Partnership Opportunities to Transform Food Systems

Introduction 

The global food system—from farm to fork—is facing dramatic changes. Food production has evolved from a predominantly local effort to meet the nutritional needs of small communities to one dominated by sophisticated supply chains that span the globe (see Figure 1). The relationship between the production and consumption of food has been impacted by urbanization, population growth, and changes in consumer tastes and dietary habits. Globally, climate change has now risen as a fundamental challenge to the world’s efforts to feed itself. In response to these challenges, technological advancements, data analytics, agriculture research and development (R&D), and new farming practices offer significant opportunities to transform food production and promote more sustainable practices. 

Figure 1: The Food Systems Wheel

Within this changing landscape, public-private partnerships (PPPs) are a vital tool to achieve a more sustainable, efficient, and equitable global food system. By combining the strengths of the public and private sectors and incorporating actors such as philanthropies, multilateral organizations, and civil society, these multi-stakeholder partnerships can drive and support innovative solutions in food production, distribution, and consumption. This paper describes some of the significant trends and challenges across the global food system and how to build better partnerships to adapt and respond to these changes.

Opportunities for Partnerships in Addressing Current Food Challenges

Food Systems and Climate Change

Food production is intimately connected with climate change in numerous ways. Food systems are significant contributors to climate change across the different stages of the food supply chain, from production to processing, transportation, distribution, consumption, and even the disposal of food waste. At the same time, food systems are vulnerable to the impacts of climate change. Thus, responding to the climate challenge in the food sector entails both mitigation efforts (i.e., actions that minimize greenhouse gas emissions) and adaptation (i.e., adjusting agricultural practices to changes in weather, water availability, and insect infestation while maintaining and increasing profitability). 

Food companies are uniquely positioned to integrate innovative solutions and mobilize funding to transform food systems in response to climate change. One example is developing climate-resilient crops. Crops can be engineered to withstand extreme weather conditions, offering a profitable and sustainable solution to the challenges posed by changing climates. In addition, food companies are leaders in the adoption of sustainable agriculture practices among their suppliers through practices such as regenerative agriculture, biodiversity enhancement, soil enrichment, and watershed improvement. These practices are vital to creating a more resilient and sustainable agricultural sector capable of withstanding the challenges posed by climate change. Companies are also implementing groundbreaking technologies to address pressing climate change issues. Precision agriculture is a prime example, where data analytics and internet of things (IoT) devices can be used to enhance farming efficiency, reducing waste and optimizing resource use. These are some of the ways that the global supply of food can be made more resilient in light of rising climate-based stressors.

Recent discussions at the UN Climate Change Conference (COP28) in Dubai were a pivotal shift in this regard. The meeting represents the first time that agriculture and food were integrated into global climate discussions and strategies. A major achievement was the COP 28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action, endorsed by 134 countries. This non-binding declaration underscores the need to incorporate food system strategies into climate action plans, focusing on reducing emissions, safeguarding farmers, and supporting resilience and profitability in food supply chains. As a result, governments and stakeholders announced $2.5 billion in commitments to support the food-climate agenda, including efforts to transition to regenerative agriculture and provide technical assistance to countries most affected by climate change. These efforts highlight the need to tackle climate change and food security, placing sustainable agricultural practices, resiliency, and profitability at the forefront of the climate discussion. 

Food Quality and Safety

Although regulations and standards in food production and distribution have improved the quality and safety of food dramatically, 1 in 10 people worldwide still fall victim to illnesses due to contaminated food. Food supply chains involve the production, distribution, handling, and storing of food. With every additional step in production, each logistical hand-off, and additional storage requirements, the challenge to maintain food quality, profitability, and safety grows. 

To prevent foodborne diseases, food production companies and distributors are responding in a variety of ways. Companies are implementing robust quality-control systems and aligning with international standards, such as ISO 22000 for comprehensive food safety management. The Global Food Safety Initiative (GFSI), one of nine coalitions under the Consumer Goods Forum, is one of the largest business-led networks for ensuring safe food for consumers by devising food safety standards and auditing platforms.

