Digital Transformation of Business and Society: Challenges and Opportunities by 2020 – Frank Diana

At a recent KPMG Robotic Innovations event, Futurist and friend Gerd Leonhard delivered a keynote titled “The Digital Transformation of Business and Society: Challenges and Opportunities by 2020”. I highly recommend viewing the Video of his presentation. As Gerd describes, he is a Futurist focused on foresight and observations — not predicting the future. We are at a point in history where every company needs a Gerd Leonhard. For many of the reasons presented in the video, future thinking is rapidly growing in importance. As Gerd so rightly points out, we are still vastly under-estimating the sheer velocity of change.

With regard to future thinking, Gerd used my future scenario slide to describe both the exponential and combinatorial nature of future scenarios — not only do we need to think exponentially, but we also need to think in a combinatorial manner. Gerd mentioned Tesla as a company that really knows how to do this.

Our Emerging Future

He then described our current pivot point of exponential change: a point in history where humanity will change more in the next twenty years than in the previous 300. With that as a backdrop, he encouraged the audience to look five years into the future and spend 3 to 5% of their time focused on foresight. He quoted Peter Drucker (“In times of change the greatest danger is to act with yesterday’s logic”) and stated that leaders must shift from a focus on what is, to a focus on what could be. Gerd added that “wait and see” means “wait and die” (love that by the way). He urged leaders to focus on 2020 and build a plan to participate in that future, emphasizing the question is no longer what-if, but what-when. We are entering an era where the impossible is doable, and the headline for that era is: exponential, convergent, combinatorial, and inter-dependent — words that should be a key part of the leadership lexicon going forward. Here are some snapshots from his presentation:

