1) Why is supporting agricultural technology and innovation important to Rabobank?
Rabobank can trace its origins and character back to agriculture, to the land, and our focus as a bank is very much linked to food production and agriculture.
When you talk about the global food challenge, about creating more sustainable food for more people, we think it’s going to be the innovators that are going to solve this challenge and that those with disruptive technologies and new ideas will find solutions – and we want to help those people succeed.
One of our goals is to improve access to finance, access to networks and access to knowledge to people working in food, which is why it’s important to bring our researchers and sector heads to forums like the World Agri-Tech Investment Summit, which is one of the biggest and most important in the industry. We also run our own event, FoodBytes, which brings together people that want to work in food with people who want to invest in food.
2) What’s driving the current surge in innovation and investment in ag and food?
I think you have a few things going on right now that make this possible. You have changing consumer preferences: More sustainable food for more people is not only a necessity because of what’s happening in the world with the environment, but it’s also what the consumer wants. They want to know where their food comes from, how it was made, if it’s sustainable, if it’s good for them – all these things are a key part of the narrative for anyone who’s working in food.
The other thing going on is that, more than ever, customer acquisition is faster and easier and cheaper. In years back you needed to be on TV and spend a lot of money, but today you have social media and a number of ways to get your message out.
So, customer acquisition is cheaper, consumer preferences are changing, and at the same time access to capital is improving – all these things create an environment where people are really excited to create something new and get their ideas out there.
3) In which particular sectors of ag and food are you seeing lots of innovation?
Precision agriculture is one of them. Maybe 21st agriculture is going to look like high-tech manufacturing in just a few years – there’s a lot of technology going into making farming more efficient. There’s also a lot of capital that can go into this as soon as we have more clarity on which is going to be the winning technology.
Non-animal protein alternatives. A lot of thought has been going into this both from the final product point of view and the ingredient point of view.
Also sugar alternatives that have the same flavor profile as sugar but that can be a healthier ingredient for food production – that’s very very hot.
Food safety and traceability. We saw Chipotle losing $9 billion because of food safety. This is going to continue to be a huge topic and not enough is being done.
And finally I would say indoor agriculture. Indoor ag is difficult – it seems it should be easier to control, with no pesticides or chemicals and more safety and traceability, but when you have something in a confined environment there are many other things that happen.
4) What do you see as obstacles to this growth? What’s preventing more technologies reaching scale?
There are people willing to write checks – and big ones – entrepreneurs just need to get a big company or farm to try their product at scale.
When something small works well, investors still question whether it will work at scale and I think this has been the main limiting factor. Can you prove that your product can really improve the way farmers do things, that it can decrease their costs, and that this can be done at scale? Those are the questions and that’s what people need to prove.
It’s a chicken and egg situation. If an entrepreneur can get a big farmer/company to use their product at scale and show that it saves money and improves production, then that product will become an industry standard – but that’s where people are struggling.
In the next year we’re going to see a couple of people who’ve been able to put their products into bigger farms and show that they work and those companies will be the winners – not necessarily the best technologies but the ones who could convince people to try their product at scale.
5) Are there any other sectors within agriculture where you would like to see more innovation? In your opinion what’s ripe for disruption?
I think that there’s not enough in food safety yet – that’s huge. For India, for China, food safety is key. There’s a lot that can still be done there.
Automation of equipment – I think we’ll see driverless/autonomous tractors driving around producing the data.
Also technology that decreases the costs in small farms – that’s very important, especially in emerging markets where farmers have small plots of land and it’s difficult to be efficient.
Food waste. There needs to be a lot more done. One thing I really like is the “second class produce” that retailers don’t want but it’s still good. I’ve seen ideas that I really like, such as people making a market for these types of products.
6) How important are “big data” and advances in data analytics in accelerating the development and adoption of new solutions in ag?
Farmers are bigger data junkies than we know and give them credit for. A lot of them are already producing a ton of information – the issue is what to do with all that information. That’s what they’re struggling with – do I really need it, and does it really help me?
The big question is which solution is going to become the standard – and that’s the key, I don’t know.
7) In your view, which countries/regions have the potential to become hubs for agricultural innovation? Where do you see the next wave of new technologies emerging?
Israel, the Netherlands and the US – when you look at the number of new ideas emerging, these are the top three.
Israel is huge – it’s a small country but they’re number two in agri-tech development after the US. Most people come to the US because of scalability – you can scale a lot in one country. That’s why it’s become such an important place. Also the access to capital – the willingness to listen to new ideas and to fund them.
8) Finally, what are your goals at the World Agri-Tech Investment Summit next week?
I’m looking to meet new people that are doing new and exciting things, together with the people that we already know. Our big clients are coming, great companies and great investors, so I’m keen to catch up with them. It’s about knowledge and about networks.
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