Sustainable Foods Captivating Global Tastes

Sustainable foods are rapidly rising as the food of the future. The sustainable food craze is spreading fast in YouTube and SNS channels, and not only famous creators and the MZ generation but also political and business celebrities are showing great interest. We examine why sustainable foods caught on in the first place and how the market is reacting as well as what strategy SK Group is charting.

 

 

 

 
Sustainable foods riding on the back of ESG as the food of the future

Do you happen to know what ‘meaning out’ means? It is a coined word combining meaning and coming out, indicating that one reveals his/her faith or view of values. In a broader sense, it includes an act of demonstrating one’s political or social beliefs, and view of values, preference, inclination, claim, etc., which is often found in the MZ generation. One of the markets rapidly expanding on the boost of such value-focused inclination of the MZ generation is that of sustainable foods. Regarded as foods for vegetarians or unique and newfangled foods in the past, sustainable foods are now being repositioned as foods conducive to both personal health and social values.

Popularization of ESG is also a contributor to the big surge in the popularity of sustainable foods. COVID-19 has impacted our life in many different ways. Both businesses and consumers share their concern over environment and climate. Food industry has significant influence on the environment of our planet. Agriculture and livestock industry account for 24 of the global greenhouse gas (GHG) emissions. 70% of fresh water used in a year and 50% of available land is used for food production, with corresponding contamination of water and land. Furthermore, modern meat product production processes are associated with animal food product safety issues including risks of infectious diseases as well as such social issues as compromised ecosystem and animal welfare.

 

 

 

 

To address such challenges, countries around the world are working on sustainable foods containing plant-based protein extracted from beans, mushrooms, or fermented by cutting-edge microorganism-enabled fermentation technology as opposed to animal-based livestock products. Generally speaking, sustainable foods are divided into five different categories, including plant-based alternative foods; insect-based alternative foods; marine algae-based sustainable foods, microorganism (fermentation)-based protein food products; and cultured meats. Sustainable foods are appealing to businesses and consumers in that their quality and quantity can be assured on a stable platform not exposed to the risks of animal farming, and their production processes are eco-friendly.

 

 

 

 

 

 

 

 

 
Global market capital is funneled into sustainable foods

According to AgFunder, US food-tech venture capital, global investment on sustainable foods jumped over 20-fold from about 130 billion won in 2016 to 2.6 trillion won in 2020. A joint survey conducted by Boston Consulting Group of the US and Blue Horizon investing in future foods estimated the consumption of sustainable protein foods to rise seven times by 2035 when compared with 2020. Global business organizations are rushing into the sustainable food market to be a first mover in future food industry and expand their ESG portfolios.

 

 

As we have seen, the sustainable food market is growing rapidly thanks to investment continuously funneled into R&D programs and resulting in technological breakthroughs, with knock-on effects expected not only in the food industry but also in retail locations, smart farms, and food production plants. Then, how is SK Group is endeavoring to venture into the sustainable food market?

 

 

As relevant industries undergo change/expansion, the sustainable food market is predicted to grow by leaps and bounds, replacing part of the conventional food market. In addition, as the MZ generation with significant interest in wellness and environment and propensity to value-oriented consumption gain increasingly more purchasing power, they are emerging as a key consumer group for sustainable foods. Flexiterians (who voluntarily limit their meat consumption) are not vegetarians by definition but conscious of health and environment are accounting for the lion’s share of sustainable food consumption in the United States and many other countries. Plant-based products currently constitute the majority of available product offerings. But, more advanced sustainable foods derived from cutting-edge biotech fermentation or cell-culture technologies are expected to emerge and eventually lead the sustainable food market.

SK Inc. made its first move in the sustainable food market in 2020 when the company invested approximately 54 billion won in Perfect Day, a leading US-based fermentation-enabled sustainable food business with the world’s first fermented milk protein produced from protein genes extracted from dairy cow. SK Inc. is also expanding its sustainable food investment portfolio in the United States, with about 29 billion won invested in Nature’s Fynd, a promising sustainable food producer.

In addition, SK Inc. signed an MOU with Joyvio Group of China on July 26 to raise a sustainable food investment fund valued at about 100 billion won (550 million RMB). Joyvio Group is a leading food business enterprise that owns several top industry brands for premium fruits and seafood products in Australia and Chile. SK Inc. plans to invest jointly with Joyvio Group in sustainable food production businesses specialized in plant-based meats, fermentation technology, etc. SK Inc. is also prospecting for business collaboration pipelines with food-tech businesses empowered by IT technologies such as vertical farms as well as partnering with global sustainable food businesses to jointly venture into the Chinese market. SK Inc. plans to expand its plant-based sustainable meat portfolio in addition to fermented protein in the global market.

Firstly, as a strategic investor, SK Inc. vows to maintain its initiative in the sustainable food market and identify and invest in promising businesses that own key proprietary technologies. Secondly, the company will introduce product offerings and technological solutions of its portfolio companies to major Asian countries including Korea and play a pivotal role in fostering partnerships or joint ventures with industry-leading food businesses. In so doing, SK Inc aims to enhance the valuation of its portfolio companies and spearhead sustainable food markets in Asia in the long run.

 

 

Thanks to sustainable food-tech businesses active on R&D programs, sustainable food products are showing increasingly greater similarity to traditional food products. Furthermore, as people are getting more and more health and environmentally conscious, sustainable foods are drawing closer to the general public. What about trying out a sustainable food today to protect our environment and as a precursor to the food of the future? We look forward to the day when the products from sustainable food producers invested and fostered by SK Group become a regular addition to our dinner table.