On October 4, 2018, we hosted an AgTech evening event with our partners at IBM: “Crop Cycles – Technology and the New World of Agriculture” opened a new chapter in the conversation around agriculture innovation and technology’s role in feeding the planet. As the climate change continues apace and the population continues steady-on to the predicted 9.5 billion, the need for forward-thinking solutions to a time-honored industry is stronger than ever.
Rob Trice, founding partner of Mixing Bowl Hub, kicked us off with a short, info-packed keynote, where “constant change is the new normal.” He introduced the crowd to the US military’s concept of VUCA thinking: being ready for a world full of Volatility, Uncertainty, Complexity, and Ambiguity. Responding to volatile, shaky markets with agility means turning a rough situation around more quickly—and with climate change speeding up, time is a key component that’s unfortunately in short supply. “But just talking about how to feed the nine billion is not the right way to focus—we need to find people who are making agile changes NOW.” By his own estimation, comparing today’s companies with modern strategies to old-school companies is like comparing a hummingbird to a brontosaurus—large beasts with little brain (“and about to die in a swamp,” he added).
Food is changing—we’re already living it day to day. We’re seeing the nascent stages of the future already: the Impossible Burger, Uber Eats, Amazon buying Whole Foods are all changing the way we think about food and delivery; even legendary poultry sellers Tyson have a $100m venture fund investing in lab-grown, plant-based meat. Grocery shelves are being tracked via data processing, leading to less food waste overall. But there’s still work to be done in the alignment between startup activity and farmer’s needs. “We’re seeing a lot of people dropping robots into the field, when farmers are still working with analog systems. We need basic record-keeping to start with, and then we can go from there.”
Our panel then took the stage to examine and expand on Rob’s presentation. Highlights from the panel discussion are below. Some comments have been edited for clarity and/or brevity. “Farmer” and “Grower” are used interchangeably here.
- Nathan Dorn, CEO of Food Origins
- Deborah Magid, Director of Software Strategy at IBM Venture Capital Group
- Vicki Vegis, Founder and CEO of foris.io
- Rob Trice, Founder of Mixing Bowl Hub
Deborah Magid: Large tech corporations like IBM are only getting into AgTech recently—terms like AI and data science/machine learning certainly don’t bring agriculture to mind. How are they impacting the industry?
Rob: They’re contributing to a new kind of data-informed decision making, taking a “Moneyball” approach to the food industry.
Vicki: We’re working on smarter programs to give growers a better experience, both in the field and with tech programs.
Raja: I’ve been blown away at the wide array of tech that’s been deployed in Ag in such a short time, and people getting meaningful use out of it: now we have data that can quantify is this food fresh, where did it come from, etc. We’re seeing data tracking, DNA tracking, and even GPS tracking for food safety and disease outbreak. Blockchain is going to create trust.
Nathan: If you spend time with farmers, you’ll find they have all the tech—they have laptops, desktops, iPads, you name it. They’re mechanics, they’re geneticists, they understand soil, they understand labor, they understand pest control, they understand markets. Farmers are often categorized as unskilled, or low-skilled, but they have a wider set of talents than most people you’ll ever meet. What our company [Food Origins] is trying to do is make it easier to manage all those systems more easily. Technology can do tons of things, but what it really starts with is this: what are the pain points of actual farmers? What do they need solved?
Deborah: Which technologies are most interesting right now for growers? What are they responding to?
Nathan: Once farmers fill in a knowledge gap, they use that knowledge to go and fix the problem. Spectral imaging can help with fruit picking as well as flaw discovery—one farm recently fixed a $10k problem in less than two weeks, simply by changing the time of day they picked their strawberries. They discovered the strawberries were more optimal for picking at a different time of day, because the skin was plumper and less susceptible to bruising.
Raja: I can’t say I have one favorite or another—I suppose I’m lucky I’m not an investor, because I’d throw money at so many interesting companies! We’ve had a lot of interest in the distribution and supply chain logistics. The personalization of food is a real trend in the future.
Vicki: Solving connectivity is a huge problem, and reduction of labor. Getting good labor is difficult, especially nowadays.
Rob: One challenge to solve for is creating solutions that work for specific growers—especially with different crops, different climates, different field sizes. A corn grower in Iowa doesn’t face the same challenges as a berry grower in California. Adding technology is barely step one—actual profitability is key.
Deb: Some use-cases for AgTech benefit consumers, like reducing resource waste; some benefit growers, like increasing harvest output. What’s most important right now?
Rob: Who’s going to pay for [the tech]? What’s the driver to adopt a particular system or piece of hardware? Improving yield doesn’t matter when you’re not making any money. Creating a linkage between AgTech and your balance sheet is important. There has to be incentive for growers to adopt.
