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[Editor: This article was fi rst published online at PureAdvantage.org, and is condensed and reprinted here with permission.]
Technology strategist Ben Reid has commented that New Zealand is in danger of fast becoming the “Detroit of Agriculture” – a rustbelt left behind after production has moved elsewhere. Unfortunately, I am inclined to agree.
With technologies, science and new business models evolving, accelerating and converging at current breakneck speeds, industries globally – from banking, transport, accommodation and healthcare are having the rug pulled right out from beneath their feet. And sadly (at least for New Zealand farmers), agriculture, our economic mainstay, is next up on the chopping block. Fast en route towards becoming a sunset industry.
Overtaken and displaced by disruptive technologies, science breakthroughs and new business models. And the people at the helm? Not the people on the inside like our dairy farmers, apple breeders and savvy winemakers. But by sneaker-wearing tech millennials and wealthy Tesla driving Silicon Valley venture capitalists and well funded research agencies. Most of whom have no background in agriculture (at least in the traditional sense) nor a liation with NZ. A very scary thought for NZ. For our farmers, for our policy makers and for every New Zealander who has indirectly benefited from the export revenues traditional pasture based agriculture has a orded us since our very existence as a new world nation.
Delaying the inevitable
I’m not talking about the threat of technologies a ording precision agriculture its day in the sun like sensors, crop yield monitors and satellite imagery. Or smart farming hardware/ software systems enabling our farmers and growers to digitalise, monitor and measure and improve current conventional farming practices with more efficiency.
Yes, these technologies are useful and highly beneficial. They help farmers improve productivity (think crop yields) efficiency (think energy and water use) and sustainability (think less effluent, emissions and healthy soil). And we in New Zealand are, thankfully, well ahead of the pack globally when it comes to our adoption rates of this type of on farm, pasture based technology. But these technologies are not disruptive to agriculture.
Why? These technologies are designed for a living breathing moo cow. A pasture (or cage) roaming egg-laying chicken. A spring leaping lamb. A paradigm based on outdoor fruit orchards and picturesque vineyards. And vast acreages of monoculture vegetable fields. Technologies designed for a system that will fast become to food production what the cassette type has become to Spotify. A paradigm on the brink of extinction.
I’m talking about the threat of technologies and innovations that are currently designing the NEW world of agriculture and food production. Agriculture 2.0. Lab manufactured and bio-printed animal and plant proteins. Indoor and vertical crop production (of almost any variety). Next generation of soil and seed technology negating the need for GMO and pesticide use. CRISPR for food (clustered regularly interspaced short palindromic repeats) and open sourced digital agriculture. Funded by venture capitalist coffers with more than New Zealand’s entire economy.
The cow that has so lucratively helped bolster NZ’s bottom line for decades is about to be disrupted by tech entrepreneurs, mainly in Silicon Valley.
A new agricultural paradigm enabling everyone on the planet to eat ethical and sustainable versions of tasty meat and juicy protein. To consume and even grow environmentally friendly and nutritious versions of fresh produce when they want. Where they want. Whatever the weather is doing. A system that New Zealand’s conventional agrarian-based agricultural model – Agriculture 1.0, is wildly ill suited to.
But the only system designed to feed a world of 8.6 billion people whilst keeping the planet intact and without the need to displace even more of our precious rainforests, native forests and eco systems. No matter how smart and e cient our farmers become. Nor how smart on-farm technology becomes.
The cow that has so lucratively helped bolster NZ’s bottom line for decades is about to be disrupted by tech entrepreneurs, mainly in Silicon Valley. Startups like Impossible Foods, Memphis Meats, Kite Hill, Willow Cup and Perfect Day (previously branded Muufri) are now successfully producing tasty, healthy and environmentally friendly protein, milk and dairy product alternatives and substitutes such as beef, chicken, milk and dairy products that taste like the real thing, look like the real thing. Except without the animal.
Similarly, Hampton Creek and Clara Foods (amongst a handful of others) are now reinventing eggs and tasty egg products like mayonnaise – without the chicken. And indoor and vertical farming startups like Aero Farms, FarmedHere, Gotham Greens and indoor shipping container startup FreightFarms are redefi ning the very essence of what environmentally friendly, healthy and locally produced arable crop farming looks like. Without rolling green pasture in sight.
And the pace of disruption is accelerating. Agtech startups displacing poor Daisy the cow are popping up faster than I can keep up with. Now not even our wine industry or fi sheries – seemingly safe bets – are immune. San Francisco startup – Ava Wines – is busy engineering top quality wine with no grapes or fermentation. Co-founder and biologist, Alex Lee, says Ava’s mission is to recreate the wine experience in the lab using science without having to recreate the resource and land intensive process. “Our pursuit of the molecular reconstruction of food will help push the envelope of the food tech revolution”.
