Investing in Regenerative Agriculture and Food

253 Sam Kass - Get people access to carrots before talking about nutrient density, former Obama's chef and nutrition advisor turned investor says

October 17, 2023 Koen van Seijen Episode 253
Investing in Regenerative Agriculture and Food
253 Sam Kass - Get people access to carrots before talking about nutrient density, former Obama's chef and nutrition advisor turned investor says
Show Notes Transcript Chapter Markers

A conversation with Sam Kass, former White House Chef and Senior Policy Advisor for Nutrition of the Obama's administration and partner at Acre VC. We talk about the potential of VC in the space, the challenges of the real world and why we should focus on getting everyone access to carrots before focusing on the quality and growing practices, why carbon payments is a very interesting and real entry point to scale, and more.

How a young chef became the personal chef of the Obama’s, started a vegetable garden in the garden of the White House and became very active and involved in the food and ag policy. After 6 years he left and started focussing on the investing and entrepreneurship side. Joining an impact VC.

Sam argues we should focus on getting everyone access to carrots (and of course other veggies) before we focus on the quality and growing practices. Don’t have perfect be the enemy of the good and have the whole food as medicine and nutrient density space become super elites. Most people don’t have access to healthy food to begin with, let alone nutrient dense food.

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Speaker 1:

How a young chef became the personal chef of the Obamas, starting a vegetable garden in the garden of the White House. And not only that, but it got actually very involved and active in the food and agriculture policy space. After six years he left and started focusing on investing and entrepreneurship, joining an Impact VC. We talk about the potential of venture capital, vc in this space, the challenges and the tensions that brings, and the real world and why he argues we should focus our energy on getting everybody access to carrots and, of course, a lot of other veggies, before we focus on quality and growing practices. Don't have the perfect, be the enemy of the good and have the whole food as medicine. Nutrient density space become super elitist. Most people don't have access to healthy food to begin with, let alone nutrient density food, and why he thinks carbon and payments is a very interesting and real entry point to scale Enjoy. What are the connections between healthy farming practices, healthy soil, healthy produce, healthy gut and healthy people? Welcome to a special series where we go deep into the relationship between regenerative agriculture practices that build soil, health and the nutritional quality of the food we end up eating. We unpack the current state of science, the role of investments, businesses, nonprofits, entrepreneurs and more. We are very happy with the support of the Grandham Foundation for the protection of the environment for this series. The Grandham Foundation is a private foundation with a mission to protect and conserve the natural environment. Find out more on grandhamfoundationorg or in the links below.

Speaker 1:

Welcome to another episode today with the former senior nutrition advisor at the Obama Administration and current partner at Acre VC. Welcome, sam. I'm Sam K and I mean there are already many things to unpack in that little introduction sentence. But what led you to soil, to food, to begin with? And of course then we're going to talk how you ended up being a nutrition advisor and why a president needs that, but of course also your step towards the investment side. But on the personal side, I always liked that, that question from all the career paths you could have taken and you could have walked into, why did you end up on soil?

Speaker 2:

Well, I'm actually a chef by training. Okay, that was an excellent one. And so, yeah, if you're a chef and trying to put the most beautiful food on the plate wherever you're serving, then you're forced to start to think about the land which it comes from and the way it was produced, and both from a health standpoint, but also from a climate and sustainability standpoint. And so is that relationship that really set me on my path. Ultimately, to, you know, first start caring about that and then start understanding a lot of the political and financial implications of how the system works and what's, you know, led me to focus on policy for many years. And now on to the investment side.

Speaker 1:

And I mean as a chef. I think there are many that simply get their stuff wholesale, get it delivered to the back door, at the kitchen, and, of course, focus on quality but not necessarily on, let's say, the practices of how. Not because they have the time and maybe their mental space to think about it, because it's a gruesome, many hours a day job. Like what triggered you into not just caring about the quality and the taste what ended up on the plate but actually connecting that back to what happened on the farm or wherever the food came from. Do you remember what triggered that, or was it a very natural process?

Speaker 2:

Actually, it was a very specific moment.

Speaker 1:

That's what we like in the podcast, so we can talk about it.

Speaker 2:

So I finished my studies from the University of Chicago in Vienna and while I was there I got myself into one of the better restaurants in the city and I was sort of working for free and learning how to cook because I was very interested in food. And so there was this moment very early in my training where the sous chef had me make a rhubarb sauce for this fall-groud dish and they called me Yankee and he said okay, do I have to keep it clean or no, you can do whatever you want. It's a podcast, you don't need to go on TV. So the sous chef, they called me Yankee. He said all right, yankee, cook the rhubarb down. And then, fucking the butter. That's what he said. He was like all right, I guess that means putting in a lot of butter. So I cooked this rhubarb down and I put a big, big, big old spoonful of butter in there and he said no, yankee. I said, like you know, fucking the butter. I said, oh, okay, well, that's a lot of butter. So I put another giant thing of butter in and he came over to me and got right in my face and he said if the guest walks out of here and drops dead of a heart attack. That's not my problem. The guest asked us to make food that tastes good and not that's good for them and with that he put like it's just like this gigantic amount of butter and walked away and it you know.

Speaker 2:

So I go back to my station. You know he was like yelling at me and I will catch him and like stopped and listened and that was super embarrassed. But I also was like you know it was really upsetting because he was both right, but that is true, like that was absolutely right and that was so wrong, like something was so wrong about that moment and I could. So I'm sitting there like reeling from this, and I look out into the dining room because I could. You know, sort of like a semi open kitchen. I looked at there and I just realized like God, like everybody out there looks like shit, like they look sick, like they don't you know they're not healthy, and so I start thinking about, okay, what are the implications of what I'm serving as on the you know wellbeing of the people that are eating in?

Speaker 2:

And then, right as I'm in the middle of that, like line of questioning, the purveyor of all the ducks and chickens and eggs came and dropped this huge stack of product on the ground and I and to my left and and I just you know they asked why I wonder what the implications are on the land and the environment and the soil and the people who are producing the food.

Speaker 2:

And once I asked those couple of questions of myself and started picking up you know weird policy books and history of agriculture books, you quickly got an understanding that you know food and agriculture systems are at the cornerstone of most of the biggest challenges we face and that you know if you want to actually solve a lot of these problems, you have to transform. You know how we eat and you know the more I dug, the more like I understood that and very much sent me down the path of like, okay, well, what can we do? And then I started shifting policy and you know, and shifting our culture and then working on the business side. So that is very specific. It really wasn't that moment that really changed this trajectory of my career.

Speaker 1:

So you came back to the States and did you work in the restaurant world or you went straight to policy after that revelation, or did you try to set up I don't know, farm to table or deeply farm focused restaurant to change Like what was the step after after that. Or you realized actually I need to go into policy and then business to have a bigger change.

Speaker 2:

So sort of a combination. Like I started I really wanted I was young, like I was, I don't know 23 or something, 24 and that happened and so I started. You know, I finished my time there, I started cooking and driving around the world and while I was doing that I was like reading everything I put my hands on around these issues and starting to really educate myself. And as I did that, I ended up coming. I came back, I cooked a restaurant in Chicago for a little while.

Speaker 2:

In the middle of that, when I ran out of money back out on the road, did a bunch of private chef things sort of really developed my style, which was very health, you know, nourishing, focused, like I don't cook health food per se, but you know food that is conscious of people's well-being.

Speaker 2:

And then I finally, after like five years, would kind of be out in the world and realize, okay, it's time to, you know, maybe settle down a little bit and start building something. So I came back with, you know, a desire to. I felt and still believe that chefs are, you know, maybe the most, one of the most, the most important group of influencers on these issues. We sort of sit between the producers and eaters and and we, you know. So I came back thinking I'd start organizing chefs for food policy and food politics and also starting to think about some businesses that I could start. I had a private chef company that's focused on, you know, education and better food, and you know that's when I started cooking for the Obamas. And so during the camp, just after the camp, super logical staff obviously yeah.

Speaker 1:

Like you do like, one does Like, one does Like one does.

Speaker 2:

Yeah, so I cook for them for two years in Chicago before they won. So I was sort of it was a good set, you know, for somebody who was trying to get into food politics and figure out how to change, to be cooking for them.

Speaker 1:

Of course, of course we do also continue to cook for them. I don't know, in the White House, and and and actually you decide, or focused, or doubled down on the policy side and on the advisory side, necessarily feeding the Obama side, which is, of course, essential.

Speaker 2:

I actually did. Well, I actually did both. Okay, so I both was. I both led food policy for him and I ran her big campaign called let's Move, which was their big childhood mission. So I did the garden and all of her school nutrition work and I cook five nights a week so they kept me pretty busy. So I was doing both while I was there.

Speaker 1:

And how did that second piece came? Because, going from, I'm cooking, I'm taking care of the food side, of course, and then, but layering the other layers on top of that, was it a natural fit, did they ask you? Did you at some point said actually I want to do more than just making sure you and the family are as fit and healthy and and and nourished as possible?

Speaker 2:

So it was a natural fit for them. I wouldn't say it was a natural fit for anybody else in the White House in the beginning. Anyway, you know, we had just you know, Michelle and I had discussed- as one does it of course when you're eating food cooking food you start discussing.

Speaker 1:

I mean, it's a very natural place to discuss around the house.

Speaker 2:

Yeah, we spent hours talking about everything, what was going on and you know she saw the impact on her own health and her kid's health and so that you know, I think, really opened her eyes to what's possible. And also, you know, we talked about all the problems that were happening. You know how much you know American families were struggling on these issues and you know she realized that she was also struggling, like you know, and she was worried about her own kids, and that was somebody who had plenty of resources and very well educated, et cetera. And so we went to the White House basically with a plan that we're going to do this garden and sort of use that as a way to take the temperature of the country and, you know, see if these issues really resonated. And then, you know, if it did, then we'd do a big, you know broader health initiative to try to take on, you know, the bigger issues around food and health and nutrition. And so you know that's exactly that's what happened.

Speaker 2:

There's never been anybody else in the White House who's had a role both in the residents as well as in the executive office of the president. So that took yeah, that took some time to be, you know, like I'll never forget that. You know, people were like you're the chef, like what are you doing in this policy meeting? You know, I'm sort of like you're some random policy person. What are you doing in this food and agriculture meeting? You know, like, what do you know? So you know, you know you don't know anything about food. So that was interesting.

Speaker 1:

Now, of course it takes time to see everybody tries to.

Speaker 2:

It just took some time for me to get a role and where?

Speaker 1:

what room do I have to maneuver or not? And everybody's worried for their own. What do you say? Their own? Their own job, not job. But also, yeah, of course, I can imagine a competition around in an office like that or in an institution like that, like, let's say, with a gazillion cameras focused on you like never before. It's the boiling temperature is easy and it's very intense. So how long did you do that, like, how long did that combination? Or also, in general, were you very involved in that?

Speaker 2:

So I was in the way after six years. It was exhausting. It was very deeply exhausting, yeah, and intense. And look, I mean the loading curve for anybody walking away after the first time is incredibly steep. Nothing really prepares you for a place like that and you know it took me a while to learn how to play the game.

