Volume 5, Issue 2 • June 2018 agtechnexus.com

GAIGAZETTEDOES

‘BIG MONEY’HAMPER

INNOVATION?What does it take to drive

investment in agtech: ‘smart money’ or ‘big money’?

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SPECIAL EVENT ISSUE: INTERACTIVE DIGITAL CONTENT

EXECUTIVE PROFILE: AIDAN CONNOLLY, ALLTECH How one of the top 10 global animal health companies is carefully working to find value in the agtech startup environment. Page 6

INNOVATING THE FUTURE OF FOOD SYSTEMSImagining, identifying, and evaluating transformational innovations in ag for a glimpse into four possible futures for global food systems. Page 9SM

GAIGAZETTEVolume 5, Issue 2. June 2018

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3 DOES‘BIGMONEY’ HAMPERINNOVATION?

What does it take to drive investment in agtech: ‘smart money’ or ‘big money’?

6 EXECUTIVEPROFILE: AIDANCONNOLLY,ALLTECH

How one of the top 10 global animal health companies is carefully working to find value in the agtech startup environment.

9 INNOVATINGTHEFUTURE OFFOODSYSTEMS

Imagining, identifying, and evaluating transformational innovations in ag for a glimpse into four possible futures for global food systems.

13 THEPROMISEOFVERTICAL INDOORFARMING

A view into the anticipated US$7.461 billion market that is changing the trajectory of food production.

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DOES ‘BIG MONEY’

HAMPER INNOVATION?

© 2018, HighQuest Partners. All rights reserved. GAI Gazette is a Global AgInvesting publication, published 4 times a year in April, June, September, and December, by HighQuest Group, 300 Rosewood Drive, Suite 260, Danvers, MA 01923. For other publications or a full list of events and services, visit www.highquestgroup.com.

STAFF

Managing EditorMichelle Pelletier Marshall

EditorLynda Kiernan

Director of ContentKate Westfall

Content CoordinatorSarah Linn Pepper

Graphic Design, Art & LayoutBob LeBlanc

ContributorsGKI/The Rockefeller Foundation

Michael Helmstetter

GAIGAZETTE

The 2015 agtech investment bubble was a master class in the difference between ‘big money’ and ‘smart money’.

Big money flows indiscriminately into the ‘Next Big Thing’. While it might fund a lot of startups, it can easily pressure them into an unsustainable business model or the wrong market. If enough big money hits a sector – the way it hit agtech in 2015 – it can infuse a frenetic energy into a niche ecosystem. But when the bubble bursts, consumers come away skeptical of the value of speedy innovations, making the next cycle that much harder to get off the ground.

On the other hand, smart money doesn’t just fund startups; it shepherds useful products to exit. Smart money insists on a deep understanding of the market and how a product addresses the needs of the customer. By supporting companies and products that provide clear value, smart money offers support to an entire ecosystem through sustainable growth, propelling future innovation.

From gene editing to artificial intelligence, agtech is one of technology’s fastest-moving sectors. With so much to be gained, it is crucial to understand how big money can hamper innovation, as witnessed in the aftermath of 2015’s agtech investment bubble. Instead, the sector needs smart money and here is why.

2015, Re-examinedAs perceptively noted by The Breakthrough Institute, “Just because it is mechanically possible to put different amounts of fertilizer or water in each part of a field does not mean that we know the best amount to put there.” In the end, this describes many of the products and services that didn’t sell.

In 2015, big money destabilized agtech through an influx of indiscriminate cash that prompted many companies to take their eye off the customer. Instead of investing in things that actual farmers would use, there was energy channeled into speculative innovations based on what worked in tech. This resulted in a proliferation of cross-over technology like drones, remote sensors, and other precision agtech that teemed with promise but much of which lacked in real-world application.

Part of this error can be attributed to companies misunderstanding the complexity of the ag market space. It is influenced by hundreds of factors, from weather patterns to microorganisms, and consists of a diverse ag infrastructure made up of farmers, suppliers, co-ops, commodity traders, labor, transport systems, processors, banks, lenders, and numerous other go-betweens. Without an on-the-ground understanding of the industry, companies pitched products to the wrong audience or at the wrong spot in the value chain.

In 2015, the idea of big rewards attracted funds from Silicon Valley venture capitalists, but not everyone was ready, willing, or able to sustain an investment that requires years (and growing seasons) of patience.