Similarly, New Wave Foods, another Silicon Valley startup, using biochemistry, is mastering the art of producing plant-based shrimp and seafood alternatives that are healthier and better for the environment. Miles away from the depths of any ocean.
And don’t even get me started on novel insect protein startups that are eating into our NZ’s animal protein-derived competitive advantage. New kids on the block like Tiny Farms, Exo and Entomo Farms are using lab product cricket factories to produce sustainable and clean forms of nutritious protein alternatives for health-conscious consumers rebelling against the dirty and environmentally-taxing cow.
Thank goodness at least one forward thinking Kiwi startup, Anteater, has seen the opportunity in this space and is helping to put NZ on the map of Ag 2.0. Where are the rest?
These are the technologies disrupting agriculture. Not the latest smart farming apps. Those are merely stopgap, band-aid solutions that will only help our farmers in the very short term.
Granted, not all of the aforementioned startups have hit the market at scale, and some are still in R&D phase. But their potential to wildly disrupt conventional agricultural players over the long term should not be dismissed by even the most niche food or on-farm producer.
Organic crops – our panacea?
I can hear many of our leaders telling themselves: We might be losing the protein battle, but we will still need to grow some outdoor crops in this new agricultural and food paradigm. And New Zealand can make up for lost ground here. Like better positioning and leveraging our farmers’ clean, green and organic, non-GMO credentials as a way forward for competitive advantage.
Wrong. Oh so wrong.
The very same genetic engineering, technology and science that once brought GMO, drought, herbicide, and pesticide resistance traits to the market are now being used to produce far superior non-GMO strain of seeds, healthy plant probiotics and microbiomes, and digital plant recipes that are not only productive and nutritious but also incredibly more environmentally friendly and sustainable than their traditional counterparts. In the mass markets that need them – like the USA, a nation crippled by GMO and ready to rebel, as well as rapidly expanding Asia.
Is New Zealand ready to compete with such an attractive competitive offering?
New kids on the block like Tiny Farms, Exo and Entomo Farms are using lab product cricket factories to produce sustainable and clean forms of nutritious protein alternatives for health-conscious consumers rebelling against the dirty and environmentally- taxing cow.
For example Indigo Ag, the latest darling amongst the agtech VC community, and New Zealand’s own Biolumic and BioConsortia have developed technology that enables plant seeds to be bathed in carefully crafted concoctions of light spectra or ancient microbes, bacteria and fungi to make plants healthier, hardier, and more drought resistant without the need for pesticides, herbicides and fungicides. Think light treatment and probiotics for plants. A simple concept but one that has the potential to attack huge problems like world famine, GMO or the global food supply in a dramatically new and healthy way.
Similarly, AgBiome has developed a proprietary organic fungicide application using the plant’s own microbiome that is effective against a broad range of fungal diseases. Early trials indicate its efficacy is comparable to the potency of leading chemical solutions and up to twenty times more effective than existing organic solutions on the market. Plant bacteria may finally provide its own salvation enabling the rapidly expanding population’s growing global crop needs to be met without chemical pesticides and toxic residues.
Such advances are undeniably a crucial and welcome development in the world of global food security and food health. But they also have huge potential to render the need for healthy, safe non-GMO fruit and veg crops like New Zealand’s shipped from afar almost redundant. A scary thought for our horticultural sector.
STEM not Swandri
This swag of savvy Ag 2.0 startups demonstrate a common theme. Experts in STEM (science, technology, engineering and math) are sowing the seeds for a sustainable, profitable and ethical protein food supply. Biochemists, plant biologists, DNA analysts, food scientists and geneticists. Not stoic, rugged Swandri-wearing Kiwi farmers labouring on the land.
The founder of Impossible Foods is a medical doctor and professor of biochemistry. Ava Wine’s founder, a bioengineer. New Wave Food’s founders are a material scientist and a marine biologist. And Indigo’s co-founder holds a PhD in biomedical engineering and medical physics. The list could go on.
But it’s more than just technology and science itself that’s disrupting the very fabric of New Zealand’s agricultural system. It’s the speed at which these are developing footholds and gaining acceptance in the global marketplace. Before long they will be mainstream – at a cost far more appealing to price-conscious consumers than our current dated offerings.
It seems our government, MPI and Callaghan think because we know how to get the most milk from our cows, package it up in pretty yoghurt containers and use apps on our farms, we are ahead of the world. But we aren’t.
Beyond Meat’s 100% plant protein “chicken” and “beef” substitutes are two to three times cheaper to buy at Whole Foods in San Francisco than grass fed or free range conventional alternatives. And chefs in SF and NYC are charging between $12 to $19 for Impossible Food’s hot o the grill “Impossible Burgers” of varying sizes – no more than what you’d pay for one Burger Fuel Bacon Backfire.
These costs are on the continual decline too. Impossible Foods, along with cultured cell real meat alternatives like MosaMeat and Memphis Meats say their products will compete on price with conventional beef as production scales up.
What’s more, jaw dropping levels of venture capital, agtech accelerators and research institutes, primarily based in the US and Europe, are further fast tracking the progress, cost competitiveness and equally important, legitimacy, of tech players fueling the Ag 2.0 paradigm.
According to BloombergMarkets, venture capital fl ooding into the agtech sector (protein, food and seed and crop technology) has reached record heights – $25 billion in 2015. A staggering 15% of NZ’s total GDP for the same period.
Impossible Foods, Modern Meadow, Beyond Meat and Hampton Creek attracted $183M, $55.4M and $40.5M in VC backing respectively in the last year alone says CB Insights. Indigo Ag, a hefty US$100M and Hampton Creek received a healthy $120M in past 22 months. A private report released by AgFunder and BCG suggests even more mind-blowing figures for 2016 year-end are in the pipeline – not to mention the years to come. How on earth will NZ ever stay afl oat with these numbers?
BioConsortia, New Zealand innovator of microbial solutions for natural plant trait enhancement and crop yield improvement, recently announced it raised $12 million this year for future growth. Unfortunately for New Zealand, no other Kiwi players with the potential to help catapult us towards Ag 2.0 competitiveness are in sight.
If that’s not all, VC backed research labs and consortiums specifi cally focussed on alternative protein and plant based R&D are also adding fuel to the fi re for traditional ag players, rapidly eroding New Zealand’s future competitiveness. AgFunder recently identified 90 resources and programmes available to startups in the agtech sector— from accelerators to incubators to pitch competitions – to fast track their success and legitimacy.
New Harvest Foods, Indio Bio and Berkley Biolabs are amongst a handful of research platforms helping to accelerate breakthroughs in cellular agriculture and alternative protein sectors, as well as fund- promising and ground-breaking research for protein alternatives. New Crop Capital, launched in 2016, has $25M specifi cally to invest (along with other investors) into early- stage companies researching the plant-based and cultured meat sector. And Power Plant Ventures the world’s largest vegan venture fund has $42M it plans to invest in early stage visionary companies using technology and plant based nutrition to re-architect our food system sustainably and ethically.
Fonterra’s business model based on pasture grazing milk products could become the next Kodak in no time.
Where to from here?
What are we doing to stay in the race? With technology, science, R&D, VC accelerating and converging at such exponential rates, blowing the traditional pasture based model of agriculture out of the water, how does New Zealand compete? Sorry to rain on anyone’s parade, but smart farming and food innovation based on pasture based milk products do not count.
New Zealand’s Foodbowl, an open access national network of science and technology resources, funded largely by Callaghan Innovation, is doing a smattering of work to support the growth of the Food & Beverage sector and promote innovative food science. Alexandra Allan, Foodbowl’s CEO, says initiatives include supporting a novel plant based meat protein startup that has the potential to serve as a healthy and ethical chicken alternative, as well as few early stage companies looking to commercialise food products using cricket protein. But frankly, simply not enough of this is going on.
It’s not that we intend for New Zealand to become a failed agricultural state, but it seems our government, MPI and Callaghan think because we know how to get the most milk from our cows, package it up in pretty yoghurt containers and use apps on our farms, we are ahead of the world. But we aren’t.
Does this mean New Zealand’s current agricultural system is quite simply doomed to become the new “Detroit of agriculture”? And if we are, where does that leave us and what are our options?
Rather than hindering entrepreneurs with red tape and resting on our laurels as world class dairy producers, Callaghan and other national industry advisories would be wise to refocus their e orts on retraining our up and coming children and millennials in STEM subjects. To focus on driving and backing technology development programmes so we too, can create an Impossible Foods or Perfect Day of our own. To focus on curbing the growth of dairy farm conversion. On investing in true long-term valuing-adding activity that our precious land, technological genius and entrepreneurial brains can provide.
To focus on how we can insert ourselves into this future. The future of Ag 2.0. A future underpinned by technology.
This is where the real opportunities lie and what will help us retain our global competitiveness in the world of agriculture in the coming years. Not investing in developing apps for farmers that support the infrastructure of what will soon be out of business as the world of protein and plant agriculture shifts inwards and upwards.
Yes, it will be painful to watch the sun setting over one of our treasured economic mainstays forming the very essence of our rural – even cultural identity. But what will be more painful for New Zealand is if we allow denial of the rapidly changing technologically- led agricultural and food paradigm, and our nostalgia for pasture-based farming paralyze our future economic progress.
It’s time to start thinking seriously about Plan B for New Zealand’s road ahead. Otherwise becoming the “Detroit of Agriculture” could fast become New Zealand’s nightmarish reality.
With a PhD in disruptive sustainable innovation and technology development, and a background in marketing and account management, Dr Rosie Bosworth consults in business.