Global food systems are facing unprecedented pressures. Climate change is threatening the supply of food, while growing populations are increasing the demand for it. Meanwhile, food systems are themselves worsening the situation through their serious environmental and social impacts.

Innovation can mitigate these challenges—but only if that innovation is scaling sufficiently. Our analysis suggests that it is not. While global food systems are responsible for one-third of the world’s greenhouse gas emissions, investments in food innovation—a strong indicator of scaling potential—account for a disproportionately small 8% of climate-tech investments.

“Mainstreaming Food Innovation: A Roadmap for Stakeholders,” by the World Economic Forum in collaboration with BCG, provides a framework for scaling food innovation using case studies from the WEF’s Food Innovation Hubs Global Initiative. With the proper mechanisms in place and strong cross-sector collaboration among stakeholders, we can make transformative and sustainable improvements in how food is produced and consumed.

Food Systems Are Struggling

By 2030, global food production will need to meet a significantly higher demand for calories, driven not only by a growing population but also increased per capita calorie consumption; as nations become wealthier, diets tend to shift toward resource-intensive foods. ¹ 1 A complete list of sources can be found in the full report. Notes: 1 A complete list of sources can be found in the full report.

On the supply side, the amount of arable land is decreasing by 1% per year, and more than 90% of global soils could be degraded by 2050, reducing overall food production by 10%. Making matters worse, about one-third of food produced for human consumption is lost or wasted.

While food systems are under environmental pressure, they also contribute to the problem, accounting for one-third of global greenhouse-gas emissions, 70% of freshwater use, and 80% of global deforestation. Food systems also fall short in securing the livelihoods of farmers—of the 700 million people living in extreme poverty globally, two-thirds work in agriculture.

In addition to their environmental and social impacts, food systems are failing at their most basic obligation: feeding the world. Since 2016, undernourishment has been increasing worldwide; today, 735 million people—nearly one in ten—experience hunger regularly. At the same time, 890 million people are obese. And many of those that are neither hungry nor obese still suffer from nutrient deficiencies, which affect an estimated one-fourth of the world’s population.

Innovation Offers Solutions—but It’s Not Scaling Fast Enough

Innovation can not only mitigate these challenges—it can help solve them. By 2050, for example, implementing regenerative agriculture practices could sequester 120 billion tons of CO₂, three or four times the world’s annual emissions. Smart irrigation can reduce water use by up to 50% compared to conventional irrigation systems. By 2035, switching to plant-based alternatives for animal proteins could cut over 100 billion tons of CO₂ and save 39 billion cubic meters of water—the annual water consumption of Germany.

Despite the potential impact, food innovation is not scaling relative to other climate innovations. While patenting activity shows that food innovation is occurring in line with general climate innovation trends, investments are not keeping pace. Exits are significantly smaller in food innovation: 20% lower for mergers and acquisitions and 40% lower for IPOs. Moreover, compared to climate innovation, food innovation experiences 40% less late-stage investment, which is crucial for scale.

And the situation is getting worse. Since 2021, investments in climate innovation have been in retreat overall, but investments in food innovation have retreated faster. Whereas food innovation accounted for a quarter of climate-innovation investment in 2020, it’s now at only 8%—and falling. (See Exhibit 1.) Indeed, most areas of food innovation have seen investments fall from their 2021 peak. (See Exhibit 2.)

There are several reasons for this, including:

• Higher production costs, which lead to unfavorable unit economics
• A lack of supportive regulatory frameworks
• Consumers’ unwillingness to pay a premium for more sustainable options
• A lack of the basic infrastructure to enable innovations

If a mechanism can be designed that overcomes these barriers and leads to increased and better investment, then innovation in food systems can scale and reach its promised impact.

Before innovations can scale, however, they must be sourced and shaped. (See Exhibit 3.)