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DOES ‘BIG MONEY’ HAMPER INNOVATION?

By Michael Helmstetter, CEO and co-founder of TechAccel

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Smart Money Cuts the Hype

With trends like soil sensors and drones hitting new lows on the agtech hype curve, now is a ripe time for smart money to refine the agtech industry, bringing smart ideas to fruition with these three rules for startups and investors:

1. Go back to basics.

Before sourcing out funding, it is critical that as a company, you identify exactly what needs your product addresses. If you are still hazy on an exact target audience and pain point, you need to talk to the people in the chain who have the need you are solving. You need to understand their world in a deep and personal way. Walk in the fields, work on the machinery, get up early to tend the animals with them. Understand the multidimensional pain points that are on their minds regularly before you propose options to address those issues.

From here, study your market. Know where your product will fit in the value chain before you start out, and then test your knowledge. Check multiple points in the ecosystem and be willing to learn or adjust.

2. Be patient.

Think in terms of growing seasons, not software update cycles. These products, markets, and players have long-term cycles for planning, investing, and acting. That may mean learning to look beyond short-term incentives.

Trends like massive chemical application in farm fields and widespread use of antibiotics in farm animals may have created short-term production cost advantages, but with significant long-term fallout: environmental damage, antibiotic-resistant bacteria, lawsuits, and consumer backlash. The ability to take the long view isn’t just essential to success in the ag space; it ’s essential to developing any truly disruptive innovation.

3. Be ready to be humbled.

Even if your solution works perfectly in the first field trial, be aware that it may fail in the second. Agriculture is notoriously difficult to control, across both time and geographies. In fact, replication of a controlled environment may ultimately be a futile goal.

Instead, take each failure as an opportunity to learn and iterate. Look for common issues across markets. This can increase the costs and time needed, but if you’ve taken the time to learn your customers well, it also gives you more ‘swim lanes’ to work in. Over the long run, you’ll gain more information more quickly.

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“Know where your product will

fit in the value chain before you start out, and then test your knowledge.”

Impacts of ‘Big Money’

Billion-dollar agriculture startups have attracted significant venture capital, which, of course, lures even more from investors driven by a fear of missing out. Here are the top-seated ag unicorns worth watching to see how staying power and sustainability plays out:

Indigo Agriculture, a promising technology to treat seeds with microbes to produce crops that are tolerant to heat and stress and produce greater yields, claimed the title of 2017’s top-funded agriculture unicorn. Based in Boston,

this agtech startup closed a $203 million Series D round in December 2017 and generated a $1.4 billion valuation. A strong company with exceptional leadership, it will be worth watching.

Near-unicorns, Gingko Bioworks and Zymergen, also focused on microbial engineering, making this microbiome technology sector as hot as a supernova. But we await evidence to prove out the technology and business models. Remember, it can be a long trek from the lab to the greenhouse to the field to the market.

Technology sectors, like agriculture drones, attracted $326 million in venture investment, a 189 percent increase over the prior year, according to AgFunder research. Applying GPS technology and advances in miniaturization, drones fed the zeal for expanding ag automation. Drones promised sensing and imaging data to inform precision ag platforms and fuel artificial intelligence engines that would lead to the next generation – “predictive ag.” Drones capable of carrying heavier payloads would be deployed to target precise just-in-time delivery of chemicals, nutrients or pesticides. Global Market Insights estimates the ag drone market will exceed $1B by 2024. The best investments will be focused and patient.

Farmobile as an example of an agtech firm that listens to farmers, pays attention to the basics and stays focused on the long view. This Kansas-based company offers a small in-cab device to harvest agronomic and machine data from farm fields. The data feeds farmer-owned Electronic Farm Records, which can be shared independently or licensed to third-party buyers, giving farmers a new asset. With a reported 700 farmers and data gathered from 1.3 million acres, Farmobile has raised about $24 million in two funding rounds. Farmobile is pursuing #FarmerPower, not Big Money.

Building Ag Tech Innovation

When smart money drives investment in agtech, the benefits won’t be confined to just the industry. With an open exchange of information derived from adoption in ag, new best practices will emerge. This can help build sustainability into each new cycle of innovation.

Smart money doesn’t just sustain industry growth, it sustains our planet.

