontheindividualcircumstancesandmaybesubjecttochangeinthefuture.UBSdoesnotprovidelegalortaxadviceandmakesnorepresentationsastothetaxtreatmentofassetsortheinvestmentreturnsthereonbothingeneralorwithreferencetospecificclient’scircumstancesandneeds.Weareofnecessityunabletotakeintoaccounttheparticularinvestmentobjectives,financialsituationandneedsofourindividualclientsandwewouldrecommendthatyoutakefinancialand/ortaxadviceastotheimplications(includingtax)ofinvestinginanyoftheproducts mentioned herein.

ThismaterialmaynotbereproducedorcopiescirculatedwithoutpriorauthorityofUBS.UnlessotherwiseagreedinwritingUBSexpresslyprohibitsthe distribution and transfer of this material to third parties for any reason. UBS accepts no liability whatsoever for any claims or lawsuits from any thirdpartiesarisingfromtheuseordistributionofthismaterial.Thisreportisfordistributiononlyundersuchcircumstancesasmaybepermittedbyapplicablelaw.ForinformationonthewaysinwhichCIOmanagesconflictsandmaintainsindependenceofitsinvestmentviewsandpublicationoffering,andresearchandratingmethodologies,pleasevisitwww.ubs.com/research.Additionalinformationontherelevantauthorsofthispubli-cationandotherCIOpublication(s)referencedinthisreport;andcopiesofanypastreportsonthistopic;areavailableuponrequestfromyourclient advisor.

Important Information about Sustainable Investing Strategies:Incorporatingenvironmental,socialandgovernance(ESG)factorsorSustain-ableInvestingconsiderationsmayinhibittheportfoliomanager’sabilitytoparticipateincertaininvestmentopportunitiesthatotherwisewouldbeconsistentwithitsinvestmentobjectiveandotherprincipalinvestmentstrategies.ThereturnsonaportfolioconsistingprimarilyofESGorsustain-ableinvestmentsmaybelowerthanaportfoliowheresuchfactorsarenotconsideredbytheportfoliomanager.Becausesustainabilitycriteriacanexcludesomeinvestments,investorsmaynotbeabletotakeadvantageofthesameopportunitiesormarkettrendsasinvestorsthatdonotusesuchcriteria.CompaniesmaynotnecessarilymeethighperformancestandardsonallaspectsofESGorsustainableinvestingissues;thereisalsonoguaranteethatanycompanywillmeetexpectationsinconnectionwithcorporateresponsibility,sustainability,and/orimpactperformance.

DistributedtoUSpersonsbyUBSFinancialServicesInc.orUBSSecuritiesLLC,subsidiariesofUBSAG.UBSSwitzerlandAG,UBSEuropeSE,UBSBank,S.A.,UBSBrasilAdministradoradeValoresMobiliariosLtda,UBSAsesoresMexico,S.A.deC.V.,UBSSecuritiesJapanCo.,Ltd,UBSWealthManagementIsraelLtdandUBSMenkulDegerlerASareaffiliatesofUBSAG.UBSFinancialServicesIncorporatedofPuertoRicoisasubsidiaryofUBS Financial Services Inc. UBS Financial Services Inc. accepts responsibility for the content of a report prepared by a non-US affiliate when it distributes reports to US persons. All transactions by a US person in the securities mentioned in this report should be effected through a US-registered broker dealer affiliated with UBS, and not through a non-US affiliate. The contents of this report have not been and will not be approved by any securities or investment authority in the United States or elsewhere. UBS Financial Services Inc. is not acting as a municipal advisor to any municipal entity or obligated person within the meaning of Section 15B of the Securities Exchange Act (the “Municipal Advisor Rule”) and the opinions or views contained herein are not intended to be, and do not consti-tute, advice within the meaning of the Municipal Advisor Rule.

External Asset Managers / External Financial Consultants:IncasethisresearchorpublicationisprovidedtoanExternalAssetManageroranExternalFinancialConsultant,UBSexpresslyprohibitsthatitisredistributedbytheExternalAssetManagerortheExternalFinancialConsultantandis made available to their clients and/or third parties.

Austria:ThispublicationisnotintendedtoconstituteapublicofferunderAustrianlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,NiederlassungÖsterreich,withplaceofbusinessatWächtergasse1,A-1010Wien.UBSEuropeSE,NiederlassungÖsterreichissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralBank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority (Bundesanstalt fürFinanzdienstleistungsaufsicht),aswellasof theAustrianFinancialMarketAuthority(Finanzmarktaufsicht),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGer-man law in the form of a Societas Europaea, duly authorized by the ECB. Bahrain:UBSisaSwissbanknotlicensed,supervisedorregulatedin

BahrainbytheCentralBankofBahrainanddoesnotundertakebankingorinvestmentbusinessactivitiesinBahrain.Therefore,clientshavenoprotectionunderlocalbankingandinvestmentserviceslawsandregulations.Brazil:ThispublicationisnotintendedtoconstituteapublicofferunderBrazilianlaworaresearchanalysisreportasperthedefinitioncontainedundertheComissãodeValoresMobiliários(“CVM”)Instruction598/2018.ItisdistributedonlyforinformationpurposestoclientsofUBSBrasilAdministradoradeValoresMobiliáriosLtda.and/orofUBSCon-sensoInvestimentosLtda.,entitiesregulatedbyCVM.Canada:InCanada,thispublicationisdistributedtoclientsofUBSWealthManagementCanadabyUBSInvestmentManagementCanadaInc..China:ThisreportispreparedbyUBSSwitzerlandAGoritsoffshoresubsidiaryoraffiliate(collectivelyas“UBSOffshore”).UBSOffshoreisanentityincorporatedoutofChinaandisnotlicensed,supervisedorregulatedinChinatocarryoutbankingorsecuritiesbusiness.TherecipientshouldnotcontacttheanalystsorUBSOffshorewhichproducedthisreportforadviceastheyarenotlicensedtoprovidesecuritiesinvestmentadviceinChina.UBSInvestmentBank(includingResearch)hasitsownwhollyindependentresearchandviewswhichattimesmayvaryfromtheviewsofUBSGlobalWealthManagement.Thisreportshallnotberegardedasprovidingspecificsecuritiesrelatedanalysis.TherecipientshouldnotusethisdocumentorotherwiserelyonanyoftheinformationcontainedinthisreportinmakinginvestmentdecisionsandUBStakesnoresponsibilityinthisregard.Czech Republic:UBSisnotalicensedbankintheCzechRepublicandthusisnotallowedtoprovideregulatedbankingorinvestmentservicesintheCzechRepublic.PleasenotifyUBSifyoudonotwishtoreceiveanyfurthercorrespondence. Denmark:ThispublicationisnotintendedtoconstituteapublicofferunderDanishlaw.It isdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,DenmarkBranch,filialafUBSEuropeSE,withplaceofbusinessatSanktAnnaePlads13,1250Copenhagen,Denmark,registeredwiththeDanishCommerceandCompaniesAgency,underNo.38172433.UBSEuropeSE,DenmarkBranch,filialafUBSEuropeSEissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralBank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority (Bundesanstalt fürFinanzdienstleistungsaufsicht),aswellasoftheDanishFinancialSupervisoryAuthority(Finanstilsynet),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.France:ThispublicationisdistributedbyUBS(France)S.A.,French“sociétéanonyme”withsharecapitalof€132.975.556,69,boulevardHaussmannF-75008Paris,R.C.S.ParisB421255670,toitsclientsandprospects.UBS(France)S.A.isaproviderofinvestmentservicesdulyauthorizedaccordingtothetermsofthe“CodeMonétaireetFinancier”,regulatedbyFrenchbankingandfinancialauthoritiesasthe“AutoritédeContrôlePrudentieletdeRésolution”.Germany: This publication is not intendedtoconstituteapublicofferunderGermanlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,Germany,withplaceofbusinessatBockenheimerLandstrasse2-4,60306FrankfurtamMain.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheEuropeanCentralBank(“ECB”),andsupervisedbytheECB,theGermanCentralBank(DeutscheBundesbank)andtheGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),towhichthis publication has not been submitted for approval. Greece:UBSSwitzerlandAGanditsaffiliates(UBS)arenotlicensedasabankorfinancialinstitutionunderGreeklegislationanddonotprovidebankingandfinancialservicesinGreece.Consequently,UBSprovidessuchservicesfrombranchesoutsideofGreece,only.ThisdocumentmaynotbeconsideredasapublicofferingmadeortobemadetoresidentsofGreece.Hong Kong: ThispublicationisdistributedtoclientsofUBSAGHongKongBranchbyUBSAGHongKongBranch,alicensedbankundertheHongKongBank-ingOrdinanceandaregisteredinstitutionundertheSecuritiesandFuturesOrdinance.UBSAGHongKongBranchisincorporatedinSwitzerlandwith limited liability. India:UBSSecuritiesIndiaPrivateLtd.