Monday 12 July 2021

Points experts

Food For Generations - Putting food's sustainable transition on the menu

The impact investment journey of CPR AM begins in 2017 with the launch of the Food For Generations fund and the ambition of addressing the global food challenge: feeding a growing population while mitigating the negative impact of food production and consumption. In this regard, the freshly released annual impact report illustrates the complete sustainable approach applied to the fund and the impact indirectly generated by its investments. As the fund just achieved the symbolic 1€ billion Euros of AUM milestone, 2021 seems to be confirming its robust and successful investment approach with a consistent +16% year-todate performance.
Interview with the investment specialist, Arnaud Demes, to take a closer look at the trends and transformations currently shaping the agro-food system and how the fund is positioned to benefit from current market
conditions.

COULD YOU BRIEFLY SUMMARIZE THE MA JOR CHALLENGES FACED BY THE FOOD SYSTEM AND HOW FOOD FOR GENERATIONS ADDRESSES THEM?

Food production is at the crossroads of the major contemporary trends generating pressure on both demand and supply. This pressure is quantitative, through an increase in global consumption driven by a growing world population and rising incomes in emerging countries, and qualitative, through changes in consumption and eating habits. This growing and evolving food demand has to undeniably take into account the constraints on natural resources already under strong pressure and the climate-related challenges.

As such, CPR Invest - Food For Generations aims to enhance the role played by investors in the transition towards more sustainable agri-food models by supporting companies that improve the sustainability, access and quality of food. To do so, the fund invests throughout the agro-food value chain - from farms to forks - by adopting a responsible approach. Since its inception, the fund has committed to closely monitor precisely defined environmental impact targets such as the carbon and water intensity or the waste recycling ratio. This is key to assess the impact generated by the investments and achieve an increase of their positive contribution over time.

AMONG THE MANY CONSUMER TRENDS EMERGED AND/OR ACCELERATED DURING THE PANDEMIC, WHICH ONES WOULD YOU MORE IN PARTICULARLY POINT OUT?

The global pandemic has been fueling the growth of the stay-at-home economy with the acceleration of e-commerce and food & grocery delivery for the thematic. The meal-kit delivery industry in particular, enjoyed a real boom under lockdown and will continue to grow beyond restrictions, due to a profound behavioral change. Within this dimension, the HelloFresh stock continues to be a strong performance contributor for the fund. Moreover, pandemic has raised awareness on the importance of food supply chain control. Indeed, the sanitary crisis had an impact on the whole process from the field to the consumer and as such there is now considerable concern about food production, processing, distribution and consumption. More generally speaking, consumer preferences have been shifting with the emergence of a more digital and conscious consumer profile. Increasing adoption of digital traceability solutions, delivery and aggregator apps: millennials are now asking for more food transparency, customization and convenience.

THE FOOD SYSTEM IS UNDERGOING A MASSIVE TRANSFORMATION TO BECOME MORE SUSTAINABLE – COULD YOU PROVIDE SOME EXAMPLES I LLUSTRATING T HIS DYNAMIC?

ndeed, many innovative solutions are currently taking place throughout the entire food value chain.

To this end, we can mention precision agriculture, a farm management concept aiming to improve the profitability and sustainability of agricultural production through the application of new technologies such as artificial intelligence, robotics, machine learning etc. John Deere for example, one of the fund’s top performance contributors in 2021 and a leading agricultural machinery manufacturer, has developed an advanced technology capable of sensing subtle differences between crop and weed allowing to target and spray herbicide on the weed only and therefore minimize the use of chemical pesticides. To respond to the increased food security concerns mentioned previously, Zebra Technologies, also among the fund’s top performing companies, has developed digital tracking solutions that automate safety procedures through data collecting and recording,
ranging from cooking and storage temperatures to employee sanitation procedures. The system can also provide real-time reports so that the necessary actions are taken as quickly as a food safety problem is identified...

Read the full document below

Arnaud Demes, Investment Specialist - CPR AM

Document