Food And Agriculture Industries Are Ripe For Disruption, Investors At The Pinduoduo Forum Say

The agriculture and food system, which has one of the lowest rates of digitization among industries, is ripe for transformation by new technologies, according to investors speaking at the Pinduoduo Food Systems Forum.

“Technology has disrupted industries, which said before, ‘Oh, it can’t be done, digital doesn’t [work] here, we are different,’ and one after the other those industries have been disrupted,” Przemek Obloj, Managing Partner at Blue Horizon, a venture capital firm investing in alternative proteins, said at the forum, which was held 14-15 July. “I think it’s time for food and agriculture because we can do it much more efficiently than 10, 20, 30 years ago.”

The role of the food system in climate change has come under increasing scrutiny as research casts new light on its contribution to global greenhouse gases. A recent paper by the United Nations’ Food and Agriculture Organization, NASA Goddard Institute for Space Studies, New York University, and Columbia University found that the global food system was responsible for a third of all global emissions in 2018, much higher than previously thought because of narrower definitions.

But whether it’s “agtech” innovations in precision farming technologies or advances in “foodtech” in the areas of alternative proteins, companies and investors have to overcome the hurdles of acceptance and scale.

“One consideration when it comes to agtech is adoption as farmers by nature are conservative,” said Andy Ziolkowski, Managing Director of Cultivian Sandbox. “I mean it looks great, it could be developed by a very sharp software developer from Silicon Valley, but when he takes it to a farm in Salinas or in the Midwest, and a farmer had to actually write a check to buy a product, will he?”

When it comes to plant-based or cell-based meat, the question is “whether companies can take technologies that weren’t developed on the lab bench and scale it up and provide products that are commercially viable,” he said.

The agri-food sector is one area where investors can have an impact while doing sustainable investment because 40% of people work in agriculture around the world, 70% of the land gets used in agriculture, and 30% of water gets used in agriculture, according to Anuj Maheshwari, Managing Director of Agribusiness at Temasek Holdings.

“There will be a lot of impact when efficiency is brought into agriculture and it will improve lives of people around it,” said Maheshwari. “If you’re an investor in agri-food, by default you’re having massive impact, assuming you’re investing in companies that are focused on resiliency, that are focused on environmental sustainability and they’re focused on doing things in a more efficient way.”

Among the areas that the investors on the Pinduoduo forum panel singled out as holding potential are precision fermentation, fintech for smallholder farmers, and drone use in agriculture.

There’s “exponential evolution” taking place in precision fermentation with the collapse in the cost of gene-reading and editing, so that “things that were complete science fiction five years ago are doable today,” said Obloj.

Digital platforms are emerging in South America and starting to do so in Africa to cater to smallholder farmers, who have traditionally relied on larger companies to provide financing, said Ziolkowski.

As for precision agriculture, China will lead the way to teach the rest of the smallholder community how to use drones, “and not just from a survey perspective and data perspective, but actually to spray pesticides and detect various diseases going forward,” said Maheshwari.