(CorporateIdentityNumberU67120MH1996PTC097299)2/F,2NorthAvenue,MakerMaxity,BandraKurlaComplex,Bandra(East),Mumbai(India)400051.Phone:+912261556000.ItprovidesbrokerageservicesbearingSEBIRegis-trationNumberINZ000259830;merchantbankingservicesbearingSEBIRegistrationNumber:INM000010809andResearchAnalystservicesbear-ingSEBIRegistrationNumber: INH000001204.UBSAG, itsaffiliatesor subsidiariesmayhavedebtholdingsorpositions in the subject Indiancompany/companies.Withinthepast12months,UBSAG,itsaffiliatesorsubsidiariesmayhavereceivedcompensationfornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservicesfromthesubjectIndiancompany/companies.Thesubjectcompany/companiesmayhavebeenaclient/clientsofUBSAG,itsaffiliatesorsubsidiariesduringthe12monthsprecedingthedateofdistributionoftheresearchreportwithrespecttoinvestmentbankingand/ornon-investmentbankingsecurities-relatedservicesand/ornon-securitiesservices.Withregardtoinformationonassociates,pleaserefertotheAnnualReportat:http://www.ubs.com/global/en/about_ubs/investor_relations/annualreporting.html.Indonesia, Malaysia, Philippines, Thailand:ThismaterialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Shouldyouhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.Anyandalladviceprovidedand/ortradesexecutedbyUBSpursuanttothematerialwillonlyhavebeenprovideduponyourspecificrequestorexecuteduponyourspecificinstructions,asthecasemaybe,andmaybedeemedassuchbyUBSandyou.Thematerialmaynothavebeenreviewed,approved,disapprovedorendorsedbyanyfinancialorregulatoryauthorityinyourjurisdiction.Therelevantinvestmentswillbesubjecttorestrictionsandobligationsontransferassetforthinthematerial,andbyreceivingthematerialyouundertaketocomplyfullywithsuchrestrictionsandobligations.Youshouldcarefullystudyandensurethatyouunderstandandexerciseduecareanddiscretioninconsideringyourinvestmentobjective,riskappetiteandpersonalcircumstancesagainsttheriskoftheinvestment.Youareadvisedtoseekindependentprofessionaladvice in case of doubt. Italy:ThispublicationisnotintendedtoconstituteapublicofferunderItalianlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,SuccursaleItalia,withplaceofbusinessatViadelVecchioPolitecnico,3-20121Milano.UBSEuropeSE,Suc-cursaleItaliaissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralBank(DeutscheBundesbank),theGer-manFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheBankofItaly(Bancad’Italia)andtheItalianFinancialMarketsSupervisoryAuthority(CONSOB–CommissioneNazionaleperleSocietàelaBorsa),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacredit institutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorized by the ECB. Jersey:UBSAG,JerseyBranch,isregulatedandauthorizedbytheJerseyFinancialServicesCommissionfortheconductofbanking,fundsandinvestmentbusiness.WhereservicesareprovidedfromoutsideJersey,theywillnotbecoveredbytheJerseyregulatoryregime.UBSAG,JerseyBranchisabranchofUBSAGapubliccompanylimitedbyshares, incorporatedinSwitzerlandwhoseregisteredofficesareatAeschenvorstadt1,CH-4051BaselandBahnhofstrasse45,CH8001Zurich.UBSAG,JerseyBranch’sprincipalplacebusinessis1,IFCJersey,StHelier,Jersey,JE23BX.Luxembourg:ThispublicationisnotintendedtoconstituteapublicofferunderLuxembourglaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,LuxembourgBranch,withplaceofbusinessat33A,AvenueJ.F.Kennedy,L-1855Luxembourg.UBSEuropeSE,LuxembourgBranchissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralbank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheLux-embourgsupervisoryauthority(CommissiondeSurveillanceduSecteurFinancier),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlawintheformofaSocietasEuropaea,dulyauthorizedbytheECB.Mexico: This information isdistributedbyUBSAsesoresMéxico,S.A.deC.V. (“UBSAsesores”),anaffiliateofUBSSwitzerlandAG, incorporatedasanon-independentinvestmentadvisorundertheSecuritiesMarketLawduetotherelationwithaForeignBank.UBSAsesoresisaregulatedentityanditissubjecttothesupervisionoftheMexicanBankingandSecuritiesCommission(“CNBV”),whichexclusivelyregulatesUBSAsesoresregardingtherenderingofportfoliomanagement,aswellasonsecuritiesinvestmentadvisoryservices,analysisandissuanceofindividualinvestmentrecom-mendations,sothattheCNBVhasnosurveillancefacultiesnormayhaveoveranyotherserviceprovidedbyUBSAsesores.UBSAsesoresisregis-teredbeforeCNBVunderRegistrynumber30060.YouarebeingprovidedwiththisUBSpublicationormaterialbecauseyouhaveindicatedtoUBSAsesoresthatyouareaSophisticatedQualifiedInvestorlocatedinMexico.Thecompensationoftheanalyst(s)whopreparedthisreportisdeter-minedexclusivelybyresearchmanagementandseniormanagementofanyentityofUBSGrouptowhichsuchanalyst(s)renderservices.Nigeria: UBSSwitzerlandAGand itsaffiliates (UBS)arenot licensed,supervisedorregulated inNigeriabytheCentralBankofNigeriaortheNigerianSecuritiesandExchangeCommissionanddonotundertakebankingorinvestmentbusinessactivitiesinNigeria.Portugal:UBSSwitzerlandAGisnotlicensedtoconductbankingandfinancialactivitiesinPortugalnorisUBSSwitzerlandAGsupervisedbytheportugueseregulators(BankofPortugal“BancodePortugal”andPortugueseSecuritiesExchangeCommission“ComissãodoMercadodeValoresMobiliários”).Singapore: This materialwasprovidedtoyouasaresultofarequestreceivedbyUBSfromyouand/orpersonsentitledtomaketherequestonyourbehalf.Should