  • Because of exponential progression, it is difficult to imagine the world in 5 years, and although the industrial era was impactful, it will not compare to what lies ahead. The danger of vastly under-estimating the sheer velocity of change is real. For example, in just three months, the projection for the number of autonomous vehicles sold in 2035 went from 100 million to 1.5 billion
  • Six years ago Gerd advised a German auto company about the driverless car and the implications of a sharing economy — and they laughed. Think of what’s happened in just six years — can’t imagine anyone is laughing now. He witnessed something similar as a veteran of the music business where he tried to guide the industry through digital disruption; an industry that shifted from selling $20 CDs to making a fraction of a penny per play. Gerd’s experience in the music business is a lesson we should learn from: you can’t stop people who see value from extracting that value. Protectionist behavior did not work, as the industry lost 71% of their revenue in 12 years. Streaming music will be huge, but the winners are not traditional players. The winners are Spotify, Apple, Facebook, Google, etc. This scenario likely plays out across every industry, as new businesses are emerging, but traditional companies are not running them. Gerd stressed that we can’t let this happen across these other industries
  • Anything that can be automated will be automated: truck drivers and pilots go away, as robots don’t need unions. There is just too much to be gained not to automate. For example, 60% of the cost in the system could be eliminated by interconnecting logistics, possibly realized via a Logistics Internet as described by economist Jeremy Rifkin. But the drive towards automation will have unintended consequences and some science fiction scenarios could play out. Humanity and technology are indeed intertwining, but technology does not have ethics. A self-driving car would need ethics, as we make difficult decisions while driving all the time. How does a car decide to hit a frog versus swerving and hitting a mother and her child? Speaking of science fiction scenarios, Gerd predicts that when these things come together, humans and machines will have converged:
  • Gerd has been using the term “Hellven” to represent the two paths technology can take. Is it 90% heaven and 10% hell (unintended consequences), or can this equation flip? He asks the question: Where are we trying to go with this? He used the real example of Drones used to benefit society (heaven), but people buying guns to shoot them down (hell). As we pursue exponential technologies, we must do it in a way that avoids negative consequences. Will we allow humanity to move down a path where by 2030, we will all be human-machine hybrids? Will hacking drive chaos, as hackers gain control of a vehicle? A recent Jeep recall of 1.4 million jeeps underscores the possibility. A world of super intelligence requires super humanity — technology does not have ethics, but society depends on it. Is this Ray Kurzweil vision what we want?
  • Is society truly ready for human-machine hybrids, or even advancements like the driverless car that may be closer to realization? Gerd used a very effective Video to make the point
  • Followers of my Blog know I’m a big believer in the coming shift to value ecosystems. Gerd described this as a move away from Egosystems, where large companies are running large things, to interdependent Ecosystems. I’ve talked about the blurring of industry boundaries and the movement towards ecosystems. We may ultimately move away from the industry construct and end up with a handful of ecosystems like: mobility, shelter, resources, wellness, growth, money, maker, and comfort
  • Our kids will live to 90 or 100 as the default. We are gaining 8 hours of longevity per day — one third of a year per year. Genetic engineering is likely to eradicate disease, impacting longevity and global population. DNA editing is becoming a real possibility in the next 10 years, and at least 50 Silicon Valley companies are focused on ending aging and eliminating death. One such company is Human Longevity Inc., which was co-founded by Peter Diamandis of Singularity University. Gerd used a quote from Peter to help the audience understand the motivation: “Today there are six to seven trillion dollars a year spent on healthcare, half of which goes to people over the age of 65. In addition, people over the age of 65 hold something on the order of $60 trillion in wealth. And the question is what would people pay for an extra 10, 20, 30, 40 years of healthy life. It’s a huge opportunity”
  • Gerd described the growing need to focus on the right side of our brain. He believes that algorithms can only go so far. Our right brain characteristics cannot be replicated by an algorithm, making a human-algorithm combination — or humarithm as Gerd calls it — a better path. The right brain characteristics that grow in importance and drive future hiring profiles are:
  • Google is on the way to becoming the global operating system — an Artificial Intelligence enterprise. In the future, you won’t search, because as a digital assistant, Google will already know what you want. Gerd quotes Ray Kurzweil in saying that by 2027, the capacity of one computer will equal that of the human brain — at which point we shift from an artificial narrow intelligence, to an artificial general intelligence. In thinking about AI, Gerd flips the paradigm to IA or intelligent Assistant. For example, Schwab already has an intelligent portfolio. He indicated that every bank is investing in intelligent portfolios that deal with simple investments that robots can handle. This leads to a 50% replacement of financial advisors by robots and AI
  • This intelligent assistant race has just begun, as Siri, Google Now, Facebook MoneyPenny, and Amazon Echo vie for intelligent assistant positioning. Intelligent assistants could eliminate the need for actual assistants in five years, and creep into countless scenarios over time. Police departments are already capable of determining who is likely to commit a crime in the next month, and there are examples of police taking preventative measures. Augmentation adds another dimension, as an officer wearing glasses can identify you upon seeing you and have your records displayed in front of them. There are over 100 companies focused on augmentation, and a number of intelligent assistant examples surrounding IBM Watson; the most discussed being the effectiveness of doctor assistance. An intelligent assistant is the likely first role in the autonomous vehicle transition, as cars step in to provide a number of valuable services without completely taking over. There are countless Examples emerging
  • Gerd took two polls during his keynote. Here is the first: how do you feel about the rise of intelligent digital assistants? Answers 1 and 2 below received the lion share of the votes
  • Collectively, automation, robotics, intelligent assistants, and artificial intelligence will reframe business, commerce, culture, and society. This is perhaps the key take away from a discussion like this. We are at an inflection point where reframing begins to drive real structural change. How many leaders are ready for true structural change?
  • Gerd likes to refer to the 7-ations: Digitization, De-Materialization, Automation, Virtualization, Optimization, Augmentation, and Robotization. Consequences of the exponential and combinatorial growth of these seven include dependency, job displacement, and abundance. Whereas these seven are tools for dramatic cost reduction, they also lead to abundance. Examples are everywhere, from the 16 million songs available through Spotify, to the 3D printed cars that require only 50 parts. As supply exceeds demand in category after category, we reach abundance. As Gerd put it, in five years’ time, genome sequencing will be cheaper than flushing the toilet and abundant energy will be available by 2035 (2015 will be the first year that a major oil company will leave the oil business to enter the abundance of the renewable business). Other things to consider regarding abundance:
  • Efficiency and business improvement is a path not a destination. Gerd estimates that total efficiency will be reached in 5 to 10 years, creating value through productivity gains along the way. However, after total efficiency is met, value comes from purpose. Purpose-driven companies have an aspirational purpose that aims to transform the planet; referred to as a massive transformative purpose in a recent book on exponential organizations. When you consider the value that the millennial generation places on purpose, it is clear that successful organizations must excel at both technology and humanity. If we allow technology to trump humanity, business would have no purpose
  • In the first phase, the value lies in the automation itself (productivity, cost savings). In the second phase, the value lies in those things that cannot be automated. Anything that is human about your company cannot be automated: purpose, design, and brand become more powerful. Companies must invent new things that are only possible because of automation
  • Technological unemployment is real this time — and exponential. Gerd talked to a recent study by the Economist that describes how robotics and artificial intelligence will increasingly be used in place of humans to perform repetitive tasks. On the other side of the spectrum is a demand for better customer service and greater skills in innovation driven by globalization and falling barriers to market entry. Therefore, creativity and social intelligence will become crucial differentiators for many businesses; jobs will increasingly demand skills in creative problem-solving and constructive interaction with others
  • Gerd described a basic income guarantee that may be necessary if some of these unemployment scenarios play out. Something like this is already on the ballot in Switzerland, and it is not the first time this has been talked about:
  • In the world of automation, experience becomes extremely valuable — and you can’t, nor should attempt to — automate experiences. We clearly see an intense focus on customer experience, and we had a great discussion on the topic on an August 26th Game Changers broadcast. Innovation is critical to both the service economy and experience economy. Gerd used a visual to describe the progression of economic value:
Source: B. Joseph Pine II and James Gilmore: The Experience Economy
  • Gerd used a second poll to sense how people would feel about humans becoming artificially intelligent. Here again, the audience leaned towards the first two possible answers:

