As part of a team that has been working on nutrition-focused investing for several years, sometimes feeling like we were the only ones at the table, it’s been an exciting few months! Nutrition as an investment theme really seems to be resonating more widely and gaining traction in diverse places.
In September, nutrition was on the agenda of the Aspen Network for Development Entrepreneurs (ANDE) Annual Conference for the first time, and we had the pleasure of facilitating a discussion session on the topic of nutrition investing with a gender lens, as well as having side conversations with investors and ecosystem players interested in it. There was a lot of curiosity, it was clear that the concept is still fuzzy. What does nutrition investment mean in practice? It is much wider and goes to the heart of the foods typically missing in poor diets in healthy diets - foods such as vegetables, fruits, dairy, eggs and fish and meat. This provides opportunities for investment in companies along these food value chains, in the processing, transport, logistics, and marketing of these foods, includes local entrepreneurs and SMEs that typically deliver these services.
So there is some momentum in related areas.....but what is really going to impact and to nutrition? Still an open question.
And there have been several other recent developments in the broader financing space:
- Global healthcare funds, including those in the design and fundraising phase, are considering allocating a portion of their funding towards nutrition, as it improves human health. An example of this is AfricInvest’s Transform Health Fund supporting Ready-to-Use Therapeutic Foods (RUTFs) company Insta Products.
- The Global Agricultural and Food Security Program (GAFSP), the multilateral financing platform dedicated to improving food and nutrition security worldwide, has recently launched the Business Investment Financing Track (BIFT), a new $75m investment programme aimed at supporting inclusive, climate-smart, and nutritious food systems in low-income countries. The pilot programme would focus exclusively on support for value chains anchored in nutritious foods—as defined by GAIN.
- An SDG 2 Zero Hunger basket bond is being developed by Symbiotics Investments in partnership with Worldview Global Impact (WGI).
- The Global Conference SOCAP 2024’s overall theme was ‘Going Deeper: Catalyzing Systems Change’, and it included a track on Regenerative Food Systems!
- The GAIN-Incofin Nutritious Foods Financing Facility, which focuses on SMEs in nutritious food value chains in Sub-Saharan Africa, has announced its first three investments, in a Kenyan processor of fortified flours, a Zambian bean and groundnut seed producer, and a Kenyan tilapia fish aggregator and distributor. To us, the diversity of these initial companies highlights the breadth of opportunity for nutrition-related investments.
Alongside these positive steps for nutrition and food, the Global Impact Investment Network (GIIN) recently announced that the global impact investing market has reached 1.5 trillion USD. While this shows existing momentum, the impact Asset Under Management (AUM) share allocated to Sub-Saharan Africa and South Asia is still relatively low at 6% each, as per the September GIIN Trends report, and only about 5% has been allocated to food and agriculture. Nearly three-quarters (74%) of surveyed GIIN investors principally targeted market-rate returns; we can therefore assume that about 26% of investors primarily target catalytic impact-first investments. While 41% of investors report that at least some of their portfolio contributes to achieving SDG 2 on Zero Hunger, we have no insight of what share of financing this represents – and what share of it is likely to benefit nutrition. There’s thus a real need for developing and applying consistent metrics for tracking nutrition-related investments.
To end on a positive note, we at GAIN see a strong potential role that Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) can play in getting the world back on track to meet SDG 2 and eliminate hunger and malnutrition. At COP29 in Baku, we signed an agreement to work with the Asian Development Bank to supports them in scaling up investment in nutrition security as a key priority, and we are also working closely with IFAD on how to get bigger nutrition impact as part of its portfolio. Our conversations with these large institutions have been encouraging, and we stand ready to support DFIs and MDBs’ investees with a nutrition value proposition for the local market, as well as tools for screening and measuring nutrition impact. We are optimistic about the potential for some level of commitment among DFIs and MDBs by the Paris Nutrition for Growth Summit in March 2025—which would truly show that nutrition investment is finally on the menu!