Companies are using emerging technologies, including biosensors, IoT tools, and blockchain, to improve food quality and safety. In particular, blockchain technology can be used to enhance the traceability of food products, ensuring high transparency and accountability in the supply chain. In this regard, IBM’s development of a blockchain-based food tracking system, Food Trust, underscores the potential of this technology in the food sector, providing a model for others in the industry to follow. In 2019, Albertsons, one of the largest food retailers in the United States, joined Food Trust, highlighting the growing recognition among key players in the food industry of the value of blockchain for improving supply chain transparency and efficiency. Similarly, Walmart’s application of blockchain to track its pork supply in China in 2016 marked a significant step in using such emerging technology to guarantee supply chain integrity.

In addition to blockchain, AI-driven predictive analytics is vital in enhancing food safety. These advanced analytical tools help identify potential contamination risks and manage them proactively, thereby preventing food safety incidents before they occur. For instance, AI technologies are used to analyze vast amounts of data for early detection of foodborne illness outbreaks, ensuring rapid response and mitigation. Moreover, data management informs agricultural decisionmaking, improving productivity and supply chain efficiency. For example, data analytics can provide insights for optimizing crop selection and forecasting market demand, which is essential for transforming agricultural practices and enhancing food security.

However, many technological solutions are out of reach for average farmers due to the high cost of some tools. Private sector players can support innovative farming techniques and practices, but in many cases, they need to also be willing to provide seed funding for new technologies that are still in nascent stages. Moreover, the widespread effectiveness of these technological solutions is contingent on the adoption of quality controls and standards by national governments. Such regulatory frameworks can significantly improve the ability of global companies to operate and enforce quality standards over multiple regions, transforming localized adaptations into reliable national standards.

Food Fortification

Food fortification is not a new development. However, given the high levels of malnutrition in the world, it has risen once again to the top of the international agenda. In 1992, the UN Food and Agricultural Organization (FAO) and World Health Organization (WHO) held the first international conference dedicated to nutrition, recognizing the high level of protein-energy and micronutrient deficiencies in the world, especially in Africa. This was followed by a second nutrition conference in 2014 dedicated to obesity and diet-related noncommunicable diseases (NCDs). In 2023, WHO members adopted a resolution to accelerate efforts to prevent micronutrient deficiencies through safe and effective food fortification. The resolution calls on member states to make informed food fortification and supplementation decisions and consider ways to strengthen financing and monitoring mechanisms.

Food fortification is an essential tool to combat malnutrition, particularly in regions with low dietary diversity. Partnerships between governments, nongovernmental organizations, and companies are crucial in scaling up fortification efforts to meet the nutritional needs of targeted populations. In this context, the private sector’s role extends beyond mere production; it involves active participation in shaping policies, contributing to research, and providing financial and technical resources to ensure that fortification efforts are broadly adopted in the food-producing state as well as embraced by consumers. 

One exemplary case of such collaboration is the involvement of major food companies in national fortification programs. In countries facing high rates of iodine deficiency, salt manufacturers have partnered with governments to fortify salt with iodine, significantly reducing related health issues. For example, governments and salt producers work together to iodize salt through the West African salt iodization initiative to address iodine deficiencies. Likewise, large scale food fortification (LSFF) is a priority highlighted by UNICEF that involves food manufacturers, governments, and local agri-businesses fortifying foods such as wheat flour and vegetable oil with essential nutrients. Establishing programs for LSFF can help create a policy development and advocacy platform, fostering continuous dialogue and collaboration. Additionally, Innovative Food Systems Solutions’ nutrient-rich school meals project integrates fortified foods into school meals, involving food service companies and local suppliers, thus enhancing school-age children’s cognitive and physical development, which can be placed under stress due to micronutrient shortfalls.

Another avenue for fortification is biofortification, which is the process of increasing the nutrients of food as they are grown rather than in the processing stage. For example, agriculture research centers can collaborate with the private sector in Africa to breed new plant varieties, such as orange-fleshed sweet potatoes and maize varieties, which are naturally enriched with micronutrient content through breeding, agronomy, and genetic modification. These efforts improve the nutrient profile of the staples at the source and hold the potential to revolutionize food systems. By focusing on sustainable, ground-level interventions, biofortification presents a long-term solution to malnutrition, offering a pathway to healthier diets and improved public health outcomes across generations. The fortification of crops with essential nutrients promises a significant reduction in the prevalence of nutrient deficiency diseases, marking a substantial step towards global food security and nutritional well-being.

