Food industry risk is being underestimated as the sector continues to absorb supply shocks without significant hits to performance, according to speakers at a Future Food Movement roundtable this week.
Food industry risk and the resilience paradox
Participants said the sector’s resilience is obscuring the scale of nature and climate threats. Ana Cuddeford, head of investor engagement at Inside Track, noted that earnings and valuations at major listed food companies have held up, which means markets are not reflecting the level of exposure.
She said firms have managed supply pressures well, but warned that success may be turning into a vulnerability if it delays investment in long-term risk reduction. Moderator and Future Food Movement founder Kate Cawley said strong on-shelf availability also shields consumers from feeling the strain.
Cuddeford added that boards are weighing risk mostly through commercial and capital allocation lenses, and less through nature and systems perspectives.
Where the pressure lands
Sophie Bauer, head of food system transformation at WWF-UK, cited Energy and Climate Intelligence Unit analysis showing the United Kingdom imports about 40% of its food, with roughly a quarter of those imports coming from regions highly exposed to drought, flooding and extreme weather. With El Niño conditions in play, she expects harvest pressures to repeat.
She supported stronger backing for domestic farming while warning that the United Kingdom’s global commodity footprint also shapes national food security.
Bauer pointed to WWF’s latest Living Planet Report, which found a 73% average decline in monitored wildlife populations since 1970, while highlighting the recovery of Atlantic bluefin tuna as an example of progress through joint action by industry, governments and communities.
Getting it to the board
Panelists said a recurring challenge is convincing boards, and chief financial officers in particular, to finance supply risk mitigation. Cuddeford urged leaders to use insurance signals, noting that actuaries already have views on coverage withdrawals and premium hikes.
She recommended scenario analysis aligned to insurance renewal cycles and urged companies to compare today’s realities with scenarios modeled five years ago, since planning often focuses on 12 to 24 months.
Bauer said water risk is a practical entry point because food production, processing and logistics depend on reliable water. She also flagged legal exposure from the EU Deforestation Regulation, which takes effect at the end of this year for companies selling into the European Union.
Northern Ireland is set to adopt the EU framework, and non-compliance could draw significant fines, she said. Longer-term transitions such as regenerative or nature-positive farming can take about seven years to repay, which makes the case harder in the short run.
The innovation gap
Discussion turned to agrifoodtech investment as a signal. Venture capital funding for agrifoodtech peaked at $56 billion in 2021 and fell to $16 billion in 2023, according to AgFunder data.
Panelists warned that while systemic risks are elevated, financing for solutions has slumped, creating an additional layer of risk. Start-ups working on alternatives to synthetic fertilizer and climate-resilient ingredients need customers and exit pathways, yet large food companies have been slow to purchase products or acquire businesses.
Generalist venture investors who entered during the pandemic boom largely retreated when categories missed timelines. Some segments, including ag biotech, biological inputs and gene editing, have fared better, and in Europe climate-focused companies have captured a larger share of a smaller pool.
Cawley relayed concerns from founders in the group’s Catalysts program who fear that even if demand materializes in three to five years, many may not survive until then. Regulation can create demand, she said, pointing to deforestation rules that could boost companies in traceability and measurement, reporting and verification.
Kevin Watson, chief sustainability officer at Levy, part of Compass Group, offered a case study. Levy signed a letter of intent with seaweed packaging maker Notpla when its product cost about 240% more than Levy’s incumbent option.
Four years on, Levy is Notpla’s largest customer.
What alt protein got wrong
On alternative proteins, an audience question asked what could have been done differently. One view shared was that companies overestimated consumer willingness to accept inferior taste in exchange for climate benefits.
Many tried plant-based meat during the pandemic, did not enjoy it and did not repurchase. Valuations ran ahead of realistic demand, and some firms could not last long enough to improve products and reduce prices.
A purist approach also limited hybrid options that might have improved taste and accelerated adoption. Health considerations and debates over ultra-processed foods further dampened demand.
Watson said Levy introduced a burger in 2022 with half the meat replaced by beans and pulses, and when mainstream processors sought to double the price, Levy produced it with its butchers. From 2022 to 2025 it was the only burger Levy served.
This season, at venues including Tottenham, Manchester United, the O2, Brentford and Burnley, Levy is serving 100% wild venison burgers instead of beef on sustainability grounds.
One risk each
Asked which risks are most underestimated heading into 2027, Watson cited the speed at which environmental, health and social issues are becoming full business risks and said they require direct access to executive teams and boards. Another panelist highlighted cybersecurity as a growing threat as the food chain digitizes.
Bauer warned against falling into continuous crisis response and urged boards to seize the current window to make the long-term business case, noting that nature and climate effects extend beyond the farm gate.
Cuddeford closed by calling for collective action, stating that companies and investors are competing within the same supply chains and facing the same exposures, and that collaboration will be essential.
Another panelist highlighted cybersecurity as a growing threat as the food chain digitizes, echoing concerns similar to those raised in Business email compromise: steps agriculture leaders can take about digital vulnerabilities in agriculture and food-related sectors.