With COVID clearly demonstrating weaknesses in local, regional, and global food systems, doing more with less was a key driver for 2020 development across the agrifood space. On the crop production side of the value chain, digital transformation, alternative crop protection methods, and production sustainability received a considerable proportion of innovation attention. Digital transformation efforts were led by major industry players that invested heavily toward the demonstration of product value to growers.
Alternative crop protection remained an important area of innovation for crop production, but food waste challenges strengthened by COVID-19 increased interest from post-harvest up the value chain. Sustainability experienced additional momentum as the soil carbon sequestration opportunity expanded, but nitrogen management also experienced considerable commercial advancement. Below, we provide some hand-picked examples from the year that exemplify progress in these innovation areas.
As we reflect on 2020, we take a look at some of the most important developments that occurred in the Doing More With Less storyline.
- Climate Corp. cut its data sharing collaboration with Tillable. Digital transformation pushed forward to enable doing more with less, but challenges around data sensitivity are critical. The breakdown of this collaboration independent of any actual fault points to the clear need to protect data privacy.
- Semios raised $75 million. The raise, which enabled expansion across the U.S., exemplifies the importance of technology integration for successful digital transformation. The company's specialty crop target market also helped. The lesson here remains technology integration.
- Land O'Lakes partnered with Microsoft to connect its digital platform. Integration of agtech is critical to success, and this move exemplified that need but also the difficulty of achieving integration well. Digital enablers are playing a critical role in the digital transformation of agriculture toward doing more with less.
- Merck Animal Health acquired IdentiGEN. This deal closely followed Merck's acquisition of Quantified Ag and highlighted the growing trend toward leveraging digital technologies through the entire livestock value chain to promote increased traceability and transparency.
- Corteva expanded its relationship with Evogene subsidiaries. With partnerships in place with AgPlenus and Lavie Bio, Corteva aimed to streamline the co-development of alternative crop protection as regulations continued to constrain available products.
- Enko Chem raises $45 million to exploit the new chemical space. Enko brought DNA-encoded libraries, developed for the pharma industry, to small molecule discovery for crop protection. This company, like Oerth Bio, exemplifies the trend of technology spillover from pharma into agrifood. Look out for opportunities in 2021.
- Bayer signed an MOU with XAG. Drones continue to be an important area of opportunity, but few companies have achieved the scale of XAG. The partnership provided Bayer clear penetration into the region, and competitors identified similar opportunities.
- DSM acquired Erber Group through a $1.1 billion deal. Through the acquisition, DSM gained Erber Group's specialty animal nutrition and health businesses, Biomin and Romer Labs, which offer solutions that complement DSM's eubiotics portfolio. Eubiotics are an opportunity to increase livestock gut performance and protect against disease.
- Bayer entered the agriculture soil carbon market. Following early developers Indigo and Nori, major players invested significant resources to connect soil health outcomes to a novel revenue stream. With the first credits purchased in 2020 on the Nori platform, expect significant momentum into 2021.
- Bayer and Temasek established the Unfold joint venture. With the controlled environment agriculture space gaining significant funding from vertical agriculture developers, crop development to enable future indoor production was limited. Unfold targets crop trait development for the vertical farming and controlled environment agriculture industry.
- Benson Hill Seeds announced its Ultra-High Protein soybean. Doing more with less is not only about how crops are produced but also what they produce. Benson Hill made significant headway this year as it emerged as a seed company touting soybean varieties capable of increasing protein content by as much as 50%.
- BASF partnered with Adifo Software on sustainable feed formulation. Feed is the largest single cost for livestock production and therefore an ideal target for using digital tools to promote sustainable feeds and ingredients while balancing economic feasibility.
Additionally, the Lux Agrifood Team curated the following "Analysts' Choice" reading on the evolution of Doing More With Less:
- "Framing the Water-Energy-Food Nexus." In 2021, expect digital transformation and sustainability to continue to merge and become important aspects of business development. You must be able to frame opportunities across critical resources to be successful. Take a nexus approach to identify these.
- "Beyond Antibiotics: The Future of Animal Health Alternatives." While some major digital acquisitions occurred, antibiotic alternatives played a major role in industry momentum as companies looked to productize the microbiome either through direct manipulation or through an array of other technologies. We break down the space and trade-offs you are likely to face.
- "Koppert takes integrated pest management digital." Digital transformation is not only for synthetic products. Integrated pest management (IPM) strategies require significant planning to be used effectively, and this move by a clear leader in the space indicated progress toward the scaled application of alternative crop protection solutions gaining development momentum.
- "Food security in Asia: Regional trends and startups for data-driven agriculture." Asia continues to gain momentum toward the evolution of its crop production. Whether for its aquaculture, livestock, or crop production, governments, along with private companies, are driving innovation and transformation forward. Expect continued momentum as these countries seek food security and to improve the financial wellbeing of smallholder farmers.
This blog is part of the Lux Agrifood and Health Team's Year in Review series examining the highlights and key developments of the agrifood sector in 2020. For an overview of the other storylines in Emerging Ecosystem of Agrifood and Health program, be sure to subscribe to our agrifood newsletter.