New Food Order: Investigating alternative business models in food, agriculture

Companies are being forced to rethink the way they do business. The food and agriculture industry is no exception.

“We’re on the cusp of the largest generational wealth transfer in history, where the millennial generation is projected to inherit an estimated $41 trillion from the baby boomer generation over the next four decades,” says Adrian Rodrigues, co-founder and managing director at Provenance Capital Group. “That's more cumulative wealth than has ever changed hands in history.”

That could dramatically change how businesses are funded and, thus, operate.

In the 11th episode of New Food Order, a podcast about the business of tackling climate and social crisis through food and agriculture, entrepreneur Danielle Gould, the founder of Food+Tech Connect, and Louisa Burwood-Taylor, head of media research at venture capital firm AgFunder and editor of AgFunderNews.com, dive into alternative business models and the potential solutions offered by B corps, cooperatives, Perpetual Purpose Trusts, stewardship models, decentralized autonomous organization (DAO), and open-source research initiatives.

One of the biggest problems with business models right now is how founders and investors handle a liquidity event when they want to sell their stake in a company, Rodrigues says. That often requires an IPO to Wall Street or selling to a large multinational company that forces a company to then think more about quarterly earnings than long-term growth.

Related:The Future of Food: Letter to the natural products industry

“There's something inherently disconnected between what the typical exit strategies are for early-stage companies and the mission they're trying to create,” Rodrigues says. The next generation of investors will manage money very differently, in a more holistic, intentional fashion, Rodrigues adds.

Plenty of other business models are available, such as the concepts outlined here.

Create a social enterprise

Jon Jandai, the founder of Pun Pun Center for Self Reliance, created a small organic farm and learning center in Thailand after realizing thousands of varieties of rice were disappearing and farmers didn’t have enough to eat. Farmers also were losing their farms and families were sick with new diseases like diabetes, cancer, heart attacks and high blood pressure they never had before.

“When I was kid, we have more than 20,000 varieties of rice in Thailand,” Jandai says. “Now we have less than 200 varieties that people grow. And what people eat now is about two varieties every day.”

He’s trained an estimated 100,000 people in the past nine years to be self-reliant, grow foods like rice and produce that families can eat—instead of cash crops like sugar cane—so they aren’t hungry and can sell the excess. They use sustainable practices including seed saving, collecting rainwater and developing the soil without chemicals or burning. That’s led to healthier land and better yields.

Similar to a co-op, the social enterprise company now has three restaurants and a farmers market in Bangkok, Thailand, as well as an online market. Now, no one will be hungry, Jandai says.

Become a cooperative

Katherine Miller, the former senior director of policy and advocacy at the James Beard Foundation and the founder of Table81, says more businesses should consider becoming a cooperative. Not only does a cooperative offer employees opportunities to advocate for themselves, but it can positively effect a company with potentially higher employee retention, better human resource systems and the ability to more easily make changes related to environmental sustainability or community involvement. This includes companies such as Land O’Lakes and Chobani. 

“[The co-operative model] has huge economic benefits and impact for the company because the money that they pay the local farmers and ranch stays in that community,” Miller says.

Companies who are looking to become cooperatives might want to explore Zebras United which supports companies looking to make the transition, Gould says, or Democracy at Work Institute, Miller suggests.

Shared ownership models

Web3—the new decentralized internet based on blockchain technologies, token-based economies and decentralized autonomous organizations—is an infrastructure that provides users of those technologies shared ownership of a product or organization.

Gould says many companies in the food world have sold non-fungible tokens (NFTs) to fund their businesses including Flyfish Club, the world’s first NFT restaurant.

"I'm really excited about shared ownership models that distribute value more equitably across all stakeholders, as well as models that help democratize access to capital and those that create deeper relationships with your customers," Gould says.

Other businesses are using DAOs, Gould says, which are collectively owned blockchain-governed organizations that use code to define how the organization works and funds are spent.

Snaxshot founder Andrea Hernandez points to friesDAO, a collective organized around buying successful fast-food franchises and has already raised more than $5 million.

“DAOs have to center around some sort of agreement for the community to organize around,” Hernandez says.

Open-sourced sharing via a tech-based business model

Traditionally, intellectual property is a key part of business. Keeping research in-house can limit innovation, so some companies are turning to open-source communities using a GitHub-like model. GitHub is an internet-based community through which developers share coding and tools to accelerate software development.

Many people have questions about how a GitHub model would work in a plant-based world because it’s not the first thing most people understand, says Nigel Teh, founder of Next Billion Burgers, which wants to make plant-based burgers more sustainable and nutritious through the sharing of knowledge.   

The concept can be applied to the food industry. From sharing ingredient lists and step-by-step instructions for recipes, Teh says open-source sharing of processes and formulation secrets allows founders to ask the industry to provide insights into how to do things differently.

The whole goal is better formulations that are more sustainable, affordable and nutritious, he says. 

“But don't just take what I've made,” Teh says. “Take it. Tweak it. Make it for your own audience and your communities that you're based in. Then that's a truly democratic world for plant-based foods.”

Listen and subscribe to the podcast here.

Read about previous episodes of New Food Order: