The Future of Food: AI, Biotechnology, and Sustainability Reshaping the Industry

The global food system is at a crossroads, with transformative forces reshaping everything from production to consumption. The intersection of technology, policy and sustainability will define the next chapter in food innovation, offering significant opportunities for growth and impact.

This is the view of Rahul Bhushan, Global Head of Index at ARK Invest Europe, who believes that investors who align with these structural trends will be able to benefit from changing supply chains, increasing climate resilience practices and evolving health-oriented consumer demand.

Key 2025 catalysts driving this transformation include AI, automation and robotics, the rise of biotechnology, the focus on healthy food and the issue of water scarcity. Let’s take a closer look at what these themes mean for the future of sustainable food and how to draw investment insights from ARK Invest’s analysis.

The Role of AI, Automation and Robotics in Agriculture

According to the analyst, labor shortages remain a critical issue in the agricultural sector, which will only get worse with the Trump administration’s anti-immigration agenda. Automation is now indispensable, and AI solutions, like those from Deere — which unveiled its autonomous tractors and trucks at CES 2025 — can fill productivity gaps in ways that traditional methods cannot.

These innovations will address the current labor shortage and accelerate efficiency and productivity, aligning with Deere’s vision of fully autonomous agriculture by 2030. “We believe companies like Deere are underappreciated and structurally undervalued. AGCO Corp and CNH Industrial are also developing AI-powered machinery,” Bhushan said.

The Rise of Biotechnology

Advances in biotechnology, including CRISPR technology and genetically modified crops, are changing the game for improving crop yields, drought resistance, and nutritional content. Precision fermentation, a rapidly evolving technology, is decreasing the cost of producing alternative proteins and sustainable ingredients, making them more commercially viable.

“Among the most interesting companies in this segment are Evonik Industries, focused on fermentation-based processes, and Novozymes, specialized in enzymes and biotechnology solutions for agriculture and food systems,” underlines the manager.

Focus on Food Health and Dismantling the “Big Food” Monopoly

The health implications of highly processed foods have come under scrutiny again in the United States, thanks to movements such as Make America Healthy Again (“MAHA”) and pressure from Robert F. Kennedy Jr. “From our perspective, we expect regulatory pressures, coupled with changes in consumer choice and sentiment toward healthy foods, to erode the dominance of processed food companies and mega-brands that rely on unhealthy formulas,” the manager believes.

Additionally, generational shifts—for example, Millennials and Gen Z prioritizing plant-based foods and alternative proteins—are redefining consumer habits, favoring companies that prioritize environmental sustainability, ethical supply chains, and health-focused innovations.

The giants of the processed food sector will be the most impacted in this sense, with their product portfolios that could struggle in an increasingly health-conscious and transparent world. For this reason, we exclude these types of stocks in our Sustainable Future of Food ETF.

Water scarcity in agricultural and food systems

As water scarcity intensifies due to overuse, pollution and climate change, the global food system faces increasing pressure to adapt. Water-intensive crops, such as almonds, avocados and rice, are increasingly receiving attention, driving innovation in water-efficient farming practices and technologies.

“Companies that focus on sustainable irrigation solutions and water recycling, such as Lindsay Corporation and Valmont Industries, are therefore poised to play a key role in addressing this challenge,” concludes Bhushan.

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(Featured image by No Revisions via Unsplash)

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