In a system as complex as the food and agriculture sector – a system intended to feed and nourish humanity, but which is increasingly degrading land, climate, and human health – the same linear thinking to problem solving and profitability that has brought us to this point can no longer be applied. A new approach to food systems investment is needed. One that leverages a diversity of expertise to invest holistically across a system.
An innovative new firm, Biome Capital Partners (BCP), is building a new approach to address this need and to scale investment in regenerative food systems. Their strategy presents a new way of tackling the complexities of the food system and offers a shift in how to address agriculture investment. The aim is to create scalable methodologies for regenerative investment that consider the crucial interconnectedness of food systems and foster new investment vehicles for aligned capital to meaningfully participate in regeneration of land and community.
A New Strategy Develops
To help enable the development of a strategy that addresses the authentic tenets of regeneration in a way that is suitable to existing investor expectations, human capital from outside food and ag was critical. In recent years, as the Zach Bush MD and Farmer’s Footprint platforms attracted diverse professional expertise spanning agriculture, venture capital, CPG, institutional investment, and health, a coalition was born – one that found higher order value in working together toward the development of what they saw as an emerging regenerative asset class, expanding beyond insufficient ESG frameworks.
“The genesis of BCP is a story of unlikely intersections,” explains former institutional investor and now Managing Director at Biome Capital Partners, Darren Baccus. Brought together through these platforms, Baccus, Farmer’s Footprint co-founder David Leon, ag-tech entrepreneur Brian Dawson, and Erin Feger make up BCP’s managing team. Together, they serve the BCP mission to build profitable food systems that regenerate the land, fulfill and support growers, and nourish all people.
Adding further depth to the BCP team, is the additional founders and distinctive group of advisors, which include Dr. Zach Bush and farmer and agronomist John Kempf, who both bring essential perspectives often missing from agriculture investment conversations. Joining them are private equity investor Tom Darden and consumer markets leader Steve Barr. This unique group not only brings invaluably different backgrounds and networks to the team but also helps uniquely define them as an organization that brings a holistic approach to investing in regenerative agriculture.
“While our expertise touches many different parts of the economy, BCP aligns with the common and, we believe, widely appealing goal of a just and thriving food system, one that nourishes the land and those who steward her,” Dawson explains.
Through the thoughtful development of their strategy, BCP seeks to identify the blueprints that can widen the channels that will enable significant capital to flow into this nascent yet urgent space. Their strategy is propelled by three driving factors:
- Methodologies supporting regeneration of land and its outputs,
- An ecosystem approach, and
- Equity partnership with growers and supply chain stakeholders
Regeneration of Land and Its Output
The narrative that supports a transition to regenerative land management is well reported however we are just at the beginning of the data. BCP sees the gathering of both robust ecological and economic data of regenerative management as pivotal for increased capital to enter the space. When we nurture the soil and soil biology through regenerative management – including continuous soil cover, minimizing soil disturbance, increasing biodiversity, maintaining a living root, and integrating livestock – we build nutrient-rich soils, increase productivity, and enhance weather and climate resilience, while reducing costs. In turn, this can lead to increased farmer incomes and more nutrient dense foods – all outcomes that lead to a system that continues to regenerate conditions for people and planet to thrive. The significant challenge lies in how to get from where we are now, to this regenerative paradigm. BCP’s strategy addresses this through two other key tenets: an ecosystems approach and symbiotic partnerships. Both of which address some of the existing barriers to successful scaled investment into regeneration today – including the construct of traditional asset investment, insufficient ESG frameworks, and the absence of farmer-centered investment.
An Ecosystems Approach
There is not one universal prescriptive methodology for regeneration. Regenerative systems are best realized with a holistic approach that accounts for the geographic context and embraces the unique qualities of the regional foodshed – including soil, climate, available resources, and post-farmgate infrastructure. For example, transitioning a farm without development of field level technologies (such as data, MRV, production, inputs), processing infrastructure, or access to markets may result in blockages across the supply chain that limit the success of the operation and accessibility of products. As a result, in order to build resilience, a broad group of stakeholders across the supply chain must be engaged to ensure farmers can profitably execute, especially in light of any iterative changes to a consumer facing ESG narrative.
Framing an investment strategy to address this within the confines of existing asset classes – where allocations are made based on specific risk/return profiles and often to only a piece of the system rather than the entirety – fundamentally limits resilient and scalable outcomes. In contrast, Leon explains that BCP’s strategy, “assesses the balances and deficits of a region’s existing regenerative capacities – for example, grower knowledge, infrastructure, capital, and market access – to fill in gaps that catalyze and incentivize better land stewardship and relationship-driven value chains.” In other words, if lack of access to enabling technology or lack of appropriate processing infrastructure serves as a barrier to grower adoption of regenerative management, then the strategy will take this into account and work to fund this gap.
“We did not see this approach anywhere in the space and believe that developing a strategy that recognizes the necessary overlap of these traditional asset classes presents the best opportunity for meaningful scalability of regenerative agriculture,” says Baccus.
Through this strategy, BCP thinks they can identify common characteristics within regionalized foodsheds that contribute positively to regenerative transition. And with this, they believe they can unlock a powerful heuristic for efforts elsewhere, including standards and learnings that can be shared with the investment community more broadly, enabling broader scale transition to regeneration.
Building Symbiotic Partnerships
There is a tacit acknowledgement by the BCP team that growers often distrust outside capital, and that investment funds, in particular, are often perceived as predatory to growers. Reframing the role of capital in alignment with both grower concerns and more equitable food systems is crucial for transformation of the system. The way they aim to accomplish this is through partnerships with growers to preserve and support their relationship with the land.
Where historically financial relationships can feel hierarchical and can disproportionally distribute the risks and rewards of the transition to regenerative, in BCP’s strategy, partnership serves to align mutual incentives with both risk and upside shared more equitably. This presents opportunity for deeper farmer participation in fund economics and enabling investments beyond the farmgate.
Through partnerships, BCP aims to gather common metrics supporting an empowered farmer at the center of the ecosystem, which they believe can, in turn, help establish a foundational pillar that can be utilized and expanded upon by the investment community more broadly.
“The present lack of structure and avenues that understand the nodal role of our land stewards is itself an immense gap,” explains Feger. “We believe that as growers and the land itself increase in resiliency, new paths are able to emerge that can drive value to the web of the agriculture economy.”
The implications of this work include scaled regeneration of land and community but also extend beyond the goals and vision of BCP and to the many organizations leading the way alongside of them and those soon to follow. Ultimately this strategy – characterized by an ecosystems approach and partnerships – is designed to help the rapidly emerging regenerative agriculture and food asset class take a huge step forward. There is an opportunity here to rethink investment in this space and establish the initial rails that will attract significant investment from institutional capital. In doing so, the case for investment in a regenerative future will be further solidified through track records and data that serve as proof of concept, paving the way for continued and increased capital allocations.
The enormity of the challenges and the opportunities presented by making regenerative farm management practices the norm – or what BCP deems ‘Conventional 2.0’ – is both daunting and inspiring, according to Baccus. “We don’t have all the answers. We are grateful for the opportunity to listen to those who have been marinating in sustainable agriculture since well before Biome Capital arrived and we invite all to join in asking questions and reimagining this corner of the investable universe.”
To learn more about Biome Capital’s work, email the team at email@example.com.
Sarah Day Levesque is Managing Director at RFSI & Editor of RFSI News. She can be reached here.