Reflections on Agrifoodtech in a Time of Danger & Opportunity
We believe technology is the single biggest lever available to help address the challenges of the massive, impactful sector of food and agriculture—and realize the multitude of opportunities. Our two organizations, The Mixing Bowl and Better Food Ventures, play complementary roles toward a similar mission:to harness the potential of information technology to make a positive impact now on food and agriculture challenges. The Mixing Bowl connects food, agriculture and technology innovators for thought and action leadership. Better Food Ventures invests in startup companies applying information technology to food and agriculture.
MACRO REFLECTIONS ON THE AGRIFOODTECH ECOSYSTEM IN A TIME OF DANGER & OPPORTUNITY
These are odd times for a number of different reasons, full of both the danger and opportunity, as JFK noted. Through our work at The Mixing Bowl and Better Food Ventures, we are delving into the following five themes of opportunity in the agrifoodtech ecosystem in response to underlying dangers:
Furthering Interoperable Data in Agriculture (IDEA)
Scaling Climate-smart Soil-centric Ag with Technology & Finance
Leveraging Data for Better Supply Chains in the “Messy Middle of Food”
On-farm Climate & Labor Dangers, Indoor Ag’s Rising Opportunity
Using Tech for Better Food Choices
We’ve been involved with Silicon Valley and the VC scene since the internet tech boom of 2000 and have seen waves of danger and opportunity ebb and flow. In some ways, the current gold rush feels the same. In other ways, it feels different. The main difference—looking at this from a food/agtech perspective rather than the mobile/internet tech focus of our past—is that the stakes are higher, particularly given the reality of climate change and other economic, social, and environmental crises.
The big danger we see right now is that we are simply not solving food and agriculture problems with the speed or the scale necessary to stave off these crises. In 2014, we outlined our Mixing Bowl mission as a four-step “Staircase Progression to Solving Food/Ag Challenges.” In a recent post, I revisited those four steps: See Problems, Seek Solutions, Solve Problems, & Scale Solutions. While the rise of the agrifoodtech ecosystem since 2014 has been astounding, we are still spending too much effort on seeing problems and seeking solutions, not solving problems at scale fast enough. We need to employ new, more effective problem-solving innovation approaches like “collective impact” for reasons I describe here.
While we love facing the challenges of food and agriculture head-on, we recognize that investing in this sector has particular characteristics that make it different from investing in many other areas such as enterprise software, gaming, or social media. On this theme, there have been interesting discussions about the suitability of the standard ten-year VC model for agrifoodtech. I was pleased to join Sarah Knowlet and J. Matthew Pryor on the AgTech…So What? podcast to explore, Did Silicon Valley Kill AgTech?. The discussion launched from their provocative piece, “How Silicon Valley Set Agtech Back a Decade”.
Our team believes, yes, there are opportunities to apply the standard venture model to agrifoodtech, but doing successfully requires selecting companies that are aligned with the realities of the industry. We have a concern that many of the investments made these last few years have not properly accounted for the peculiarities of food and ag versus other tech investment sectors. To be clear, we believe there are many food/ag innovation business opportunities that can be quite profitable—but are simply not suitable for venture capital due to challenges in achieving venture-type scale or speedy adoption. And there are another set of opportunities that may not be a good business for a startup but are critical prerequisites to fully unlock digital innovation in food and agriculture to solve problems and scale solutions.
FURTHERING INTEROPERABLE DATA TO ENHANCE AGRICULTURE (IDEA)
Data interoperability in food and agriculture is one area that may be questionable for venture capital investment but is foundational to unlocking digital innovation in the sector. (If you remember when you could not open a Word doc on a Mac computer or send a text message across some wireless carriers, you know the pain from lack of interoperable data). Once in place, interoperable data will not only help farmers and others in the value chain but will also create more opportunities for successful and impactful agrifoodtech startups. Many startups, researchers and NGOs in the agriculture space have developed valuable data sets with their own semantic ontologies and APIs, but they aren’t broadly usable as they remain in silos and not connected to other systems. We need platforms to interconnect and translate between systems.
To explain the critical need for data interoperability in agriculture, please check out this Issue ReportMegan Shahan from our team wrote for the Farm Foundation that is being called a “must read” on the topic.
As we engaged with those organizations working on interoperability in food/ag data, we were amazed how little they were connected or collaborating; they weren’t interoperating themselves. So in 2020, we started a group called Interoperable Data to Enhance Agriculture (IDEA) to serve as a coordinating function for ag data interoperability efforts. To scale IDEA across agriculture sectors, it is now being integrated into the Digital Ag efforts of our partner, Farm Foundation, an accelerator of practical solutions for agriculture with nearly 90 years of history and impact.
With the Farm Foundation, the Purdue Open Agriculture Technology Systems (OATS) Center, as well as Centricity by Semios, The Mixing Bowl rolled up its shirtsleeves to tackle two data silo challenges in agriculture. First, between November of 2020 and March of 2021 we worked with the National Pork Board on two activities. On November 20th, we held a virtual “event storming” to map out the data needs of the pork industry and then in a follow up activity March 26-27, we “hacked” a digital advance ship notification. A summary of those activities is here. Second, on August 24, 2021, we held another event storming activity called the “Regenerative Ranching Data Round Up”. We are currently planning a follow up event (“the Regen Ranching Data Rodeo”) to focus on how regenerative ranchers can more easily collect and analyze soil and other natural resource-related data to optimize the practice of adaptive rotational grazing for their operations and pass verifiable data from “soil to steak” for greater transparency and access to market premiums for climate-smart agriculture practices. Please let us know if you would like to learn more or get involved in our efforts here.
