Why Value Chain Work Matters: Sustainable Sourcing Insights
PBFI's current positioning is grounded in years of direct work at the intersection of agricultural production, food manufacturing, and market development. Our Sustainable Sourcing Initiative, a pilot program connecting plant-based food companies with domestic growers and processors, gave us a clear view of where the system actually breaks down, and what it takes to move it.
That work confirmed something important: the barriers to scaling plant-based foods are structural, not attitudinal. Farmers want to diversify what they grow, companies want to source domestically, and consumers want more options. What's missing is the architecture that makes those interests mutually profitable and self-reinforcing.
Here's what we've learned about building it:
Lesson 1: Price is still the dominant signal – and that has to change upstream, not downstream
Across food manufacturing company surveys and sourcing pilot evaluations, price consistently ranked as the top driver of purchasing decisions. Even companies with strong values-based commitments to domestic or sustainable sourcing defaulted to cost when specs were met. This is not a value failure, it reflects the reality that ingredient costs are a small share of total product cost for many plant-based foods, which means the incentive to pay a premium for domestic supply is limited. Building durable domestic supply chains requires changing the upstream economics: through long-term contracts, policy support, and shared infrastructure investment that reduces cost at the source.
Lesson 2: Supply chain transparency is not optional
Sourcing pilots revealed that opacity upstream of the processor level creates real risk. Companies that lacked visibility into whether their processors had grower contracts in place were exposed when markets became volatile, particularly during COVID and international conflict, even when they thought they had stable supply. Transparency is key to resilience for supply networks and that can be built into sourcing relationships from the start.
Lesson 3: Regional processing is a bottleneck and opportunity
One of the resounding themes we heard from farmers was not whether a farmer could grow a crop, but whether there was anywhere nearby to process it. Transporting specialty crops over long distances often eliminates the margin for small-to-medium growers. The rise of regional grain milling and processing capacity across the U.S. is one of the most promising developments in the food system—and it's where coordinated investment has the highest leverage. Bringing processing closer to the source is good for farmers and makes the entire supply chain more resilient.
Lesson 4: Long-term contracts unlock systemic opportunity
Growers who received long-term contracts were able to invest in seeds, equipment, and agronomic transitions that would otherwise be too risky. Lenders also offered more favorable terms when there was more built in certainty and brands were able to access more reliable supply. The model pioneered by larger companies, such as Country Crock, offered multi-year agreements in exchange for adherence to production standards and could serve as a template that smaller brands with growth plans can begin to implement now, at their scale, and build toward over time.
Lesson 5: Market formation requires more than willing buyers and sellers
Some of the hardest challenges were not about willingness but about the infrastructure for the market itself: inconsistent supply volumes, lack of forward contracting mechanisms, no benchmarked pricing, missing quality specs, and absent brokers or aggregators for newer crops like fava, lupin, and mung bean. Building markets for these crops means investing in the scaffolding, price discovery, aggregation, quality standards, so see partnerships through.
Lesson 6: Cover crops and regenerative transitions are accelerating
One underrecognized signal: demand for cover crop seed has consistently exceeded supply for several years. Satellite data shows cover crop adoption was 3.3x higher in 2021 than in 2011, with a 63.6% acceleration in planted acreage from 2020 to 2021. Farmers are already making agronomic transitions. The plant-based foods industry has an opportunity, and an incentive, to connect those transitions to market opportunity.