Speaker 2:

I mean I was a pretty quick study, but you know it's highly competitive in there. I mean you're sort of all on the same team and you're sort of all competing intensely to try to move whatever your issue is forward. And you know a lot of your energy is actually spent dealing, navigating the internal dynamics of getting anything done, getting anything like the impact. If you can get anything done, the impact is massive. Right, you're dealing with these huge dollars and you know, in the US, you know 350 million people and any one little thing you can do can affect a lot of people. But it's really hard to get anything done. So that part, you know, took me a while to sort of figure out how to navigate. But you know I figured, I definitely made my way, and you know.

Speaker 1:

but what was your biggest surprise in there? Like looking back, and then I'm going to ask you biggest accomplishment, but are we your most proud of? But what's your looking back now? What was the thing that surprised you the most?

Speaker 2:

Surprised me. I mean, it's a good question.

Speaker 1:

I don't know what was like surprising, Like looking back like I would never expected that, or that I would be doing that, or that that would be a thing or an issue or not.

Speaker 2:

Well, I mean kind of the whole thing, dude. I mean I'm just like a kid from the South side of Chicago and that I would be, you know, cooking for you know Barack and Michelle Obama and feeding their family every night and running food policy for him, and like digging up the South lawn and planting like plants and zucchini, you know, and also you know being good friends with them and sort of being really able to witness, you know pretty closely, all that happened and all that they went through. I mean the whole thing was not to be believed even now, but you know, I don't know, I it's something I would say is like really surprising. It's just, it's just really.

Speaker 2:

The intensity of that place is very hard to describe. The stakes on everything you do is very hard to describe and you know, being the first African American president and first lady, the scrutiny that we were dealing with was like unlike anything anybody had seen before and you know there was no margin for error at all. Like we look at what's happened since and you know, like there was a. There was a. There was a big controversy because he wore a light suit. She got huge criticism because she wore shorts one day when she was in like a hundred degree heat in a desert, like that was the kind of controversy yeah it's because we remember that that we were.

Speaker 1:

We, I'm saying the general we were worried about considering what happened after and what. Everything else was suddenly okay, but and your biggest accomplishment, or what you're most proud of sorry, not accomplishment sounds, but what are you most proud of of your time there? Could be the garden, could be, of course, policy work what do you look back through?

Speaker 2:

like wow, we managed to get that done. I'd say I think I'd say three, three things. You know, transforming school nutrition was, you know, probably the biggest accomplishment we had. You know that the standards hadn't been updated in 20 years and you know there had been no new money in 30, I think something like that and so you know that was a really big deal. We were able to get a lot of really important things done within that bill that you know with. You know, a decade now attempts to try to undercut it. Most of it has remained intact and hopefully we'll get some new, you know, improvements to it in the coming year. So that one, obviously, you know like 32 million kids a day are affected by that. So that one you got to feel pretty good about.

Speaker 2:

We did a big partnership with Walmart that transforms a lot of key issues around accessibility and affordability of healthier foods, which changed the whole industry because they're so big that they were. If you have to change for them, then you kind of have to change for everybody. So that was pretty proud of what I was able to do. On that one I did a thing to get the least amount of attention or credit with that. In some ways, it's the bedrock of all kinds of change that have come since. Is we really focus on shifting the culture around food in the country, really elevating it as an issue that everybody should care about? You know, when we got in there, most people really weren't thinking about it. It was, you know, advocates and we're yelling at the food industry and nobody was really paying much attention to it. And we tried to very, very deliberately put these issues kind of front and center in the psyche and culture of the country, which is what is absolutely necessary as a precondition for policy to start to move.

Speaker 1:

Or for businesses to start to care.

Speaker 2:

Yeah, yeah, and still, to this day, voters are voting on food policy issues, which is why they don't get the kind of attention and change that we need. So we made a lot of progress, particularly like, which is where you see all these startups and all the shift in the big guys. That's that she is deserved a tremendous amount of credit for dramatically accelerating. You know there was some good movement happening, but she really took it to a whole other level to make it a mainstream issue, and so we'll never really get the credit on that one that we deserve, but it's really had a transformation impact and then why did you decide to leave for the next election?

Speaker 1:

Leave policy and leave policy, but go to the investing and the company or entrepreneur business side. What would make you transition?

Speaker 2:

I think what I came to realize is that we had been able to start, either finish or start, most of the big things that were possible. Certainly at the time, particularly given the state of politics in the US. Yeah, you're not getting much done, you're not getting anything really done in Congress, and so, and from the executive, you know we kind of pulled all the levers that were within reason pullable and that the next wave of change was going to be driven by entrepreneurs and innovations and technology, that Either we're gonna start replacing some of the big guys and taking market share from them or, you know, you could utilize their scale to scale a better way of doing things, and that pressure and Relationship is gonna move most of the industry. They do think the thing.

Speaker 2:

Most people forget it. You know I was the government has a big role to play in food and food policy, but ultimately the government's not dictating what ends up on the plates of Americans. It's just not. I wish it was in some levels Because it would be easier to change things. But then yeah, but depending on who's an offer like there is next game.

Speaker 2:

You know what that guy's deciding, like that you have to eat like well done steak and you know pizza or whatever the hell. He was so and so you know. I think I think understanding and trying to shift the ecosystem that's really ultimately driving what ends up on our plates and how is how it's grown and produced Is is why I decided to spend the next phase of my career and I own the investment side.

Speaker 1:

And yeah, how did you I mean, of course, after I stand at the White House there many options. What made you choose a partner role at Acre? Would make you choose an investor role, compared to maybe setting up another company, like you did before with private chefs, like what was the the choice on the investing versus the investee side?

