F&A Next 2019: The intersection of Innovation and Sustainability

Wednesday 15 May – Day 1

The 4th edition of F&A, which zoomed in on the intersection of Innovation and Sustainability, attracted 572 representatives from corporations, banks, venture capitalists and other investors, and of course, food and agri startups.

During the opening, host and moderator Rens de Jong asked the audience how innovative they believe they are. 50% consider themselves or their company as innovative, 25% as extremely innovative and 25% as okay. De Jong said it is important to use these innovative skills to feed the ever-growing world population and how important startups can be to rethink and disrupt the supply chain. Technology can help achieve this, but politics also needs to pave the way. This is also important for supply chain partners, especially producers, to earn their fair share.

A few of the biggest trends in food and agri, mentioned by the audience were:

  • Plant based food (meat)
    • Vegan meat
  • Sustainable packaging
  • Robotization to fight labour shortages

Rens Buchwaldt, Member of the Executive Board, Wageningen University & Research, explained how the venue, Wageningen University & Research (WUR) Campus, and its ‘inhabitants’ act as an ecosystem to help society make the necessary transition to a more circular and bio-based food and feed production using animal and plant proteins. He invited companies and institutions to join and partner with WUR to find the right answers and solutions.


Dirk Jan Kennes, Global Strategist Farm Inputs, Rabobank, said that there’s a lot of talk going on in agriculture about the needed change(s), but that Rabobank does not see too much action yet. He said agriculture has to change from supply driven to demand (consumer) driven. “Global agriculture hit a wall and is now on the verge of change.” The objectives will change from yield maximalisation to being fast and resilient and flexible and to reduce the environmental food print.

Two megatrends identified by Rabobank are:

  1. Climate change urging biodiversity and different soil and land use
  2. Consumer change, as they more and more focus on how and where their food is made (quality)

Technology can be an enabler for the fragmentation of demand. Like Alibaba and Amazon who know what products you want before you even know it yourself. Consumers digitise and this urges agriculture to digitise its supply chain as well. “Farmers will therefore be connected to consumers and this will mean that the supply chain will never be the same as before.”

Kennes also sees a need for changing farming operations in countries/continents with predominantly monocultures like Brazil and the US (cereal crops like corn and soy bean) where glyphosate and GMO-crops rule. It will be innovation that drives the shift to alternative ways of farming.

On the other hand, there’s the very intensified farming like in the Netherlands (especially cattle/pig farming). “50% of pigs’ nutrition comes from imported by-products like soy bean. Circular agriculture will require rebalancing / repositioning the mix of local, regional and global supply chains to minimise the global part and maximise the local part.”

Then there’s indoor farming in Asia. Urbanisation leads to indoor farming initiatives and Kennes mentioned Singapore, where the need for being self-sufficient as a city, leads to (vertical) indoor farming being integrated into city planning whereas in Hong Kong, greenhouses are in use. “China will revolutionise farming faster than any other country/continent in the world.”

As drivers and facilitators for innovation and sustainability, Kennes names technology and (required) social innovations. Digitisation can help farmers make their, on average, 42 decisions per growing season better. Social innovation will help to better distribute the margins in the supply chain with more money for farmers.

Kennes concluded by saying that he has no doubt that farmers will be able to feed the growing population.


Prof. Phil Macnaghten, Wageningen University & Research, asked for responsible innovation and how to align technology with sustainability and the need for that by society. He explained how, at the start of his career (around 1996), he conducted research on GMO (Genetically Modified Organisms) food and how big the controversy was at that time. Nonetheless, Unilever was interested already and was part of the research. One of the findings of the research was that people who received more info on GMO, became more concerned.

According to Macnaghten responsible innovation is built on four corner stones: anticipation, reflexivity, responsiveness and inclusion. He also explained how gene editing can be a responsible innovation approach to animal gene editing to improve yield (efficiency), health and welfare and resistance to diseases.


