Last week we looked into food security more in-depthly only to discover we are nearing a worldwide crisis as a confluence of factors coupled with our current methods of production leave us teetering towards a complete global collapse of the food system. It was admittedly a heavy post, as is the case when looking at what the worst case scenario is for us in any area. However for that reality to occur, we would have to actively stop all the wonderful innovations and technologies we are introducing in the way we grow, store, process and distribute our food. Thankfully, millions around the world are dedicating their lives to making changes to the traditional paradigm of how things are done.
So instead of focussing on what could be, let’s instead now look at this from the other angle, what amazing solutions are we finding to these problems, how can we help those finding solutions accelerate their progress and then get the current and beginning farmers these solutions all within a timeframe that stays ahead of population rise, urbanization, water shortages, land shortages and all the other factors we looked into last week.
First, let’s identify the areas of interest by their sectors and how they relate to food security.
This portion of the overall global agriculture sector focuses on breeding of plants and bacteria with improved traits to help plant growth. The Biotech Industry has a range of companies like well-established juggernauts Monsanto and Bayer to start-ups like Rootillity, Kaiiam and Groundwork BioAg.
Biotech solutions are going to be huge in the coming decade. Anything we can do to make plants thrive in climate extremes will help us mitigate against crop losses from climate change and the variability it causes. Any solutions that evolve plants to rely on less water without impacting nutrition and yield will help mitigate against water shortages, droughts and best of all, reduce the water consumption rate in agriculture. Any solutions that evolve plants to more disease and pest resistant, will reduce our needs for chemical applicators to treat these issues. (Note I’m not for solutions that put pesticides in the DNA of a plant, but you can breed plants naturally. For example, fusarium resistant basil was just bred out of generational selective breeding of plants that showed better resistance to the disease than others of the same generation).
Biotech solutions stand to be one of the sectors with the most opportunity as these solutions will help farmers in every area and method of agricultural production. Whether you are trying to farm in the Sahara or Antarctica, it will be thanks to advances in Biotech that will allow you that ability to grow plants that can thrive in the conditions and methods needed to grow in those places. It will also be Biotech solutions that lead to plants that thrive better indoors and thrive better in soilless grow systems and thrive better in vertical towers etc. Whatever the growing environment or technology, through Biotech we can evolve plants to thrive in those conditions.
Smart Farming and Big Data Analytics
Big data isn’t just for Google to give you a better news feed. Data is going to revolutionize almost every industry as supercomputers start collecting and analyzing thousands of data points and help us better understand how to improve efficiencies. In farming, this will lead to insights into planting densities, environmental conditions, growth times, light settings, nutrient supplementation, and countless other areas that will optimize outputs and minimize inputs to make farms more productive, cost efficient and create food that tastes better, lasts longer and has denser nutrient profiles.
Data based technologies making use of big data and predictive analytics to help farmers make better decisions on daily farm issues like those mentioned above. In indoor farming, we are already seeing smart sensor systems and controllers that allow farmers to run their farm almost entirely from their phone. It allows farmers to run experiments and track data points and gain insights that help them make informed decisions on how to farm more effectively.
The ultimate evolution of this will eventually be computer generated custom specifications for each farm, indoor or outdoor, on what parameters to set, given your environment and resources in order to grow the best yields of the crops that thrive in that setting. It will actually lead to us being smarter farmers and will evolve our knowledge base to the extent that it will make today’s farming in the future look as unrefined as the days we used mules to plow fields does to us today. Some of the more known smart farming startups to watch include Agrilyst, Phytech, Cropx, Taranis, and Prospera.
Machinery and Robotics
Everything from drones to field robots is covered in this sector, companies that are working on automating every aspect of growing are using machinery and robots to create solutions for all the physical labor involved in the farming process. Everything from seed starting through post harvest packaging has multiple companies working on solutions to those labor points. The future farmer will be managing a field of robots as opposed to a field of hands.
These solutions will be introduced to help everyone from the backyard gardener to the farmer of thousands of acres. Farmbot is looking to take the labor out of home food production whereas companies like Metomotion are focussed on solutions for large-scale greenhouse providers and companies like Plenty are focussing on large scale indoor farms.
Machinery and robotics will not only reduce labor costs and times on farms but they will also help farmers become more efficient with their resources. If you have a field robot that can roam around and identify weeds and pull them out completely you no longer need to spray weed killers on your crops. If you have a drone that can fly overhead and identify pests or disease with pinpoint accuracy and treat or remove the affected plants you reduce your need for dangerous pesticides and herbicides. This will enable more people to farm or garden, reducing the barrier to entry and the labor and time needed to dedicate to such things thus resulting in more food production in more places around the globe leading to actualized food security.
Irrigation and Water Management
Water Management has been a sector that’s seen innovations for decades now. Ever since the introduction of drip irrigation, farmers have sought out solutions that help them use less water to grow better crops. Israel is well known for water innovation and still lead most innovation today. Companies such as Neotop and Fluence are great examples two different approaches to water management and conservation.
With water shortages one of the most significant factors into our level of future food security and general human welfare, this sector stands to be one where the most opportunity will stand for investors but also the most impact is possible as many of these solutions will have applications outside of the general food sector.
Pests and disease affect every farmer. Even in controlled environment scenarios like warehouse grows with the strictest protocols all ultimately ending up with pests or disease at some point. However, the big opportunity will likely be in the field and greenhouse production sector, which traditionally has the hardest time with pest and disease management. Outside of an Integrated Pest Management strategy utilizing a host of biological controls, chemical substances have been the go to tool for pest and disease, especially and large multi acre operations.