Speaker 2:

Yeah, I Felt that it's gonna be a big opportunity on a couple levels. One, there was not a lot of mission driven capital out there that cared about climate change and human health, and it was broader environmental health.

Speaker 1:

And this was when we talk like this was so.

Speaker 2:

You did six years 2014, like 15, 15, 16 yeah, that was desert out there probably yeah, yeah, yeah. And so and I believed and still do believe, and increasingly it's proving out that the companies that are solving these massive problems that, in you know, live within the food system are gonna also outperform Companies that are not. You're seeing that play out in within the portfolios of the big guys, like a tour of what products are growing or products Are not, and you're definitely seeing that from a capital standpoint, like come, you know, in this sector it's not true in every sector, but in this sector you know companies that are solving some of these big pain points around sustainable practices or general agriculture, or healthier In more nutrient dense products. There, there, they're doing better than just the next. Generally, there's some exceptions, of course, but since not a one-to-one correlation, but generally it's, it's absolutely true and so I felt like there's a chance.

Speaker 2:

So, you know, try to build the companies of the future and build, build the future of the food system. And we kind of had to do that because you know that, ultimately, is what does shape, what ends up on people's plates and is going to. I mean, ultimately, food and ag is a private sector endeavor and Either you get in the game or up your sleeves and sort of fight the fight in that arena, or you're going to be kind of on the outskirts trying to shape it and, you know, push it a bit, which has a big role, but not the heart center of what actually shapes what we, why we eat it and how it's produced and would you say, as an investor, you're at the heart of and center, or is it the companies you end up backing?

Speaker 1:

Because, you could argue, you're still not, still you're at bit of the outskirts, because at the end the Work work would ends up on the plate. But you are very active as well, early-stage investing, and you pick what you pick and you, you support what you support. So how do you see a role there?

Speaker 2:

Great question. Yes, on some levels, you still on the outskirts. I, I'm taking this kind of role. I'm trading some breath for death, right? So, instead of picking one company where you, you build and you're just all in super deep and like I debate this because they're straight Offs, right, sometimes it feels like, okay, I'm too, too spread and not deep enough, but, but, but, you're still. If you're just doing one company, you're still, you know, relatively limited in terms of your ability to Doesn't work out, and or your.

Speaker 2:

Yeah, you know it's it's higher, it's higher risk in some levels and it's Many levels and it's also, yeah, you're, you're still gonna be constrained by whatever those four walls of that company are. And you know, for me, being on a Platform as big as the White House, sort of looking to get scale and having broad, big impact, is something that I'll be chasing First my life on some levels, I think, even though I work hard to not, but I, you know, I can't, I can't shake the feeling of doing something really big that has a, you know, a huge nationwide impact. Like there's nothing, there's nothing that Can compare to that feeling. And so, and so I think, the way we, you know, the way I look at it and the way we look at it in acres, where we're high conviction Investors meaning we're not making like 50 bets and hoping something works we find companies really think could change the world and we really think it'd be successful commercially and then we, like, go deep in and just really work our butts off on behalf of those companies and Do everything we can to de-risk that investment for our investors, for our limited partners, and also, you know, try to help, you know, make the change we believe in.

Speaker 2:

And so, you know we were, we really build alongside of our founders, so it's definitely a couple clicks removed. We are not this, you know it's not my company, the ones that I'm on the board of, but I joke like you know one company called planet forage, wonderful company helping to decarbonize the, the food system, with, with data and models and strategy around. You know, life-like assessments and then strategies to reduce Emissions to the system. And I don't that, I'm her, you know, cheapest employee because I work for free, basically To the seat for the CEO. So you know it's that's the approach.

Speaker 1:

So I'd say it's somewhere in the middle and For the listeners, of course, I put the website below and a car dot PC. I don't go now to check it, but just to describe it a bit. What's? What is the? The fund, or the funds? What's the size at the moment? What's the the focus? You have a very interesting list of portfolio companies. Obviously, we just do to for people to understand a bit what we're talking about when you talk about the platform, that, where you're, you're spending your time.

Speaker 2:

Yeah, so, yeah, so acreage, where we have, as I said, we're a mission-driven Venture fund focus on climate change and environmental health, human health and through food and agricultural systems, um, and so we look to invest, you know from generally like seed through be rounds For companies that we think can have a measurable and meaningful impact on the company, those issues that we care about. We'll look at anything related, even tendentially related, to food and ag systems and nature-based solutions. And you know, we sort of divided up in these three buckets, although you know, in the reality it's a, it's a comprehensive system that you know is working in a very holistic and fluid way. So it's it's hard to sort of neatly divide them, but we look at sort of.

Speaker 1:

But you have to do it for your slides when you're raising. Yeah, yeah for the deck of the deck.

Speaker 2:

So it's yeah, so it's ag and ag. I call to technology, food tech, like supply chain investments, and then and then consumer. But we don't really do Too much like next print. Yeah, not a ton of cpg, we have a couple, but for the most part we're not doing the next granola bar. We're looking for, you know more underpinning innovations that could really unlock, like the food is medicine, space or you know the like. But I'm spending a lot of my time on climate right now, obviously for Obvious reasons, and I will get to the.

Speaker 1:

Food is medicine and just in terms of length, is it the standard 10 year VC Path, let's say? And Two part question when are you in the journey now and and does our exits happening? And or and is it also creating tension? Do you see the timing? We hear that often on the podcast, not because I want to bash the VC world necessarily, but 10 years sometimes might not be Enough or sometimes great tension. So let's start with the first part when are you in your journey and and do you see that tension sometimes as well?

