Agrifood industry: a haven for investments

Agriculture is an activity that has accompanied human beings since their early years. However, today it has acquired a leading role for humanity given the sustained increase in the global population. Thus, the agrifood industry is one of the most important productive sectors today, especially for the future.

According to the forecasts, the world population will grow to 9.7 billion people by 2050; this will bring a series of challenges over the next few years, such as increasing agricultural production without harming the planet. 

In this sense, sustainability in the food industry has become one of the great priorities of the sector, especially when understanding the impact of climate change on humanity, which is why it is taking measures to face the issue through innovation

Innovative solutions within the agriculture sector have enabled operations to have a lower impact on the environment and make agricultural processes more efficient, thus reducing the risks of cultivation. Hence, FoodTech (food technology) and AgTech (agricultural technology) related to Chilean startups are gaining more relevance.

Why invest in the agrifood industry in Latin America?

Agricultural land is an asset that consistently weathered the ups and downs of the economy, even in the context of a pandemic. The above is due to a straightforward reason: we all need food. At the same time, challenges faced by the sector and the need to increase productivity have motivated innovation startups to transform the agricultural and food system.
 

But, why specifically invest in the agricultural sector in Latin America? It should suffice to say that agriculture in Latin America and the Caribbean accounts for between 5% and 18% of the GDP in 20 countries in the region. However, achievements in the sector had been obtained at the expense of high environmental and health costs.

Due to the above, actions to unleash the vast potential of the region’s agricultural and food systems without damaging the environment have been proposed. Among these measures is the modernization of the agri-logistics infrastructure, deploying more efficient farming systems, optimizing the use of water, and relying on innovative solutions to increase the profitability of investments by extending the useful life of food items.

These significant changes, already underway, make Latin America a special area for investment in agricultural lands, allowing for the exportation of fruit to countries in other regions, such as Europe or North America.

Chile: an important focus for agricultural production

We have talked a lot about how important agriculture is to Latin America, and vice versa, but what about Chile? The country has unique characteristics to promote agriculture, making it a very profitable business. In fact, there are even agricultural properties that have increased capital gains by over 100% in recent years.

Here, the most significant thing is Chile’s geographical location: having the Andes mountain range to the east, the sea to the west, the desert to the north, and Antarctica to the south, there is a phytosanitary barrier that keeps us away from pests and eases the production of high-quality fruits.

At the same time, geography offers diverse climates, which allow us to grow products with high international demand. In this sense, Chile is privileged concerning other countries because of the climate, high quality of the soils, and water availability. 

On the other hand, the United States and Europe have their seasons opposite ours, so Chilean agriculture is most productive when they are not producing; this ensures a high demand for products and eases fruit exportation.

In short, agriculture is a constantly growing sector committed to sustainability and attracting more and more foreign investors. Especially in Chile, one of the South American countries with the most remarkable economic development in recent years; politically speaking, it has been historically stable, even with the pandemic and social movements, having investment favoring conditions, in addition to geographical advantages.

Foodtech industry: innovative solutions for the 21st-century market

Innovation and technological solutions improve agriculture to increase productivity and efficiency while reducing its impact on the environment, turning it into a more sustainable industry.

The main innovative solutions in the sector focus on:

  • Agricultural biotechnology: Thanks to genome editing, it is now possible to improve crop yields, increase resistance to pests, animals, and adverse weather conditions, and increase the nutritional content of foods.
  • Vertical agriculture: It is a process of growing food in vertically stacked layers, allowing working in environments with a lack of arable land and providing high-quality food without using other lands.
  • Precision agriculture: covers everything that makes agriculture more accurate and controlled. It usually involves GPS, control systems, sensors, robotics, drones, autonomous vehicles, automated hardware, and software.
  • Alternative proteins: these are technologies that make it possible to considerably reduce the inputs used to increase efficiency in the food chain.
  • Midstream technologies: refers to food safety and traceability technologies, logistics and transportation, and processing technologies.

Agricultural and food technologies in Chile and Latin America

In recent years in Latin America, AgTech and FoodTech records have been broken. In September 2020 alone, 400 million dollars were invested in three Latin American startups in agriculture and food technology, double what was totaled in 2019 (200 million dollars).

Among the most extraordinary success stories in Chilean startups, it is worth noting the following companies:

PolyNatural 
A biotech company focused on producing a certified organic and 100% environmentally friendly coating that delays spoilage and reduces food waste. In 2020, PolyNatural prevented the waste of 273.6 tons of fruit. 

Its most significant investment to date was USD 800,000 in February 2020.

NotCo 

A food technology company producing plant-based meat and dairy substitutes. To date, the company has received more than USD 130,000,000 in funding.

Instacrops

This company is focused on precision agriculture, which detects issues with water, irrigation, fertilizers, pests, and diseases. All the above thanks to a combination of IoT sensors, Big Data, and software. Its most important investment was USD 100,000 in February 2020.

These are some of the leading agrifood startups that are revolutionizing the food market in Chile and the world, increasing the benefits offered by Latin America as an investment center.

Considering that the future of food poses certain challenges, these innovative solutions from the Foodtech Industry respond to the increase in population and the growing demand for food, addressing resource scarcity and caring for the environment.

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