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Investing in food technology

With a growing population, scientists are finding new and innovative ways to feed the world.

MAY 2024

The food industry is under pressure to produce more food in a sustainable and eco-friendly manner due to the rapidly growing world population, which is expected to reach 9.7 billion by 2050. Climate change also intensifies the urgency to adopt proactive strategies for food and water security. As climate-related disruptions threaten conventional agricultural practices, innovation becomes essential to navigate this changing landscape, and technology has the potential to transform the food industry.

At Siemens Financial Services (SFS), we are committed to supporting the development of innovative food technology as well as improving agricultural infrastructure by financing projects and companies that focus on offering more sustainable practices.

Financing innovation in the food industry can help the sector transform how we grow, deliver, and eat, making healthy options both more attainable and environmentally practical.
Anthony Casciano, CEO, SFS Americas
A man is purchasing food items in a supermarket.

Innovation needed from the ground up

SFS recognizes the pressing need we face to feed the world’s population sustainably by financing companies that can help ensure a stable food supply while mitigating the impact of climate change.

For example, SFS participated in financing – including a sustainability-linked loan (SLL) – for Covanta, a Waste-to-Energy company that serves agricultural customers among others. The SLL incorporates key performance indicators (KPIs) that incentivize a 2.5% growth in sustainable waste processed and a 25% increase in waste recycling and reuse between 2020 and 2025. By fulfilling specific KPIs from the loan, Covanta can divert more waste from landfills, significantly reduce emissions, and support the development of a circular economy. Waste-to-Energy is far more sustainable than landfilling waste, reducing landfill volumes by 90%.

Covanta values the strong strategic support of Siemens Financial Services. As a world leader in waste and energy solutions, sustainability is intertwined into every facet of our business. It is what drives us to innovate, grow and challenge ourselves - and it is why these incentivized goals are so important.
Brad Helgeson, CFO, Covanta

With arable land quickly depleting due to erosion and pollution, alternative ways to produce healthy food without needing acres of quality topsoil are needed. Vertical farming can help contribute to this solution by farming upward rather than outward. Anchored by SFS’s initial investment, Siemens and 80 Acres have partnered to apply technology within the agriculture industry, fostering sustainable, healthy, traceable, and more productive farming practices.

In addition, SFS recently teamed up with Urban Crop Solutions, which supplies end-to-end growth solutions in the fast-emerging global market of indoor vertical farming launching a program where, under certain conditions, its customers can benefit from financing options offered by SFS.

Driving chat with innovative solutions

India accounts for a quarter of the world’s hungry and is home to more than 220 million malnourished individuals, despite achieving self-sufficiency in grain production and being a net exporter of wheat, rice, and other food grains. The lack of modern food storage facilities and extreme weather conditions brought about by climate change is exacerbating the country’s hunger problems. SFS’s recent investment in Leap India Food & Logistics Limited is helping to address these food security and storage concerns in India. An agri-warehousing developer, Leap India is aiming to develop a series of automated food storage silo projects – each with an operating capacity of 50,000 metric tons of storage – to prevent food grain waste. Each new silo built will feed more than 830,000 people living under the poverty line in India.

A cement manufacturing plant with a large building and machinery in the foreground.
Investing in food technology isn't just good for business, it's also good for the planet and for people. At SFS, we're proud to be at the forefront of this important and exciting industry, and we look forward to partnering with Leap India and other companies to help feed the future.
Steffen Grosse, CEO, SFS Equity Finance

Creative changes can make a big impact. SFS recently provided financing for Restaurant Technologies (RT), a leading provider of bulk cooking oil management services to the food industry. SFS provided financing, which supports RT's core operations, including collecting used cooking oil from customer locations and storing it in depots to then convert and sell it as biofuel feedstock. The loan helps RT achieve their goal of becoming a more sustainable company, promote sustainability in the industry while also providing benefits to food service businesses, such as reducing costs.

Additionally, SFS announced its investment in FertigHy, a company aiming to produce affordable and low-carbon fertilizers for European farmers using green hydrogen. Fertilizers are a linchpin of modern agriculture, and their eco-friendly evolution is paramount in sustaining our environment. Our investment in this project supports the transition towards more sustainable practices in the food industry throughout Europe. Fertilizers are critical in the food industry, and eco-friendly fertilizers are being developed to support sustainable farming practices.

For nearly 25 years of helping 32,000+ customers work smarter, safer, and more sustainably, Restaurant Technologies is proud to team up with Siemens Financial Services to advance sustainable business practices in the restaurant and food industries.
Jeff Kiesel, President and CEO, Restaurant Technologies

Alternative sources needed

As the demand for sustainable food sources continues to rise, alternative proteins are gaining popularity as a viable solution to meet the needs of the growing population. The production of alternative proteins, including plant-based meat and cell-based meat, requires significantly less land, water, and energy compared to traditional livestock farming. According to a recent report, the plant-based protein market is expected to reach $162 billion by 2030, while the cell-based meat market could reach $25 billion by 2030. These innovations require fewer resources than traditional livestock farming, aligning with the imperative for sustainable food production.

Examples, including companies like Del Monte Foods who identifies itself as “The Original Plant-Based Food Company,” are essential in meeting the needs of a growing population. SFS has been providing corporate lending solutions to Del Monte Foods for over 15 years, enabling the company to overcome periods of uncertainty and strategic transformation to achieve their goals. With help from financing from SFS, Del Monte Foods has been able to achieve growth objectives and has even won awards for product innovation.

The food technology industry is expected to reach a value of $700 billion by 2030, with investments in innovations such as plant-based meat alternatives and vertical farming leading the way.

Siemens has the expertise in financing and technology to help achieve greater innovation in the food and beverage industry. In fact, Siemens' Center of Competence for Controlled Environment Agriculture emerges as a beacon of excellence. This center serves as a hub for research and collaboration, facilitating the advancement of controlled environment agriculture practices, including vertical farming. Harnessing technological advancements, Siemens empowers the industry to embrace sustainable, efficient, and space-conscious farming methods. By financing innovative projects with targeted investments, debt financing, and intelligent leasing models for equipment and technology, SFS can help transform the sector promoting a more sustainable and nourishing future for generations to come.

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