Welcome to the first December edition of AgFundersNews’ weekly digest.
Drones for agriculture took a new turn this week after Chinese drone company DJI, which is arguably the world’s largest, unveiled its first drone targeting the agriculture sector. The DJI Argas MG-1 is a smart crop-spraying drone, which is dust-proof, water-resistant, and made of anti-corrosive materials that can be folded up. According to DJI, the Argas MG-1 can carry 10 kilograms of liquid and can cover between 7 to 10 acres per hour. The company claims that the device offers 40 times the efficiency of manual application.
DJI is not the first company to debut a crop dusting aerial device. In May 2015, the Federal Aviation Administration authorized the use of Yamaha’s 207-pound remotely-piloted RMAX spraying helicopter, which had already been used by Japanese rice farmers.
Some farmers remain skeptical about whether a drone equipped with spraying equipment offers enough benefit to make its price tag, learning curve, and operational demands worthwhile. Even for non-spraying drones, one of farmers’ biggest complaints has been drones’ inability to pack enough power to cover more expansive fields and acreages. There have also been some doubts expressed about spray drones’ application efficiency.
The UN Climate Change Summit, COP21, is in full swing this week. According to some farmers, climate change is one of the biggest threats to the future of farming. New Zealand’s Prime Minister John Key acknowledged these concerns during a speech at the conference and announced that the country is committing $20 million in funding over the next four years to help farmers reduce ag-related emissions. This amount is in addition to the initial $45 million investment the country made toward the Global Research Alliance on Agricultural Greenhouse Gases.
Meanwhile, the Asian Development Bank (ADB) is taking steps to revive Afghanistan’s war-torn agricultural industry. The UK government provide the Manila-based bank with $11 million in funding for enhanced project facilities and to help achieve ADB’s objectives for the region. This amount will be added to the $30 million grant that ADB provided for the Agriculture Market Infrastructure Project, which will build facilities and other standards in horticulture and livestock. The Afghan government is contributing a $1 million in-kind donation to the project.
Los Angeles venture capital firm Greycroft Partners has closed its fourth investment fund, totaling $200 million. This brings the early-stage investor’s total portfolio to $800 million. The firm’s average investment ranges from $100,000 to $20 million and is typically dolled out during a startup’s Series A round. Although its portfolio includes major companies like Huffington Post, it’s also backed powerhouse food e-commerce businesses like Plated and Munchery, and healthy food online retailer Thrive Market.
Across the Atlantic, Israeli-based fund GreenSoil has amassed between $53 million and $74 million for investing in agtech companies throughout Europe and Israel. The total fund amount will be divvied up equally between both locations. Founded by former Minto Group real estate business developer Alan Greenberg and former boutique investment banker Gideon Soesman, GreenSoil invests in startups that enable efficient resource utilization in energy, electricity, water, and land. So far the fund’s portfolio companies have attracted attention from large institutional investors, including Horizon Ventures.
Impossible Foods has named David Lee as the company’s new COO and CFO. Lee has worked in leadership positions at big name companies such as Zynga, Del Monte Foods, and Best Buy. Based in Redwood City, CA, Impossible Foods founded in 2011 and is on a mission to replace traditional proteins with plant-based alternatives. The company recently closed a $108 million Series D led by the Bill and Melinda Gates Foundation.
The food world is in flux these days, with an ever-growing menu of issues launching into the spotlight. You may have missed it in your pre-Thanksgiving holi-daze, but the US Food and Drug Administration has approved the first genetically modified animal for human consumption: AquAvantage Salmon. The company behind the GM salmon is AquaBounty Technologies; a biotechnology company focused on enhancing productivity in aquaculture. AquAvantage salmon has been genetically enhanced to reach market size in less time than conventionally farmed Atlantic salmon. What’s got consumers concerned, however, is that the FDA has not required AquaBounty to label the salmon as a genetically modified food. Instead, AquAvantage Salmon will be marketed and sold under the label “Atlantic Salmon.” Some retailers like Costco, Trader Joe’s Whole Foods, Target, and Kroger have already released statements indicating that they will not sell AquaBounty’s GE salmon.
While a bill that would prevent states from requiring companies to label GM foods is idling in the Senate, The Grocery Manufacturers Association may be rolling out an initiative to help soothe consumers’ concerns. The trade group, which represents some of the biggest retailers around the world like Wal-mart, is announcing a consumer information program that will allow customers to easily and immediately access the information they want about a variety of food and personal care products. Hershey’s holiday kisses are one of the first products to participate in the so-called SmartLabel Initiative. Each bag of the infamous chocolate drops bears a QR code that provides curious consumers with information about whether the product contains GMOs if the ingredients were sourced sustainably or certified, among other things.