youhavereceivedthematerialerroneously,UBSasksthatyoukindlydestroy/deleteitandinformUBSimmediately.ClientsofUBSAGSingaporebranchareaskedtopleasecontactUBSAGSingaporebranch,anexemptfinancialadviserundertheSingaporeFinancialAdvisersAct(Cap.110)andawholesalebanklicensedundertheSingaporeBankingAct(Cap.19)regulatedbytheMonetaryAuthorityofSingapore,inrespectofanymattersarisingfrom,orinconnectionwith,theanalysisorreport.Spain:ThispublicationisnotintendedtoconstituteapublicofferunderSpanishlaw. It is distributed only for information purposes to clients of UBS Europe SE, Sucursal en España, with place of business at Calle María de Molina 4,C.P.28006,Madrid.UBSEuropeSE,SucursalenEspañaissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralbank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsi-cht),aswellasoftheSpanishsupervisoryauthority(BancodeEspaña),towhichthispublicationhasnotbeensubmittedforapproval.Additionallyitisauthorizedtoprovideinvestmentservicesonsecuritiesandfinancialinstruments,regardingwhichitissupervisedbytheComisiónNacionaldelMercadodeValoresaswell.UBSEuropeSE,SucursalenEspañaisabranchofUBSEuropeSE,acreditinstitutionconstitutedunderGermanlawinthe form of a Societas Europaea, duly authorized by the ECB. Sweden:ThispublicationisnotintendedtoconstituteapublicofferunderSwedishlaw.ItisdistributedonlyforinformationpurposestoclientsofUBSEuropeSE,SwedenBankfilial,withplaceofbusinessatRegeringsgatan38,11153Stockholm,Sweden,registeredwiththeSwedishCompaniesRegistrationOfficeunderReg.No516406-1011.UBSEuropeSE,SwedenBankfilialissubjecttothejointsupervisionoftheEuropeanCentralBank(“ECB”),theGermanCentralbank(DeutscheBundesbank),theGermanFederalFinancialServicesSupervisoryAuthority(BundesanstaltfürFinanzdienstleistungsaufsicht),aswellasoftheSwedishsupervisoryauthority(Finansinspektionen),towhichthispublicationhasnotbeensubmittedforapproval.UBSEuropeSEisacreditinstitutionconstitutedunderGermanlaw in the form of a Societas Europaea, duly authorized by the ECB. Taiwan:ThismaterialisprovidedbyUBSAG,TaipeiBranchinaccordancewithlawsofTaiwan,inagreementwithorattherequestofclients/prospects.UAE:UBSisnotlicensedintheUAEbytheCentralBankofUAEorbytheSecurities&CommoditiesAuthority.TheUBSAGDubaiBranchislicensedintheDIFCbytheDubaiFinancialServicesAuthorityasanauthorisedfirm.UK:ThisdocumentisissuedbyUBSWealthManagement,adivisionofUBSAGwhichisauthorisedandregulatedbytheFinancialMarketSupervisoryAuthorityinSwitzerland.IntheUnitedKingdom,UBSAGisauthorisedbythePrudentialRegulationAuthorityandissubjecttoregula-tionbytheFinancialConductAuthorityandlimitedregulationbythePrudentialRegulationAuthority.DetailsabouttheextentofregulationbythePrudentialRegulationAuthorityareavailablefromusonrequest.AmemberoftheLondonStockExchange.ThispublicationisdistributedtoretailclientsofUBSWealthManagement.

Version 05/2019. CIO82652744©UBS2019.ThekeysymbolandUBSareamongtheregisteredandunregisteredtrademarksofUBS.Allrightsreserved.

Documents

The food revolution - It's Your Business · July 2019 – The food revolution 5 Food is life. Producing it has reshaped our planet. Today, whole economies and even national security