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Business Opportunities in Sustainable Food

In all the sustainable industries, none perhaps present such ubiquitous opportunities for entrepreneurs as sustainable food. Clean tech, green building and alternative transportation typically require massive investments and technical expertise, putting the fields out of reach for many aspiring green workers and entrepreneurs. Sustainable food is different in its scale, but it is also different in its appeal. People may argue against a solar or wind project for NIMBY reasons or against high speed rail for cost reasons, but few people oppose sustainable food, besides perhaps the Monsantos, ConAgras and Cargills of the world that profit from the conventional farming.

Sustainable food opportunities include farming, wholesale production and labeling, the service industry, and many more. Sustainable food has no lack of green business startup ideas. But how does this all translate into a transitioning economy? In a recent panel, the Hawai'i Venture Capital Association talked about whether this trend has translated into an agricultural renaissance for Hawai'i.

Fred Lau of Mari's Farms suggested that the business case for local food production is still not there without some kind of government support. Of course, large scale agribusiness has enjoyed a long history of government support, and the argument can be easily made that creating local food networks has a very positive effect on the local community and thus justifies subsidies, whereas the argument that factory farms need subsidies is much more difficult to make.

But where does one draw the line? In Hawai'i, there is only one slaughtering facility, and it is not economically viable, so without some form of subsidy, it is likely to disappear, meaning that local meat will become impossible to come by. According to John Morgan of Kualoa Ranch, if we lose that capacity, it'll be hard to bring it back. Kualoa Ranch raises calves in the first phase, meaning up to about 500 pounds, after which they're typically shipped off to the mainland for further fattening up and eventual slaughter. The appetite for grass fed beef is on the rise as people learn more about factory farms and try to avoid them.

Still, the interest in sustainable food is creating opportunities for entrepreneurs. The direction being taken by Kamehameha Schools is likely a good lesson for food entrepreneurs. Thomas Kae'o Duarte said the organization is investing $22 million over the next 5 years to develop a local food system in Hawai'i, moving away from unprofitable activities like ranching and more into profitable crops like vegetables, macadamia nuts, coffee, and orchards, as well as energy.

Is ranching dead, then? The answer is complicated, but vegetarians have argued for years that the whole process of large scale meat production is unsustainable. Among the reasons is that resource use is inefficient. It takes 16 pounds of grains to feed to a cow to produce 1 pound of meat. As our world grows in population and resources become more scarce, this simple math eventually should force the price of meat higher as public appetite for subsidies of factory farms dries up.

Diane Ley of the US Department of Agriculture suggested that farmers can make money in forestry and algae biofuels on less productive lands that might typically be associated with ranching, and that those industries come with a much better return on investment. Both also are very beneficial to the sustainability of our economy, as trees lock down carbon and algae biofuels can be used as a drop-in replacement for engines and generators.

Scott Cooney is the developer of a GBO Hawai'i, a new Triple Bottom Line board game, where players are impact investors helping Hawai'i transition away from oil and imported foods, and the author of Build a Green Small Business (McGraw-Hill).

Follow Scott's company, GreenBusinessOwner.com, on Twitter: Twitter.com/GreenBizOwner


Photo credit pneedham on Flickr Creative Commons

Scott Cooney headshotScott Cooney

Scott Cooney, Principal of GreenBusinessOwner.com and author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill, November 2008), is also a serial ecopreneur who has started and grown several green businesses and consulted several other green startups. He co-founded the ReDirect Guide, a green business directory, in Salt Lake City, UT. He greened his home in Salt Lake City, including xeriscaping, an organic orchard, extra natural fiber insulation, a 1.8kW solar PV array, on-demand hot water, energy star appliances, and natural paints. He is a vegetarian, an avid cyclist, ultimate frisbee player, and surfer, and currently lives in the sunny Mission district of San Francisco. Scott is working on his second book, a look at microeconomics in the green sector. In June 2010, Scott launched GreenBusinessOwner.com, a sustainability consulting firm dedicated to providing solutions to common business problems by leveraging the power of the triple bottom line. Focused exclusively on small business, GBO's mission is to facilitate the creation and success of small, green businesses.

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