The SmartLabel program represents one of the first industry-wide efforts to use technology to help strike a balance between consumer demand for traceability and industry concerns over new regulations, costs, and burdens. Some policy leaders have indicated their support for technology-based solutions to the GM food labeling issue, in particular, including US Department of Agriculture Secretary Tom Vilsack and the head of Just Label It, a consumer interest group, Gary Hirshberg. But there are questions over whether consumers are satisfied with a QR code link as opposed to a printed, on-package label.
Labels seem to be popping up everywhere these days, and now New York City residents will see them printed next to their favorite meals on city restaurant menus. Starting December 1, 2015, NYC’s new sodium labeling laws take effect, requiring restaurants to print a salt shaker icon next to any item with 2,300 milligrams of sodium or more.
If it isn’t labels that are making waves, it’s the FDA’s recent release of its long-awaited Produce Safety Rule (PSR), representing one of the first waves of rulemaking to come out of the Food Modernization Safety Act. The PSR includes new proactive safety requirements for agricultural water, biological soil amendments, sprouts, domestic and wild animals, and worker training, health, and hygiene.
Indian food e-commerce investments seem to be fizzling out, but Gurgaon-based Bite Club recently completed a seed round led by early-stage multi-sector investors growX Ventures for an undisclosed amount. Long-haul investors The Phoenix Fund and existing investors Powai Lake Ventures, a group of founders turned venture capitalists, also participated in the round. Bite Club enables users to order a meal from a dynamic changing menu through its Android app. Folks like home chefs, amateur cooks, and professional chefs prepare the food. Despite the domino effect taking down Indian food startups, Bite Club plans to use the funding to expand its market reach into Delhi and increase its product offerings.
A few weeks ago, AFN reported on the powerhouse beer union between AB InBev and SABMiller, resulting in a massive $106 billion merger. The Europen Union’s competition regulators weren’t too keen on the deal, however. Now, AB InBev will sell off its Italian Peroni beer brand and Dutch Grolsch label to satisfy the regulators’ concerns. In the US, SABMiller is set to offload its 58 percent share in MillerCoors to venture capital partner Molson Coors for a price tag of roughly $12 billion. It may also have to sell Snow, a leading Chinese beer brand. Despite these hiccups, the deal is expected to close sometime in 2016 with the merged entity controlling roughly 30 percent of the world’s beer market and a whopping three-quarters of the American market.
In other M&A news, food & agriculture private equity fund Arlon Group, in partnership with Wholesome Sweeteners management and Edward Billington & Son, acquired a substantial stake in Whole Sweeteners, a North American organic sweetener supplier. Wholesome Sweeteners was founded in 2001 as a joint venture between Imperial Sugar Company and U.K.-based Edward Billington & Son. Arlon led the buyout of Wholesome Sweeteners alongside Billington, Wholesome Sweeteners’ management and several other investors. Imperial Sugar Company sold all shares to the investor parties.
This week, the World Food Center at UC Davis is hosting the Food, Ag & Health Solution Summit where there will be a workshop on precision agriculture, an “idea hack” session, and an app hackathon for farming. Hackathon coordinator Apps for Ag is organizing the hackathon, with Intel, the University of California, Sacramento, California-based new industry-cluster-focused program AgStart, and networking incubator Royse Law Agtech sponsoring the affair. Oh, and there’s a $10,500 prize pool for the winning apps.
Are you a young farmer strapped for cash? Bayer is soliciting applications for its Young Farmer Sustainability Award, which acknowledges young agricultural producers who demonstrate excellence in environmental and economic sustainability. Farmers and ranchers age 40 and under who receive at least half of their income from farming and farm-related ventures are eligible to apply. Applications are due January 15, 2016.
What’s cooking up on Capital Hill when it comes to food and agriculture? Quite a bit lately. Crop insurance proponents may be excited to learn that lawmakers may tuck a reversal of the $3 billion in crop insurance cuts passed in a two-year budget deal back in October in an upcoming five-year highway bill. If included, the reversal provisions would repeal a nearly 9 percent cap on the rate of return for crop insurance companies and a requirement that USDA renegotiate its current agreement with private insurers participating in government backing by December 2016.
That’s it for this week’s news blitz! Until next time, we leave you with this: A Japanese textile maker is using rayon technology to turn the tree-based fiber into edible pasta. AgFunderNews wants to know: wood you try it?
Have news or tips? Email Media@AgFunderNews.com
— Check AgFunder.com for agriculture investment opportunities —
Image credit: DJI