The World Agri-Tech Innovation Summit has exploded in attendance and scope over the years I’ve attended. This year over 1,200 eager attendees and a multitude of star-studded panels met in San Francisco, almost doubling attendance in 2018.
With the growth of the event, we are hearing different voices. Previously, the show focused mostly on corn and soy and the Silicon Valley VC’s that funded US companies serving those crops.
This year many different voices were heard, and stories told. We heard more about the entire food chain, consumers driving food demand, grower’s requirements in technology, and from a variety of different producers from large Illinois soy farms to small farms in India. We heard from the large consolidated Ag companies but also important newer entrants to Ag like IBM, Microsoft to AWS.
These different voices brought different perspectives and insights.
- NUTRITION-DENSE FOOD
Howard-Yana Shapiro from Mars says nutrition should be on the lips of everyone focused on food production. In countries with the highest disposable income per capita, we are shifting from needing calories – which most of the current production is based on – to needing nutrition-dense foods. Due to health concerns like obesity and diabetes, whole nutritious foods like fruits and vegetables are becoming in high demand. Technology and solution providers have typically not focused on smaller crops and smaller producers. Seventy percent of food grown globally is produced on small farms, 25 acres or less. Technology solutions for specialty crops and for small farms lag those for commodity crops. Getting a return on the high investment required for technology development in non-commodity crops is difficult. But technology companies, startups, and investors are starting to consider them as viable targets due to consumer demand.
2. CONSUMERS DRIVING THE FOOD SECTOR
I now call it the food demand chain instead of the supply chain. Sanjeev Krishnan at S2G Ventures spoke on how consumers drive change in the food system by voting with their pocketbook. According to a report by the USDA, millennial households are buying more unprocessed foods like fruits and vegetables rather than buying processed foods like pasta and potato chips. Basically, they want their food quick, easy, fresh, organic, and non-processed. These types of consumers are demanding more transparency about their food – they want to know where it comes from, is it sustainability grown, and what is the grower’s story? This is a challenge and opportunity to produce more nutritious food in a more sustainable fashion.
3. TECHNOLOGY ADOPTION
We have a technology delivery issue of solutions to growers and benefits to consumers. Matt Crisp of Benson Hill talked about how we have lots of technology, but we are not getting adoption as fast as expected. Margins are razor-thin throughout the supply chain. Producers may have little appetite to invest in new, unproven innovations with such tight margins and a limited amount of time to help new technology iterate. My panel with Emily Smith of Smith’s Farm and Steve Pitstick was a great reminder of who the AgTech industry is serving and what their needs are. Technology needs to solve a problem to be adopted. Products and systems must deliver increased efficiency, production, and competitiveness; and/or make life easier. Sid Gorham of Granular says “Growers aren’t tech adverse; they are technology impatient.”
4. ARTIFICIAL INTELLIGENCE / MACHINE LEARNING
There were numerous sessions and many conversations about AI and ML. Ag is so early in exploiting the potential power of AI/ML. We are still finding ways to gather data and get data out of silos within farms. The data being collected lack consistency and comparability. We have issues of trust, data ownership, and compatibility of data infrastructure along with the on-going platform race. I’m excited to see this develop but we have a way to go and some patience is required.
As Bob Reiter from Bayer discussed, it is a big shift in mind-set and culture for a farmer to go from making decisions based on his/her experience of their farm to decisions based on what their phone tells them – developed by machine learning, from patterns that humans can’t see, over millions of acres.
5. CORPORATE CULTURE SHIFTS
Changing consumer demands, new technology, and large company consolidation are requiring cultural shifts in all parts of the supply chain. Here are some interesting observations I heard from a few of the big companies. Knowing the cultures of these companies, we should remind them of these positions as we work with them!
BASF: We need new models on how to deal with early-stage companies to attract technology. We need to be more open and accommodating. Our models have all been volume driven.
Syngenta: We are not just a biology (seeds) and chemical company, but we need to take a more holistic look at what is needed on-farm, and how to supply it for farmer success.
Cargill: We need to let innovation happen outside our walls and use it. We don’t have to bring everything inside and own it.
Land O’ Lakes: We are shifting in how we handle talent. We are bringing in people with digital skills to match with agronomists.
There are new entrants that we better get used to. The big tech companies are having a huge and important impact on the digitization of Ag. They will add value and also move into what some traditional Ag companies view as “their lane”. Companies with a big presence at the conference were: IBM, Microsoft, and AWS.
Business models for startups are also experiencing a culture shift. Two years ago, VC’s left the room if the startup talked about a service model. Tech companies are realizing that service models work best with many digital solutions and are also looking for more patient capital.
We are seeing a big shift in agtech and the World Agri-Tech Innovation Summit was a great showcase of that. As an industry, we need to continue to bring in new voices, new technologies, and new business models to prosper and deliver real solutions to the grower.