Gerd then summarized the session as follows:

The future is exponential, combinatorial, and interdependent: the sooner we can adjust our thinking (lateral) the better we will be at designing our future.

My take: Gerd hits on a key point. Leaders must think differently. There is very little in a leader’s collective experience that can guide them through the type of change ahead — it requires us all to think differently

When looking at AI, consider trying IA first (intelligent assistance / augmentation).

My take: These considerations allow us to create the future in a way that avoids unintended consequences. Technology as a supplement, not a replacement

Efficiency and cost reduction based on automation, AI/IA and Robotization are good stories but not the final destination: we need to go beyond the 7-ations and inevitable abundance to create new value that cannot be easily automated.

My take: Future thinking is critical for us to be effective here. We have to have a sense as to where all of this is heading, if we are to effectively create new sources of value

We won’t just need better algorithms — we also need stronger humarithms i.e. values, ethics, standards, principles and social contracts.

My take: Gerd is an evangelist for creating our future in a way that avoids hellish outcomes — and kudos to him for being that voice

“The best way to predict the future is to create it” (Alan Kay).

My Take: our context when we think about the future puts it years away, and that is just not the case anymore. What we think will take ten years is likely to happen in two. We can’t create the future if we don’t focus on it through an exponential lens

Source : https://medium.com/@frankdiana/digital-transformation-of-business-and-society-5d9286e39dbf

What Do Investors Need to Know About the Future of LED Grow Light Technology – Agfund

The horticultural lighting market is growing, and growing rapidly. According to a September press release from Report Linker, a market research firm specializing in agribusiness, the horticultural lighting market is estimated grow from a $2.43 billion market this year to $6.21 billion in 2023.

One of the key factors driving current market sector growth is increased development of LED grow light technology. LEDs (light emitting diodes) were first developed in the 1950s as a smaller and longer-lasting source of light compared to the traditional incandescent light bulb invented by Thomas Edison in 1879.

LEDs last longer, give off less heat, and are more efficient converting energy to light compared to other types of lights, all features that can result in higher yields and profits for indoor growers.

But until recently, LEDs were only used to grow plants indoors experimentally, largely because the cost was still too high for commercial businesses. Many commercial growers still use HID (High Intensity Discharge) lights such as High Pressure Sodium, Metal Halide, and Ceramic Metal Halide; all lights that have a high power output but are less durable than LED lights, generate far more heat, and have less customizable light spectra.

Today, LEDs are fast becoming the dominant horticultural lighting solution. This is due primarily to the one-million fold decrease in fabrication cost of semiconductor chips used to make LED lights since 1954.

For investors more familiar with field-based agriculture, it can certainly be a minefield to know where LED lighting technology for horticulture is going in the future. Although it is no longer the “early days” of LED technology development, current trends are still shaping the future of LED technology.

So what does the intelligent agtech investor need to know about the current state and future of LED grow light technology?

I interviewed Jeff Mastin, director of R&D at Total Grow LED Lighting, to discuss what the future of LED grow light technology for agriculture looks like, and how investors can use current trends to their advantage in the future.

What is your background – how did you get involved in grow light technology at Total Grow?

The company behind TotalGrow is called Venntis Technologies. Venntis has, and still does, specialize in integrating touch-sensing semiconductor technologies into applications.

Most people don’t realize LEDs are semiconductors; you can also use them for touch-sensing technologies, so there’s a strong bridge to agricultural LED technology.

Some of the biggest technical challenges in utilizing LEDs effectively for agriculture include LED glaring, shadowing and color separation.

We have used our expertise in touch-sensing LEDs to expand into horticultural LEDs, and we have developed technology that addresses the above challenges better, giving better control over the spectrum that the LED makes and the directional output of the light in a way that a standard LED by itself can’t do.

My personal background is in biology. When TotalGrow started exploring the horticultural world, that’s where being a biologist was a natural fit to take a lead on the science and the research side of the development process for the product; that was about 7 years ago now.

If you were going to distill your technical focus into trends that you’re seeing in the horticultural lighting space, what are the main trends to keep an eye on?

