Innovation & Technology
Why Entrepreneurs, Not CPG Giants, Will Lead Us to ‘Earth-Functional Foods’

New report uses the term “Earth-Functional Foods” to describe food that provides environmental benefits beyond health.

By Matt Zieger | Published 5 years ago | About a 3 minute read

Image: Sophie's Kitchen

The way we eat and produce food is a significant contributor to climate change. In fact, agriculture is estimated to contribute between 13 and 24 percent of global greenhouse gas emissions. Moreover, if average consumer diets continue as is, the livestock sector alone could consume 80 percent of Earth’s annual greenhouse gas budget by 2050.

Thankfully, in the United States, consumer preferences are starting to change. Our new report, Growing a Sustainable Food System, highlights entrepreneurs that are innovating around sustainable agriculture, from the farm to the table. We devote a section to brands that sell what we call “Earth-Functional Foods” — foods that provide environmental benefits beyond health, including lower carbon footprints, alternatives to meat, and incorporate recycled or upcycled ingredients.

Interestingly, this innovation is being led by startups, not incumbents. The reason? The biggest CPG brands typically spend around 1-5 percent of their budget on research and development — compared with 15 percent for larger players in other industries. With a recent spike in demand for sustainable products, several CPG companies have invested in smaller brands that are pushing the envelope on sustainability. 13 of the largest food companies — including Campbell Soup Company, General Mills, PepsiCo and Tyson Foods — have launched their own venture capital arms, startup incubators, scholarship programs and more, aimed at unearthing next-generation sustainable food solutions.

The demand for “Earth-functional foods”

The term “functional foods” has emerged to describe foods such as probiotics and coconut oil that improve your health beyond basic nutrition. In this report, we use the term “Earth-Functional Foods” to describe a broader category: Food that provides environmental benefits beyond health. That’s being driven by changing consumer preferences — a rising demand for plant-based proteins (including the growing “center of the plate” movement), and a rising demand for sustainable CPG products (in a recent survey, 45 percent of shoppers would be prepared to stop buying their favorite brands if they don’t commit to measuring their products carbon footprint).

Communicating complex, unfamiliar sustainability claims on CPG packaging

Join us as Applegate and HowGood share insights into marketing lessons, consumer response and understanding, and marketplace data on the expression and communication of new categories of sustainability claims on CPG packaging - as well as tips for avoiding consumer and industry backlash and controversy - Wed, Oct. 16, at SB'24 San Diego.

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What does this innovation look like? It can take many forms such as Sophie’s Kitchen — developer of 100 percent plant-based seafood alternative protein meals that are vegan, soy-free, gluten-free, non-GMO, Kosher and, above all, good for the environment; or Kuli Kuli Foods, the startup that may have singlehandedly created an international market for moringa, a superfood that not only improves nutrition and livelihoods for rural female farmers in Haiti and West Africa, but also helps to purify water in these native growing regions.

If you would like to read about more examples of Earth-Functional Foods on the rise, or more insights into Growing a Sustainable Food System, click here.