Food Loss, Waste, and Distribution

Finally, food loss (at the farm and food production levels) and food waste (happening at the retail and consumer levels) are challenging food systems by squandering valuable resources such as land, water, energy, and inputs and contributing to environmental damage. It is also a missed opportunity to feed hungry families. In the United States, for example, approximately 30 to 40 percent of the food supply is wasted. Globally, the United Nations estimates that “13 percent of food produced is lost between harvest and retail, while an estimated 17 percent of total global food production is wasted in households, in the food service and in retail.” Other studies paint a more bleak situation, estimating that “between a third and a half of all food produced is wasted worldwide.” 

Companies working with farmers can use tools such as IoT for vehicle tracking, livestock monitoring, and other operations as well as inventory management systems to better store food and minimize food waste. While many of these technologies exist at affordable costs, the real challenge is getting farmers to adopt and use them at scale. Farming is particularly tradition-bound, and new technologies take time to embrace. 

In this regard, food distribution provides the critical link between food production and consumption—a link that has been under increased stress due to climate change and geopolitical disruptions. In order to feed 8 billion people, distribution risks must be mitigated, and when done effectively, the consumer is the winner. 

The private sector plays a significant role in ensuring that food distribution provides convenience, availability, and affordability to consumers. These aspects are evident through the advent of e-commerce and digital platforms, which have revolutionized food distribution. These innovations include online grocery shopping, meal delivery services, and direct-to-consumer sales models, making food more accessible and convenient for consumers worldwide. For instance, in India, start-ups such as BigBasket and Swiggy have revolutionized the grocery-shopping experience, offering various products delivered directly to consumers’ doorsteps. Similarly, companies such as Jumia are tapping into the online food delivery market in Nigeria, providing an array of options that cater to local tastes and preferences.

Additionally, there are significant innovations in food packaging and processing technologies. In Kenya, companies such as Twiga Foods are pioneering new packaging solutions to keep produce fresh for longer, thus reducing food waste and making fruits and vegetables more accessible and affordable for the urban population. In Southeast Asia, Vietnam’s rice industry exemplifies significant achievements in varietal development, cultivation practices, harvesting, and post-harvest technologies that improve yield and rice quality while reducing environmental impacts and greenhouse gas emissions. For example, by adopting modern techniques, like “alternate wetting and drying,” Vietnamese rice producers have reduced the cost of production and made their farming practices more sustainable, ensuring a steady supply of affordable rice domestically and for export markets.

Partnerships of the Future

A reliable global food system is foundational for good health and human safety. Yet the challenges facing the food system continue to grow. The food system has to meet the needs of a growing number of consumers as well as expanding appetite for a greater diversity of products, all while new challenges continue to arise. No government or company can address these alone. 

PPPs will continue to have an important role in addressing the evolution of the global food system and related challenges. However, to ensure that PPPs achieve the scale needed, and are fit for purpose, these collaborations will need to incorporate new actors, practices, and tools. What does the future of PPPs in the global food system look like? How can better PPPs be created? This section unpacks some of these considerations. 

Building More Inclusive Partnership Models 

Building more inclusive partnership models that include philanthropy and international organizations can secure more funding and enable innovation in food systems. Recent examples of these types of multistakeholder partnerships are shown in Box 1. 

Although private actors, from large agribusinesses to tech start-ups, are at the forefront of innovative partnership models and provide significant funding to these endeavors, governments and philanthropic organizations also play essential roles. For instance, public funding can mitigate some of the risks that private actors face and encourage innovation in areas such as climate-resilient crops or sustainable packaging. Governments can also provide grants and policy support that make certain food production areas more financially viable. 

Philanthropic organizations often fill financing gaps, particularly in areas that may not be immediately profitable, such as smallholder farmer support and nutrition programs. Philanthropies can deploy blended finance models that use grants and development finance to attract additional commercial capital. An example is Aceli Africa, which since 2020 has provided financial incentives to banks and other institutions to lend to underserved small and medium-sized enterprises (SMEs) in Africa working in agribusiness and agriculture. This and other models can also be used to de-risk capital. Philanthropies can likewise provide advice and build the capacity of government agencies or train farmers to ensure the long-term sustainability of these initiatives. Innovative financing models led by philanthropy and private actors, such as impact investing, can be a way to mobilize private capital for sustainable agriculture projects. Financing models requiring less due diligence without compromising on essential standards for smaller deals may also be an incentive for private actors to invest, enabling greater scale.