The horticultural lighting industry is really becoming revolutionized because of LEDs. Less than 10 years ago, LEDs in the horticultural world were mainly a research tool and a novelty.

In the past, they were not efficient enough and they were definitely not affordable enough yet to really consider them an economical general commercial light source.

But that is very quickly changing. The efficiencies are going up and prices down and they are really right now hitting the tipping point where for a lot of applications, but definitely not all applications, the LED world is starting to take over horticulture and indoor agriculture.

How do you view the translation of those trends into actionable points? For investors or technology developers in the agriculture technology space, how do they make sure that the LED light technology they are investing in isn’t going to be obsolete in a year or two?

With LEDs, the key question is still cost-efficiency, and there’s only so far the technology can improve.

Why? There are physical limitations. You can’t make a 100% efficient product that turns every bit of electricity into photons of light. At this point, the efficiency level of the top of line LEDs are up over 50%.

Can we ever get up to 70 or 80%? Probably not any time soon with an end-product, not one that’s going to be affordable and economical generally speaking.

So to answer your question, it’s not a category where you’re going to say, “well this is obsolete, I can get something three times better now.” The performance improvements will be more marginal in the future.

Ten years from now the cost will be cheaper. But that again doesn’t make current LED technologies obsolete. In terms of that fear, I don’t think people have to worry about current LED light technologies becoming obsolete.

In a large commercial vertical farming set up, what is the ballpark cost of horticultural LEDs currently?

To give just an order of magnitude sort of number, you’re probably going to be someplace in the $30 per square foot number for lights for a large facility. It can be half that or it can be double that.

That’s just talking within the realm of common vertical farming plants like greens and herbs, or other plants similar in size and lighting needs.

If you start talking about tomatoes or medicinal plants, then the ability to use higher light levels and have the plants make good use of it skyrockets. You can go four times higher with some of those other plants, and for good reason.

What type of horticultural lighting applications are LEDs still not the best solution for now and in the foreseeable future?

There are at least 3 areas where LEDs still may not make sense now and in the near future.

First, if the LED lights are not used often enough. The more hours per year the lights are used, the more quickly they return on their investment from power savings and reduced maintenance. Some applications only need a few weeks of lighting per year, which makes a cheaper solution appropriate.

Second, in some greenhouse applications, LED’s may not be the best choice for some time to come. Cheaper lights like high-pressure sodium have more of a role in greenhouses where hours of use are less and higher hang heights are possible. (Many greenhouses will still benefit strongly from LEDs, but the economics and other considerations make it important to consider both options in greenhouses.)

Lastly, some plants are not the best in vertical farming styles of growing where LEDs have their most drastic advantages. At least at this point it is not common to attempt to grow larger fruiting plants like tomatoes or cucumbers totally indoors, though when attempted that is still more practical with LEDs than legacy lights.

Source : https://agfundernews.com/what-do-investors-need-to-know-about-the-future-of-led-grow-light-technology.html/

Why Olam is Deploying Tech First, Then Thinking About CVC – AgFunder

Why Olam is Deploying Tech First, Then Thinking About CVC

“We have realized that some companies have gone down the wrong path by adopting the approach of inventing the problem. They find a technology that’s exciting and try to force-fit that technology for a problem that they don’t have. This is why we want to be very deliberate about the problems first, and then come to technology.”

Suresh Sundararajan is president and group head of strategic investments and shared services at Olam International, the Singapore-headquartered agribusiness giant. Sundararajan is speaking to AgFunderNews ahead of a speaking slot at the Rethink AgriFood Innovation Week in Singapore later this month.

“I’ll give you an example of blockchain. There’s so much hype about blockchain around the world. And in our industry, there are a few companies that have done some pilots. But we have not gone down that route, because we have not seen a tangible, scalable use case that could give us significant benefits for adopting blockchain.”

If one company could benefit from the efficiencies new technology can bring, it’s Olam, with a complex supply chain that grows, sources, processes, manufactures, transports, trades and markets 47 different agrifood products across 70 countries. These include commodities like coffee, cotton, cocoa, and palm oil that are farmed by over 4 million farmers globally, most of which are smallholders in developing countries.

In-House Tech

But the third largest agribusiness in the world has been noticeably absent from the agrifood corporate venture capital scene in recent years, instead opting mostly to build its own technology solutions in-house. (It did deploy Phytech’s FitBit for crops in Australia in 2016 as an outside example.)

For traceability, and perhaps an alternative to blockchain-enabled technology, there’s Olam AtSource, with a digital dashboard that provides Olam customers with access to rich data, advanced foot-printing, and granular traceability. Olam hopes AtSource will help its customers “meet multiple social and environmental targets thereby increasing resilience in supply chains.”

