APAC’s sustainable food agenda: key areas for investors
Sustainable food systems are vital to ensuring that animal products are humanely sourced, crops are responsibly harvested, natural habits are protected, and local communities benefit. They are also the key to providing adequate food supply for a growing population over the long-term and maintaining important export income.
In Asia-Pacific (APAC), the sustainable food agenda is set to play an increasingly influential role in the decision-making of investors in the region. Here, we discuss three food categories that are at the forefront of the region’s agenda and are increasingly attracting the attention of governments and investors.
1) Meat and Dairy
The consumption of meat and animal products in APAC has increased significantly over time1, a trend that threatens to exacerbate existing sustainability shortcomings within the food sector, particularly by increasing greenhouse gas emissions and degrading natural habitats for farming.
Globally, almost 80% of agricultural land is used to produce meat and dairy2, which is not only responsible for twice the Greenhouse Gas (GHG) emissions of plant-based food but is also incredibly water intensive, using 70% of freshwater supplies3 .
Meat alternatives and new food innovations have proliferated over the past few years, including plant-based options and laboratory-grown meat, which aim to reduce greenhouse gas emissions, particularly those generated by livestock.
In APAC, numerous solutions are already on the market, including fermentation using microbes or fungi, and algae-based proteins, which are nutrient-rich and can have various flavours depending on the species. Others are still under development, including bioprocess and tissue-engineering principles to produce animal muscle cells without rearing the animal itself4, using insect larvae to convert discarded food to proteins5, and cell-cultivated meat technology leveraging stem cells6.
Find out more about tackling Asia’s biodiversity challenge.
2) Seafood
According to the World Wildlife Fund, over 90% of global fisheries have been overfished or fully exploited7. Fish provide 30% of APAC’s animal protein in a typical diet, but common seafood such as tuna, swordfish and cod are disappearing from the world’s oceans.
The precarious state of the oceans is also threatening incomes. Fishing and related industries provide either the main or a supplementary source of employment, livelihood and income for many of the region's poor. APAC’s tuna industry, for example, one of the largest in the world, is estimated at USD 1 billion annually and directly employs more than 6 million people8.
Work has long been under way in APAC to preserve fish stocks, improve processing practices, and maintain the integrity of the marine environment, including water quality and the overall marine ecosystem.
However, much more work needs to be done in the region to limit greenhouse gas emissions from fishing activities, ensure a decent and fair income for workers in the sector, and respect the coastal communities that often depend on fishing, either directly or indirectly.
This critical balancing act means that the seafood industry will play a prominent role in the region’s sustainable food agenda going forward, requiring both government initiatives and private investment.
3) Wines
With consumers increasingly concerned about the environmental impact of their purchases, organic wines, sustainably produced wines, and ‘natural’ wines – wines made with minimal intervention – have gained a foothold in Asian markets such as China, South Korea, and Singapore.
Consumers now make little distinction between a ‘good quality’ wine and a sustainably produced wine. Sustainable practices include conserving water, improving soil quality, cutting carbon emissions, and reducing the impact of pesticides and fertilisers. Switching from glass wine bottles to other forms of packaging is an important focus, with glass producing as much as 86 million metric tons of CO2 annually9.
In APAC, Japan has the longest-standing tradition of making natural wines, with over 30 years of consumption and shops dedicated to the category10.
Read on about Japan’s net-zero strategy
However, according to the ISWR (global alcohol research group), China is now leading the way globally for organic wines, sustainably produced wines, and natural wines. The country’s organic wine market, for example, grew by 8% volume CAGR from 2017 to 202211. Meanwhile, Southeast Asia is also starting to embrace sustainable wines, particularly in Bangkok, Kuala Lumpur and Manila12. This growth is creating huge investment opportunities. Asia’s wine market is expected to grow from USD 75 billion in 2024 to USD 111 billion in 202913.
At Lombard Odier, we believe that the world needs to transition from an extractive, linear economy to one that is Circular, Lean, Inclusive and Clean (CLIC®).
This transition presents significant investment opportunities across four major economic systems - in materials, consumer, health, and energy - with technology as a cross-cutting enabler, offering new efficiencies in production and distribution.
Sustainability – a race worth running. Find out more.
We need to move towards a model that can feed a growing population while operating within, or even helping to restore, our planetary boundaries. On behalf of our clients, we strive to manage downside risks whilst capitalising on the potential performance upside created as the world makes this vital transition
1 Asia’s Eating Habits are Changing and the Environmental Impact Could be Huge (blogs.adb.org)
2 10 tips for eating more sustainably this summer (lo.com)
3 Carbon (lo.com)
4 What is the future for sustainable protein in Asia-Pacific (weforum.org)
5 Transforming Organic Waste into Proteins – with Insect Larvae (anteja-ecg.com)
6 Cell Sources for Cultivated Meat (National library of medicine)
7 WWF-Hong Kong Launches Sustainable Seafood Week (wwwf.org)
8 Sustainable Tuna Fisheries in Asia and the Pacific (adb.org)
9 Lowering wine’s carbon footprint starts with the bottle (revinobottles.com)
10 From grape to glass: Asia’s spirited embrace of natural wine (retailinasia.com)
11 Sustainability concerns drive interest in organic, natural and alternative wines (theiwsr.com)
12 From grape to glass: Asia’s spirited embrace of natural wine (retailinasia.com)
13 Asia Pacific wine market (marketdataforecast.com)
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