The new tide of companies are taking an alternative approach by looking for solutions, biological or chemical, that protect crops from pest and disease in a non-toxic and environmentally friendly way.
Given the widespread use of pesticides and herbicides that cause health issues to farmers, degrade their soils, make our food less healthy and themselves become less effective year after year, the opportunities in this sector are enormous. Companies like BioFeed and EdenShield are some of the early adopters poised to make big changes in the way we go about crop protection.
Technologies used to reduce losses post-harvest are going to be huge in boosting food security by reducing or eliminating waste in processing, packaging, storing and distributing food.
Solutions that help those in rural and underdeveloped nations with this will be the ones to look for as the father produce has to travel the more susceptible it is to crop loss. The less affordable or available electricity is the harder it is to get produce stored at its ideal temperatures. Technologies and services that afford the producer to get more crops to market or table are the ones that will be the biggest opportunities for investors. Solutions to get a lettuce grown in Brooklyn to a restaurant also in Brooklyn, not so much.
Farm to Consumer Platforms
In recent years there has been a host of startups and mega corporations alike that are looking to shorten and simplify the supply chain by connecting the farm to the end consumer. Almost exclusively done through a digital platform these technologies not only reduce the time and travel from harvest to dinner plate they also in many cases afford the consumer more transparency into where their food comes from, how it was produced processed and transported.
With local foods, and organic foods surging in growth year over year it’s safe to say consumers are collectively becoming more and more conscious about what they eat, how it’s grown or made and where it’s from. Platforms that make this process easier for consumers to get foods that meet their standards and make it easier for farmers and producers to sell their products are going to be successful. There’s a lot of competition in this sector but also lots of opportunities.
Other sectors that will see amazing innovation and thus investment opportunity are Livestock, Waste Technologies, Specialty Crop Production, Aquaculture and Novel Farming Systems. I will briefly note on each one, but for the most part, these sectors are on my radar but not my area of interest (with the exception of Novel Farming and Aquaculture) so we will just look at the issue they solve and a company or two on the forefront.
Livestock – Companies that create technologies for farmed animals and farm pets. These companies cover anything from improved disease prevention to mass vaccination tech to even sex detection for baby offspring. eggXYt is a good example, helping you determine the sex of baby chicklets before they even exit (or eggXYt) the egg.
Waste Technologies – Processing livestock manure, harvesting energy from animal waste, capturing and utilizing fertilizer runoff, up cycling harvest waste and creating value added products from it all fall under this sector. Companies that help farmers create new products from waste, reduce greenhouse gas emissions from animal wastes, create biofuels from waste are the big ones to follow in this sector. Companies like 3PLW and HomeBiogas are great examples. They convert organic waste to bioplastic and cooking gas respectively.
Specialty Crop Production – Companies that deal with medicinal plants or plants that are high value grown for a purpose other than food. For example, Collplant is a company that grows medicinal plants to extract collagen for human tissue repair. At the other end of the spectrum is crops like Marijuana, an exploding industry that’s been dubbed the next gold rush by industry advocates includes an industry that has hands in recreational sectors, medicinal cancer treatments among many other medicinal applications, health and beauty industry, food and beverage and even on the hemp side of things the textile industry. Hemp is a strong fiber and also can create a soft fabric similar to cotton. Companies like GW Pharmaceuticals and Axim Biotechnologies are good examples of company’s to follow in this sector.
Aquaculture – Not limited to just fish, this sector refers to companies that develop technologies to grow things in water. Algae is a very exciting niche in this sector as its being used for everything from biofuel production to nutritional supplements to feed for animals on farms. Algalo is a great example of an algae company. For more traditional aquaculture Pentair is one of the industry stalwarts for products and services around aquaculture.
Novel Farming Systems – This covers your aeroponics, your hydroponics, your aquaponics and any of the other new farming techniques of the last few decades. While relegated to “novel” there is nothing novel about the potential of these niche sectors. There’s been huge venture capital investment in all three sectors in the past 5 years, and these methods and technologies in these industries are what’s empowering farms on rooftops, in multi thousand square foot warehouses and greenhouses that out produce acres of fields and do it while using less water, fertilizer, and pesticides (many don’t use any). Early investment has been around companies focussed on solidifying commercial models, providing technology for farmers, and developing sensor and software platforms to pull big data off these systems and learn how to maximize them for resource and production efficiencies.
We’ll leave off our discussion here today. The big takeaway is that there are numerous areas in which billion dollar problems facing food security already have innovative, adaptable and scalable solutions being worked on, tested and implemented. There are entirely new industries emerging from this process. The indoor farming industry was almost exclusively confined to clandestine Marijuana growers up until about a decade ago. It really didn’t start taking off until the past few years as advances and price reductions in LED and other lighting technologies have made indoor farming a profitable and scalable and repeatable business model. Next week we’ll continue our talk, we’ll take a look at where investment dollars are already pouring in, what the characteristics of these investors are and where we expect to see more investment in the future. We’ll also look at the fastest growing sectors and end looking at what a new paradigm in our overall food ecosystem might look like in a world with actualized food-security.
Breathe easy, we will have food in the future, it’s just our farmers may be using their cell phone as opposed to their pitchfork to care for their crops.