Speaker 2:

So raising our third fund, which will be done by the end of the year. And fun too is we're investing on a fun three already, you know, look.

Speaker 1:

In total, total money more or less Deployed or raised. If you can, what you can share, of course, just to have an idea of size it's not five or ten million, I think.

Speaker 2:

No, no, no, yeah, yeah. So like, well, um, let's see, just do the math, you know we'll be at sort of Um like 250, 300 million to like that 300 million or something by the end of this one. Yeah, give or take a little bit. Um, uh, look I. I think there's some challenges in the venture model. For sure, I think the bigger problem is the quality of the people and the no no the venture on the venture side.

Speaker 2:

Yeah, yeah, I mean you know there are a lot of really good people who are stand up. You know folks have to run their businesses and sometimes make very difficult decisions but for the most part you know are helping to build these companies and not trying to. You know, just Put, pump them and flip them and you know not care about the long-term Viability of the company. That's definitely not how we roll. There's plenty of those kind of folks out there. You said we really care about who you get into business with, like anything. So I think like there's some incentives in the VC model that you know can be problematic and from a time standpoint, duration standpoint, in the ag side let's maybe a little even more cute, because some of these things just take longer to to build and say just a piece of software that you you know can sort of get out there, um, uh. But on the other hand, like you, know, we have 10 years probably.

Speaker 2:

Yeah, we don't have much time left.

Speaker 1:

No, it's, it's the answer, but we had that conversation quite a few times like yes, and at the same time, this is a model you can raise 300 million with and put it to work. So we're what? Yeah.

Speaker 2:

And I just think and also just think like, yeah, like you know, the world is burning and dying and we got to have solutions. Like the pressure on speed, you know, the pressure to like, build and really make progress, which allowed you to raise an extra round, is is like good, it forces companies to get, you know, tight and smarter and better and more efficient and develop technologies are going to work and um, and you know, look, if, if it, if something's not really working for some reason, you know, then the realities of the market take care of that. It's not to say there's some great technology that haven't made it for bad, you know, for the wrong reason. So it's not a perfect system, but I think it's just. I think it's a little ways to say all ventures bad and um, you know, it's uh, it's all problem because I just want to do it so fast.

Speaker 2:

I'm sort of like if you can't, if you have a piece of, if you have a, if you have a model or a piece of tech that you Can't get scale in 10 years, probably More often than not, far more often than not, it's probably not coming. That's going to work ever. There's definitely exceptions. I'm sure somebody's going to write to you and be like well, there's just one company that I like no farming.

Speaker 1:

but you're not talking about selling a farm. Yeah, that's a different.

Speaker 2:

Yeah, of course. So like they had land and such in carbon projects. There's lots of things that have longer durations that we should be thoughtful about and figure out how this kind of capital can work in a broader ecosystem. Like venture is not the only thing, but in fact I think part of the problem is we don't have enough capital, that's mission aligned and values aligned through the journey.

Speaker 2:

So one of the things that does keep me up at night it's like okay, yeah, we can get a company to like the C or the D, but then you have the real assholes out there who will take advantage of any more where they can to extract as much value for themselves as they can.

Speaker 2:

Now there's also some wonderful investors who are later stage, but there's not enough of them, and so you could build something really great and then you just run into a few months of a tough situation and you can lose everything, and somebody else would just take all the value that you had created over five years and basically just take it because the company's in a tough spot and that capital has real leverage, and so on the metals that business are great and, like you see right now, a lot of companies are in that situation and this next year is going to be really painful, and so I think that's a risk to keeping mission and values aligned through the growth of a company, and that's a real challenge that we face continuously.

Speaker 2:

But we're seeing some incredible entrepreneurs with solutions that I think the technology that I truly believe could transform the world and mitigate some of the worst of the climate crisis that we're facing, to significantly accelerate a move towards a gender of agriculture, invest some of the underpinning technologies for that and down through the health side as well. So I remain. Actually it's the part of my daily experience that gives me hope. The rest is pretty difficult. When you sit and grapple with what the data is saying, it's pretty hard to stay hopeful, but when you see some of the things that are coming, that gives me reason to believe we can mitigate the worst of this.

Speaker 1:

And talking on the food as medicine peas, or the nutrient density and nutrition connected to healthy soils, what have you seen there? Obviously you saw it firsthand as a chef and then as a market gardener in the White House and as a chef there as well. But what have you seen in the past let's say nine years, eight years we're recording this in the summer of 23, on that intersection, and what gives you hope there or excites you from a investor point of view, but also in general as a chef and, of course, as a father and somebody that really pays attention to debt?

Speaker 2:

Yeah, well, I mean, I think there's lots of different ways to look at it, at least how we think about it. If you look at, I think lots of people like to go to personalize nutrition and all this other stuff. For me, the challenges are far more just, basic and fundamental. When you look at the amount, everybody always there's a very convenient, nicely packaged narrative that says the reason why cheese burgers are cheap is because of government subsidies and why they're cheaper than a bunch of carrots. The reality of that is just unfortunately. I wish they were true. It's just really not true.

Speaker 2:

There's some really bad subsidy policies all over the world, and particularly in the United States, that are just inefficient uses of taxpayer dollars and definitely helps to prop up a certain system, but it's, considering the size of corn and soy production in the United States, actually a very, very small amount of money compared to what the economy that's been built around it. The thing that's been much more impactful over the last 50 years, the amount of research and innovation dollars that we put into the production of those two crops and our ability to grow them far more efficiently. Now, I put efficient in quotes because a lot of the impact of that has been externalized of that production system.

Speaker 1:

We pushed it within a current system, as far as we could push it basically.

