When lockdowns began, not everyone expected every store to be suddenly running low on toilet paper and sanitary wipes. Nor did they expect that a variety of food products would subsequently be difficult to find. While the pandemic has revealed many things, one of the most notable is the vulnerability of the food supply chain. The abundance that often seems to be present is simply an illusion. In reality, these systems are much more fragile. And it’s a big reason that investors are looking to Ag-Tech innovations to solve these problems.
In many ways, innovative startups and businesses have strived for a more robust, digital food supply chain. On the distribution and logistics end of things that have already evolved to a great extent. But on the other end of the supply chain, digital systems are not as common. Today, consumers expect convenience and are advancing the Come-to-Me Economy. The promise of Ag-Tech innovations today is to therefore pursue this by focusing more on the farming aspect of things. And numerous companies are bringing some pretty amazing concepts to the table.
“The pandemic exposed how fragile the food system is. Farmers want to get more data about what feeds into their business and are more eager than ever to learn what is happening in the product of food.” – Jim Ethington, CEO of Arable
Ag-Tech Innovations for Farming Decisions
For decades, farmers have applied science in an effort to create better cultivation methods and agricultural yields. But it hasn’t been until lately that these strategies have sought to develop a digital food supply chain process. Startups now are utilizing machine learning and data analysis to help farmers make better choices. By applying these Ag-Tech innovations to farming, better yields and timing of harvests can be realized. This has tremendous potential in production, but likewise, it also has the potential for huge strides in resource use efficiency.
Several companies are receiving attention for Ag-Tech innovations in this area. Arable, based in San Francisco, is employing data systems to identify best practices in crop development. In the process, the company provides farmers with insights about the right amount of light, water, and nutrients to provide their crops. To date, Arable has received $38 million in funding. Benson Hill, a St. Louis-based company, recently received $150 million in Series D funding. This startup utilizes genomics and genetic diversity to promote healthier, sustainable foods from farm to table. In both cases, digital food supply chain solutions enhance farming choices for the better.
“The power of genomics and genetic diversity is largely untapped, and we believe that [Benson Hill’s] technology and collaborative model unlocks efficiencies and new product differentiation for stakeholders across the value chain, from farmers to end-consumers.” – Max Clegg, Head of LDC Innovations
Ag-Tech Innovations in Farm Management
Even if crop yields are advanced through digital food supply chain solutions, mismanagement may still occur. While inefficiencies have been addressed at the inventory and store levels there remains some work to do in farming. In many cases, the raw materials must be processed, which may not always be optimized. Likewise, some products, like grains, are routinely stored on-site and require their own inventory management. Streamlining these issues through Ag-Tech innovations can also improve food supply and sustainability.
Understanding this, several Ag-Tech startups are exploring this aspect of the digital food supply chain. Think IQ, a California-based company that recently received $11.6 million in funding, helps farmers track their manufacturing process. Using sensors, they provide manufacturing data from raw materials to processed food to aid decisions about crops, transport, and purchasing. Another startup, TeleSense, uses a remote sensor to digitize post-harvest agricultural goods. Specifically, it helps farmers track the age of storage grains, which are only good for 6 to 8 months. This information provides the basis for better choices in farming management.
“When we look further into the future, we will see innovation, such as remote sensing and ways to connect growers to platforms where they can verify environmentally friendly crops, such as grain. We continue to be impressed at how growers are investing in the future of farming every day.” – Steele Lorenz, Head of Sustainable Business at Farmers Business Network
New Opportunities through Ag-Tech Innovations
The entire goal of more recent Ag-Tech innovations is to enhance existing systems while building consumer trust. By developing a digital food supply chain. The chance to reduce food waste and improve quality exist. But these are not the only potential advantages of these types of innovations. In addition, streamlining farming production techniques can be beneficial for the environment. Given that over 10 percent of all carbon emissions come from agricultural processes, this is a valued opportunity. And it’s one that farmers can take advantage of as well.
One startup based in Cambridge, Massachusetts, is using Ag-Tech innovations to help farmers generate and sell carbon credits. CIBO is helping farms employ regenerative farming practices that reduce their carbon footprint. And with the savings they realize, farms can earn carbon credits that can be sold to other entities for credit. Though not directly part of the farm-to-table product, these types of solutions still utilize a digital food supply chain approach. The benefits they provide affect the entire agricultural and food sector in a positive way.
Investors See Great Things from Ag-Tech Innovations
The opportunity for improvement in efficiency and productivity at the farming level is substantial. Ag-Tech solutions therefore have become highly attractive as an investment interest. In the last year alone, venture capitalists have poured $4.4 billion into these types of startups. And over the last 5 years, this figure reaches $17.7 billion. These numbers highlight the potential investors see in a fully digital food supply chain from start to finish. The tighter this becomes, the more productive and profitable farming businesses will be. And ultimately, this benefits the consumer as well as world hunger challenges at large.
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