About the AuthorDr. Michael Helmstetter is co-founder, president, and CEO of Technology Acceleration Partners (TechAccel LLC), a venture and technology development company in the agriculture and animal health sectors t hat invests in or acquires new technology, and funds science advancement programs.

Before founding TechAccel, Helmstetter served as president and CEO of MRIGlobal – one of the nation’s most prominent research institutions. He has more than 30 years of experience working with the private sector and government agencies, including laboratory management positions at Applied Marine Research Laboratory in Norfolk, Va., and program management for the Harbor Branch Oceanographic Institution in Fort Pierce, Fla.

Helmstetter holds a Ph.D. in chemical toxicology/oceanography from Old Dominion University and a B.S. in biology from Allegheny College. He has been a panelist, keynote speaker, and lecturer, and is the author of numerous publications, articles, book chapters, and technical reports. He can be reached at Michael@TechAccel.net.

Impacts of ‘Big Money’Billion-dollar agriculture startups have attracted significant venture capital, which, of course, lures even more from investors driven by a fear of missing out. Here are the top-seated ag unicorns worth watching to see how staying power and sustainability plays out:

• Indigo Agriculture, a promising technology to treat seeds with microbes to produce crops that are tolerant to heat and stress and produce greater yields, claimed the title of 2017’s top-funded agriculture unicorn. Based in Boston, this agtech startup closed a $203 million Series D round in December 2017 and generated a $1.4 billion valuation. A strong company with exceptional leadership, it will be worth watching.

• Near-unicorns, Gingko Bioworks and Zymergen, also focused on microbial engineering, making this microbiome technology sector as hot as a supernova. But we await evidence to prove out the technology and business models. Remember, it can be a long trek from the lab to the greenhouse to the field to the market.

• Technology sectors, like agriculture drones, attracted $326 million in venture investment, a 189 percent increase over the prior year, according to AgFunder research. Applying GPS technology and advances in miniaturization, drones fed the zeal for expanding ag automation. Drones promised sensing and imaging data to inform precision ag platforms and fuel artificial intelligence engines that would lead to the next generation – “predictive ag.” Drones capable of carrying heavier payloads would be deployed to target precise just-in-time delivery of chemicals, nutrients or pesticides. Global Market Insights estimates the ag drone market will exceed $1B by 2024. The best investments will be focused and patient.

• Farmobile as an example of an agtech firm that listens to farmers, pays attention to the basics and stays focused on the long view. This Kansas-based company offers a small in-cab device to harvest agronomic and machine data from farm fields. The data feeds farmer-owned Electronic Farm Records, which can be shared independently or licensed to third-party buyers, giving farmers a new asset. With a reported 700 farmers and data gathered from 1.3 million acres, Farmobile has raised about $24 million in two funding rounds. Farmobile is pursuing #FarmerPower, not Big Money.

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Alltech, headquartered in Kentucky, is the only privately held and family-owned business among the top 10 animal health companies in the world. The leading company has more than 4,700 employees and 77 production facilities across the globe as well as three bioscience centers, all working toward fostering trading relationships in 128 countries.

The company is steadfast in its mission to improve the health and performance of people, animals, and plants through natural nutrition and scientific innovation. It seeks to excel at this through its ACE principal – the promise that in doing business they have a positive impact on the Animal, the Consumer, and the Environment.

This mission, set forth in 1980 by well-known industry disruptor and founder Dr. Pearse Lyons, has set the company on a path of exploration into ways to naturally enrich foods through improving the animal diet or crop produced. Mergers and acquisitions dot the framework of this mission and include the recent acquisitions of Canadian company Masterfeeds, Montana-based WestFeeds, and Keenan Systems of Ireland – its fourteenth acquisition since 2011.

Global AgInvesting caught up with Aidan Connolly, chief innovation officer and vice president of corporate accounts at Alltech, for a discussion on how the company’s innovative technologies are having an impact on the ag sector.

1. From soil to feed, Alltech’s goal is to seamlessly

bridge the gap between science and sustainability in the livestock and poultry sectors. How have the company’s innovations advanced the industry?I think it is clear that Alltech is viewed in animal nutrition as being a leader in thinking about how to feed animals differently. We first made advancements in this industry back in the 1980s with some fairly basic technologies, and in 1990 we announced that we were going to become a company that was focused on animal consumer and environmentally-friendly solutions, which might not seem that revolutionary, but in those days it was.