Prof. Dr John van der Oost, Wageningen University & Research, gave the audience a crash course on CRISPR-Cas technology of which he is one of the developers / inventors. He explained how genome editing evolved from ‘chain saw cutting’ (type 1, Cascade) to precise surgical cutting with Type II (Cas9) and Type V (Cas12) genome editing. And how clinical trials are now taking place to cure genetic disease.

Van der Oost is aware of the European opposition / controversy against CRISPR-Cas genome editing and that there are different laws on it on different continents. He also emphasised the successes of the technology to successfully edit a range of plants, introducing dedicated changes exactly at desired genomic locations. The arguments against (ethics, safety and power) are opposed by arguments in favour (genetic change is a natural process that occurs spontaneously during cell division, CRISPR-Cas is at least as safe as the accepted classical mutagenesis approach, complex rules take a lot of time, labour and money for pre-market evaluation and approval which is a major hurdle for SMEs). “Gene editing is something that happens in nature all the time and CRISPR-Cas has major potential for safe and useful crop improvement to use less inputs (water, fertilisers, herbicides/pesticides and energy) and provide more (enhanced production of safe, healthy and tasty food).”


Panel discussion on ‘Embracing new gene editing technologies: EU versus Rest of World’, moderated by Maarten Goossens, Principal, Anterra Capital

Panellists:

  • Arjen van Tunen, CEO, KeyGene
  • Dr John van der Oost, Wageningen University & Research
  • Rick Peterson, Senior Director R&D Animal Sciences Division, Intrexon
  • Floris Leijdekkers, Coordinating Policy Advisor Horticulture, Ministry of Agriculture Nature and Food Quality

Peterson said that gene editing and selection is something that has been done for decades and offers potential to possibly introduce heat resistance to the Holstein species of dairy cows. “It can introduce a property much faster than traditional breeding.”

Van Tunen mentioned that various crops like bananas and grapes can’t be edited or modified yet, whereas CRISPR-Cas could help these crops improve their resistance to pests and diseases. “Worldwide, most chemicals are used on grapes,” he emphasised.

To the question from Goossens on whether gene editing will be adopted in 15 years’ time, three panellists answered with a question mark and one said yes. Three of them also think that the EU imports of GMO food and feed will increase. The main (safety) concerns according the panellists is that legislation is slow and that it is tough as well. Since (European) countries have different standpoints and taking it (laws) through EU parliament will be tough. Van Tunen: ”It’s a divided world in which seed companies already face difficult challenges that take a long time.”

The panellists also emphasised the possibilities of GMO / CRISPR-Cas to cater taste to consumers likings and to produce food and feed in a more sustainable way to get increased acceptance by consumers.


Erik Fyrwald, CEO Syngenta, first shared his experiences from trips to and with farmers in Africa and India where Syngenta aims to help maximise yields and safe use of crop protection chemicals. He emphasised that the global use of crop protection chemicals has decreased drastically, with 95%, since the 1950’s. This especially relates to decreased use of herbicides and insecticides.

Syngenta bought a startup that developed a farm management information software (FMIS) provider to help the company gather data on one hand and also calculate the environmental footprint of farming/farmers.

Examples from cooperative and sustainable innovation include the development of a wall coating to help prevent malaria, technology to lower the water consumption of corn by 30% and to increase the shelf life of tomatoes to 30 days. Fyrwald said Syngenta aims to accelerate innovation through collaboration and science-based regulation.


Panel discussion on ‘How to make innovation create value for farmers?’, moderated by Matthijs Mondria, Head of Sustainable Business Development Rabobank

Panellists:

  • Damien Lepoultre, VP AgTech, Land O’Lakes
  • Carl Jones, Global Head of New Technologies, Bayer Crop Science
  • Dan Harburg, Senior Director Innovation, Indigo
  • Cees Jan Hollander, Global Farming Expertise Manager, Danone

Jones feels that digital innovations like Bayer’s planting script can help farmers create value and Hollander thinks that it is important to shorten the supply chain to get (more) information from consumers to farmers. Lepoultre added that farm data platform(s) can help farmers protect natural resources and Harburg feels that innovation can help farmers sell / market their products and it can help to increase farmers’ profitability.


