Celebs LeBron, Cuban and Gates Back Carbon Neutral Foods for $12M
Neutral Foods announced its $12 million first round of Series A funding from Bill Gates and various celebrity investors like Mark Cuban and LeBron James to help dairy farmers cut carbon emissions and earn carbon credits.
Neutral Foods is a company that tracks and buys carbon credits to neutralize greenhouse gas (GHG) emissions from dairy farms. It’s partnering with farmers to help them cut their own emissions at the source.
The firm is one of the first carbon neutral food company in the United States. It debuted nationally in 2021 and its milk products are found in 2,000 grocery stores. It also plans to expand into butter and meat.
Carmichael Roberts from Gates’ Breakthrough Energy Ventures said that:
“It’s clear that consumers are hungry for sustainable, climate-forward options and they’re reflecting that in their buying decisions, especially when it comes to buying food and beverages…”
The food company has also got funding from different celebrity investors. They include Mark Cuban, LeBron James, Kevin Love, Tobias Harris, John Legend, and Questlove.
This round of funding will support Neutral to scale up its carbon-neutral foods and technologies that will revolutionize the food industry.
Neutral Foods and Carbon Credits
Consumers are now looking for ways how they can make more climate-conscious purchases.
So Neutral Foods are measuring the emissions of its products’ entire lifecycle. Then the company is buying carbon credits for those measured emissions.
Carbon credits are permits that firms buy to certify GHG removal from the atmosphere. Neutral Foods are buying offsets verified by carbon certification firm Climate Action Reserve (CAR).
But apart from using offsets, the firm also plans to work with farms to cut their emissions directly.
When it comes to efforts to reduce global emissions, the transportation and electricity sectors are in the spotlight. But agriculture is also a huge emissions contributor.
According to Breakthrough Energy Ventures, agriculture is one of the largest emitters at the number 3 spot. It’s accountable for 19% of total GHG emissions. The other major emitters include:
Currently, Neutral Foods has 8 different projects underway at farms it partners with. And it has 30 projects under development. With these projects, the company aims to achieve two things:
To change the way farmers plant to improve the soil’s ability to absorb carbon
To change what cows eat and how cow manure is managed
Ann Radil, the Head of Carbon Reduction at Neutral Foods, said that separating and composting manure “alone can reduce manure-related GHG emissions like methane and nitrous oxide by 19% to 50%.”
Cutting emissions at the farm
The company aids farmers to make those changes happen while also providing them with the fund they need.
Neutral Foods helps the farm learn a farming practice called co-cropping or relay cropping. The process refers to planting two different crops at the same time. This reduces the amount of carbon dioxide emitted by the farm.
The firm’s milk brand is sold at stores under Whole Foods, Sprouts, Target, and many other grocers.
With the positive feedback from customers of Neutral Foods’ products, some grocers are planning to expand into other items.
The company will start selling carbon-neutral pasture-raised butter. And it is also planning to include beef eventually.
On this note, Neutral Foods is piloting a project with Carman Ranch. It’s a century farm that raises cows and hogs.
The ranch owner sought the help of the startup on emissions tracking programs for beef. The rancher has learned about cattle feed supplements that reduce the methane that cows belch out during digestion.
The pilot project is on a trial to put a seaweed supplement into the feed for 50 cattle. For this program, the firm will bring researchers, partners, and procedures to measure methane emissions.
Neutral Foods will then perform a full lifecycle analysis and produce the verified carbon credits.
It may take some time for this project to take effect. But it inspires investors to continue supporting the company’s decarbonization strategies.
For Gates’ investment fund, this kind of project sends a price signal to farmers that sustainable practices have value. And as the brand grows and expands, the same goes for scaling up outcomes at the farm level.
Other investors like Marc Cuban also think so, commenting that:
“I think consumers are becoming more concerned about the impact of the products they consume on the environment… I think Neutral is well positioned to meet that demand.”
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