It’s a tech news week, whether at CES in Las Vegas or across the agriculture industry. This week, venture capital firm S2G Ventures revealed 10 trends shaping the future of food and agtech in 2022. The company, focused on investing in the food, agriculture, oceans and seafood, released its new report ahead of CES 2022, where Food Tech will have a growing presence this year.
Farm Progress spoke to Aaron Rudberg, COO, S2G about the report. “We have the advantage of seeing between 1,500 and 2,000 different entrepreneurial ideas or innovations each year,” observes Rudberg. “As we move into 2022, probably the biggest surprise is the increase in the number of innovative ideas and businesses that people are trying to launch in food and agriculture.”
Rudberg acknowledges that agriculture is commodity-based and has long adoption cycles, but this does not slow the pace of innovation in many of the areas covered by the report. “We see people from the traditional industry, from the tech industry, who are really trying to innovate in food and agriculture. And I think that’s what’s the most exciting. “
On the agriculture side, Rudberg says he sees two areas related to digitization in financial technology. He groups the two together because one allows the other. What he sees is the innovation in finance and crop insurance that is made possible by technology and data. “I think it’s super exciting and we’re about to do it. You’ve seen fintech change the education market, change the consumer loan market, we’re going to start to see that spill over into. the agricultural market, ”he said. said.
The second agriculture-focused area where S2G Ventures sees innovation is organic products. “They’ve been around for a long time and adoption still has a way to go,” he says. “There is a significant number of companies in the space and I think we will see some consolidation over the next 12 months. We will quickly see new innovations around what we have highlighted – the RNA – in our report. You will see RNA is really coming from the health space to the agricultural space. “
He adds that this is exciting because it will open up a new product path and “for stability, which has been a challenge in the organic market”.
In the report, S2G ventures grouped the 10 innovations into three categories, which the company named: The 4th Industrial Revolution Comes to the Farm; The disruption of the supply chain accelerates innovation; and food technology advances the health and choices of consumers.
Here is a look at the 10 within those groups.
The 4th industrial revolution is coming to the farm
Farmers today face many challenges, but they also create the conditions for innovation and the adoption of new technologies. These four fall into this first category:
- Robots will increase efficiency while reducing labor requirements across the food system.
- The rise of ESG (Environment, Social and Governance) will contribute to the digitalization of farming. This trend towards ESG includes stewardship, regenerative agriculture and other practices, which could provide new sources of income.
- Fintechs will transform opportunities in agriculture, just as they have done in the student loan and mortgage markets.
- RNA technology that saved lives during Covid-19 will be applied to farms to save soils. Startups are already looking at RNA tools to improve biological efficiency.
The disruption of the supply chain accelerates innovation
Supply chain disruptions have had major impacts on agriculture over the past two years, which has also created a sense of urgency to develop solutions to make these chains more agile, sustainable, localized and less expensive, notes the S2G Ventures report. This includes:
- Fermentation will fuel the next generation of alternative protein products.
- Cellular protein will provide safe and sustainable food for consumers around the world. Although controversial in the field of animal proteins, this technology is gaining ground in certain markets.
- Adopting food waste solutions will be recognized as both good business practice and an essential tool in feeding the world. It is estimated that over 40% of the food produced in the United States is wasted according to Feeding America.
Food technology advances consumer health and choices
Declining national health will spark growing interest in dietary changes, which S2G Ventures plans to include in holistic diets, with food and nutrition startups using cutting-edge science, artificial intelligence and machine learning to develop nutrient-dense, functional and personalized food products.
- Artificial intelligence and machine learning platforms will improve understanding and use of plants and fungi.
- Diet will become a central part of efforts to prevent chronic disease and improve health outcomes.
- Food brands and grocery stores will have to “personalize or perish”.
What do these trends mean for farmers? “If I’m a farmer and assess what’s going on on the consumer side and on the food tech side, I think it starts with profitability,” says Rudberg. “As a producer, I really want to tap into the trends that allow me to make extra money, either pennies a bushel or a dollar a bushel, because I provide things like traceability, transparency and I can access new markets. “
Consumers demand more information about their food, but the margins in the supply chain are tight, Rudberg admits. He says these food trends are turning a commodity market into a disaggregated market offering premiums for agricultural products. “The faster you can get to some of these types of disaggregated markets, the more potential you have to earn that extra dollar that wasn’t necessarily available five or 10 years ago.”
The technology trends described here are an indication of what may happen to the tools farmers use and market opportunities as well. You can view the full report online.