The way people eat is changing, which means there is a giant market ripe for disruption and money to be made.

• However, most investors won't profit from the disruption because very few of the companies driving the change are public and that's unlikely to change anytime soon.

Why it matters: The lack of public opportunities to invest in food disruption despite the ravenous demand is the latest example of the broken U.S. capital market structure SEC chair Jay Clayton bemoaned at the annual Investment Company Institute meeting in May, noting that around 98% of American households have no access to private markets.

What’s happening: Attitudes about food — from how it's delivered to how it's produced — are evolving, which is forcing a rethink of every part of the industry.

• Increasing demand for organic produce, the spread of vegan and gluten-free diets, and the shift away from foods with added sugar or animal meat mean changes for farmers, transportation and businesses.
• New technologies like cellular agriculture (lab-grown meat) and cellular aquaculture (lab-grown seafood) as well as online food delivery, seed treatment and science have all piqued investor interest.

Wall Street's desire for access to the sector can be seen in plant-based burger company Beyond Meat's 600% share price rise in less than 3 months since its IPO or Americold Realty Trust's and Lineage Logistics' ostensible takeover of the American cold storage industry.

The intrigue: Investors clearly are clamoring for opportunities, but as Andrew Lee, UBS’ head of impact investing in the Americas, tells Axios, "direct investment opportunities are often not in the public markets."

Background: In the past, small companies with big ideas would typically need to go through an IPO to raise money to scale and expand. In exchange, the public got access to their financial records and the opportunity to invest.

• Today, more companies are staying private longer and going public after multiple rounds of private funding that drive up valuations. With more than enough money from private investors or big companies that can acquire them, these companies can hold out on going public until they are billion-dollar behemoths.
• The number of public companies in the U.S. has fallen by 50% over the last 20 years.

The big picture: As more disruptive companies eschew IPOs, a smaller and smaller subset of wealthy investors are yielding more of the gains from U.S. industry and innovation, leaving scraps for everyone else.

• "We have to do something about that," said the SEC's Clayton.

An example of a growing new food industry seeing burgeoning growth is agrifood tech — companies aiming to improve or disrupt the global food and agriculture industry. Companies in the space are already a mature market for venture capitalists and deals have consistently gotten bigger in recent years, data shows.

In 2017 and 2018, the largest venture deals across the food and agriculture supply chain were in the food delivery segment.

• U.S.-based food delivery company Instacart saw a $600 million Series E funding round last year that followed a $400 million Series D funding in 2017.
• Brazil's restaurant marketplace iFood garnered a $590 million funding round last year, the country's largest ever.
• India's Swiggy, an online market for restaurants, is now valued at $3.3 billion after a $660 million investment from South Africa's Naspers.

What they're saying: "Until now, multinational corporations have exerted tremendous influence on what people eat and how staple food and food ingredients are procured and transported," UBS global wealth management analysts wrote in a recent white paper titled "The food revolution."

• Today, however, "shifting demand patterns are disrupting the industry and forcing big food companies and traders to scramble to stay ahead of consumers."
• "This move is being funded by some of the wealthiest individuals and corporations in the world."

Hedge funds continue to struggle this year with divergence among large and small funds growing more stark. Inflows and strong performance by large fund managers pushed the total level of assets under management to an all-time high in the first 6 months of 2019, despite having net redemptions during the time period.

The HFR Global Hedge Fund Industry Report shows hedge funds increased assets to $3.245 trillion, edging past the previous record set in the 3rd quarter of 2018.

Between the lines: The redemptions were largely concentrated in smaller funds, as managers who oversee strategies with less than $5 billion of assets saw net outflows of $10 billion, while funds with more than $5 billion of AUM saw inflows of $5.4 billion. It was the first quarterly net inflow of capital for the large funds since the 4th quarter of 2017, HFR's data shows.

• Hedge funds are still struggling broadly as the stock market continues its bull run. Even simple index funds that mix 50% global stocks with 50% global bonds, offering investors some downside protection at much lower cost, have outperformed much of the industry in recent years.

What they're saying: Peter Laurelli, global head of research at data firm eVestment, notes in a recent eVestment hedge fund report that the majority of hedge funds continue to see investors pull their money out, and flows for the quarter were "the worst the industry has seen in a second quarter for as long as we have tracked the industry’s flows [since 2004]."

The bottom line: That's bad news, especially since the first half of the year was the best hedge funds have performed since 2009 and there are around $13 trillion of negative-yielding bonds in the world, making a potential source of competition less attractive.

Go deeper: The hedge fund moment is over

Shares of embattled retailer JCPenney fell 17% on Friday after a Reuters report that the company had hired advisers to help restructure its debt in the latest effort to stave off bankruptcy. 

Background: The stock fell 18 cents to close at 90 cents a share. It has traded near $1 since 2018.

What they're saying: JCPenney said in a statement that it "routinely" hires external advisers and that it has not hired advisers to prepare for a court restructuring or bankruptcy.

What they're not saying: The company has roughly "$4 billion in debt coming due in the next few years, with more than $1.5 billion currently available under a revolving credit line, according to SEC filings," CNBC reported.

Shoe retailer Skechers scored a strong second quarter, and its earnings report Friday sent shares up 12%, backed largely by strong growth in emerging markets, despite the strong U.S. dollar.

By the numbers: Quarterly revenue rose nearly 11% year over year to $1.259 billion, and net income rose to $75.2 million, or 49 cents a share. Analysts were expecting just a 30–35 cent increase, and the Q2 number was up 69% from the same year-ago period.

• “We experienced growth in every region, with the biggest dollar increases coming from India, the Middle East and China, as well as in Mexico with the conversion of the business to a joint venture,” Skechers COO David Weinberg said in a statement.