Disruption is occurring across countless sectors, with agribusiness no exception. Silicon Valley entrepreneurs have now discovered (and are loving) the immense potential to revolutionise agriculture.
Last year, I led a series of KPMG roundtable events here involving some of Australia’s most experienced, insightful and innovative agribusiness leaders. Themed the Impact of Global Trends and Innovation in Australian Agriculture Business, countless issues and ideas were shared, with the goal to improve productivity and profitability in the industry.
So what does disruption in agribusiness look like? An initiative led by Jamie Oliver and UK supermarket chain ASDA is one example. The ‘Beautiful on the Inside’ campaign offers “wonky”, or second-grade fruit and vegetables to consumers at a cheaper cost. This is enabling suppliers to secure a new source of revenue, while the supermarkets benefit from an increase in affordable food. But more importantly, the initiative helps consumers that could not afford fresh fruit and vegetables to be able to buy them with direct benefit in enhanced health outcomes.
Innovation is also impacting traditional models and broadening the consumer base for certain types of food. Fairlife Dairy is removing sugar and lactose from milk to add protein and appeal to the fitness market looking for high protein products; and Philly Cow Share is a crowdsourcing model that allows consumers to pre-purchase parts of a cow and receive their order when the animal is slaughtered. The idea is to engage consumers, but also ignite cash flow for farmers.
Nemo’s Garden is experimenting with technology to grow and produce plants under the sea; and Planet Labs takes continual satellite imagery to feed back to farmers,helping them make decisions based on real-time data.
Perhaps the most obvious way in which the sector will change is with the advent of so-called ‘impossible’ foods. Thanks to new ways of thinking about and approaching food, items such as plant-based cheeseburgers (which have a smaller environmental impact than meat-based burgers) and plant-based eggs (which address concerns about the welfare of hens) will soon become reality.
Animal-based food products will not be entirely missed by the wave of innovation. Insect protein will be increasingly used in foods in the next 10 years including crickets, ground and used as a flour replacement.
Other food trends I expect to emerge include the over 65s need to increase their requirement for ‘premium food’, while genetically modified foods will boom. Also, expect food to become a key driver of wellness, with a shift from sugar and fats with more money invested in wellbeing for preventative measures
Preparing for this future will be critical for the industry’s and the nation’s prosperity.
Fortunately, the Australian Government has identified the strategic importance of agriculture – something many countries have failed to do. The Agriculture Competitiveness Whitepaper is a bold step as a clear strategy and vision is important to navigate the challenges of the sector. It is vital to be able to outline what the investment threshold will look like, and the expectations for new investment partners to ensure the right people are on board.
This is especially critical because the breadth and speed of disruption is unprecedented.
In the last 10 years, close to $9 billion of venture capital funds was invested was into startup and disruptive agriculture. And importantly, this funding has not poured exclusively into the established players because this is not where new ground is broken. It will be the smaller and mid-sized entities that will drive the disruption in agribusiness, not with a goal of just making profits but addressing the imbalances which still exist in the global food system that leaves around 40,000 people every day dying from malnutrition.