Rob Kelly, Group President International Operations, Zoetis, brought forward three trends that create a growing demand for animal health: population growth, a growing middle class and urbanisation. “The dog has moved from staying in the backyard to staying in the house and now in the bed.” He also expressed his worries about African Swine Fever (ASF) that is becoming a real threat, especially in China. Kelly mentioned the importance of data for today’s veterinarians and that trends and innovations are driven from / by emerging countries like India, China and Vietnam. The key is how to transform data into valuable information and actions with the example of e-tags for cows resulting in 8,000 data points per cow per day.

According to Zoetis, curing diseases is more and more evolving into a continuum of care with the prediction and prevention of (animal) diseases. This shift offers great chances for innovation whereas vaccination nowadays is the fastest growing business.


Panel discussion on ‘Innovation in livestock farming’, moderated by Rob Kelly, Group President International Operations, Zoetis

Panellists:

  • Aidan Connolly, CEO, Cainthus
  • SriRaj Kantamneni, Managing Director Digital Insights, Cargill
  • Timothy Wallace, Sr Business Development Manager Strategy & New Business, Novozymes
  • Martin Scholten, Managing Director Animal Sciences Group, Wageningen University & Research

Connolly said data collection can help remove the human element from livestock farming and Kantamneni added that the industry is now at the tipping point of moving from reactive management to proactive and predictive management by the use of vision, sound, AI (Artificial Intelligence) and the IoT (Internet of Things). Scholten mentioned that innovation can help secure our (natural) resources as livestock animals are most efficient in turning resources into food.

Wallace described how AI can help farmers in detecting mastitis as an answer to the limited education of farmhands, now and in future. Regarding the challenges for the adoption of innovative technologies, Kantamneni feels that labour shortages can catalyse adoption, but that people must be trained to use and adopt technology. Wallace sees opportunities to help convince consumers and for regulatory reasons whereas Scholten said to focus on the animal.

The panel advised combining the answers and solutions from both developed and emerging countries to bring the best results.


Iris Bouwers, crop & livestock farmer, Vice President of CEJA (EU Young Farmers Association), emphasised that the number of young farmers (<35 / 40 years) has decreased rapidly over the past decades. In 1979, 23% of farmers were under 35 and 12% over 65. Nowadays, 7% are under 35 and 38% above 65.

“How to have young farmers in farming in future” – is what she said/asked. Possible solutions to that challenge include:

  • Access to land (which is the most significant barrier)
  • Access to credit
  • Access to knowledge and
  • Access to technology

“Besides, young farmers are coming more and more from a non-farming background, are more often female and higher educated.”

Bouwers called on the audience to make new technology available to small-scale farmers.


Panel discussion on ‘Best approach for transformation and profitable farming in Emerging Markets’, moderated by Mark Kahn, Managing Partner, Omnivore

Panellists:

  • Matilda Ho, Managing Director, Bits x Bites
  • Maurice Scheepens, Investment Officer Agribusiness, Food & Water, FMO
  • Ranjith Mukundan, CEO and Co-Founder, Stellaps
  • Albert Boogaard, Head Innovation, Rabobank Foundation

Kahn started the discussion by mentioning that lack of food is not a problem for farmers in emerging markets, but lack of income is. “It’s not uncommon for an Indian dairy farmer to have an income of $1,000/yr,” said Mukundan. Besides, food losses and inefficiencies in the supply chain are causing problems.

Ho said that a fundamental change in the production of protein for animal feedstuffs is required. Scheepens added that especially young African and Asian smallholder farmers have a great potential to upscale their usually low productivity. “They’re young and keen on high-tech technology.” Boogaard mentioned a few data driven examples from Kenia like Apollo Agriculture and Agri Wallet. Mukundan put forward that Stellaps nowadays collects data on milk production at 1.5 million farms and from 0.5 million cattle adding up to 3 million litres per year. This data collection opens up possibilities for insurance companies who can offer affordable 1-day cattle insurances instead of 3-year periods.

On the question of what the bottleneck is for the adoption of digital farming by Chinese farmers, the panel identified the need for easy to adopt low tech digital farming solutions.


