Investing in the Future of Food with Elysabeth Alfano, CEO of VegTech™ Invest
This transcript has been edited for clarity.
Dan Carreno: Thank you for tuning in to Rewilding Wall Street, where we provide insights and analysis into the ever-evolving world of sustainable investing. And I'm Dan Carreno.
Brittany Damico: And I'm Brittany Damico. And today we have a special guest with us, Elysabeth Alfano, Co-Founder and CEO of VegTech™ Invest, a firm that invests in plant-based innovation and the future of food. Thanks for joining today, Elysabeth. How are you doing?
Elysabeth Alfano, VegTech™ Invest: Happy to be here.
Brittany Damico: Wonderful. So, in this episode, we're going to be digging into our global food system. So, let's kick things off. First, tell us a little bit about yourself, Elysabeth. What inspired you to begin looking at the global food system and how would you describe the current state of it?
Elysabeth Alfano, VegTech™ Invest: Well, I had changed my diet myself personally. I thought, I'm just going to go for healthier food. And once I started looking into that, I realized that it wasn't just my health at stake, it was planetary health. It was animal health; it was financial health. I realized the implications on a global scale. When one looks at their own food intake, it's hard to see the scale of which we're speaking. But when you take a step back, you see there's 8 billion people on the planet, but there's 80 billion animals in factories. They all go to the bathroom. Where does that go? It goes into our water. It means deforestation to feed animals. You start realizing the ripple effect of this inefficient system is causing real pain and disease beyond the individual. It's causing it to the planet and to the financial system. So that's when I decided I've got about 30 years left in life to make an impact. And this sector is where I can make the most impact in the shortest amount of time.
Dan Carreno: The term that you just threw out there, inefficient. That's the one that always strikes me. I always think that inefficient systems are generally ripe for disruption. And disruption is an amazing investment opportunity. So, could you talk a little bit about how you see new technologies emerging in this field that are set to disrupt the existing paradigm?
Elysabeth Alfano, VegTech™ Invest: You look at things like fermented proteins. We've all had fermentation, right? Beer, you've had beer. You've had tea. You've had bread. These technologies that are older than the hills. You can ferment proteins by basically fermenting microbes. You give those microbes carrots and potatoes and starches and sugars, and you can grow the amount of protein of a cow in three to four hours. That would take, depending on how much drugs you want to give it, between 12 and 24 months for a cow. But in that 12 to 24 months, you are going to have to cut down all those trees to grow crops, crops that have protein and fiber. Are you giving that food to people? No. Animals are terrible calorie converters. It takes 25 to 35 calories of crops to get one calorie of cow. 16 to one for pigs. Nine to one for chickens, which means that's an awful business equation. Who invests $3.50 to get a dime back. So, all of this is to say with things like fermented proteins you can grow large amounts protein in a couple of hours. Things like cultivated meat. Now that's about seven to eight years away. But you could take the cells of an animal and grow a chicken breast right there. You don't have to grow the chickens, give them antibiotics, have all that ammonia, which causes cancer and air pollution and these kinds of things. You just go straight to what you want. Very, very efficient. And we haven't even spoken about greenhouse gas emissions. 18% of the world's greenhouse gas emissions come from animal factories. 32% of the world's methane comes from animal factories. You cannot impact climate change in the time we need to if you don't address methane. So, if you want change fast, you're going to have to disrupt now. That's why you're seeing in the supply chain disruption taking place, even if you don't realize it yet on your plate.
Dan Carreno: So, when you talk about that type of a leap forward in efficiency, where you're able to create the cow equivalent in protein in a couple of hours, one would imagine that eventually that is just going to be a much cheaper form of protein. But obviously these are newer technologies, and they need an opportunity to scale. So, where are we in the process of achieving price parity?
Elysabeth Alfano, VegTech™ Invest: I just talked about the novel technologies that no one's heard about, but you've all probably heard about straight plant-based foods. So that would be taking fava beans or quinoa or pea protein, and making burgers and sausages and chicken breasts. That exists right now. So, getting that to price parody, I think we're looking at 2026 or 2027. Now this is dependent on investment and the ability to scale the supply chain. There's a great study by the Boston Consultant Group saying, if you wanted to invest in green technologies, which green technology would impact greenhouse gas emissions the most? Would it be alternative materials, alternative proteins, alternative energy, or electric vehicles? And it turns out alternative proteins impacts greenhouse gas emissions three times to 40 times more. The reason for that is the CapEx is a lot less. So, you can change food systems a lot easier. You can change food systems a lot easier than you can change the entire electric grid for electric vehicles. So, changing it with less CapEx means changing it faster means the food system's going to shift pretty quickly.
Brittany Damico: When I've talked to people about investing in food systems transformation, people light up, they get really excited. It's one of those moments when you have a conversation, and they see that that's something that they can directly invest in. But I'd be curious from your perspective, what are some of the misperceptions about food systems and the investment opportunities associated with alternative proteins?
