Circular Economy and the food industry: it’s a ripe time for sustainable investment

Circular Economy and the food industry: it’s a ripe time for sustainable investment

  • How much money is wasted by unsustainable food production worldwide every year? £5 trillion.1
  • How much food do we waste? About a third.
  • How much of the world’s population go hungry? Nearly 10%.
  • Can the food industry really transition to a circular economy?


According to the Ellen MacArthur Foundation, for every pound spent on food, two pounds worth of health, environmental, and economic waste is created. Half of these costs — totalling £5 trillion each year globally — are the result of the way food is produced, and food waste is handled.

The ethical and financial case for a sustainable circular economy in food is clear and compelling. But what is being done to address this enormous challenge?

Plant-based food is shaking up production

We’ve all seen the rise in meat-free and dairy-free alternatives, but the scale of projected growth in this sector is astonishing. Demand for plant-based food production is expected to soar to more than $162 billion by 2030, up from just $29.4 billion in 2020.2 A major element of circular economy thought is to look at reducing inputs to drive more sustainable production. Plant-based food is a sustainable resource, has nutritional benefits and is less costly to produce.

Unsurprisingly, the sector has attracted a lot of interest from investors, with recent examples including the successful fundraise of Meatless Farm, and the investment in THIS, a provider of pea and soy-based meat substitutes, which secured £11 million of funding co-led by BGF and Lever VC. Allplants, a provider of plant-based meal delivery services received £38 million funding led by Draper Esprit. The sector was galvanized into a new phase of growth during the pandemic, and remains a key area of investment as consumers increase their adoption of alternative foods.

Investment in Agritech is spurring innovation

Tech-led sustainable farming is another area that is making significant contributions to the circular economy and attracting the eye of investors. Worldwide, agritech investment has been soaring, with a record $10.5 billion funding injected in 2021, representing 42% CAGR since 2010.3

In the UK, tech investments counted for almost half of all circular economy related food investments in H1 2022 and the highest capital injections. Recent deals include £50 million funding to Eider VF by Slate Asset Management, and the £100 million investment in GrowUp Farms by Generate Capital. GrowUp Farms uses science and technology to grow food which they claim tastes better, lasts longer with the lowest environmental impact, while Eider VF is a vertical farming company, and will use the funding to construct new facilities, equipped to sustainably grow leafy produce 24/7, 365 days a year, significantly reducing wastewater, nutrient usage, and biohazard risk.

A huge range of innovative projects are underway – technologies which develop farming practices, automate processes, increase yield, share information, all of which can make traditional practices more sustainable. With funding available through government grants and an increasing number of private investors looking to back sustainable agritech businesses, it is an exciting space.

Cutting food waste with new systems and technologies

There’s a lot more we can do to make the most of food. A third of all food produced globally is thrown away; in the UK it’s estimated that £1.2 billion of food is binned each year.4 Beyond the financial and ethical impact, this level of waste causes major environmental issues.

Thankfully, there are plenty of new businesses seeking to address the challenge: developing systems to prevent food waste in the first place, to distribute surplus food to people who need it, and creating circular processes to redeploy inedible waste streams as inputs for new products.

Businesses recently attracting investment include OLIO Exchange, a food sharing app, designed to connect neighbours with each other and with local businesses so surplus food can be shared, not thrown away. The business has achieved rapid growth in the UK with a user base of five million people, and the £31 million funding received will spearhead global expansion. The oversubscribed fundraise was led by VNV Global, with a host of other investors participating.

Another exciting business is Fresho UK, which raised £38 million in Series A funding, led by Primorus Investments. Fresho offers an online ordering system for chefs, which seeks to save time, improve cashflow and reduce waste. Based in Australia, the business is now seeking to accelerate growth in the UK and US too.

Winnow, which has a similar business model and backed by Circularity Capital, found that on adopting its technology, a typical client could expect to reduce waste by 40 - 70%, with an average reduction of about 50% and huge improvements to the bottom line. Less than a decade after its launch, Winnow technology now serves more than 1,400 businesses across the world, saving the equivalent of 36 million meals each year from the bin, and $43 million in food cost savings for its clients.

The time is ripe for circular economy investments in Food

As the cost of living bites consumers and businesses alike, the time is ripe to accelerate circular business models that benefit both the purse and the planet.

While the steep rise in investments in 2021 noted in our latest Circular Economy publication has been sustained in H2 2022, the amount of money flowing into the circular economy food sector has risen sharply, with over £200 million invested in the first half of 2022, compared to £267 million in the full year 2021. 

Our latest Food and Drink publication reports that environmental, social and governance (ESG) issues continue to be a concern for food and drink companies, with 53% of leaders surveyed saying ESG and sustainability is a key focus for their business in 2022. Furthermore, 36% of business leaders called for more help in reducing carbon emissions and investing in the circular economy.

As we continue to live with generous portions of macro uncertainty, food is one of the most resilient sectors for investment. If businesses embrace the circular economy, perhaps investors can have their cake and eat it.



1 Ellen MacArthur Foundation
2 Bloomberg Intelligence

3 Pitchbook
4 2022 Sainsbury’s poll