We have definitely been a leader in finding solutions for raising livestock without the continuous use of antibiotics in the feed, as well as understanding how to use organically complex trace minerals such as zinc, manganese, copper, iron. We mix them into a form such as is found in nature to be included in feed to help animals with immunity, fertility, and productivity. When people think Alltech, it is synonymous with innovation and with bringing ideas to the marketplace that have not been there before.

2. Much of your work in the last 10 years has been focused on

nutrigenomics, the science of how diet affects gene expression. What type of results have your products helped producers realize?Nutrigenomics has allowed us to do three things: learn how we can improve the products and technologies we have developed; replace things in the feed that for some reason we can no longer use; and allow us to look at benefits that can be achieved by combining combinations of nutrients, specifically for meat quality and the bigger issues of fertility and disease.

Genomics is like the blueprint for who we are, but as we have found out, the genes in our body actually react with nutrients and that science is called nutrigenomics – so how nutrition impacts on the expression of the genes that we have in our body. It is very interesting because at a basic level it means that what we feed animals could be adapted on an individual basis and could have a big impact on what happens to them in their lives. And, as we’ve studied it further, we’ve discovered that you also can be impacted by what your parents ate, or what your parent’s parents ate. We’ve realized that nutrition is as important as the genes in our body. And while we thought we were finishing the story by mapping out genes, we’ve discovered that we are far from done and may, in fact, just be beginning the book.

EXECUTIVE PROFILE:AIDANCONNOLLYChief Innovation Officer & VP of Corporate Accounts, Alltech

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And keep in mind that for humans, bad nutrition and bad habits can take years to produce ill effects because our metabolisms are very, very slow, but in animals – pigs, chickens – who are consuming nutrition very quickly and have a fast metabolism, when something goes wrong, we see it very quickly. Nutrigenomics lets us establish what happens when we change nutrition for the better or for the worse, and provide “precision nutrition” – feeding each animal precisely what it needs at the right time.

In essence, we are experts at improving the genetic capacity of food production, which means that on an annual basis we have improved the productivity of wheat, barley, corn, milk production, pork production, etc., by about 2 percent per year for the last 30 to 40 years. The average has been pretty consistent due to better management, better nutrition, better genetics, so we are getting more out of our ag productions systems. However, that means that we have to become more and more precise about what we are doing. It doesn’t concern me that we have to produce more food by 2050, because if you think about it – in 35 years, we need to produce 70 percent more food, which compounded out translates to about a 1.6 or 1.7 percent increase per year. It ’s not that difficult to achieve, but it does mean that we really need precision agriculture.

3. For seven years now, Alltech has published the annual

Global Feed Survey, which serves as a barometer for agriculture, and demonstrates the economic strength of the countries included in the survey. What subsectors are showing the most promise in the marketplace and why?

Some of the big numbers in the feed survey, not just this year but every year include: China is the number one producer of feed, followed by the U.S., then Brazil. Over 40 percent of the world’s feed is going into chickens – eggs and broiler meat; Asia represents over one-third of the world’s feed production. These numbers reflect that chicken meat is growing tremendously quickly because it ’s affordable and easy to produce with a low environmental impact, it ’s not influenced by cultural or religious restrictions, and it’s very flexible as far as its ability to be further processed. And this will only continue to gain strength.

The growth of aquaculture is high – fish farming now exceeds the fish taken from the sea. And the sector is becoming more efficient so it ’s requiring less feed to produce fish than it has in the past. Asia is number one in farmed animals, but Africa is the fastest growing. I think this reflects the growth from an economic perspective of what’s happening in Africa.

Over the seven years [of the survey], the trends we’ve seen do reflect the fact that the world is continuing to eat more animal proteins, supporting the fact that the middle class continues to grow.

4. You have been a professor at the Michael Smurfit

Graduate Business School (in Dublin) and China’s Agricultural University (in Beijing) for many years. From this perspective, how has the academic level of interest in food and agribusiness changed, and what particular fields/topics are attracting the most attention?

At my appointment in Dublin, which is Ireland’s leading MBA program and in the top 25 in Europe, reflects the fact that that university decided it was time to get serious about food and agribusiness. It certainly hadn’t been before, but nowadays agriculture is seen as quite an exciting career, seen as being very critical to the future of the world. It ’s something to be proud of; to say that you are involved in food production is a great story. Their [the MBA program] acceptance of case studies on food companies who are disrupting the way the world produces food, such as Nestlé, Danone, and McDonalds, and also Amazon and Alltech, is very exciting.

In China, we address more of the societal issues, such as consolidating farmers – where do they go and what do they do once they are no longer farming?

That said, the biggest issue we discuss is how many people do we need to feed by 2050, 2100, and how are we going to do it? What will the impact be on natural resources, sustainability, and human health?

5. Alltech partners with producers to increase

their efficiency, productivity, and profitability through analytical service, and is active in M&A. What opportunities for ag investors might be on the horizon related to this?We are a private company so I can’t name specifics, but in general from our perspective the agricultural industry is not very profitable, but it is very solid and can produce very consistent returns and that’s important to remember.

Whether it be feed or baking or brewing or trading grains, there are opportunities to make superior returns. If we think about agtech, specifically digital technologies, the market has turned to startups, which are creating some real challenges from an investing perspective. If you get in too early you run the tremendous risk of losing all of your money, and if you get in too late you run the tremendous risk of overpaying for your investment.

So that sweet spot of how and when to invest is really exercising the mind of a lot of companies at our level and larger. Those that I have spoken to at Kellogg’s, Anheuser Busch, and Nestlé, are trying different things to kick start their activities from an

“If we think about agtech, specifically digital technologies, the market has turned to startups, which are creating some real chal-lenges from an invest-ing perspective. If you get in too early you run the tremendous risk of losing all of your money, and if you get in too late you run the tremendous risk of overpaying for your investment.”

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innovation perspective by engaging with a wide range of startups of various natures. And I know that a lot of the companies that are middle or smaller level are struggling because they don’t have the cash to take a portfolio approach to startups.

When we work with startups we look closely at the people and the commercial outlook – we evaluate the technology but we tend to take for granted that it will work – and then we look for a portfolio approach. From an investment perspective, it ’s the most exciting market that we’ve even been in but it ’s also one that you have to work very carefully to find the true value, because outside of traditional businesses, and in this startup environment, it ’s very easy to make the wrong choice.

6. Alltech’s Pearse Lyons Accelerator program,

which brings applicants to Dublin’s Dogpatch Labs for a three-month program that offers space, mentoring, and investment opportunities, is underway. What were the results for last year’s class of companies, and what are your expectations for 2018?

We felt that we added a lot of value to the companies that were in the program, and the companies themselves reported that they generated $60 million in leads. There were 10 startups in last year’s program and they had already raised about $13 million in capital combined, and in the 10 months since the

program concluded, they have raised another $20 million. We’re glad to provide this opportunity to raise capital and generate leads, and from our perspective it was great to have them at the One Conference, which is what we did again in May. We brought in venture capitalists, private equity companies, and local startups and provided an opportunity present on stage on the innovation day in front of almost 4,000 people, including our speakers such as Professor Robert Wolcott of the Kellogg Innovation Network of Northwestern, and Jack Welsh, the legendary leader of General Electric.

This year with the accelerator program, we did something a little different – we had five internal ventures combined with five external startups. Externally, they included a company that is involved with insect larvae for feed for chickens and fish; a company that is using CRISPR gene editing to make eggs glow naturally under a light if they are male but not if they are female; another that uses ear tags to measure movement and detect stress in dairy cows; another that uses drones to create virtual fences to corral wild animals into small areas, which can also be used with beef cattle; and one that is using probiotics for the bioremediation of soil that has become toxic.

Overall, the Pearse Lyons Accelerator program is a very exciting program that infuses energy into our business, while we infuse knowledge and business opportunities into the participants of the program. So it ’s a very symbiotic relationship that’s mutually beneficial.

About Aidan Connolly

As chief innovation officer and vice president of corporate accounts for Alltech, Aidan Connolly is responsible for the commercialization of Alltech’s global research and overseeing the company’s corporate account strategy. He also has responsibility for the highly-anticipated Alltech Global Feed Survey, which is released annually, and led the implementation of The Pearse Lyons Accelerator, a late-stage, agri-tech accelerator run by Alltech and Dogpatch Labs, which received 184 applications from more than 30 countries for its inaugural program.

Connolly has been with Alltech for more than 25 years, initially in Ireland and afterward in France, Brazil, and the United States. From 2002 to 2008, he held the position of vice president of Europe for Alltech.