Olam has also developed and deployed the Olam Farmer Information System (OFIS), a smallholder farm data collection platform providing smallholders with management tools and Olam customers with information about the provenance of products.

“OFIS solves the information issue by providing a revolutionary tech innovation for collecting and analyzing first mile data,” Brayn-Smith told AgFunderNews when OFIS launched in 2017. “We are able to register thousands of smallholders, GPS map their farms and local infrastructure, collect all types of farm gate level data such as the age of trees, and record every training intervention.”

This product is a clear example of a “transformational technology” that solves a problem for Olam and also gives the business efficiencies that could impact the bottom line, according to Sundararajan.

And Olam has built on top of OFIS to transact directly with cocoa farmers in Indonesia where Olam is publishing prices to around 30,000 farmers and buying cocoa directly from them.

“Before technology was available, it was almost impossible for any company to buy directly from the farmers, just because of the sheer volume and number of farmers. But, with technology, you have a far better reach, which will allow us to directly communicate with them,” Sundararajan tells AgFunderNews.

“Now the farmer can just accept a price and type in that he wants to supply it, and we arrange the complete logistics to pick up the cocoa from the farmer,” he says adding that the company’s country heads in other parts of the world are keen to launch this service in their markets. The company is starting next in Peru, then Guatemala, Colombia, Cote d’Ivoire, Ghana, and Nigeria.

Olam as Disruptor

While Olam deployed OFIS to solve for a problem, it also gives the company the opportunity to be disruptive in the markets it serves, according to Sundararajan.

As well as looking for transformational ways to solve specific problems, Olam also looks at “any ideas we have that will give Olam an opportunity to disrupt our own industry. So, we end up being a disrupter and not be at the risk of being disrupted by a new player,” he says.

“This fundamental shift in terms of Olam getting an opportunity to directly interact and transact with farmers is a starting point of disruption for us. This is a very complex point, which will bring into play several technologies for us to be able to successfully scale it.”

Going down this route, Sundararajan says Olam could end up providing farmers with new services and creating “separate streams of revenue that has nothing to do with what we were doing five or 10 years back.”

In this vein, Olam is working on deploying a technology to detect moisture — and therefore quality — in its commodities. The company is also looking at financial tools for its farmers.

“Looking at our business model, we believe that we have a few very good opportunities at the first mile of the supply chain and the last mile of the supply chain to change the way we compete,” says Sundararajan. “We believe that since we have control of the supply chain end-to-end, we can use technology to differentiate our service to customers in a way that our competitors will find difficult to replicate.”

Informal Startup Interactions

Olam does interact with startups on a selective basis, and Sundararajan’s participation in Rethink’s Singapore conference, as well as a hackathon it took part in with Fujitsu in Australia last year, are two examples. Sundararajan said he is considering an idea like The Unilever Foundry, but the company has yet to create a formal process or framework for these interactions. And the same goes for corporate venture capital.

“We believe that our digital journey has to mature much more, where we should demonstrate success within, by implementing the solutions that we’re developing, before even considering investing in venture capital. We believe that we have a very good strategy and a suite of products, stretching across from farm to the factories, to digitize our operations, whether it is a digital buying model, or whether it is spot factories in terms of predictive maintenance or increasing yield or it’s drone imagery from our own plantations, and productivity apps for employees.”

Source : https://agfundernews.com/why-olam-is-deploying-tech-first-then-thinking-about-cvc.html/

How sustainable is the food packaging industry? – Food Dive

As more consumers search for sustainable packaging options, food and beverage companies are forced to make tough decisions about their products.

Shoppers and investors are increasingly looking for companies and brands to take the initiative on environmental issues. A Horizon Media study found 81% of millennials expect companies to make public commitments to good corporate citizenship and 66% of consumers will pay more for products from brands committed to environmentally friendly practices, according to the Nielsen Global Corporate Sustainability Report.

But more eco-friendly practices haven’t been easy for the food packaging industry. Designing eco-friendly packaging that can keep products fresh and endure temperature changes that come with cooking can be a challenge. Packaging companies told Food Dive they recently made moves to offer sustainable options with water-based ink and more compostable packaging, but have faced obstacles along the way. While some brands are aiming to only appear more sustainable, others are making slow efforts to be eco-friendly with new innovations and products.

For major food and beverage companies, the higher cost of sustainable materials and the struggle to keep food fresh are barriers. Production costs for sustainable options be about 25% more compared to traditional packaging. These materials also tend to be less effective in maintaining freshness, since packaging companies say plastic can have a tighter seal and keep out air better than other materials.

“That’s their compromise, it looks eco-friendly — but it’s not.” Damon Leach – Account representative at Green Rush Packaging

Some companies have found a way around the high costs. Damon Leach, an account representative at Green Rush Packaging, told Food Dive that a solution for some food companies has been to use material that looks recyclable to shoppers, but in reality, is not.