Other key actors in this space are multilateral organizations, which can bring a global perspective as well as substantial funding resources to the problem. Organizations such as USAID, the World Bank, and the FAO offer financial and technical support for large-scale projects addressing food security, agricultural development, and climate resilience. They often act as bridges between government and private interests, ensuring that projects align with broader sustainable development goals. These organizations can also help propagate best practices that have demonstrated success from one geographical region to another. Perspectives from these organizations can complement those of private sector entities, which may be focused on individual regions. However, careful attention needs to be given to adapting potential solutions to new and different contexts.

Speeding Up the Establishment of PPPs

Large development organizations such as USAID, the FAO, and others have been working on agriculture and food systems development for a long time. Over the years, they have adapted their operations to accommodate inclusive and sustainable projects and increased engagement with local and international private actors. For example, since the establishment of the Global Development Alliance more than 20 years ago, USAID has been at the forefront of PPP efforts in this space. 

Many organizations have set up strategies to engage with the private sector, and stakeholders want to see results. To this end, USAID is revamping the way it works with the private sector. Its newer strategy, PSE Modernize, launched in November 2022 and aims to improve the agency’s operational ability to partner with companies and other stakeholders by reducing bureaucratic burdens and empowering staff to achieve more impactful outcomes. This initiative is at its early stages but builds on decades of USAID’s private sector partnerships. Similarly, the FAO has been working with the private sector since 2000 through a series of initiatives and strategies. In 2021, it updated and launched a comprehensive private sector strategy to improve responsiveness and transparency toward PPPs, streamline its processes, and overcome a conservative culture toward the private sector within the institution. Other development organizations, such as the World Bank, UK Aid, and the African Development Bank, have been developing more innovative, streamlined PPP strategies. However, given the urgency of food challenges, there is a sense that PPPs should be increasing in number and scope far quicker than they currently are. 

Unfortunately, large bureaucracies are not particularly effective at structuring partnerships at a fast pace. Industry actors point out that speed is of the essence; otherwise, the world risks not achieving food security goals such as Sustainable Development Goal 2, even by 2050. One way to overcome this sluggishness is for large development organizations to better train their staff on how to adopt these strategies and policies. There also needs to be more interagency collaboration. The appropriate structures and processes may exist, but they are unevenly used.

Another important area where these public agencies can speed up their work with private stakeholders more effectively is on climate change adaptation, where they can encourage more interagency collaboration and coordination. Climate change is generating a host of new problems, from challenges to irrigation and water supplies to increased transmission of diseases from animals to humans. For example, the decline in snowpack in mountain regions, such as the Sierra Nevada in California, has reduced runoff water available for irrigating crops. And in Southeast Asia, cases of dengue fever are on the rise due to climate change, as longer rainy seasons and increasingly frequent and severe floods allow mosquitoes to thrive. These are issues that require rapid responses and resources from many actors. Setting up a rapid response mechanism to fast-track PPPs in this space could be a good first step to demonstrate that these strategies have actual teeth. For example, mechanisms such as innovation sprints within the Agriculture Innovation Mission for Climate (AIM4C), which aims to increase investments for climate-smart agriculture and food systems innovation between 2021 and 2025, can be a promising avenue.

Using Climate Finance to Enhance Food Systems

Looking forward, climate finance can also be a promising funding stream for agriculture and food systems. There are many opportunities in the food industry to develop financial tools to support mitigation and adaptation to climate change. For example, mechanisms such as the Green Climate Fund are allocating funds to adaptation measures. Governments need assistance in developing strong pipelines of bankable projects to attract climate-smart investments. Moreover, innovative vehicles such as green bonds, carbon taxes, carbon  credits,  and climate funds, as well as traditional tools such as lending and equity investment, can support farmers and small and mid-sized agribusinesses.

However, the state of the industry still resembles the Wild West in terms of its architecture due to fragmented actors and regulations. Likewise, institutions and stakeholders may be tempted to greenwash their investments and impacts. Nevertheless, there is ample room to bring in more private actors in this space, as agriculture represents less than 2.5 percent of total mobilized climate finance. 

Blended finance approaches may be promising in this area. Agencies such as development finance institutions and international financial institutions need to take more risk to crowd in additional private finance to agriculture and food production. Oftentimes, these institutions take too few risks, or when they do enter markets, they can end up crowding out private money. Focusing on food and agriculture would allow these institutions and their partners to standardize some aspects of financial instruments. Moreover, broad climate finance programs may lack a clear return on investment. Tying climate finance to food systems and agriculture would make it easier to define the return on investment with clear metrics such as nutritional value, agricultural yield, and farmer incomes.

