From Fast Food Nation to Pro Food Ventures

In 2001, Houghton Mifflin Company published a book by Eric Schlosser titled Fast Food Nation –The Dark Side of the All-American Meal. Much like the work of Upton Sinclair in his 1906 title The Jungle, Mr. Schlosser, an award-winning investigative journalist exposed how the explosive growth of fast food in America had “hastened the malling of our landscape, widened the chasm between rich and poor, fueled an epidemic of obesity, and propelled American cultural imperialism abroad.”

For a handful of people, this book provided enough incentive to act, but nowhere near the critical mass needed to show up on most radar screens. That started to change with Michael Pollan’s The Omnivore’s Dilemma, published in 2006 and the 2009 release of Food, Inc., a food documentary incorporating much of the work of Schlosser and Pollan. Still, unless you were seeking out information on America’s industrial food system, and specifically how it was negatively impacting health, regional economies, and the environment or global trade, you probably had no idea that there were significant problems with America’s abundant food system.

TIME Magazine changed that with its August 21, 2009 cover story titled Getting Real About the High Price of Cheap Food. TIME brought the story of industrial food to mainstream America through its 40 million readers and Web users worldwide. As America’s most trusted new source, it shifted the balance of the debate about our need to reform our food system toward the sustainable food advocates that have been waging a noble, but slow campaign. Here are some highlights from TIME describing how ripe the time is for innovations in how we grow, sell and prepare food in America:

• “…our energy-intensive food system uses 19% of U.S. fossil fuels, more than any other sector of the economy.”
• “And perhaps worst of all, our food is increasingly bad for us, even dangerous.” • “…obesity adds $147 billion a year to our doctor bills.”
• “With the exhaustion of the soil, the impact of global warming and the inevitably rising price of oil — which will affect everything from fertilizer to supermarket electricity bills — our industrial style of food production will end sooner or later.”
• “…quantity of fertilizer is flat-out scary: more than 10 million tons for corn alone — and nearly 23 million for all crops.”
• “…about 70% of antimicrobial drugs used in America are given not to people but to animals, which means we’re breeding more of those deadly organisms every day.”

When you consider this was presented to at least 40 million Americans, a vast majority who don’t know where their food comes from, you get a sense of how this single article will likely impact the evolution of sustainable food. The TIME article’s author specifically states, “So what will it take for sustainable food production to spread? It’s clear that scaling up must begin with a sort of scaling down — a distributed system of many local or regional food producers as opposed to just a few massive ones.”

As sustainable food discussions move into the mainstream, so will the opportunities for entrepreneurs and existing companies to bring to market innovative approaches to selling higher quality, healthier foods to increasing percentages of consumers, businesses and institutions. As these companies grow, they have an increasingly realistic chance to break the near death grip that industrial food has put on America’s food system:

• Seed Companies: What was once a highly diversified, regional industry is now controlled primarily by pharmaceutical and chemical companies, including Monsanto, Dupont and Syngenta.
• Farms: According to the USDA, “Small farms, while numerous, account for less than 2% of all U.S. farmland, while large farms account for 67%. Consequently, the growth in the number of large farms has increased the concentration of crop production.”
• Meat Packers: According to Sustainable Table, four companies controlled processing of >80% of country’s beef and three of these same four companies joined a 4^th in processing >60% of country’s pork. Four major companies in broiler chicken processing provide >50% of our chicken supply. Same for turkey meat.
• Food Processors: The Top 50 U.S. processors accounted for $326 billion or ~25 percent of the global market. Add in European giants like Unilever, Nestle, Cadbury Schwebbs, Danone, etc., and you fast approach a majority of the market.
• Food Retailers: Wal-Mart is at top of the heap with nearly $100 billion in food sales. The next 49 companies all report income over $1.0 billion dollars. On global scale, the USDA reports “Top 15 global supermarket companies account for >30% of sales.”

There are already examples of sustainable food innovations throughout the food chain, from Will Allen’s Growing Power to an alliance between Good Natured Family Farms and Ball Food Stores, to name a few. Early pioneers, with dirt on their hands, lessons learned and progress made, played a critical role in blazing trails for new ventures. Some of those companies have grown dramatically, e.g., Green Mountain Coffee Roasters (NASDAQ: GMCR; market cap of ~$2.5 billion). Others have been acquired by larger companies, e.g., Stonyfield Yogurt (acquired by Groupe Danone), Ben & Jerry’s (Unilever), Burt’s Bees (The Clorox Company). Still others have remained independent.

The next wave of ProFood start-ups will have the advantage of leveraging the many lessons learned by these pioneers. Unlike earlier sustainable food entrepreneurs, this next-generation will also have the benefit of a growing number of mission-driven investors showing up sustainable food conferences, e.g., Slow Money Alliance and New Seed Advisors, looking to drive sustainable food forward.