Instead of paying more for eco-friendly materials, companies have been picking material, like kraft paper, that looks more sustainable to consumers, he added. Leach said the products that appear to be more green do sell better.

Although Leach said more suppliers and consumers theoretically want sustainable packaging, those materials typically don’t have a long shelf life and consumers don’t want to pay the extra money. But some companies are still making an effort to pay more for eco-friendly packaging despite the challenges.

When will sustainable be the norm?

From producers and companies to retailers, consumers and recycling organizations, packaging can affect the whole supply chain. So the challenge for packaging manufacturers becomes determining what new innovations and materials are the best investments.

Randall LaVeau, business development manager at Interpress Technologies, which manufactures formed paperboard and plastic food packaging products, told Food Dive there is a huge push for more recycling in the marketplace. But he said it is hard to get an eco-friendly material that holds water but isn’t plastic and doesn’t degrade — a necessity for microwavable products that need water to cook.

Many companies are now working to develop recyclable packaging that can withstand heat and hold liquids, but LaVeau​ said there is still a lot of research and development to go before it is widespread.

“Everybody is in the shop trying to figure it out,” LaVeau said. “People have been working on it for the last 10 years or longer, they just haven’t had a good success for it.” 

Evo Ware

For companies that have made sustainability goals, the time is ticking to figure it out. Mondelez just announced its plans to make all their packaging recyclable by 2025. Nestlé, Unilever and PepsiCo have agreed to phase in packaging made from recyclable, compostable and biodegradable materials with more recycled content by 2025, but haven’t released specific details about their plans. In fact, a recent report identified Coca-Cola, PepsiCo and Nestle as businesses contributing most to pollution.

But as these big companies push for more development on sustainable materials, that means cost could continue to be an obstacle. Although consumers say they are willing to pay more for sustainability, they don’t always pick up the more expensive options in stores.

“Just like anything else, when something new comes out… it is more expensive until they can work with it in time and maximize their efficiencies for the cost to come down,” LaVeau said.

New innovations in sustainable packages

Several companies have developed more sustainable options this year. For example, HelloFresh is rolling out more sustainable packaging for its meal kits with recyclable liners created by sustainable design company TemperPack.

And some new developments haven’t come into the mainstream yet. U.S. Department of Agriculture researchers have developed an edible, biodegradable packaging film made of casein, a milk protein, that can be wrapped around food to prevent spoilage.

Other companies are working to find new ways to help the environment. Wayne Shilka, vice president of innovation and technical support at Eagle Flexible Packaging, a printer of packaging in Chicago, has prioritized offering more sustainable options to their customers. Eagle Flexible Packaging uses a water-based ink because it doesn’t create any probable organic compounds that then go out into the atmosphere, making it more environmentally friendly, Shilka said.

“We are finding that sustainable packaging is getting more and more and more interest.”, Wayne Shilka – Vice president of Eagle Flexible Packaging

Six years ago, Eagle Flexible Packaging put together a compostable material for packaging, and about 100 companies discussed the option with them. Only one customer ended up using the compostable product because it cost more any other packaging option the company offered. Every year since, a few more customers have worked with them to outfit their products with compostable material, Shilka said.

As more companies turn to compostable and sustainable packaging, the price will come down and make it more appealing, Shilka added.

“It continues growing to the point that it’s becoming not mainstream, but it’s much more routine that we had people who are calling and are interested and are actually doing something sustainable,” Shilka said.

‘Recyclable to an extent’

While some companies work to find new recyclable materials, others are satisfied with current packaging options. Flexible packaging — which is any package whose shape can be readily changed, such as bags and pouches — is popular. Representatives at packaging companies said flexible packaging can be an issue for sustainability since it has multilayer films with plastic and paper that need to be separated to be recycled.

LaVeau said most of his products are “recyclable to an extent” because of the layers. Certain recycling mills can handle his products, but at others, consumers need to separate the packaging for recycling — which doesn’t always happen.

Green Rush Packaging has the same issue.

“We got to get the end users to separate and recycle better instead of just facilities otherwise it is just waste, bad for the environment,” Leach said. 

Flexible packaging can also provide a higher product-to-package ratio, which creates fewer emissions during transportation and ultimately uses less space in landfills.

Some companies stand by their use of packages that aren’t fully sustainable. Robert Reinders, president of Performance Packaging, a family owned corrugated box plant founded in 1995 by packaging professionals, told Food Dive that about 5% of his products are recyclable. He said flexible packaging is a sustainable option because it uses up less energy and prolongs the shelf life of the food so it eliminates food waste.

“There is all kinds of great benefits to flexible packaging that gets drowned out by the recycle, compostable needs,” Reinders said.