Vicki: The tariff going on right now is changing things, and how we trace our food will become extremely vital in the near future. We have to look at how we can compete in a world market. Canada is used to treating US wheat as secondary—it’s cattle feed! And soybean farmers have no place to put this year’s crop, because the silos are full. We need to be able to compete in a world market—it’s the only way our industry can survive.
Raja: Sustainability is huge, but people all have interesting definitions of it—so you have to define for your company which part of sustainability makes the most financial sense for you. There are so many components of sustainability: soil health, clean water, waste reduction, you name it. Make sure to market the one that makes sense for your company.
Rob: Which leads to an interesting question—how do we overcome people buying cheap and convenient? The $3 strawberries from Mexico look identical to the $6 strawberries from California. People will buy what’s affordable as long as it looks more or less the same.
Nathan: It leads to a demand for farmers to become more efficient, and increase capital boundaries to do everything cheaper. So you buy a bigger tractor, buy more land, and then go into $100m debt in your first year. The average age of growers has gone up, because there’s no incentive for young people to pick up the family business. We’ve changed the nature of farming.
Deb: Let’s talk about where we are with adoption—how is it going, what’s affecting it, and what can we do to help?
Nathan: In the berry world, there’s the haves and have-nots—and everybody below the break-even line will be out of business in less than three years. In all honesty, it’s not necessarily good for everyone to adopt—a lot of farmers are in a waiting game to see who goes out of business so they can scale. But some farmers are excelling with tech adoption, including big data and biotech.
Raja: Our experience with farmers is what Nathan described—a lot of them do try out different technologies, but it has to be convenient, affordable, and can’t disrupt too much. A drone is basically a great toy for about a week. Tech has been embraced—now it’s about what sticks. If you’re going to tie it to the economic question—do all boats rise if the consumer is willing to fund it?—the answer is maybe, but there’s better ways to go about it. Transparency between farmers and consumers is a good start.
Vicki: Climate change is helping adoption—10 years ago, if you were driving down I-5 and saw water being sprayed on the field, you wouldn’t have thought badly of the grower! Underground irrigation is the way to go these days. The California fires delayed crop harvest by about 2 weeks—growers have had to adopt and adapt. Energy is becoming extremely expensive.
Rob: Big brands are starting to step into AgTech, and we need them—current providers haven’t had competition, and haven’t had to pull up their socks at all. Think about it in tech terms: back in the day, you had to buy a $1400 WiFi access point installed by a Cisco-certified technician, which may or may not work with your computer setup. Then the Best Buy Geek Squad came in. And now WiFi is all plug-and-play—you can pick up a system and set it up yourself same-day. We need more of that plug-and-play approach for farmers now. We can’t give them all this data and not give them a way to manage it.
Deborah: Providing an integrated view is crucial—otherwise it’s too much, and it’s overwhelming. Silicon Valley has a lot of open-source—I’d like to see the same thing for Ag.
Deborah: What role do you think startups play in all of this?
Rob: Smaller crops are underserved—think kiwi fruit and Brussels sprouts. Start learning and building algorithms on the smaller markets first. Become capital-efficient.
Vicki: One of the things that’s difficult about Ag is the seasonality of it—you’ve got 180 days on, 180 days off. Make sure that what you’re doing works with that time schedule. Make sure you’re solving for the pain points of farmers and growers. They have a wealth of innate knowledge you won’t find anywhere else—figure out how to capture that data in a cognitive way.
Raja: 98% of startups fail, and that’s a fact. It’s a bruising, crushing, Darwininan process, with 3 fundamental outcomes: you start to measure capital allocation, you get a sense of market timing, and it creates a wormhole for somewhat-successful companies to get to the next step. Find companies making a small change in the way business is done. Startups are like wildlife: they spawn, they all get killed, a few survive. The ones that survive set the tone.
Nathan: We have to find ways to make technology work to our benefit. You have to know what you’re trying to do, and make sure you’ve listened long enough to solve a problem the farmers really have.
A few final thoughts:
Rob: We need to find a way to benchmark tech success: start with the performance of irrigation sensors—set em up, test em, and just call balls and strikes. Implementation starts small. There’s a recognition for the need for collaboration—years ago, Farmer John didn’t want to share his proprietary ideas with Farmer Jim down the road.
Vicki: But farming has changed. The older growers are realizing they have to change too.
Raja: I think this is the second coming of digitization—especially with collaboration opportunities. The digital experience is underway—now we just have to connect all the dots.
Best audience comment:
Planting sensors in the ground is great—but gophers love to chew them. Whoever solves the Gopher Problem is the real millionaire.
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