Startup pitches, Tomorrow’s heroes in Agtech, moderated by Adam Anders, Managing Partner, Anterra Capital

  1. Hectare Agritech (UK) wants to help farmers sell their livestock and introduced its Graindex solution. The startup made the headlines earlier this year with its Tinder for cows called Tudder on Valentine’s day
  2. GreenLight Biosciences (US) wants to control pests by using targeted RNA chemicals. Examples include the Colorado potato beetle
  3. Mootral (CH) said it wants to solve the problem of cow burbs that are responsible for causing 95% of the emission from livestock / cattle farming. Their ruminant is supposed to lower this emission with 30%
  4. Stable (UK) offers hedging and risk management solutions to farmers to make the difficult / hard work of hedging simple and now has 300 different indices of various commodities like salmon, pigs, et cetera
  5. Ignitia (US) says it can better and more accurately forecast tropical weather in the upcoming 48 hours targeted at West Africa – using open data sources to do so. The company says their SMS forecasts costs $0.04/day and that every day, 750 new farmers subscribe
  6. RootAI (US) aims to develop smart harvesting and crop care robots to lower labour costs in mainly indoor greenhouse farming by 30%. Their upcoming Virgo multicrop harvesting robot is to be offered as a service in $/kg harvested as from 2020. Optional sensors are to detect insects and viruses
  7. Augmenta (GR/US) uses image recognition through multispectral camera’s and AI to detect crops’ nitrogen needs and to fertilise according to the site-specific variances. The technology (camera) is leased to farmers for prices around $6/ha/yr

Thursday 16 May – Day 2

Startup pitches, StartLife breakfast session, moderated by StartLife

  1. Clevabit (Ger) offers digital data from animals to farmers and veterinarians and says it can save up to €125,000 annually on veterinarian costs for pig farmers with 1,000 sows by using an ammonia sensor to better monitor / provide clean air in stables
  2. ZERO FoodWaste (NL) has developed a waste bin with a weighing scale and a camera to keep track of the amount of food waste in restaurants. It claims to enable restaurant owners to save up to 350 kg and €1,500 per month. The costs are €400/month/installation
  3. Sponsh (NL) filters water from the air by means of a temperature sensitive textile. The textile can filter up to 1.3 l/m2/cycle from the air and is used for instance in greenhouses and elsewhere for irrigation. The latter especially in Portugal and South Africa. The costs are €590/100m2. Durability and sensitivity to moulds et cetera are still to be tested
  4. SAIA Agrobotics (NL) said that greenhouse owners are willing to invest €315,000/ha/5 yr in harvesting. As skilled and motivated labour is increasingly difficult to get, it develops the harvesting robot Sweeper
  5. Thelial (P) has developed a natural solution to combat heart burn that enables pregnant women and people that can’t take other heart burn medicines to take its product
  6. Ellipsis Earth (NL) delivers satellite data to access land use. This relates to, for instance, water, potato fields and flood risks. Their main products are their website and API

Louisa Burwood-Taylor, Head of Media & Research, Agfunder, explained why it is important that EU food and agri tech should be brought together to compete with other continents on innovation and startups, both upstream and downstream. European annual financings of start- and scaleups varied from $1 billion in 2016, to $1.6 billion in 2017 and 2018 to $ 1.8 billion in 2015. The number of deals however rose from 230 to 289 to 342 and finally to 421 in 2018. The majority of the deals concerned seed stage funding (279 deals, $244 million) and this was 70% of the deals in 2018 whereas globally this is 35%.

From 2017 to 2018 there was a 50% drop in downstream funding and a 200% rise in upstream funding. Categories that are currently popular in Europe for investors are insect farming, FMIS/IoT and especially farm robotics with a 500% rise in 2018 with France as a leading innovator.

The agrifood tech monetary investment volumes are highest in the UK, followed by France, Spain, Germany and Ireland.


