Ag Tech Sunday - The state of innovation in Ag Tech and Food Tech

By Prof Andy Lowe - Food futurist

Farmers are a pretty canny lot and constantly innovating. But whilst we have seen major changes to the agriculture system driven by mechanisation and computers in the past, we are facing a time of unprecedented change.

These changes are being driven by:

• Food security – we produce enough food to feed the world, but food is unevenly distributed;
• dietary health – for the first time in some developed countries, the life expectancy of children is lower than their parents due to a range of dietary related non-communicable diseases, including obesity, heart conditions, strokes, cancers;
• rapidly increasing middle class, particularly in Asia, with serious spending power and changing tastes;
• choosy customer base prepared to buy according to principle;
• technology developments that are revolutionising the way we produce food;
• sustainability requirements driven by concerns over climate change, drought resilience, water security;
• massive global uncertainty driven by global pandemics, climate change, political upheaval and economic fluctuation.

Against these changing global dynamics, a range of new agricultural innovations are hitting the sector (see McKinsey 2015 report), some with tremendous market potential.

So lets take a look at some of the big ones

AgTech

A large and complex sector. The term agtech refers to a wide range of technologies many, but not all, digital in nature. From robots to drones, from computer vision systems to IoT, and ultimately to smart farms aiming to make farming operations more efficient (see blog post the agtech revolution is here, or listen to podcast with Ranveer Chandra – Chief Scientist Microsoft Azure).

Driver for change: Reduced labour costs, efficiency, sustainability (energy and water efficiency)

Market opportunity: Agtech market is expected to grow 18% pa from $494B to $729B by 2023

Innovation in South Australia: SA is host to the Australian Institute of Machine Learning, the 3rd best research centre of its type in the world (after Carnegie Mellon and the Chinese Academy of Sciences).

Provenance and food fraud

There are a range of innovative technologies that allow the origin of a product to be verified, from block chain through DNA, from chemical tracers to light-based sensor technologies (see blog post food fraud is big business).

Driver for change: Consumer choice around ethical and sustainable products; Avoiding revenue loss

Market opportunity: Saving or avoiding up to $50B in losses each year, where a single food fraud event can be devastating and cost individual companies 2-15% of revenue due to lost consumer confidence.

Innovation in South Australia: Technology that can analyse timber DNA to verify the species and country of origin of products was developed and commercialised in SA and is now used to police timber supply chains around the world (see blog post science can identify illegally logged timber).

Plant-based protein

From plant milks that froth in coffee to vege burgers that bleed like meat, plant-based protein products are now hitting us hard and fast (See blog posts milking the plants, alternative protein sources, or listen to podcast with Jack Cowen, CEO of Hungry Jacks – yes that’s Jack of Hungry Jacks).

Driver for change: healthy diet, ethical and environmental considerations

Market opportunity: The plant-based milk market is expected to grow by 10% pa to $21B by 2024, but plant-based protein is expected to grow by 14% to $35B by 2024, of which plant-based meat is $24B.

Innovation in South Australia: Good expertise in legume breeding and chemical and biochemical processing required for next wave of plant based products. Thomas Foods International just launched its Blue Butcher range of vegetarian and vegan alternative protein options.

Lab grown meat

The next frontier of meat production is to grow animal tissue cells in a vat – real meat but without the environmental impacts. Its currently possible but expensive. Costs are coming down rapidly though, and KFC aim to have first lab grown meat in trial by end of year.

Driver for change: high volume intensification, environmental

Market opportunity: gaining a slice of the global meat market – valued at $945.7B in 2018, and forecast to increase to $1142.9B by 2023.

Innovation in South Australian: Good expertise in synthetic biology, including fermentation.

Food waste

We waste a lot of the food – between 30-40% of all food produced that’s about 1.3B tons . Instead of wasting food we can turn it into – charity redistribution, soups and purées, animal feed, nutraceuticals, cosmetics, fertiliser and even energy (see blog posts creating opportunity from food waste, food waste is big global issue, or listen to podcast with Krista Watkins on green banana waste).

Driver for change: production efficiency, environmental concerns

Market opportunity: Australia wastes $20B of food a year – that’s $4000 per household

Innovation in South Australia: SA is home to the Fight Food Waste Cooperative Research Centre, a $134M initiative partnering with industry to reduce food waste and develop food waste transformation innovations.

Sustainable and happy livestock

Livestock production has been getting a pretty bad wrap recently, with 68% of arable land area and 15-20% Green House Gases being used/produced by livestock farming (see blog post protein is the new black, or listen to podcast with James Madden of Flinders and Co). But livestock production is also changing rapidly. Carbon neutral operations are a stated target of Meat and Livestock Australia within 10 years, and increasingly technology, much of it transferred from medical technologies, is being used to keep track of animal welfare issues

Drivers of change: environmental and ethical concerns

Market opportunity: Maintaining access and profitability in the $1T global meat market 

Innovation in South Australia: Innovative medtech and sensors are being transferred into the livestock sector at Roseworthy campus by researchers from the Centre for NanoScale Biophotonics.

Hightech glasshouses

We are seeing massive intensification of horticulture production leading to vertical and urban farming. The future is designing systems that will work off world.

Driver for Change: intensification, future farming

Market opportunity: In Australia the horticulture sector has seen 8 years of continuous growth averaging 8.4% per year, and is now worth nearly $15B pa.

Innovation in South Australia:  The northern Adelaide plains is the largest single horticulture production area in the country and SA houses approximately 50% of the high-tech glasshouses by area, largely due to the quality of light here. SA also house the national research facility the Plant Accelerator a high-tech research glasshouse, and is the centre of the Australian Space Industry.

So what about getting some of these new innovations to market? Well, Australia hits well above its weight in terms of the development of disruptive agricultural technologies (8% of global innovations as a recent survey between 2016 and 2020 has shown). And whilst we stand in awe of the commercialisation ecosystem in Israel (see blog post does Israel deserve the title ‘start up nation’?), only 5% of start ups there are based on university research. So there is a real opportunity here in Australia, including South Australia, to drive innovation and commercialisation on the back of our world class research, and become a State of Innovation.