Falling behind other countries’ sustainable goals

In the last two years, more than 70 bills have been introduced in state legislatures regarding plastic bags — encompassing bans, fees and recycling programs. However, many of those laws have not impacted the food packaging industry.

compostable packaging

In comparison, countries across the globe are increasing their efforts and goals when it comes to sustainability for both food and beverage product packaging. But U.S. companies are still in the development stage on many of their innovations.

The Singapore Packaging Agreement — a joint initiative by government, industry and NGOs to reduce packaging waste — has averted about 46,000 metric tons of packaging waste during the past 11 years, according to Eco-Business. In Australia, national, state and territory environment ministers have agreed that 100% of Australian packaging will be recyclable, compostable or reusable by 2025.

Vancouver, Canada has adopted a ban on the distribution of polystyrene foam cups and containers, as well as restrictions on disposable cups and plastic shopping bags. The U.K. also plans to eliminate plastic waste by 2042.

As countries around the world change their packaging to adjust to these sustainability goals, Reinders said U.S. companies will likely adopt more changes. And as more CPG makers start mass producing sustainable options around the world, he said it will drive prices down globally.

“I was at Nestlé headquarters in Switzerland and they are currently making the efforts to find different materials and different processes so they can be recyclable,” Reinders said. “It’s all starting now. The more the big guys get into it, the better it will be.”

Source : https://www.fooddive.com/news/how-sustainable-is-the-food-packaging-industry/539089/

 

Gaps and Opportunities for Agribusiness Technology in Latin America – AgFunder

During the first week of August, we participated in Argentina’s first Agtech Week, a series of events distributed in Buenos Aires, Rosario and Córdoba; Argentina’s main cities and agribusiness hubs.

It seems a long way since NXTP Labs, one of Latin America’s most active accelerators and venture firms, launched the first Agtech Acceleration Program (then titled ‘Agrotech’ to identify with local ‘agro’ slang for agribusiness) in the region in 2016 with a group of no more than 10 startups with little-to-no funding and only early adoption from farmers.

Agtech Week culminated in Congreso Aapresid (Argentine Association of Direct Sowing Producers) with an audience of over 5,000 farmers in Córdoba listening to use cases of Blockchain and other frontier technologies by both local and international entrepreneurs and technology companies. Last year we also helped develop Pulse, an innovation hub in Piracicaba, Brazil, together with Raízen, Brazil’s largest ethanol producer, to develop pilots with agtech startups.

Despite this initial interest from local institutions and farmers trying to understand the implications of new technological developments  — most of the initial interest in Blockchain, for example, starts with ‘which cryptocurrency should I be invested in?’ — technology is yet to disrupt the agribusiness value chain.

Latin America is a relevant player, representing 16% of the world’s Food & Agriculture exports, particularly in Bananas (+60%), Beef (+30%), Coffee (+45%), Corn (+30%), Poultry (+30%), Soybeans (+50%) and Sugar (+50%).

If global agricultural production needs to grow by 60% by 2050 to meet global demand, Latin America’s production needs to grow by 80%, according to its market participation and growth potential. This implies a bigger focus on yield increases, versus arable land expansion or higher crop intensity — the main driver behind growth in production during the last few decades. Plus, Latin America’s productivity growth (1.9%) is behind the average OECD country (2.4%).

In some aspects, Latin America has pioneered agribusiness technology adoption. An aspect engrained in Argentina’s Aapresid farmer association is the adoption of direct sowing practice [no till], which reduces soil erosion; now at 81% of Argentina’s arable land (compared to 23% in the US, and 10% in Europe).

Coupling high technology adoption with market share, local companies have seized an opportunity to grow globally under the shadows of global leaders in their key markets.

Recently, Syngenta acquired Strider, a precision farming digital tool that operates in six of the 10 largest agricultural operations in Brazil with 40 employees. In effect, Strider closed key contracts with large-scale farmers in Brazil that Syngenta would have otherwise had to do over a year or two. This was more of a quick go-to-market digital strategy.

Additionally, John Deere acquired PLA, originally from Las Rosas, Argentina, that manufactures sprayers, planters and specialty products, with 450 employees and selling in four continents. Earlier this year, John Deere announced its acquisition of King Agro, a family-owned business with approximately 180 employees and an extensive 30-year history of developing various carbon fiber products. King Agro reduces the overall cost of spraying by amplifying the sprayer’s radius.

As a venture firm focused on technology opportunities in Latin America, NXTP Labs is looking for new technology firms capturing large market opportunities where local entrepreneurs may have a competitive advantage. Latin American agribusiness is relevant in the global food export market, and it already has examples of successful entrepreneurs in both the tech and agribusiness sectors to serve as role models.