Panel discussion on ‘Can venture capital truly drive food & ag innovation?’, moderated by Sheila Struyck, Venture Partner, Shift Invest

Panellists:

  • Victor Friedberg, Chairman & Founder Foodshot Global
  • Andy Zynga, CEO EIT Food
  • Kim Odhner, Senior Venture Partner, New Crop Capital
  • Michal Drayman, Partner, Jerusalem Venture Partners

Friedberg said that venture capital can help in education, product quality and putting a start- or scaleup ahead of the market. Odhner raised the example of multiple shoe shops next to each other that stimulate each other’s sales. Drayman said that it is a challenge of finding, creating and incubating the right companies in cooperation with a.o. universities. She said there’s lack of innovation in cultured meat, health ingredients, packaging, financial solutions, AI and big data and how to disrupt these sectors/categories.

Zynga emphasised that only a fraction of the world’s plant varieties currently is used for food and feed and innovation is needed to cultivate other varieties for (human) consumption. Odhner sees a role for banks in early stage funding and Drayman said that governments need to be encouraged to grant after which VC’s (Venture Capitalists) can do the ‘heavy lifting’. She urges more VC’s to invest in food and agri and called upon private equity firms to finance scaleups. Friedberg said it is necessary to look at money differently: “Seed to growth,” and that there’s also a role for big foundations like the Bill and Melinda Gates foundation and the Rockefeller foundation.

The panel concluded that food innovations have to be trusted by consumers to create involvement and that VC’s need corporates for risk management.


Alexandre Bastos, Global Director Innovation, Givaudan explained why Givaudan founded Mista, a new innovation platform for the food industry, enabling startups and established corporations to optimise ideas, products, people and investments. Mista aims at bridging the gap between small and large companies and talked of the challenges of having ecosystems adopt/embrace innovations. “If you innovate, you want to fail fast and cheap.” Mista therefore aims at helping companies think holistically on the way they innovate, on how to bring innovations to the market. Not on what they innovate.

Niko Koffeman, co-founder The Vegetarian Butcher shared that the initiation of the company The Vegetarian Butcher was actually the pig pest in 1997/1998 where farmer and co-founder of the company Jaap Korteweg was asked to store dead pigs (11 million pigs euthanised in total!) in his cooling facilities for arable products against a €100,000 fee. He refused and became an ethical carnivore first and a vegetarian later.

Without any experience in meat production and an estimated 5% success rate, they started producing plant-based meat products with the ambition of becoming the world’s biggest (plant) butcher. In six years’ they grew to 4,500 outlets in 17 countries. Nonetheless, banks weren’t willing to finance their new plant until a crowd funding campaign brought in much more money than expected in a shorter period of time.

Koffeman expects meat prices to rise due to increased demand from emerging countries and prices of meat analogues will go down. He claims that The Vegetarian Butcher has the best tasting meat analogues on the worldwide market and that the company intends to grow its market presence and shares after the acquisition by Unilever. He also told the audience to envision the scaling down of analogue producing machines for the meat that will finally end up at consumers’ homes.


Robbert de Vreede, Vice President Foods & digital transformation at Unilever Benelux presented Unilever’s new central R&D centre that is currently being built on the WUR campus grounds. It is to be the most sustainable building in the world.

He also explained that food companies face new and bigger challenges and that innovation should be opened up. These challenges include obesity and sanitation versus the fact that only 60 different crops are used worldwide for food and feed production. “A new way of doing business is needed aimed at the masses instead of the happy few.” 55% of Unilever’s innovations are said to be using open innovation. “Nowadays, with modern communication technology and social media, it’s way easier to connect corporates to startups.”


Panel discussion on ‘Winning where the shopper shops: the growing importance of Direct to Consumer (DTC)’, moderated by Nick Fereday, Executive Director RaboResearch Food & Agribusiness Sheila Struyck

Panellists:

  • Niccolo Manzoni, Founding Partner, Five Seasons Ventures
  • Milena Lazarevska, Head of Future Brands Origination and Investing, Sainsburys
  • Sebastian Sanchez, Sr Director Global innovation, Heineken
  • Ole Schaumberg, Country Manager (DACH), FoodSpring

Sanchez told about Heineken’s new and recent ideas to deliver cooled Heineken beer to Amsterdam consumers within an hour after ordering. Manzoni explained about categories that are highly interesting for online sales like pet food. Schaumberg shared a bit of FoodSpring’s marketing strategy where Instagram is used to share free innovative content of which the revenue will come later by itself and Facebook for paid marketing and branding. Age differentiation is done by using a.o. the TikTok app for making and sharing short-form mobile videos.

