From innovation the answer to the food crisis

There are 2,527 sustainable agrifood startups worldwide. Networks for distribution of food aid to vulnerable people in cities are being strengthened, leveraging different models of cross-sector collaboration for recovery and redistribution of products and food surpluses; the cold chain plays a strategic role, but is exposed to multiple risks.

Summary of research by the Food Sustainability Observatory of the School of Management of the Politecnico di Milano *

According to the latest FAO forecasts, the level of global food insecurity - which in 2021 reached 828 million people suffering from hunger and another 2.3 billion people in a state of moderate or severe food insecurity - is set to worsen further due to the effects of the pandemic, extreme weather events and the war in Ukraine.

In Italy in 2019-21, 6.3% of the population had problems accessing food and the situation worsened.
Responses to the crisis and the momentous challenges in the agribusiness sector are expected primarily from policy makers. Cross-sectoral collaborations between local government agencies and the private sector (profit and nonprofit) also play an important role. At the same time, companies are strengthening their innovation efforts to introduce new solutions to the sector’s sustainability challenges.

«The food crisis must be addressed by operating many levers. A key response comes from agreements between countries to safeguard an adequate and equitable supply of food, along with policies by the European Commission and national governments to strengthen security, resilience and sustainability of agrifood systems. Other measures must be taken by local and national governments in partnership with nonprofit organizations to mitigate the most negative social impacts in the short term. A decisive push also and above all comes from the business system with its contribution to innovation, which is the lever for a lasting and sustainable transformation of the agrifood system»

Raffaella Cagliano
Scientific Manager of the Food Sustainability Observatory

Young companies’ goals

Of 7,337 agrifood startups surveyed in the five-year period between 2017 and 2021 globally, 34% (2,527 startups) pursue one or more of the sustainable development goals included in the United Nations 2030 Agenda.

The solutions developed by agrifood startups first aim to optimize resource use (SDG 12 target 12.2, 30%); they also promote the protection of terrestrial and freshwater ecosystems (SDG 15 target 15.1, 21%). Next, startups invest in solutions to raise awareness and incentivize the adoption of sustainable lifestyles and practices (SDG 12 target 12.8, 17%), increase productivity and resilience of crops to climate change (SDG 2 target 2.4, 17%), and promote sustainable tourism and local production (SDG 8 target 8.9, 16%).

To a more modest extent, young enterprises aim to protect small-scale producers (SDG 2 target 2.3, 12%), reduce food surpluses and waste along the supply chain (SDG 12 target 12.3, 11%), ensure employment for all and fair remuneration (SDG 8 target 8.5, 8%), and promote efficient use of and equitable access to water resources (SDG 6 target 6.4, 7%).

«In the face of the sector’s momentous and emerging challenges, agrifood startups are proposing solutions that aim to improve food security and foster the transition to more sustainable and inclusive production and consumption patterns. Young companies are the first to champion innovative technologies, services and business models, seizing new market opportunities»

Paola Garrone
Scientific Manager of the Food Sustainability Observatory 

Startups in the world

Looking at the concentration of sustainability-oriented agrifood startups in different countries around the world, Norway ranks first (25 agrifood startups, 60% of which are sustainable), followed by Israel (119 startups, 58% of which are sustainable). Nigeria ranks third (64 startups, 50% of which are sustainable), followed by Poland (20 startups, 50% of which are sustainable). Italy ranks 23rd (85 agrifood startups, 35% of which are sustainable).

On the funding front, however, considering only agrifood startups with a clear geographic indication and that have received at least one funding, 40% are sustainable startups. These raised a total of $6.4 billion from 2017 to 2021, with an average of $7.3 million per company. 
In first place are U.S. sustainable startups, followed by startups operating in Asia.  Then we find startups in Europe, which raised $911 million in funding (14% of total investments in sustainable startups) and an average of $4.1 million per startup.

The total funding raised by agrifood startups in our country is $16 million, with an average capital per startup of $1.6 million.

Cross-sector collaborations

In the current scenario, cities are facing serious difficulties in ensuring access to food for all segments of the urban population, due to continued urbanization and worsening poverty conditions for the most vulnerable people.

«The fundamental role of cross-sectoral collaborations for the recovery and distribution of food for social purposes emerges. These experiences involve local public and private, for-profit and nonprofit entities, aggregating resources and strategic expertise on the ground to provide a joint response to the growing need for healthy and nutritious food by the most vulnerable segments of the urban population».