Speaker 2:

Which means that we're just producing millions and millions of acres with only a handful of people producing it, because nobody has to be on the combine. You can grow 100,000 acres and never set foot on your field and the yield that you're getting is pretty extraordinary compared to historical numbers. That has driven down the cost of those key inputs to that system and, from a dollar standpoint, statistically insignificant number of dollars not even register on the map have gone into fruit, vegetable nutrient, whole grain production. That's why the cost is so different. I guess it's not announced, I guess I can't say yet we're finalizing the deal, we'll be announcing it.

Speaker 1:

I will share the recording before and you can sign off on it or not, before it goes live. It will be somewhere September or October. If it doesn't go through, we can take it out.

Speaker 2:

It'll be announced by then. We're just leading an investment in a company called Bonsai which is automating tractors and farm equipment for fruit, for orchard production.

Speaker 1:

There's nothing to do with small trees, I think.

Speaker 2:

Yeah, no, what you're saying is basically, labor is a huge driver of the costs in these systems, and if we want to figure out both how to farm them more sustainably based on data we're going to have to start figuring out ways to collect the data, which we don't have right now. Secondly, if you want to make sure we can bring the costs down, or at least not have it dramatically spike as we enter an age of volatility, and figure out how to produce these foods, then we're going to have to reduce our costs of how we bring them to market, and that just hasn't happened yet in this, in this part of the landscape. And so, while there's real trade-offs and I grapple with the person that comes from a labor family my dad was a big union organizer. I grew up on Pickle Lines it's a huge driver of cost, a huge driver of waste.

Speaker 2:

So much food can't be harvested because producers can't find enough labor. So we think it's a solution that can be pretty impactful in enabling these healthier foods to make it to market at a price point that people can afford. So we're looking for those kind of scalable, transformational pieces of technology, not the thing that is gonna be great for wealthy people in Manhattan, but things that are gonna make sure that people all over the country, and particularly all over the world, are gonna be able to benefit from and the theme of healthy soil and the connection to healthy humans and healthy gut systems.

Speaker 1:

What have you seen there, what have you not seen that you would like to see? Like what would excite you, especially making something or investing in something or companies that are not just for the happy few that live in Manhattan or whatever big city we can name. Like what would be like how do we make that accessible and, of course, driving the cost down, but also that all the latest research on healthier soil practices start to connect that to healthier gut and healthier people, especially for the people that need it most, but in some how, it just never ends up there. Like what would be? What have you seen or what would you love to see?

Speaker 2:

I mean I've seen there's been a lot of companies doing some very interesting work in this space that I've seen I forget the name of it a company that's basically producing live algae on farm and putting that in to really fed a lot of the biome of the soil, my land. I think, yeah, maybe that, yeah, that's it, yeah, yeah, I love them. I mean I questioned about the scalability of that. We didn't do that deal, but I think there's some really interesting work being done in various ways.

Speaker 2:

The company that I'm most excited about in our portfolio in this space is a company called LoanBio, which is an Australian based company that has identified fungi, microbes in the soil naturally occurring, that are sequestering between one and three tons of carbon per acre per year and storing that carbon far more permanently in the soil and that then leads to a much healthier overall soil construction.

Speaker 2:

You know, obviously, that carbon is fundamental to the life within the soil and also because of that, so to see a real yield bump, because of the relationship that the microbes have with the roots of the plants, I think that company can, with any kind of scale, start to fundamentally transform the way we farm, start making the numbers for a general radical to actually really work at scale, Like there's some really amazing, beautiful, brilliant producers who have figured it out over decades and decades of work. We don't have that time for the rest of us. Yeah, and I just, you know, we have to ask ourselves why hasn't everybody done it Right? And if it's so easy and obvious way to do it, why hasn't everybody done it?

Speaker 1:

Because it's not easy.

Speaker 2:

It's not easy, it's not obvious and the return on investment for many growers just isn't there. And there's also a deep culture in agriculture. So the root of how we even understand our culture, that it's hard to overcome, because people have been producing for a couple generations in this way and they have all kinds of systems that they've set up and invested millions and millions of dollars in these kind of ways of doing it, with certain kinds of equipment, et cetera, and that's hard to change unless the numbers make more sense. If it's like, yeah, maybe over time, in 10 years your soil will be better and you can make a little bit more money because you're doing a little bit more yields, that's not a story that's gonna see broad scale adaptation of a different way of production. I think we need to make the numbers work.

Speaker 1:

I do think that carbon is the way that's going to happen and well, I hope more than it is More than quantity of flavor Like do you see the potential there for the nutrient density in the healthcare angle?

Speaker 2:

I think, I think we, I definitely think carbon more than flavor right now for sure, and I think over time there could be. I think there's a lot of possibility around growing nutraceuticals and having food be more embedded in the actual healthcare system. Are we gonna start saying, like, the healthcare system will cover this carrot because it's growing better soil has more nutrients than that carrot? No, that's not gonna happen. Why? Because I think what we're gonna start to see is like we'll start covering carrots. Let's start, and that's a revolution. Yeah, like, and this is why I think we have to be careful. Like you know, I just care about getting everybody a carrot, Because right now, a lot of people don't have carrots and I think it's great for some people to be focused on how do we get the best carrot, how do we get the most delicious carrot, how do we get the most, you know, nutrient dense carrot and hopefully, over time, that starts to flow through the system and so everybody's carrot starts to get better.

