Investment firm Grosvenor has outlined ambitions to ramp up its activity in food and agritech and double the capital allocated to innovation the industry over the next decade as concerns grow over security in the supply chain.
It comes as the firm – which is owned by the Duke of Westminster and primarily invests in property – revealed significantly improved returns in its financial results for 2021, with revenue profits from urban property activities more than doubling from £39.7m to £99.7m.
CFO Rob Davies told The Grocer that despite the firm being cautious about the general economic outlook at present, Grosvenor was well placed to take of advantage of any opportunities in the food industry, with £2.2bn of financial capacity in cash and credit lines available to pursue its goals.
Grosvenor Food & AgTech, created in 2012 to diversify the estate beyond property and formerly known as Wheatsheaf Group until a rebrand earlier this year, invested £81m in the industry in 2021, down from £102m the previous year, to bring the total value of assets under management to £629m, including a portfolio of 27 assets.
It seeks to disrupt the food system with bets on the likes of plant-based packaging made from starch, meat alternatives such as US brand The Jackfruit Company and a business that recovers phosphorus from wastewater to produce eco-friendly fertilisers.
Grosvenor also joined the shareholder roster of meal kit brand Gousto earlier this year.
CEO Mark Preston told The Grocer the firm’s increased focus on food and agritech couldn’t come at a more important time.
“Food costs are rising and there are growing worries about food security in the supply chain,” he said.
“There is no proper food policy in this country, and we desperately need one. It has been taken for granted that we have food on tap and that has always been a rather short-sighted approach.
“This debate might actually force the issue to be the priority it needs to be. There is certainly pressure building on the government to act.”
Preston highlighted a number of examples in the Grosvenor portfolio of the ways innovation is helping some companies manage soaring input cost inflation, including the estate’s own dairy farm in Cumbria, Lea Manor Farms, which produces more than 35 million litres of fresh milk annually and is Tesco’s biggest milk supplier.
The farm uses renewable energy and more than 80% of its animal feed is grown without the use of artificial fertilisers, meaning its exposure to higher utility bills and commodity prices is significantly reduced.
“The [food and agritech] sector offers opportunities for commercial returns as well as for improving how food is grown, produced, distributed and consumed for the benefit of human health and the environment,” Preston said.
“The pandemic has accelerated the need to reassess our assumptions around consumer needs and trends, business models and growth projections, which we were already reconsidering in light of growing socioeconomic, demographic, technological and environmental change.”
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