Giulia Bartezzaghi
Director of the Food Sustainability Observatory

From its analysis of 39 social food distribution initiatives in various urban contexts, nationally and internationally, the Observatory has identified 4 different recurring cross-sectoral collaboration models, which can also hybridize with each other: recovery and redistribution of food surpluses through donation, suspended grocery shopping, transformation of surplus into another product with a longer residual life or into cooked meals, and social supermarket.

Among the experiences analyzed are the Neighborhood Hubs against food waste in Milan, which combine activities of recovery and redistribution of donated food surpluses from different sources with the social supermarket model and also surplus processing, which will be piloted in the newly opened fifth Hub.

Other initiatives include “Culinary Misfit” in Berlin, which reuses fruits and vegetables discarded due to aesthetic defects and purchased at a subsidized price from local agricultural producers, for the preparation of cooked dishes, also served free of charge to people in need; social supermarket experiences based on a points card system, including the “Ri:Colt.O” initiative of the Tempo Libero Social Cooperative, which also supplies its solidarity store with food produced with ingredients grown in its own garden.

Experiences of suspended spending include “Spesa SOSpesa” at the municipal market in Milan’s Nolo neighborhood and “Fate Bene” in Turin, in which spending for people in need is made up of donated surpluses or products purchased from urban markets, outlets or neighborhood stores thanks to the financial support of private citizens. 

The cold chain

The Observatory analyzed more than 79 innovative solutions introduced by agrifood startups, operating in the five-year period 2017-2021, geared toward reducing waste in the cold chain. The solutions aim to optimize production in response to demand trends and decrease inventories in the warehouse through better alignment of supply and demand (11% of the sample) and supply chain shortening (6%).

They aim to improve product preservation through extending shelf life (10%) and monitoring temperature and other critical parameters (9%). Finally, to enhance the value of surplus fresh produce, startups propose digital platforms to redistribute products through discounted sales or donation (28%), or alternatively various upcycling technology solutions to transform surplus into other edible product with a longer residual life or to recover part of its value for animal feed, recycling or energy recovery purposes (36%). 

«The cold chain is of fundamental importance in the agri-food sector because of the irreplaceable role that fresh and ultra-fresh products play in a healthy and nutritious diet. But we need to overcome the critical issues of the interfaces between the different actors in the supply chain, particularly during transport or in the loading and unloading of goods, and then the trade-off between strategic decisions and operational practices oriented, on the one hand, to energy efficiency goals or increased in-store sales and, on the other, to goals of maintaining optimal product storage conditions and thus preventing waste».

Marco Melacini
Scientific Manager of the Food Sustainability Observatory

Measuring sustainability

The Food Sustainability Observatory has developed a system for measuring supply chain sustainability performance, based on several steps, consisting of an ever-increasing detailed analysis of sustainability and circularity aspects relevant to the supply chain, culminating in the definition of performance indicators.

«The attention by companies to measuring sustainability performance is growing steadily, both in specific areas and at the supply chain level. The challenge remains the effective sharing of reliable and accurate data among the different and multiple actors involved».

Federico Caniato
Scientific Manager of the Food Sustainability Observatory

Among the many existing tools, Life Cycle Assessment (LCA) is now also widely used in the field of food packaging to quantify the impacts of each stage of the product life cycle. However, there are numerous eco-tools, software, guidelines, and checklists, which allow the eco-sustainability of packaging to be measured.

The Observatory mapped 35 of them, with the aim of understanding their distinctive features and application benefits. The analysis delved into 17 software, 12 general packaging sustainability guidelines and specifically geared toward recyclability and circularity, and 6 checklists, categorized according to their function of providing sustainability performance analysis, recyclability analysis and/or circularity analysis.

«Sustainability and circularity performance measurement systems are also finding development and application in the field of food packaging. In particular, the environmental impact of this field turns out to be the aspect on which most of the efforts carried out by companies and operators in the sector are focused to date, driven also by European Directives».

Barbara Del Curto
Scientific Manager of the Food Sustainability Observatory


* NOTE
The research was presented during the conference “Food safety and sustainability of the agrifood supply chain: where are we?” on Sept. 28.
The 2021/2022 edition of the Food Sustainability Observatory was carried out in collaboration with Danone, Dussmann Service, Fratelli Beretta, LU-VE Group, PPS-Price Performance Solutions, CONAI, GS1 Italy, Wenda, and under the patronage of Assolombarda Milan, Monza and Brianza, Lodi and Pavia, Milan City Council - Food Policy, Fairtrade Italia, Fondazione Banco Alimentare Onlus, Legambiente Lombardia.
The School of Management of the Politecnico di Milano, established in 2003, accommodates the many research, training and consulting activities in the fields of economics, management and industrial engineering that the Politecnico carries out through its various internal and consortium structures.