Speaker 2:

But most people don't have a carrot right now and we have to think about what we have to do to unlock the ability for everybody just to have basic access to these foods, and I do think the food is medicine, opportunity is is the biggest opportunity, unlock potential there to start to pull, you know, better food and food in the cornerstone of our health and our healthcare system and shifting from treatment to prevention. Like that's the opportunity. But the reality is, like you know, a little more or less, beta carotene is a far less important than eat the carrot or not eat the carrot, and you know. So that's what does get me quite excited and I'm super like I'm a cheerleader for the rest of that work and I think once we can start to let's not get the perfect bide enemy of the good.

Speaker 2:

Yeah, which plagues all progressives, Like it is a disease of the progressive side of the world, and we get in our own way, we stop our momentum because, you know, we have this idea and our vision in our minds about how the world should be and we then look at the world as it is through that lens and I think, when you're actually what changed for me, like when I went to the White House, is and I, you know all those idealists are, and writers and critics, people that you know, the US, I know most of them, I love most of them.

Speaker 2:

You know I respect them. But what changed for me is when you're then tasks are actually changing, something you know you have to grapple with the world that is not the world that you want it to be, and start from the reality of the current situation and then try to move the world towards your ideals, as opposed to starting with your ideals and saying everything's bad. So I think you know soil health has so many benefits like endless benefits and it is the right thing to really focus on. And yes, we will get better flavor, which will drive traction on certain parts of the system. It will be better nutrition which will be unlocks in other certain parts.

Speaker 1:

You're saying a bit of a lot of the carbon than it's a better caratine in a carrot.

Speaker 2:

I think, in the short term, the biggest crisis we face, which will undermine everything else that anybody's working on If you're in national security or in education or in criminal justice or like literally there's no issue that is not going to be significantly undermined and impacted by climate. So for me, the biggest existential crisis that the globe has ever faced is climate change. We really only have a handful of years left to keep this from spiraling beyond our ability to control. We're getting really close to that that day. And, you know, I don't also think that there's any other technology on the planet that is going to be able to sequester enough carbon in the time horizon. In the sciences we have in agriculture, it's the only system that has a shot at this to buy ourselves enough time, but it still doesn't mean carbon will be.

Speaker 1:

I mean it should be, but it will be the key to unlock a lot of change, a lot of hectares and acres of change.

Speaker 2:

Well, that's correct and largely right now in the US. That's true because there's problems. Right, we have still technology improvements on the measurement side, there's permanence questions, which loam is, you know, solving problem? Because I'm excited because it does block the carbon informer permanently than just practice based changes. So it's not without challenges.

Speaker 2:

But right now, you know, the carbon markets are being, you know, under siege because there's some bad actors and there's been bad credits and I understand the critiques of those systems, but the reality is I think it's kind of our only hope, and if oil and gas companies want to pay to transform a food system to be regenerative base, you know I'm fine for that for the next 10 years and then we can work to then, you know, fully transition our energy systems and bring on carbon capture technologies and the rest. But we, that's something to take too long and we have to start pulling carbon out of the air. Just reducing our emissions is not enough if we long pass that line, in my opinion, and so that's what I think is going to drive the most. I think there'll be all these other benefits and it's not a debate like for me, it's like it doesn't have to be an either or I will support any effort to try to improve the quality and flavor and nutrient density of the produce that we're bringing, because the science is pretty clear that both is the climate shifts and soils have been eroded, the nutrient density of the you know vegetables that we have also arose right, so that's also true.

Speaker 2:

So I don't think we need to get in the trap of like which is better. I do think that the economic return I just know how these big food companies work they're not going to pay more money for that nutrient that's carrot. Now a wealthy consumer at a farm market like me, who like, will pay literally $40 for a chicken down the road, literally like that chicken lives a better life than I do and I pay $40 for it. But I mean, jesus, $40 for a chicken? I mean nobody can pay that and you know. So you know. I think we just have to stay rooted in the reality of how most people are living and create the path for all of us to help us move and produce change, but not say that, like, everybody has to believe in the, in the brightest orange carrot or it's not going to work. You know, I don't think that's how it goes.

Speaker 1:

And then I want to be conscious of your time. So if you find a questions, what would be your main message, of course, without giving investment advice, but to invest stores that are coming into the game now or coming into this space, the food and egg space and what would be your main thing if we do I usually say if we do this live in a theater and of course they're excited after they learned a lot. But if they, if you could put something in their head, one thing they remember after they walk out the theater and hopefully the next morning go to work on it, what would be that one message you would like to them to remember?

Speaker 2:

Well, it's hard to say one. There's many messages. I mean, look, I think, given the size of the industry, the scale of the problems and the opportunities, you know this is still a woefully underinvested sector. That you know. Get in the game first is getting the game like we welcome people in the game. We need a lot more people in the game is one, and you know. Two, I think you know, look to Ford's partnerships or relationships with people who actually know food and how to cause their systems, because I'll tell you there's plenty of people who sort of like just come in and out and they're making some bad decisions, overvalued companies wildly because they don't really understand the sector, and that's not good for the sector. Right, you can have a lot of companies have a bunch of pain and lose momentum and may not be able to raise money because they were wildly overvalued and, you know, nonsensitive to duration and capital intensity, and that's bad because one really good companies who could have made it are probably not going to make it, so I think we just have to.

Speaker 2:

You know, people got to get smart and knowledgeable about. You know this, this part of the investment. You know ecosystem. And then I'd say my last piece of advice is, like, if an entrepreneur has no idea or experience or anybody on their team that's deeply rooted in in agricultural systems or food systems, like my very free advice to leave it is walk away, because farmers, like if somebody says I'm gonna sell this amazing tech to farmers and I've never said we never said like food on a farm yeah, I did I already.

Speaker 1:

The kids here are the least digitalized sector and I make this amazing platform and I come. There we go again exactly I will.