Both Manzoni and Sanchez put forward the controversy of shipping costs versus order sizes/baskets and the importance of fast deliveries. Lazarevska told about the FutureBrands initiative of Sainsburys that rapidly grew in online sales of groceries since its foundation about a year ago. She also explained how bonus cards and loyalty programs are vital for grocery stores to track consumers’ buying behaviour and that Sainsburys is positioned well to help sell new products directly to consumers.


Gil Horsky, Director of Innovation, Mondelez explained why Mondelez believes snacking is the future of food and that consumers are moving from three meals per day to six or seven snack meals per day. “Food products that save time are going to win.” He also said that smaller brands nowadays grow faster than bigger brands and that retailers no longer have a monopolist access to consumers due to drastically lower distribution costs.

Horsky also shared the reason of the independent innovation and venture hub SnackFutures, the company’s approach to innovation with intrapreneurs in teams: persons inside a large organisation who take risks to solve problems and grow business. An intra-corporate entrepreneur who has entrepreneurial skills blended with managerial skills but operates within the confines of an organisation instead of involving external entrepreneurs.

Furthermore, the focus on hyper-engaged consumers was enlightened as well as the idea of transactional learning. The latter relates to product testing by actually selling products that haven’t been launched commercially yet and asking buyers for their reasons to buy (or not to buy) a specific new product.

Sjaak Wolfert, Scientific Coordinator SmartAgriHubs, told how SmartAgriHubs and previous initiatives like the IoF2020 project ‘connect the dots to unleash the innovation potential for digital transformation of the European agri-food sector’. He said that digital transformation of agri-food is necessary, but that the developments are still very fragmented. By means of several European public-private partnership ICT-projects, SmartAgriHubs and its predecessors wants to offer a multidisciplinary, collaborative and agile approach. The IoF2020 (Internet of Food & Farm) project, for instance, showcases 19 + 14 use cases in various agricultural sectors. An example of a multi-actor approach is the big wine optimisation use case with IoT tools for sustainable wine production, quality management and shipping monitoring.

SmartAgriHubs focusses on Digital Innovation Hubs of which already 140+ examples are present in the EU-28.


Startup pitches, Tomorrow’s heroes in Agtech, moderated by Adam Anders, Managing Partner, Anterra Capital

  1. Phynova (UK) targets traditional Chinese medicine and says to have market knowledge by having 50% of staffing from Chinese origin. Their product Reducose, a plant extract is said to lower blood glucose levels with up to 40% after eating to help prevent / fight (pre-)diabetes
  2. Caterwings (Ger) aims at becoming the best B2B food platform where caterers, restaurants and other food service providers can order fresh food for fast delivery (like its counterparts do in B2C markets). The company says this B2B market lags behind five to seven years to the B2C market
  3. Atlas Biomed (UK) focusses on DNA and gut microbiome tests analysis of people’s health and provide personalised recommendations to improve overall wellbeing. This includes lifestyle recommendations
  4. FlavorWiki (US) developed software to match products with preferred tastes of consumers as consumers usually can’t express exactly what they taste. The technology is also suitable for measuring the taste of products along the supply chain and for market mapping and customer research
  5. Ivy Farms (UK) is developing in vitro meat from real meat to, as the startup says ‘have supply keep up with the growing demand for real meat’. They want to lab grow more meat from meat to target meat eaters with its patented bioreactor technology
  6. Edamam (US) developed an app / API based on the supposedly largest food and nutrition dataset to do real-time nutrition analysis and meal recommendations based on for instance menus in restaurants and products / labels in supermarkets. They target companies that subscribe for access to the data and licensed datasets