Developing financial instruments and insurance schemes to help farmers and agribusinesses manage climate-related risks is another area of opportunity in climate finance. For example, climate-linked insurance products could provide payouts to farmers in the event of droughts, floods, or other weather-related disasters, helping to stabilize incomes and protect livelihoods.

Enacting Public Policies More Conducive to PPPs

Governments are critical stakeholders in these efforts, and their action or inaction impacts the effectiveness of partnerships in food systems. Government policy encompasses areas such as trade and fiscal policy, the enabling business environment, infrastructure development, and public procurement. By enacting wise policies and regulations, governments can enable growth and innovation in this space and catalyze private investments as well as the growth of PPPs in food systems.

Governments are responsible for regulations and policies that affect issues such as the ease of starting a business, the treatment of domestic and foreign investors, market competition, and the protection of minority investors. Having well-defined laws and regulations fosters a conducive business environment that allows companies to plan and operate efficiently. Countries with streamlined regulatory processes, stable economic conditions, and transparent legal systems that facilitate contract enforcement tend to attract more foreign investment and entrepreneurial activity. In summary, policies that promote stability, transparency, and a conducive investment climate are essential for fostering successful PPPs in food systems. 

Nowhere is this as important as in Africa, where much agricultural potential remains untapped. Despite being endowed with ample arable land, Africa has the highest rates of poverty and undernutrition in the world; indeed, the region is a net food importer. Approximately 90 percent of sub-Saharan Africa’s agricultural output is produced by smallholder farmers (i.e., farmers who own or work less than two hectares of land) who often use inefficient techniques and lack access to markets, investments, and tools and mechanization. Because agriculture and food production benefit from economies of scale, there is ample room to improve and increase Africa’s food supply chains. 

African countries consistently rank among the lowest globally in benchmarking exercises for ease of doing business. Excessive bureaucracy and inconsistent application of laws can pose significant challenges for businesses to emerge and grow. Such environments increase the risk and cost of investment, often requiring companies to expend additional resources on compliance, legal security, and navigation of complex local market conditions. Lack of clarity, frequent regulation changes, or lack of enforcement can create an uncertain business environment, discouraging private sector participation. Governments could do more to ease these burdens and enact policies to attract more investments and PPPs in food and green business.

In this regard, trade rules, fiscal policies, and infrastructure development are essential for attracting private actors into any country. Fiscal policies can either encourage or hinder private investments by affecting costs, subsidies, and market distortions. While subsidies may support the domestic agricultural sector, they can ultimately lead to inefficiencies and market distortions that deter investment. The transition from a sheltered agriculture sector to a more open market exposed to global commerce can be a challenging one. Government programs to facilitate this transition can be critical for the long-term success of a country’s food system.

Conclusion

Food systems are evolving and becoming more sophisticated in terms of the types of actors, issues, and communities affected. Food systems are not merely networks of suppliers, farmers, and companies that feed people. They are increasingly viewed as holistic structures that help advance livelihoods, improve people’s health, and support climate stability. In the food space, farmer income goes hand in hand with farmer health, nourishing communities is linked with climate resiliency, and planting and harvesting crops now entails producing food that is both nutritious and planet friendly. The encouraging news is that efforts are already underway to integrate food security into conversations surrounding climate and health. 

To remain relevant, partnerships in this field will need to adapt to these changes by including more actors, leveraging financial innovations (including blended finance), and responding with speed, all while ensuring that governments also do their part by facilitating private investments and PPP opportunities. In this way, partnerships can become truly transformational in realizing a more sustainable, efficient, and equitable global food system in the future.

Romina Bandura is a senior fellow with the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Salome Girgvliani is a research intern with the Project on Prosperity and Development at CSIS.

This report was made possible by support provided by PepsiCo Foundation.

This report greatly benefited from private roundtable discussions held at CSIS on October 4, 2023, and November 17, 2023. 

The authors would also like to thank Curt Reintsma, Zane Swanson (CSIS), Shannon Herzfeld (CSIS), Kindra Halvorson (Technoserve), Darci Vetter (PepsiCo, Inc.), Bill Grant (DAI), Keith Dokho (USAID), Sylvia Chen (PepsiCo Foundation), Richard Crespin (CollaborateUp), Leslie Flagg (USAID), and Elizabeth DeFreest (USAID) for valuable insights and comments.