A common stumbling block I see with Agri-FoodTech startups is when they hit that “oh no, what now?” moment. Aka – scaling up to distribution, marketing and sales penetration.

It’s when an Agri-FoodTech startup founding team realizes that, while they have visionary technology or science and they have (typically) completed early-stage funding rounds with lab data and proof of concept in hand, they have no route into the marketplace. Distribution and sales channels don’t magically appear for great tech or science, at least not in the ag and food sector.

Product distribution is dispersed and complex. Development and production timelines are long and regulatory burdens can be high. Convincing busy farmers that the ROI for adopting new technology into their practices is worth it can be a significant stumbling block.

Yet, with growing global populations, shifting dietary needs and climate-change disruptions, innovation is desperately needed in how we grow, process and distribute food around the planet. Investment into Agri-FoodTech startups — a sector that didn’t even exist 10 years ago — has skyrocketed to $22.3 billion in 2020, its highest yet. And is predicted to go even higher in 2021! We see more and more announcements like “Big Meat” company Cargill’s CEO saying he is positioning Cargill for plant-based alternatives to be 10% of the protein market. Or Bayer’s former CEO announcing he’s joining a microbial crop protection startup. 

No doubt about it, we are in an era of massive disruption and opportunity. New ideas are desperately needed. The big companies recognize they’re dead in the water without innovation. But the challenge remains, how can a small company with great ideas penetrate the distribution, marketing and sales hurdle of a slow-moving, institutionalized marketplace?

I asked this question of my friend and colleague Adrian Percy, former head of R&D for Bayer Crop Science and now chief technology officer at UPL LTD, the fifth-largest agrichemical company in the world.

Percy’s answer? Developing collaborative relationships and partnerships with companies like UPL.

Percy describes the current innovation scene in ag and food like ships crossing the ocean. The big companies are massive ocean liners, following a path set long before they left port. Changing direction, even a few degrees to port or starboard, requires ‘charting a new course’ and long planning times. Then you have the startups. They’re the speedboats zipping circles around the ocean liners. They’re fast, they’re agile, but they’ll run out of fuel long before they get to shore.

They challenge is, how do you combine the innovation of the agile, but under-fueled, startup speedboats with the resources and market penetration of the Big Ag ocean liners?

Percy, who opened in 2020 a new agtech R&D hub for UPL – the OpenAg Center — in North Carolina, is focused on an open innovation approach to supporting scientists and entrepreneurs in cultivating new ideas for sustainable ag-tech and businesses like UPL want access to the innovations Agri-FoodTech startups are developing, Percy says.

The big companies understand how painfully slow, burdensome and often financially impossible it can be for a small company to develop a market-ready product and scale it independently. By the time a startup goes through several years of testing and data gathering, deals with the long process of regulatory hoop-jumping that burdens new companies in Europe, especially, many run out of money and lose their momentum.

Companies like UPL and others have realized that if they want the innovation startups can provide, then they have a responsibility to foster relationships with them and ideally position themselves to become a “partner of choice” for up and coming small companies, Percy told me. Companies like UPL can provide guidance to entrepreneurs, apply their field-testing capabilities, guide their ideas through regulatory burdens and get them to market and at scale faster than is possible to do by themselves. And frankly, usually isn’t possible at all.

What an Agri-FoodTech Startup Can do to Foster Partnerships

I asked Percy, for the entrepreneurs, what should they be doing on their end to develop and foster partnerships with bigger companies?

1. Before you do anything else, make sure your startup has a clear story and laboratory data or proof of concept to back it up, Percy says. Do you have proprietary technology or some idea of how you are protected from an IP perspective? Do you have at least some thoughts on how the product would be registered (if needed)? For crop solutions, what crops would you envision working in and what diseases or weeds would be targeted? How much might it cost to produce your product?
2. Next, create relationships with the right people at the right time. That can be as simple as picking up a phone and making cold calls or networking through LinkedIn. UPL’s OpenAg Center has a portal that helps companies submit their ideas for evaluation. It isn’t always easy to connect with the right person but look for someone who is a technology scout or working in marketing alignment strategies and get their attention.
3. The next step is to find a champion in the company. Someone who believes in your technology and is willing to “stick their neck out a little bit.” This person can help get your technology evaluated and guide you through regulatory compliance, distribution, and market positioning. They should be the ones honest enough to say ‘no’ when your product or idea isn’t simply going to work in the marketplace. An honest answer means the ability to regroup and strategize again.

The most effective partnerships are when there is a true collaboration between the startup and the larger company, Percy says.

The startups are incredible at coming up with novel and innovative ideas. The big companies are very good at quickly understanding the tech and positioning it within the marketplace. For the startups, the speedboats, this can be the path toward a commercial or development agreement and getting their tech or science into the market — making it to shore.

For the big companies, the ocean liners, it’s the innovation they need to chart a more sustainable, growth-focused and profitable way to cross the ocean.

Percy’s new R&D hub has only been open for about a year. He told me he was stunned to realize that they are already working with 100 different ideas and have 70 active partnerships evaluating new technology.

Without a doubt, the appetite for innovation exists in the Agri-FoodTech sector. Now it’s just a matter of matching up the speedboats and ocean liners in charting a course together.