Fund Management

EXCLUSIVE: Newton IM Intensifies Focus On Food, Agriculture Innovation

Amanda Cheesley Deputy Editor 4 July 2023

EXCLUSIVE: Newton IM Intensifies Focus On Food, Agriculture Innovation

With the world population set to hit 10 billion by 2050 and the food system accounting for 30 per cent of emissions, Karen Miki Behr, portfolio manager of the BNY Mellon Food Innovation Fund, discusses with this news service how innovation and technology are shaping the future of the food and agriculture sector.

In a recent interview, Karen Miki Behr at Newton Investment Management, a subsidiary of BNY Mellon Investment Management, highlighted the importance of producing more food using fewer resources in order to feed a growing population sustainably.

Precision agriculture which optimises crop productivity is a key tool for achieving this, enabling farmers, for instance, to target their fertiliser application more precisely, US-based Miki Behr said. Adoption of the technology is expected to accelerate in the future.

She also emphasised the importance of regenerative agriculture which focuses on agricultural practices which improve soil health, biodiversity, reduce emissions and water input to create resilience in the supply chain and support the planet. “Many of the firms we invest in are interested in this,” she said. “Initiatives to help farmers move in this direction are also important,” she added.

“A lot is happening too with plant and seed innovation,” Miki Behr continued. With climate change having an increasingly adverse impact on agriculture, it’s important, for instance, to have genetically-modified drought resistant plants. 

She also invests in companies that produce supplements to reduce methane emissions from livestock to combat climate change. Purchasing practices in supermarkets need to be improved too to reduce food waste. Miki Behr believes that a lot more investment from governments and financial institutions is vital to help move the sector forward sustainably and ensure food security.

BNY Mellon Food Innovation Fund
Miki Behr co-manages the BNY Mellon Food Innovation Fund which is domiciled in Ireland and was launched in 2021. It aims to achieve long-term capital growth by predominantly gaining exposure to companies located worldwide that are positioned to benefit from the investment opportunities associated with the demand for new food and agriculture technological innovations across the global food supply chain. In February 2023, the fund name was changed from BNY Mellon Future Food Fund to BNY Mellon Food Innovation Fund.

Top ten holdings include food and drinks company Nestle, followed by Pepsico and Costco Wholesale Corporation. They also include AGCO Corporation which designs and manufactures agriculture machinery and precision agriculture technology, as well as Deere & Company, a US agriculture machinery manufacturer. John Deere recently announced two new technologies, ExacShot and an electric excavator. ExactShot uses a sensor to register when each individual seed is in the process of going into the soil, allowing farmers to reduce the amount of starter fertiliser needed during planting by more than 60 per cent. The electric excavator, powered by a Kreisel battery, reduces jobsite noise, enhances machine reliability, and produces zero emissions. 

Other top ten holdings are Irish-based food company Kerry Group and US-based supermarket chain Sprouts Farmers Market, which offers a selection of natural and organic foods.

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