Feed the World

Get exposure to companies benefiting from increasing demand for food from a growing global population. This Vue includes companies positioned across the supply chain in the food economy – from farm to fork.

Agricultural output needs to be 70% higher to meet food security needs in 2050

Global population to grow to more than 9 billion by 2050

805 million people in the world are chronically undernourished

The Food & Agriculture sector market size is $2.3 trillion

With advances in medical science, we now live longer and healthier lives. It took 123 years for global population to reach 2 billion in 1927 from 1 billion. In contrast, in less than 100 years since then we have grown to more than 7 billion and it is expected that the global population will hit 9 billion by 2050.

This poses challenges and opportunities at multiple levels. First, most of the incremental 2 billion are expected to be in developing nations where rates of population growth still outstrip that of developed ones. This implies we are producing at least 70% more food relative to 2012.

Second, many of the developing countries in the world are growing wealthier with rising incomes. As families earn more, they spend the incremental income on better food with higher nutritional value. This implies higher protein consumption  as well as dairy. Global average calorie consumption has gone up from 2,370 kcal/day in 1971 to 2,770 kcal/day in 2007. It is slated to reach 3,050 kcal/day by 2050. The changing diets further multiply the need to increase yields of crops and grains. For example, it takes 5 kgs of grain to produce 1 kg of meat.

This multi-decade secular trend in growing demand for agricultural goods bodes well for the companies in our Feed the World Vue. In a commoditized sector faced with supply constraints and growing demand, this would likely provide support for prices of agricultural goods – leading to likely higher profit margins. The overall growth in demand for food also provides tailwinds to companies in packaged food industries where they can take advantage of higher volume growth.

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