Supply Change Capital: Investing in technology to transform the food system

The early-stage venture firm Supply Change Capital invests in high-growth food tech businesses and culture-first brands, saying that culture and climate deeply impact the future of food. With its investments, the company aims to unlock a food system that meets a diverse society and planet’s needs, health, and demands through technologies that provide environmental outcomes. 

Nutrition Insight meets with Noramay Cadena, one of the co-founders and strategic partners of Supply Change Capital, to discuss how the company aims to impact food and nutrition as a venture capitalist firm. 

“We think about investing in environmental mitigation, novel ingredients, modern conveniences in service of health, and across the value chain for improved flow and efficiency. We’ve made investments across all those pillars,” says Cadena. 

“Although the breadth of companies we invest in is pretty large, one of the underlying themes is around impact. Every company we invest in has to meet at least one of our impact goals or themes — reducing the food system’s impact on the environment, improving health, or improving diversity across the ecosystem.” 

When they started the firm, Cadena and co-founder Shayna Harris decided to focus on the impact of culture and climate on the food system. 

Both partners examined supply and demand side forces “driving a need for thinking about manufacturing, developing, shipping, and selling food in different ways.” This includes the US demographic shift, cultural changes in food purchases and consumption, and increases in food sensitivities and allergies. 

On the supply side, Cadena says the environmental impacts of the food system are driving changes in food production and crop regeneration. 

“That’s the thesis on which we raised the first fund, at US$40 million. We brought on some strong strategic partners, including General Mills, and we’ve now invested in 22 companies, mostly early stage, but all across the food system,” she adds. 

“We’re now raising our second fund and completing the last couple of investments in fund one.” 

Supply Change Capital’s impact goals include reducing the food system’s environmental impact, improving health, or diversity.“Systems-Aware Investing”

Cadena says she is often asked if the firm is an Impact Fund. Such funds aim to support beneficial social or environmental outcomes and generate financial returns. These long-term funds prioritize structural solutions to systemic challenges, may have a lower return, and can center on non-financial outcomes.

“It’s a hard question because we say — if you’re investing in the food system, you are categorically an impact investor; you have to be. But we certainly plan to make money in this sector.” 

Systemic investment is virtually impossible for venture capitalists, adds Cadena. “Because in venture, you have to think about capital return within a given time.”

Supply Change Capital collaborates with Idongesit Sampson and Jason Jay from the Sustainability Initiative at MIT’s Sloan School of Management, US, who coined “Systems-Aware Investing” as an intermediate-term between systemic investment and venture capitalist investing. 

According to the researchers, this type of investing aims to contribute to change within its operation system while aiming for high financial returns. It focuses on balancing scalable innovations with interventions that address adjacent systemic challenges. It combines a profit motive with an intent to address targeted systemic issues along a flexible time frame and by actively building partnerships between investors and investees. 

“I think that’s where we squarely land,” says Cadena. “That’s one of the reasons why founders pick us, and limited partners like us, because of the plus edge casework around venture capital that involves community building, leveraging these authentic networks we’ve built over 20 years of industry experience, and we can bring them to bear in support of portfolio companies.” 

In novel ingredients, the firm considers technologies that can scale at cost parity, improve health, and have competitive intellectual property.Focus areas

In 2024, the partners examined all deals made since the firm’s inception in 2020 and analyzed market developments to determine whether they needed to update their thesis. 

Cadena says the partners analyzed the trends in these deals. “What kinds of companies are getting funded downstream? Where is their exit interest? What market tailwinds are active now that we can capitalize on?” 

“We engaged with people within the food industry to dive deep into research,” she continues. “We worked with an anthropologist, for example, in thinking about the intersection of food and health because we know that to bring technology in to help us make better health decisions around food, we need to think about habits, how habits are formed, and how we develop new habits.” 

“We didn’t want to invest in companies that did not have the odds to be successful because we were demanding too big a change in how people go about their day now,” she highlights. 

Cadena explains that based on the research findings, the partners redefined its health category to “modern conveniences in service of health.” That area focuses on modern living, personalized nutrition, and preemptive health based on cultural relevance in demographic shifts. 

The themes of environment and novel ingredients have remained similar since Supply Change Capital’s start. Environment covers solutions for adaptation and mitigation, such as water innovation, closed-loop water systems, upcycling, and soil regeneration. Under novel ingredients, the partners consider technologies that can scale at cost parity, improve health, and have competitive intellectual property. 

Cadena says the value chain theme has been redefined and expanded significantly, with around half of the firm’s companies falling under this pillar. The pillar focuses on improving flow throughout the system, for example, through “software and hardware that can optimize antiquated systems, predictive decision-making using data, and AI-enabled supply chain software.”

Verve Market allows consumers to filter out products based on their food sensitivity or preference in online grocery shopping.Personalized shopping

Supply Change Capital recently invested in Verve Market, a company building a hyper-personalized grocery shopping experience. 

“There are three founders, and all three have food sensitivity, restrictions, or preferences. One of their frustrations was doing online grocery shopping and having to read through the ingredients of each and every item before adding it to the shopping cart,” says Cadena. 

Verve Market has created a product that overlays an online shopping experience and filters out products based on someone’s food sensitivities. 

“They would be able to say, I have irritable bowel syndrome, I follow a low FODMAP (fermentable oligosaccharides, disaccharides, monosaccharides, and polyols) diet, and I want to avoid seed oil. The shopping experience will filter all those items out or give you a green, yellow, or red rating on a product to say this is not the best, but you can still consume it.” 

Cadena says the team wants to see what the product can do for family purchases. She adds that 40% of US consumers follow a dietary restriction or preference, which she expects to grow. “When one person in a family has a dietary sensitivity, the entire family tends to consume that way.” 

“In this case, we were excited about the product they’re working on, the team, and their personal experience,” she highlights. “The CEO had founded another successful company in the genetic space, and we invested and then reinvested in the last six months. The company is doing well and will launch its product soon.”