Aidan Connolly on What’s Coming Next in Agri-FoodTech, Despite the Current Headlines

We’re halfway through a turbulent geopolitical year, in the post-Covid era yet not free of the pandemic, with rising inflation rates and dire warnings of a looming global hunger crisis.

How will this affect Agri-FoodTech?

So, with shifting economics and world politics, are there significant shifts afoot for Agri-FoodTech? To answer that question, I turned to Aidan Connolly, my March 2021 “Leaders on a Mission” podcast guest. Aidan is president of AgriTech Capital, a North Carolina-based venture capital and private equity firm, and a food and farm ‘futurologist’ with a finger on the pulse of agriculture and food production technology.

Crises put a hamper on change, Aidan acknowledges. The Russian invasion of Ukraine has delayed billions of dollars in U.S.-pledged climate change funding, not to mention thrown into disarray many of the commitments nations made during the COP26 summit. But ultimately, the same market drivers that birthed and nurtured the explosive growth in Agri-FoodTech still exist.

“There is an inexorable move towards the increased use of technology. And that plays in the food chain to a degree it doesn’t in pretty much any other business (sector). Partially because we have such big leaps to make,” Aidan points out. “We’re so far behind that when we say we’re going to digitize the supply chain or digitize production well we can make massive improvements in efficiency.”

So as a 30-year agribusiness leader, author of “2-1-4-3, Plan Your Explosive Business Growth”, who’s worked in over 100 countries, speaks five languages and is a Forbes Technology Council, I asked Aidan, in light of a shifting politics and economies, what’s coming down the pipeline in Agri-FoodTech?

1) Powering Up the Farm

Can farms become energy self-sufficient? Or even better yet, become a power provider?

Between mounting pressure to decarbonize the power grid and sky-rocketing energy prices, there’s renewed interest in looking at “how much energy or where energy comes from on the farm and how that can be self-supporting,” Aidan says.

Aidan is a big fan of “poop power,” or the idea of converting manure into bio-methane, a renewable natural gas that can be used as an on-farm energy source or even piped into natural gas pipelines. But that’s just one farm alternative energy path sparking interest. There are plenty of other exciting farm-energy alternatives like geothermal and wind or solar energy harvested from panels while still growing crops or grazing animals underneath them.

“We’ve got some really cool stuff where we can start to marry different technologies and make the farm not just self-sufficient but actually manage to produce electricity from what we do on the farm,” Aidan says.

2) Pay Attention to the Prosumers

Prosumers are proactive consumers who bring their aspirations to the grocery store. They are willing to put their dollars where their ethics are, especially in product categories like food.

While prosumers’ overall impact on purchases is small, they are “infusing behaviors of all consumers,” Aidan says. Even in economically and food-insecure countries.

“Even people with very small budgets still aspire to buy organic,” Aidan says. “And this is why we still see African countries banning GMOs. Why? Because they don’t want to get the technology they think is being rejected by other countries.”

Increasingly, prosumer values are part of “how we act,” Aidan says. The sector can make more money if farmers and the food chain can figure out how to address those values.

3) Gene-Editing Versus GMO

CRISPR-Cas9 gene-editing technology is an opportunity to reframe the food modification debate, Aidan says.

Much of the potential for genetically modified organisms (GMOs) in the food chain was stymied by bans in several dozen countries worldwide, including nineteen out of 27 member states of the European Union.

But world opinion appears to be more accepting of gene-editing, which uses natural mechanisms to cut or ‘edit’ DNA, versus GMO technology, which moves or inserts DNA.

“A lot of the people that are critics of GMO are quite happy with CRISPR, and I think we should go for that,” Aidan says. “If we have technology that’s cheaper than genetically modifying organisms that can be done faster, and the consumer loves it? What’s not to love about that?”

4) New Products Attuned to Individuality

How can farmers and food producers turn the same crops they have consistently grown into new products better personalized to consumers’ individuality? Aidan asks.

For instance, if you’re a milk producer and processing company, how more creative can you be with milk? Rather than cottage cheese, ice cream and yogurt, are there other products milk can be turned into that are more attuned to individual consumers’ desire for nutrition, sustainability and transparency? Like supplemental pills for pregnant women? Or an elderly individual facing hospitalization needing specialized nutrition?

“How do we find ways to take ourselves beyond milk, meat, eggs, crops, cereals and seeds? How do we take ourselves into the next generation to personalize towards the requirement of each consumer?”

5) To Digitize, We Need Connectivity

We need better connectivity on farms to realize the benefits of digitization, Aidan says.

A 2020 McKinsey report found that achieving connectivity in agriculture could add $500 billion in global gross domestic product by 2030. Yet even in the U.S., on-farm connectivity can be sadly lacking. Three in 10 of America’s larger farmers and ranchers reported they had no or poor internet service, according to a 2022 survey.

Many companies are rising to the connectivity challenge, like Land O’Lakes American Connection project fostering broadband services to rural American communities. But if connectivity is still an issue in America, you “can only imagine what it’s like in other countries,” Aidan says.

So, connectivity definitely poses a challenge to the future progress of agricultural and food digitization. But it’s one worth solving to reach the potential promise of Agri-FoodTech.

“Digitization, in general, is just incredibly cool and brings us the transparency, the efficiencies and sustainability that we’ve been desperately seeking,” Aidan says.

Despite the Inevitable Hiccups, a Better Food Future is Inevitable

Nobody can predict the future, and inevitably more challenges, Black Swan events, and global upheavals will shock the food supply chain and Agri-FoodTech’s position in it. But that won’t stop progress, Aidan says.

“It’s very clear to me that in the end, we get towards personalized nutrition. We don’t eat all the same thing. It will be fresh, as hopefully as it can be. We’ll continue to eat more and more processed foods, but healthier versions of that. And consumers, to one degree or another will be increasingly seeking information about where their food came from,” Aidan says.

How farmers, food companies and the supply chain respond to these shifts is where Agri-FoodTech plays.

“We need to think as farmers as food producers, how do we capture more value? How do we get customers to be more loyal? How do we brand better by providing some of this information? Some of this transparency? That’s where I see it going.”

So, has your Agri-FoodTech company been shifting gears or re-strategizing in light of the recent headlines? What new opportunities and needs have come to light? And how does your company respond with a solid yet resilient growth strategy plan? These questions have been buzzing through my head since talking with Aidan, and I’m sure yours too!

At CS Partners, we’re always open to a conversation about the latest insights in ag and food tech innovation critical to our sector. My ears and emails are open! Please send me a note at  S.Leich@cs-partners.net and let us chat.