“This transformation underway in our food system is an opportunity for investors and an impact on the market,” said Sheria Antia, PGIM’s head of thematic research.
Over the past two decades, technology has cemented its position as a market-leading sector that is second to none. Blockchain, the metaverse, and even artificial intelligence (AI) are just a few of the tech trends that have captured investor attention and boosted tech stock prices.
But with the U.S. economy slowing and a new business cycle on the horizon, some analysts believe it’s time for investors to finally start looking elsewhere for big long-term returns. ing.
Investing in permanent trends without being bound by short-term economic cycles is exactly the theme of PGIM, which manages assets of approximately 1.27 trillion dollars (approximately 177.8 trillion yen, converted to 140 yen to the dollar). That’s what Head of Research Shehriyar Antia does. Antia makes profitable investments in themes that will have a dramatic impact on the world over the next five to ten years.
According to Antia, there is no trend more exciting than the transformation of the world’s food system right now.
the future of food
The current food system is a behemoth, producing 20 trillion calories a day and employing almost 40% of the world’s population, Antia told Insider.
“But it’s very complex, inefficient, and increasingly futile. I’m not saying this to provoke alarm, but to highlight the critical challenges we face today. is”
According to Antia, there are several factors that have room for change.
“If there’s one thing we’ve learned in the last few years, it’s that food has huge macro and political implications. Food security is becoming national security. , the new corona made me keenly aware of this point.”
Antia explained, citing extreme weather events and Russia’s invasion of Ukraine as major disruptions to the food supply chain.
And as inflation spreads globally, Antia also cites soaring food costs as a destabilizing factor.
“Leaving food prices soaring unchecked could fuel public unrest.”
The good news, Antia said, is that our current food system is already beginning to meet these challenges and is in the very early stages of a major transformation.
The bad news is that no one has noticed that yet.
“For a massive change in a system as essential as food, it has been so overlooked. Global investors should pay more attention to this. It’s a real opportunity and an impact for
Key drivers transforming the global food system
One of the major changes driving the transformation of the global food system now is demand, primarily in frontier and emerging markets.
The world population is projected to grow by 25% over the next 25 years, while food demand is said to increase by 60% over the same period. Antia explained that the reason for this increased demand is that the world is getting richer.
Global affluence also means that diets around the world are converging, with people in frontier and emerging markets eating more meat, dairy, wheat, oil and sugar. I’m going to be devoted to the ′′ western diet ′′ including.
“Such global dietary convergence is a compelling need for increased productivity in the food system.”
On the food supply side, Antia cites climate change and technological innovation as new drivers for the evolution of the world’s food system.
While climate change is hurting agricultural production, agriculture also emits 30% of greenhouse gases. These two-way impacts between food production and the environment highlight the need for greater sustainability in the global food system, says Antia.
And technology is at play across the food value chain, from bio-organic farming, AI-powered autonomous multi-task tractors, and cultivated meat.
“At all stages of the food system, innovation is a key driver of change, and it is vital that investors understand that.”
Many investment opportunities are emerging
Antia stresses that there are many opportunities for investors in anticipation of such major changes in the food system.
For example, as diets converge, longer supply chains will be required. As the global demand for local products increases, so does the demand for refrigerated storage facilities and transportation.
Here, investors can directly participate in the refrigeration facility itself through real estate investment, or invest in bonds and stocks of cold logistics companies. Major players in the cold storage and transportation field include Japan’s Nichirei, which is strong in Southeast Asia, and Frialsa, an unlisted company based in Central and South America.
“They have already established a cold chain business locally, serving food manufacturers and retailers.
As technology continues to revolutionize the food system, especially in emerging markets, Antia also believes investors should start looking to invest in smart applications.
For example, sensors in trees or in the ground sense nutrient and moisture levels and send that information to farmers’ smartphones along with instructions on which parts of the field to water or fertilize. Antia cited startups such as India’s Gramophone and Israel’s Saturas as market leaders in this space.
Large-scale farms in Canada, Brazil, and the United States have also begun implementing precision agriculture with AI-equipped autonomous and driverless tractors. These vehicles are highly sophisticated and can perform multiple tasks such as sowing, tilling, planting, fertilizing and harvesting, Antia said.
It can also be tailored to specific field conditions, such as applying fertilizer only to crops and herbicide only to weeds, with dedicated sensors, he added. Antia says John Deere in the United States, CNH Industrial in Europe, and Kubota in Japan are the top players among the global companies that manufacture high-performance machinery for large-scale farms. explains Mr.
Another area of innovation that Antia considers particularly important to investors is agronomy, the development of new varieties of plants and fertilizers for them.
“What is needed are seeds that are drought tolerant and optimized for the soil, water and climate conditions of the cultivated land, and plant species that are resistant to pests and diseases. I think it’s a really effective way to reduce the harmful effects.”
In the field of applied crop science, the world’s leading players such as Nutrien, FMC Corporation and Corteva in North America, and BASF in Europe are listed. In emerging markets, India’s PI Industries and Dhanuka Agritech are also prominent players.
[original text]
(Edited by Toshihiko Inoue)
Source: BusinessInsider
Emma Warren is a well-known author and market analyst who writes for 24 news breaker. She is an expert in her field and her articles provide readers with insightful and informative analysis on the latest market trends and developments. With a keen understanding of the economy and a talent for explaining complex issues in an easy-to-understand manner, Emma’s writing is a must-read for anyone interested in staying up-to-date on the latest market news.