Connolly also is an adjunct professor of marketing at University College Dublin and China Agricultural University. Additionally, he is an executive board member of the International Feed Industry Federation, the National Chicken Council, and the National Turkey Federation, and he is a former board member of the European Union Association of Specialty Feed Ingredients and their Mixtures, and the International Food and Agribusiness Management Association.

He received a bachelor’s degree in commerce from University College Dublin and a master’s degree in international marketing from the University College Dublin Michael Smurfit Graduate Business School.

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Volume 5, Issue 2GAIGAZETTE

In October 2017, the Global Knowledge Initiative (GKI), with support of The Rockefeller Foundation, published an extensive report, “Innovating the Future of Food Systems”. GAI Gazette has received permission from GKI to reprint the Executive Summary and some key findings in this issue. To download the full report, please visit: http://globalknowledgeinitiative.org/wp-content/uploads/2016/09/GKI-Innovating-the-Future-of-Food-Systems-Report_October-2017.pdf.

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The future of global food systems hinge on how we respond to the challenges of today and prepare for the challenges of tomorrow. In its 2017

Scenarios Analysis on Shaping the Future of Global Food Systems, the World Economic Forum foreshadowed global food systems in 2030

teetering between unsustainable production and consumption and torn between isolationism and collaboration. Called to action by these

scenarios, the Global Knowledge Initiative (GKI) and The Rockefeller Foundation endeavored to identify the top immediately investible and

emerging innovations that will be catalytic in reducing post-harvest food loss (PHL) and transforming food systems in emerging markets within

the next 20 years. Thus, GKI conducted an Innovation Scan from April to October 2017 in its role as the Innovation Partner grantee for The

Rockefeller Foundation’s YieldWise Initiative, a $130 million initiative to demonstrate 50% reduction in PHL in key value chains by 2030. This

report is the culmination of this effort.

Investors can use these findings to indentifythose challenges or innovative solutions mostlikely to meet an existing or likely marketdemand, and which have untapped commercialpotential.

Policymakers can use these findings to assesshow high-priority innovations can be enabledthrough good governance, new regulations,targeted funding, infrastructure development,and cross-sectoral alignment.

Innovators can research, design, create, and testtheir own ideas that build upon the innovativesolutions in this report.

Business Leaders can use these findings toexpand into new markets and serve newconsumers with new products that meetunaddressed needs.

Through this Innovation Scan, we engaged global experts in the fields of

agribusiness, academia, investment, innovation, international development, and

Futures Foresight to examine the above challenge from two angles:

1. What are the most promising innovations that exist today, or arejust over the horizon, that merit investment?

2. How can next-generation innovations bridge the gap between thepresent state of the food system and the future system to which weaspire?

Our findings to the first question live in Section 2: Investible Innovations of the

full report, and our findings to the second live in Section 3 Emerging

Innovations of the full report.

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Innovating the Future of Food Systems | 4

Investible Innovations for Impact TodayIn Section 2, we present profiles of the top 22 investible innovations that should be further investigated, developed, and championed today to

build resilient and prospering food systems in emerging markets over the next five years. This selection of innovations emerged through a

rigorous process of divergence and convergence with an expert panel. Together, these experts helped to illuminate the transformational potential

of each innovation, including the existing market opportunities, comparative advantage, critical risks, and performance across an array of

evaluation criteria, explained in more detail on the next page and in Section 2.

The top 22 investible innovations for today can be found in the table below. Some innovations, such as evaporative cooling systems, offer quick

wins. These low-hanging fruit are solutions that value chain actors can adopt quickly with minimal training and low up-front costs. Other

innovations, such as modular factories, are believed to have the most potential to reduce PHL in the long run. Still other innovations yield benefits

that primarily accrue to smallholder farmers, or would have the most positive environmental impact, or would face substantial systems barriers,

such as data and transport infrastructure, before delivering impact. See Section 2 of the full report for detailed innovation profiles.

