Consumers and digitization were at the forefront at the Crop Innovation in Business Conference hosted in Amsterdam this week. The conference is conducted every other year and is in its 18th year. Given its location, it is devoted more to fruit, vegetable, floral and other specialty crops with a focus on breeding, inputs, and digital technologies. It was good to get out of my California bubble and benefit from hearing about technology and challenges from our European colleagues.
“Consumers have increasing power, and companies are taking notice” – Vonnie Estes, VP Tech, Produce Marketing Association
Clive Gristwood, EVP R&D of Food & Refreshment spoke about Unilever’s holistic approach of field to fork as a response to consumer desires and sustainability goals. One hundred percent of their agricultural raw materials will be sustainably produced by 2020. Clive said, “Sustainable farming methods increase yields, mitigate effects of climate change, and provide farmers and their communities with opportunities to build more prosperous societies to contribute to the UN’s Sustainable Development Goals.” The impact of their programs are being actively measured and reported. To meet the WHO guidelines for a healthy diet, Unilever is reducing salt, calories, and sugar and removing trans fats while dialing up micronutrients. Other CPG companies will need to follow their lead to stay relevant.
Several of us spoke about satisfying consumer needs with fresh fruits and vegetables. Consumers want convenience, natural, organic, locally grown food with complete transparency of the chain along with high-quality sensory experience year-round produced by growers with a good narrative. Oh, just that! The supply chain is being disrupted by online shopping companies (Amazon and numerous local enterprises) delivered fresh to the home within hours of ordering. The pressure is on breeders, crop input companies, and producers to bring these superior products to market. Technology is going to play a big part in our ability to deliver through advanced breeding, digitization, and supply chain disruption.
“There is a technology party going on” – Adam Anders, managing partner, Anterra Capital
Adam gave an overview of early stage agtech funding from the European perspective. Europe, though lagging the US, is coming into its own with innovation and startups. Five years ago, 90% of the startups were from the US. Now 50% are US, 25% EU and 10% Israel. Much of the technology in the EU is focused on providing solutions for specialty crops, not commodity crops.
Adam added that we are starting to see some financial scale in agtech capable of taking on the incumbents. Startups have gotten later stage rounds with significant capital like such as Indigo, Plenty, Joyn Bio, FBN, and FarmersEdge. Large scale funds are also becoming active in the space. Temasek has invested $18 billion in Ag and Softbank recently joined the agtech party. We are all watching how that will change the sector.
“We are getting amazing tools for breeding and digitization from biotech and bigtech. There are still too many single source solutions and tech that hasn’t been optimized for Ag yet, but the opportunity is great!”
“We are living in a solutions world – moving from products to solutions” – Neal Gutterson, CTO, Corteva
New technologies and business models are changing the industry from individual products to overall solutions for growers and the supply chain. Technology like visual imagery and precision application will allow for less product to be used by delivering a better overall solution. New products and ways customers access services will emerge. The traditional sources of advantage and barriers to entry are collapsing. All of this is causing big disruption and opportunity in the industry.
Some of the big companies may try to do this all within their walls but collaboration will be the best path to success. John Purcell, head of Vegetables R&D at Bayer talked about one such collaboration – the Seminis high rise broccoli. The broccoli was developed through a collaborative effort with Church Brothers Farms in response to labor shortage. Through breeding, Seminis changed the architecture of the plant so it is easier to harvest mechanically. It also matures more evenly so the harvester makes fewer passes in the field. This is a shining example of collaboration with traits and technology developing a solution to a big grower pain point.
“EU ruling on gene editing delays crop innovation around the world” Beat Spath, director of Agricultural Biotechnology, EuropaBio
The 2018 EU Ruling was the most discussed topic at the conference. The ruling states that crops obtained through gene editing should fall under laws restricting the use of genetically modified organisms. The effects will hit scientists, ag businesses, importers and exporters, academics, and consumers hard. Europe will be cut off from the rest of the world on trade, innovation, and healthier, more sustainable crops through this ruling. In coffee break conversations, people in the know predicted the ruling can likely be turned over in 5-7 years. Most people think the decision was a legal semantic decision (does the definition of the term gene editing equal genetically modified organism?) not based on science or outcomes. The rest of the world is going to move ahead with this technology leading to many unintended consequences in Europe. Students will not learn and become practitioners of this important technology. R&D groups like BASF needing to develop new varieties using the technology will move out Europe taking their research groups with them. It was the most downbeat and disappointing conversations at the conference.
“BASF hired 200 people in the last two years to work on digital tools” Peter Eckes, president, BASF Bioscience Research
Digital tools will be the single largest change in agricultural R&D. Machine and deep learning will bring phenotyping and genotyping together to speed up breeding programs and minimize off-target effects. Scientists are doing more research in silico and pairing with data analysis. In building grower solutions, AI and machine learning is used from data gathered by drones and robots in the field. One of the things I discuss is the need for a new talent pool in R&D and in farming operations. As an industry, we need to be able to attract talented people with data skills. We also need to support the education for these important jobs. This is not necessarily four-year degrees. There are a number of programs supported by companies like IBM to get talent educated for these jobs in 1-2 years. It’s not about degrees, it’s about skills and our industry needs them.
Consumer demands, grower solutions, breeding, and digital tools are important globally. This conference allowed me to see much of the work that is being done out of the US to further the cause and advance both science and the conversation with consumers.