SCALING CLIMATE-SMART SOIL-CENTRIC AGRICULTURE WITH TECHNOLOGY & FINANCE
The theme of soil health has been a pervasive one for us. Earlier this year, The Mixing Bowl published a white paper with the Croatan Institute, WBCSD, and US Farmers & Ranchers in Action (USFRA) to see how technology and finance can help transform agriculture to fulfill its potential to mitigate and adapt to climate change through improved soil management practices. The paper identifies 24 financing mechanisms across six asset classes that can be applied to support and scale climate-smart soil-centric agriculture. As one such example, our Better Food Ventures portfolio company FarmOp Capital has a tech-enabled platform for making operating loans to farmers that can be employed to provide financial incentives to farmers embracing some of these climate-smart soil practices.
Included in the USFRA white paper is a Climate Smart Soil Tech Landscape that calls for more rigorous, standardized or calibrated soil data collection, sharing, and analysis. Particularly now that substantial venture investments are betting on the soil carbon markets taking off, we need to have a solid science and data foundation—including data interoperability—upon which these transactions will be based to really support soil health, carbon sequestration, and farmer success. Our colleague Seana Day does an excellent job laying out the need to tighten up the Soil Health Tech Stack and I am excited to dive deep with her and others on a panel to discuss “Fixing the Soil Health Tech Stack” at the PrecisionAg Vision conference in January.
Our Better Food Ventures portfolio company, Bountiful, utilizes machine learning with weather, satellite, geographic, and historical data for specialty crop operations to run efficiently, economically, and environmentally sustainably. They leveraged their data analytics capabilities to model the climate benefits of almonds to help California meet its carbon reduction goals through scaling up climate smart soil-centric practices—and that’s only with one crop!
LEVERAGING DATA FOR BETTER SUPPLY CHAINS IN THE “MESSY MIDDLE OF FOOD”
Even before COVID strained supply chains, we made a distinction between “Farm Tech” (up to the farm gate), “Food Tech” (from retail downstream to the consumer) and “Supply Chain Tech” which we refer to as “The Messy Middle of Food” (between the farm gate and retail). This article from our Venture Partner, Seana Day, details our shared view on the need for supply chain innovation and the role data plays therein.
On the investment side, three of our Better Food Ventures investments are leveraging data for better supply chain performance. DecisionNext leverages econometric modeling for optimal buying, selling and trading of commodities, notably in the protein sector. Milk Moovement is helping to eliminate existing pen-and-paper solutions by bringing digital data connections to players across the dairy supply chain. And grocers using Afresh’s AI-enable solutions are seeing a 25% decrease in food waste “shrink”, 80% decrease in the times they run out of stock, as well as a 3% increase in sales.
ON-FARM CLIMATE & LABOR DANGERS, INDOOR AG’S RISING OPPORTUNITY
Earlier this year our team’s Michael Rose and Chris Taylor published an updated Indoor AgTech landscape and sector analysis based on their tracking of a whopping 1300 companies using technology to grow food indoors. Right here in California, the “salad bowl of the world”, 2021 was our worst drought year since 1977, and agriculture labor issues continue to worsen here as they are in growing regions around the world. All of this creates more opportunity for indoor agriculture and ag labor savings technologies. To that end, we are excited for you to learn more about our latest Better Food Ventures portfolio company, Four Growers, and its greenhouse harvesting robots. They should be sharing more publicly about their tomato-harvesting solution soon.
USING TECH FOR BETTER FOOD CHOICES
Sometime around 400 BC, Hippocrates is believed to have said “Let food be thy medicine and medicine be thy food.” 2420 years later this still rings loudly in our team’s thinking about dangers and opportunities in food and agriculture today. Poor quality diet is the top contributor to the Global Burden of Disease: Of seven billion humans on the planet, around two billion have micronutrient malnutrition and 800 million are calorie deficient. While acknowledging the limits venture capital can have in fully eradicating dietary issues, we have made three investments that use technology to enable better food choices. Analytical Flavor Systems’ Gastrograph artificial intelligence sensory prediction data product enables food and beverage makers to produce goods more likely to be well received by consumers (and not wasted). Byte Technology’s kiosks and software enable greater consumer access to fresh, healthy food and beverage options 24/7. And Edifice Health leverages over ten years of NIH-funded research at Stanford, state of the art “omics” platforms, and artificial intelligence methods to calculate a personal inflammatory and immune health score and match it with targeted nutritional health interventions to fight systemic chronic inflammation. While we don’t believe science is advanced enough yet to have “personalized” nutrition, we believe science is advanced enough to have “categorized” nutrition, as offered by Edifice. (If you are keen to learn more, Stanford Medicine published a good article on the science of immunology and chronic inflammation based on the research of Edfice’s Founder & Chief Science Officer, Dr. David Furman).
As a final point on the theme of “food be thy medicine,” we want to give a shout out to the non-profit Food for Climate League that we support. Climate-smart foods can be a medicine for us and our planet. The Food For Climate League is undertaking the necessary work to design how such foods can be presented, prepared and enjoyed in ways that overcome complex climate science, emotional triggers around climate change, and very personal food behavior change.
If you know of impactful ways in which we could work together in an aligned fashion on these themes of opportunity to make food better through the use of information technology, we would welcome hearing from you. For items related to our venture investing, please reach us at info@betterfoodventures.com, and for our other activities at info@mixingbolwhub.com.
