Case Study

InvestEco: Provenance Proves Profitable

Launched in 2002, InvestEco is a Canadian a venture capital firm that invests in expansion-stage private companies. It manages a series of funds including the InvestEco Sustainable Food Fund, and has an AUM of approximately $60m. InvestEco’s goal is to generate strong financial returns for investors by investing in companies that promote health and sustainability in the food and agricultural sector.

The huge opportunity for sustainable food

Over time the firm’s mandate has become specialised within the sustainable food and agriculture. Andrew Heintzman, InvestEco’s Chief Executive Officer explains, “We focused on sustainable food and agriculture, for two reasons. First, we believe activities in this sector will be particularly important to environmental and health outcomes, and also because it is an area where we see impressive returns. The North American Sustainable Food sector has been growing at a rate of more than 10% per year for the last decade and it is now estimated to be worth more than $100 billion annually. It is expected to continue growing at a CAGR (compound annual growth rate) of about 15% until at least 2019. So there is a huge opportunity.”

InvestEco argues that increasing numbers of food scandals and heightened awareness of risks linked to intensive farming are partly driving the growth of the sustainable food sector. Food scandals are changing consumer preferences, says Heintzman. He continues, “We’ve almost gone full circle in terms of understanding where our food comes from. Food is an incredibly personal experience – you are literally consuming it. As issues such as bird flu, antibiotic superbugs, and genetically modified organisms come to the fore. People start asking where does this come from. And we see increasing demand for locally grown and free-from products farm to fork traceability. For example, we hold a position in Maple Hill Creamery, which is one of the leading grass-fed dairy producers in the US. The health impacts of grass-fed dairy products like Maple Hill’s are proven to have a much better Omega 3/6 balance than conventional dairy products. There are also environmental benefits as organic grass-fed dairy reduces the need for chemical fertilisers and improve soil quality, which in turn increases biodiversity and provides a carbon sink. Increased awareness has helped, Maple Hill’s revenues increased 70% year to date in 2018 over 2017.”

Aligning values with value

InvestEco’s investment strategy means that all the companies it invests in have strong sustainability credentials prior to investment, and InvestEco also monitors ESG performance. Heintzman explains, “We typically invest in companies with between $1-30m in revenues and help them to expand both through capital and by providing strategic advice. As part of this, we also develop specific environmental and social metrics for each company. These include emissions avoided, water used, number of local jobs created. These issues are increasingly important to consumers. Our strategy is to drive performance by aligning values with value”.

Source: Transparency Market Research

To date InvestEco has invested in 15 different companies, including;
• Vital Farms – the leading brand of pasture-raised eggs in the US.
• Maple Hill Creamery – the leading brand of grass-fed organic yoghurt and dairy products in the US.
• Sol Cuisine – a company that provides Non-GMO, Wheat and Gluten-Free, Kosher, Halal and Organic vegan products for retail and restaurant consumers in the US and Canada.
• Nada Moo! – the fastest-growing non-dairy ice cream company in the United States. The company is USDA organic, non-GMO, vegan, gluten-free, and fair-trade certified
• Kulikuli – the leading provider of health supplement moringa in the US. Moringa is a plant protein, and a good source of iron, calcium, Vitamin A, and other nutrients.
• Rowe Farms – Rowe Farms is a leading retailer and supplier of locally-grown and sustainably-raised food products.

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