Speaker 2:

I will bet a thousand, give you a thousand to one odds. You know, put everything in my bank to say that that company is not gonna work. Yeah, we see it constantly, all the time, every day, all the time.

Speaker 1:

So you know it's a very specific industry with new people from that have experienced elsewhere to come in but go and spend time at farms, go and spend, go and listen, go and ask a lot of questions and partner with you and hire partner.

Speaker 2:

That's exactly right. That's really important. You got a partner with people, have people on the team who, like, come from that world. It's very different to like research and try to study it, to like I'm asking my life in this space, right. But like when you talk to somebody like grew up on a farm or worked in the big ad companies, they're different, they know it with a different level of fidelity than even I do.

Speaker 2:

That's the 20 years we're going to do these things, and so you have to at least know what's real like, know the real from the fake and know how you get the right people around to navigate it, because it's very complicated and the incumbencies are very powerful and very strong and it's hard. It's not that hard to build something small and beautiful. I mean, everything's hard, but, like, building something small and beautiful is doable, right. It's the question of how do you build something that's good or great, that's scalable? That's really hard and for me, if we're not bringing these solutions to everybody, then what's the point? Like? What are we doing here? Simply knock or not have the impact that we need?

Speaker 1:

So Good advice and then flipping this way. I mean, you're, in one way, not that far off. But I'd like to ask the question, maybe the next one that you'll get there but what if you had, tomorrow morning, a billion dollar under management and you could. This could be any duration as well, so it could be partly land, could be as long as it has been invested. Maybe a small amount could go to lobby if you really want to. But I'm asking this question usually to see what somebody would prioritize Like what would you? I'm not asking exact dollar amounts, obviously. I'm asking what would you focus on? Is it full on an ag tag? Is it more the consumer side? Is it the policy side? For the bit of lobbying, is it land funds? What would you do if you had 10 billion or 10 million? If you had a billion to put to?

Speaker 2:

work like a lot of money. This is great. This is the best fundraising call I've ever had. First you offered me a billion, now you offer me 10 billion.

Speaker 1:

This is a lot like I want to be resources almost unconstrained, like an amount that is. That's not the issue. The issue is what you focus on.

Speaker 2:

I mean I'd say to I put two ads on. If I was in some government and I had 10 billion dollars, I'd put it all into research around soil nutrient density, different crops, better genetics for healthy food To catch up a bit of the lag we have with yeah, yeah, I think it's the only way.

Speaker 2:

From an investment standpoint. I would probably yeah, I would really focus my dollars around starting with carbon but moving into more nature-based solutions and natural capital frameworks and the underpinning technologies that are needed to really make that work. I'd probably definitely have to earmark some of that for the policy infrastructure that's needed, that's both within government and also within the nonprofit world, to set up the standards reporting mechanisms that are not clear and not there yet at all. It's a real problem in the industry. I do think that that's the most important opportunity that we're facing. There's a strong critique on just focusing on carbon. I totally understand that critique and don't think it's wrong. I do think it's the first step, and so I would work to really work back what?

Speaker 1:

are the next steps? Biodiversity, water. What are you excited about beyond?

Speaker 2:

carbon, biodiversity and water are the next two for me, all underpinned by healthier soil. I think healthier soil is a really bulletproof place to focus and start. It affects all the outcomes that we're looking for. I think to set up a functioning system, you've got to start with something that's simple and easier to measure. Biodiversity is really tough to measure. It doesn't mean we shouldn't keep working and trying. I'm totally with people who, on the critique of problem, has been we've been too reductionist and that's going to get us in trouble again. I get that, but I also see no other way forward. I would invest heavily in making that a reality.

Speaker 1:

As a final one, if you had a magic wand and could chase one thing overnight I'm sorry we took away your 10 billion fund, but you do have a magic wand one only. What would you change overnight?

Speaker 2:

I really resist that kind of question because it's just not how it works and it leads us to think that there's just one thing that could magically do it. It could be consciousness.

Speaker 1:

It could be actually getting food and ag into the minds of all policymakers, or something that you wanted to do and you've pushed quite far. It could also be better taste, better develop tongues. It could be or we see the carbon leaching or the water quality before our eyes or something absolutely out of this world which won't happen but still would be an interesting, would be fundamental. If that shifts I'm not going to force it- on obviously, if you don't want to.

Speaker 2:

I guess in that regard, I can say one thing that it would imply a lot of other changes have happened. If voters said that climate change and food and agricultural systems were in their top three or five priorities, that would be transformational around what policy would do, and you would also imagine, if those people care about that enough to vote on it, they also will be caring about that in terms of what foods they're choosing to buy, what companies they will buy from, and that would have a major transformational impact on those companies. What I'm saying in that is that you have a cultural transformation which leads into an actual, true movement which has not happened before. By saying that all voters would care about it, I'm implying a far bigger shift, but that would be represented in that Magic Wand's ability to make everybody say it's my most important.

Speaker 1:

It's a Magic Wand.

Speaker 2:

It's possible, man, I should come on this podcast more often. I come away with $10 billion and a Magic Wand. This is great.

Speaker 1:

I want to thank you so much for your time and, obviously, the work you do and coming here to share about it and, of course, good luck with the third fund and deploying that and good luck with the journey so far or good luck with the journey going forward.

Speaker 2:

Thank you so much, real pleasure. Talk again soon.

Speaker 1:

Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website Investing in RegenderBagerculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcast? That really helps. Thanks again and see you next time.

Why are you doing what you are doing? Why Soil?
What should smart investors, who want to invest in reg ag and food look out for?
What would you do if you were in charge of a 1B investment portfolio tomorrow morning?
If you could wave a magic wand and change one thing overnight