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rePlant Fuels Food System’s Shift To Regenerative Agriculture With $2 Billion For Farmers To Build Soil Health

rePlant Fuels Food System’s Shift To Regenerative Agriculture With $2 Billion For Farmers To Build Soil Health

by ESG Business Institute -
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Experiencing the effects of a global issue on a personal level inspired Robyn O’Brien to investigate the reasons behind it — and that research eventually led to a movement to invest billions in regenerative agriculture practices and fuel the transition to a more resilient supply chain and a healthier planet. 

O’Brien has relied on her background in financial analytics to get at the root of today’s challenges — the dire headlines about environmental, political, and social crises — and finds hope by working with others seeking positive solutions through impact investing and related strategies. Her four children, who range in age from 16 to 21, serve as inspiration for her drive to make a difference and remain optimistic about the future. 

“What gives me hope is the tenacity, the resiliency, and the creativity and innovation that’s coming into the space,” O’Brien says. “Right now is such an exciting time because there are so many incredibly intelligent, creative, and thoughtful people who are really starting to step into this gigantic challenge in front of us and really lend their skills and expertise. Our generation has inherited a massive environmental crisis, but you flip the script and you say, ‘That’s a massive opportunity to create the solution, so let’s get going.”

O’Brien is seizing the opportunity to address the climate crisis with her fellow co-founders of rePlant Capital, which aims to increase farmer profitability and environmental outcomes by financing the transition of farmland from “agrochemical” practices to regenerative and organic agriculture. Recently O’Brien spoke with me about the inspiration for rePlant’s model and her hopes for the future of the U.S. food system as part of my research on purpose-driven business.

“As you transition off this agrochemical model, which is 99% of our farmland, sprayed and treated with all these chemicals that we now know are putting a lot of different things at risk — from the animals and the birds to our parents and our kids — you begin to restore soil health,” she says.

A Fundamental Shift For Consumers And Food Companies

It was a health issue — a life-threatening allergic reaction — with her then 1-year-old fourth child that pushed O’Brien to dive into the data behind the rise in food allergies among U.S. children in recent decades. She had left her career as a financial analyst to raise her children, and realized those skills would be helpful for her to better understand the condition that had affected her daughter. 

Her research uncovered some eye-opening information about the U.S. food system and its role in negative health outcomes. “Our own American food companies formulate products here with cheaper ingredients that tend to be artificial and then formulate with real ingredients in other countries, because the policy there has a higher standard,” O’Brien says. “And that double standard to me was just intolerable — to see companies like General Mills make a cereal bar with real ingredients, but then the U.S. families get versions with artificial colors and high fructose corn syrup.”

By questioning whether people were allergic to food or instead to what had been done to it as it grew, O’Brien attracted attention from the media and eventually wrote a book, The Unhealthy Truth, and gave a TEDx Talkthat delved into the food system’s unhealthy problems.  

“It was pretty terrifying in those early years because no one else was really talking about this stuff — genetically engineered ingredients and pesticide use,” she says. “Back then, it was new and it was incredibly intimidating. So when we posted that TEDs Talk online it just totally started to go viral the first weekend.”

Then the food companies came calling, including some big multinational corporations such as Nestle that realized the need to change — both to address environmental challenges and growing consumer demand for healthier products. “The CEO of Nestle’s frozen food division called me as a dad of three and he said, ‘You can say things I can't say, and I need you to come out here and work with my team. I know we need to make these changes,’” O’Brien says.

In her meetings with Nestle and other large companies, O’Brien soon realized the power they held. “At one meeting, the head of marketing for McDonald’s is telling them how when they launched the mixed berry smoothie, they took out a quarter of the world’s blueberry supply,” she says. “It began a decade-long relationship with the multinational companies, where I would really bring the data and the credibility to let them know this isn’t a fad. American families are getting hit by diabetes and obesity and allergies and autism and cancer. This is a fundamental shift in the way that consumers are starting to shop and feed their families.”

Addressing such shifts takes time and effort for larger companies like Nestle, which released its organic allergen-free Toll House Morsels seven years after it started working with O’Brien. “It is like turning the Titanic,” she says. “But how do you change the conversation unless you’re willing to sit at the table with these guys?”

In addition, shifts in consumer behavior — whether by choice or circumstance, as with the COVID-19 pandemic — have ripple effects throughout supply chains, and the growing demand for organic food is no different, O’Brien says. “Only 1% of the U.S. supply chain is organic, while 80% of consumers are buying something organic and 75% of grocery store categories carry something organic,” she says. “You can’t make that math work.”

Changing The Economy As Well As The Environment

To broaden her view of the food system challenge and potential solutions, O’Brien connected with Don Shaffer at RSF Social Finance and Dave Haynes of Greenmont Capital, who both were using capital to invest for positive impact in the food industry and beyond. 