1. Cooperative packaging solutions2. Modular factories3. Near-farm mobile processing4. Mobile packhouses & pre-cooling5. Dehydration for smallholders6. Battery technologies7. On-farm solar preservation8. Crates adapted for SHF supply chains

9. Micro cold transport10. Adaptable reefer containers11. Cold chain as a service12. Micro-warehousing and shipping13. Evaporative cooling systems14. Biodegradable coatings15. Microbes for agriculture16. Early warning system for diseases & pests

17. Improved traceability technologies18. Specialty marketing for PHL-prone crops19. Farm-to-fork virtual marketplace20. First-loss capital guarantee for PHL

reduction21. Mobile education centers22. Behavioral economics for agriculture

• Evaporative cooling systems• Cooperative packaging solutions• Crates adapted to smallholder

supply chains• Biodegradable coatings• First-loss capital guarantee for

PHL reduction

• Modular factories• Near-farm mobile processing• Dehydration for smallholders• Micro-warehousing & shipping• Specialty marketing for PHL-

prone crops

• Adaptable reefer containers• Behavioral economics for

agriculture• Mobile pre-cooling & packhouses• Specialty marketing for PHL-

prone crops• Mobile education centers

• Battery technologies• On-farm solar preservation• Evaporative cooling• Early warning systems for plant

disease and pests• Microbes for agriculture

• Cold chain as a service• Early warning systems for plant

diseases and pests• Improved traceability

technologies• Farm-to-fork virtual marketplace• Mobile education centers

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To gain confidence in each innovation’s estimated potential, our expert

panel converged from 100 evaluation criteria to a suite of 8 to serve as

an objective, intuitive, and comprehensive tool with which to better

assess the potential of an innovation to achieve the goals of this effort.

In the innovation profiles in Section 2, we include an estimate of how

each innovation performs on each criterion, as projected by our expert

panel. Absent rigorous field tests or primary research, these are just that

� estimates.

Supporting Emerging Innovations Now for Impact in 2035We also asked our expert panel to imagine how innovation could

alter the course of the future as offered in WEF’s four scenarios from

its 2017 Scenarios Analysis. In some instances, our experts described

specific applications for emerging innovations that could

fundamentally rewrite the way our food systems work. Quantum

computing, blockchain, Internet for All, and synthetic biology are but

a few of the innovations indicated as promising in the pursuit of such

transformation. Other times, experts offered ideas about the

opportunities that exist for transformational innovation to reshape

agricultural systems altogether. We view these opportunities as

Invitations for Innovation. In Section 3, we issue 10 such invitations,

each of which is meant to capture the imagination of investors,

policymakers, innovators, researchers, and you to inspire bold efforts

to reshape food systems in emerging markets.

1. How might we engineer productionsystems impervious to crop failureand spoilage?

2. How might we reimagine therelationship between consumers and producers?

3. How might we create closed-loopagricultural systems?

4. How might we assure that all foodeverywhere is priced to account forits true cost?

5. How might we create farm-freefoods?

6. How might we open, share, and usedata across the supply chain toeliminate information asymmetries?

7. How might we transform conventional agriculture intoregenerative agriculture?

8. How might we scale hyper-adaptive, localized polyculture?

9. How might we build and scale amodel of self-sufficient city-basedagriculture?

10.How might we reposition ruralareas as places of opportunity?

AffordabilityThe income range of individuals and institutions who could afford the innovation

UsabilityThe amount of training required for the end-user to effectively use the innovation

ScalabilityThe point in the diffusion process at which the innovation could be scaledwithin 5 years

Smallholder benefits

The percentage of benefits that would likely accrue to smallholder farmers

PHL reduction potential

The innovation’s potential to reduce current levels of post-harvest loss

SustainabilityThe length of time that external support would be required before the innovation is accepted, adopted, and provides benefits

Energy considerations

The type of energy access required to deploy and operate the innovation

Environmental impact

The innovation’s likely impact, either positive or negative, on the environment

THE PROMISE OF VERTICAL INDOOR FARMING

The global vertical farming market is expected to grow at a CAGR of 21.76 percent between 2018-2023.

Anticipated market size is US$7.461 billion by 2023 from a market size of US$2.289 billion in 2017.

Production levels on five acres of indoor farming equals 2,400 acres of conventional farming.

Vertical farming requires 70-95 percent less water than normal cultivation.

Volume 5, Issue 2GAIGAZETTE

A brand of

13A publication of

The first commercial

vertical farm called Sky

Greens opened in October

2012 in Singapore.

The stackable shipping

container method of

vertical farming was

pioneered by Boston-based

Freight Farms.

Being densely populated

makes Asia a key region for

vertical farming solutions;

Japan boasts about 450

indoor farming operations.

The first commercial

vertical indoor farm in

Europe opened in 2017 in

the Dutch town of Dronten.