Elysabeth Alfano, VegTech™ Invest: Yes, we speak about this all the time at VegTech™ Invest, which I started with my Co-Founder and Chief Investment Officer, Dr. Sasha Goodman. People assume that it's startup companies, or nano caps on the stock exchange. It's not true. If you're going to change the food system at scale, like what we're talking about, you need leaders in the field. I'm talking about ingredient companies, flavor and texture companies. We talked about the importance of that supply chain and building it out so that you can reach scale and price parity. So, we focus on investing all the way from the very beginning of the supply chain. Ag tech and then synthetic biology, innovations, technologies, ingredients, flavor, texture. Then at the end of the line, we have the consumer products that are in our financial products including an ETF. So, it is not a nano cap thing. It is not an ultra-volatile thing. So that's another thing people don't understand. The meat industry wants this as well. They know that their bottom lines are not efficient. They know they could get better margins and they know they're under incredible scrutiny for the dumping that they do in the water, for the climate change that they're causing, for the biodiversity loss, which is going to be pinned on them. And then the meat industry gets an enormous amount of subsidies that all comes straight from taxpayer dollars. So, the inefficiency is hard to ignore from an investment financial standpoint. And that pressure is going to be too much to bear going forward, particularly as we get into AI with transparent supply chains. You know, the meat industry has an incredible lobby. They're going to keep their subsidies; they're just going to shift them to plant-based innovation. And the reason I say plant-based innovation is because even if you're looking at fermented proteins or cultivated meat, it all relies on sugars and starches to grow these proteins. It's all innovation replacing the inefficient system that we have now.
Dan Carreno: Interesting. This is more of a fun question, but if you had to put yourself in the position of a futurist and imagine that it's the year 2150 and you are looking back at our current food system, what would you say is the thing that is going to be most surprising to people about how we produced calories and protein back in the year 2024?
Elysabeth Alfano, VegTech™ Invest: You can already see it now with the younger generation. When I look back, I think, I can't believe we had slavery. I can't believe it. And people are going to look back and they're going to say, I can't believe that we imprisoned 90% of the living planet in those awful conditions. I can't believe it.
Dan Carreno: I thought that's what you might say. And I've heard a lot of other people say that how we treat these animals is one of the real travesties of the modern era. And sometimes you don't see these things in real time, but when you look back on them in the future, it's going to be quite alarming.
Elysabeth Alfano, VegTech™ Invest: I know we have a short podcast here, but if people want to do kind of a deeper dive on this, I also have a podcast, it's called Upside & Impact. David Friedberg from the All In podcast, he and I had a real deep dive on this, and he does not hold back. So, it's not just like four vegans on a street corner saying this. I think a lot of people just don't have options. I think most people given the choice, if the taste and price were the same, in fact studies have shown this, if the taste and price were the same, people wouldn't buy meat from animal factories. They wouldn't. No one's okay with it. They just don't know what else to do. Now people are giving them other options with novel technologies that we're investing in.
Dan Carreno: That could be a great name for a podcast: Four Vegans on a Street Corner.
Elysabeth Alfano, VegTech™ Invest: Would be a rough way to get an audience. I mean, look, I love vegans. They're fine people. It's, it's no problem. But they're a small, group with no political power or money. So, this is not about vegans, this is about the enormous total addressable market of the food system. Dairy is $820 billion. Meat is $1.4 trillion. These are enormous market opportunities for the betterment of society as a whole. Politics as a whole. When you don't have food and water, you have enormous instability in the world. It's not good.
Brittany Damico: Absolutely. I love listening to your perspective on things, Elysabeth. I always leave feeling really inspired and excited about the future. In addition to your podcast, if listeners wanted to learn more about VegTech™ Invest, where should they go?
Elysabeth Alfano, VegTech™ Invest: Please go to www.vegtechinvest.com and you'll find information about our ETF and this subject as a whole.
Dan Carreno: Outstanding. Well, thank you Elysabeth. I think we'll start wrapping it up there, but before we go, we're going to take just a few minutes and chat around the campfire. And this is our usual segment where we go around the horn and just have everyone briefly share something that they've encountered in their lives recently that's been inspiring, interesting, or otherwise thought provoking. So, Brittany, what you got for us today?
Brittany Damico: So, there's a forge in Seattle that I went to with my partner and I forged a horseshoe into a knife. And it was one of the coolest experiences, I have to say, probably one of the least sustainable. But to engage in an activity that's so old, that's such a deep-rooted tradition. It was really cool to learn more about the process, and to just hammer some steel. I recommend it if anyone can find a forge in their neighborhood.
Dan Carreno: Awesome. I did not know that was a thing that you could do on your own. I love that. Elysabeth, how about you?
Elysabeth Alfano, VegTech™ Invest: I was recently in Sri Lanka and I have to say, it reminded me what balance felt like and for how long I've been feeling out of balance. It's large enough to be exciting, have a lot going on, have lots of people, have mountains, have ocean, have rainforest, have all these different temperatures and places to experience. But it's small enough where there's just the right amount of people, just the right amount of mountains, just the right amount of ocean. So, it is in balance, and it functions like its own circular economy. It grows a lot of its own food, and it can sustain itself. And it reminds me of how when things are in balance and in harmony, they work really well.
Dan Carreno: Well, in that same vein, I was going to share really one of the most fascinating articles I've read in recent years, which is by Ross Anderson in The Atlantic. It's titled “How First Contact with Whale Civilization Could Unfold.” This is about sperm whales in particular. And what miracles these animals are in general is just amazing. Number one, they have the largest brains of any animal on the planet. They are capable of diving from the surface of the ocean to basically two miles below the surface. That, to me, defies the laws of physics. So, in and of themselves, fascinating. But then they have very complex social structures where they are members of large clans, which can number in the tens of thousands of whales. These clans have their own dialects called codas, which have always been a mystery to us. But scientists now are using AI to decipher this language. And there is a debate emerging in the academic and scientific world as to if we get to a point where we can communicate with these cultures, should we do that? What should we say to them? It's a vexing debate at the end of the day. I don't know if there's a right answer, but I just really recommend the article. I thought it was fascinating. Okay, so we'll start wrapping it up there. For those that are interested in more information about O-Six Impact Partners, you can go to our website, which is www.osixpartners.com. Please feel free to get in touch with us through the website with any questions or feedback. We are here to support your sustainable investing ambitions. We thank you for tuning in today, and we will be back soon with another episode of Rewilding Wall Street.
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