“We were all sort of frustrated by how slowly the industry was tackling some of these systemic issues,” O’Brien says. “It was really clear that the bottleneck was the supply chain, and that if you wanted to change the economics of the food industry it was really at the farm level. Then, as we began to really look into what it looks like to convert this farmland, the environmental story in it is incredible.”

Transitioning farmland away from an agrochemical model toward soil stewardship not only reduces the potential health effects and long-term damage to farmland, it benefits the soil by restoring nutrient density, increasing carbon drawdown, and reducing chemical runoff into waterways. 

“The effects of that transition are enormous. It makes sense in the food companies’ business model, but then you also have this incredible environmental story to tell,” O’Brien says. “We sat down with the big players in the food industry like Danone and McCain, the largest producer of frozen french fries who has now committed that 100% of their supply chain is going to be regenerative by 2030, and said, ‘We want to help you transition your farmland because the conventional banks aren’t in a position to do this.’ We asked, “Who are your most forward-thinking farmers who understand that we need to move away from this agrochemical model toward this regenerative, restorative way of farming?’”

By spending money on technical assistance providers rather than chemicals, farmers can make the transition to regenerative and organic farming and become stewards of the soil, O’Brien says. It’s a change of mindset for many farmers, who for several decades have operated in the agrochemical model. For them, the shift to regenerative agriculture means embracing practices that their grandparents or great-grandparents used, while incorporating newer technology such as drones and water sensors. 

O’Brien emphasizes that regenerative farming isn’t new, and in fact has been practiced for generations by many farmers of color who didn’t have access to capital — and, in turn, financing for pesticides and other modern-day developments — because of discriminatory lending practices. 

“U.S. farmers carry over $426 billion in debt, and that is primarily to finance the agrochemical model,” she says. “Under that genetically engineered model they have to purchase those patented seeds every year or they’re in violation of the contract. Then they have to purchase the chemicals that are required to treat and grow genetically engineered seeds or they’re in violation of contract. So it's a brilliant business model for the agrochemical guys, because all of a sudden, they got these recurring revenue models.”

Talking dollars and cents with farmers can help them see the bottom-line benefits of the shift to regenerative and organic practices, O’Brien says, in addition to the big-picture environmental and health benefits. It’s true change done transparently, not performative measures that can be seen as the “greenwashing” or “carbon washing” that is happening today. 

“We worked with a farmer in Indiana who has 7,000 acres. He said when he was transitioning off that chemical model for genetically engineered corn and soy in the first year, he saved half a million dollars. So that speaks for itself,” she says. “When you’re talking about climate or you’re talking about the environment, it still can be a polarizing political conversation. But when you simply make it about the math for the farmer, that this is the smartest financial decision that they can make, that’s really where our team shows its strength.”

By incorporating flexibility and dexterity in its investment outreach, rePlant aims to actively involve farmers in the transition and create connections rather than just financial transactions, O’Brien says. 

“One farmer I met at an event in Kansas said, ‘I've been in debt since I was 13 years old, and I’m tired of being in debt. I’ve had this relationship with my lenders for 30 years — why should we switch over to you? I said, ‘You were just up there talking about your debt. That lender is so happy to keep you in debt. RePlant is successful when you don't need us anymore.’ They're just so conditioned to that system. You can’t fix a broken food system with a broken financial system. We have an extractive agricultural system because the financial system is enormously extractive of our farmers.”

Attracting Investors And Interest Around The Globe

The extractive and fragile nature of the food system became evident in the early weeks of the COVID-19 pandemic, which disrupted typical patterns of supply and demand and led companies to take a closer look at their growers and farmers — and the homogenous makeup, O’Brien says.

“Once you know better, you can do better. And I think that's the opportunity, but the discriminatory lending that has been happening on farms for decades cut a lot of the farmers of color out,” she says. “They simply couldn’t get the loan to purchase the genetically engineered seeds and other chemicals and pesticides such as Roundup to go with it. Thank goodness, because they maintained a way of farming that we now call regeneration.”

To help more farmers make the transition to regenerative and organic agriculture, rePlant aims to deploy $2 billion, and has seen strong interest from people around the globe — in Europe, Australia and New Zealand, and elsewhere. 

Most of the capital is coming from women who are high net worth, philanthropic investors, O’Brien says. “They recognize the urgency of the crisis. They also recognize their privilege. If you can go and buy organic strawberries it’s $7, and not very many people can afford to do that. So they recognize the opportunity to really provide this catalytic capital to these farmers to help them scale.”

The money also can be used to advance innovative solutions, such as bio-digesters at dairy farms that capture methane, which then can be converted to power the farm and nearby communities. 

“It’s important for us to successfully model it and demonstrate it because, like I mentioned, we've got $426 billion in U.S. farmer debt,” she says. “We’re not just starting rePlant. We’re not just starting a Soil Fund. We really want to show that there’s an opportunity for an industry — impact finance, impact agriculture — and to think about regeneration beyond the farm.”