When analyzing specific sub-sectors within agribusiness, we have identified opportunities in:

  • Logistics – 55% of post-harvest is lost due to problems in storage, packaging, and distribution – in the US its 31%
  • Financial services – 50% of LatAm’s population doesn’t have access to financial services
  • Insurance represents 0.03% of Latin America’s GDP (versus 0.06% of the US’s)
  • Traceability – certificates of origin suffer from public nationwide corruption scandals, see JBS and BRF’s case)
  • Data Collection at scale that may serve as the bottom line for these services to develop.

Some of our portfolio companies are already developing these solutions. Some examples are:

Traceability: Bovcontrol works with milk producers to monitor from farm to fork the different treatments they make on dairy cows.

Insurance: S4 Agtech analyzes satellite imagery to develop an index that helps insurers optimize their risk aversion according to real-time productivity data.

Finance: PagoRural is developing a non-banking financial service for farmers to access credit when buying their seed; and Agrofy, an Ag-specific eCommerce site is on its way to finance its marketplace products purely online.

Logistics: CargoX is helping Brazilian freight companies optimize their fleet.

Data Collection: Satellogic produces high precision nano satellites; while Kilimo and Auravant are helping farmers aggregate these images, process them, and integrate them with production data to turn it into actionable insights. 

VC Investments in Latin America surpassed $1 billion for the first time in 2017, doubling the amount committed to startups in 2016. Ag & Foodtech globally have surpassed the $10 billion mark globally, according to AgFunder.

Latin America plays a key role in the food and agribusiness value chain and is yet to set its footprint with prominent agtech players that can leverage regional advantages to become dominant global players. Its market is less integrated and lacks the venture liquidity track record of the United States. However, several sub-sectors provide an edge for local entrepreneurs to develop local solutions for problems shared by farmers, processors, and distributors in the region. Some of them have started to catch the attention of key regional stakeholders.

We have scouted approximately 520 agtech startups across the region, more than half of them launched in the past three years, and less than a quarter have institutional funding, so there is a lot of innovation and investment opportunity coming our way.

Source : https://agfundernews.com/the-gaps-and-opportunities-for-agribusiness-technology-in-latin-america.html/

 

Techcrunch – This tiny agtech company thinks it has figured out something its better-capitalized rivals haven’t

In November, we told you about Farmers Business Network, a social network for farmers that invites them to share their data, pool their know-how and bargain more effectively for better pricing from manufacturing companies. At the time, FBN, as it’s known, had just closed on $110 million in new funding in a round that brought its funding to roughly $200 million altogether.

That kind of financial backing might dissuade newcomers to the space, but a months-old startup called AgVend has just raised $1.75 million in seed funding on the premise that, well, FBN is doing it wrong. Specifically, AgVend’s  pitch is that manufacturers aren’t so crazy about FBN getting between their offerings and their end users — in large part because FBN is able to secure group discounts on those users’ behalf.

AgVend is instead planning to work directly with manufacturers and retailers, selling their goods through its own site as well as helping them develop their own web shops. The idea is to “protect their channel pricing power,” explains CEO Alexander Reichert, who previously spent more than four years with Euclid Analytics, a company that helps brands monitor and understand their foot traffic. AgVend is their white knight, coming to save them from getting disrupted out of business. “Why cut them out of the equation?” he asks.

Whether farmers will go along is the question. Those who’ve joined FBN can ostensibly save money on seeds, fertilizers, pesticides and more by being invited to comparison shop through FBN’s own online store. It’s not the easiest sell, though. FBN charges farmers $600 per year to access its platform, which is presumably a hurdle for some.

AgVend meanwhile is embracing good-old-fashioned opacity. While it invites farmers to search for products at its own site based on the farmers’ needs and location, it’s only after someone has purchased something that the retailer who sold the items is revealed. The reason: retailers don’t necessarily want to put all of their pricing online and be bound to those numbers, explains Reichert.

Naturally, AgVend insists that it’s not just better for retailers and the manufacturers standing behind them. For one thing, says Reichert,  AgVend’s farming customers are sometimes offered rebates. Customers are also better informed about the products they’re buying because the information is coming from the retailers and not a third party, he insists. “When a third party like FBN comes in and tries going around the retailers, the manufacturers can’t guarantee that FBN is giving the right guidance about their products.”

In the end, its customers will decide. But the market looks big enough to support a number of players if they figure out how to play it. According to USDA data from last year, U.S. farms spent an estimated $346.9 billion in 2016 on farm production expenditures.

That’s a lot of feed and fertilizer. It’s no wonder that founders, and the VCs who are writing them checks, see fertile ground. This particular deal was led by 8VC and included the participation of Precursor Ventures, Green Bay Ventures, FJ Labs and House Fund, among others.

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