Farmers ‘ready and willing to try’ organic growing solutions

The agricultural organics industry has seen many changes over the past year, in technology, regulation and agricultural retailing, to name a few. Consumers and governments are also increasingly demanding more organic products and fewer chemicals.

Yet in some ways, the agricultural organics sector – which includes biofertilizers, biostimulants and biocontrols – has not changed dramatically over the past 12 months. As was highlighted at this year’s BioAg World Congress, the agricultural industry remains unclear where organic products fit in, and farmers are largely reluctant to pay a premium for organic-based products.

A challenging macroeconomic environment that has seen countless food and beverage startups close their doors adds yet another layer of complexity to the organic produce sector.

Pam Marrone, founder and president of Invasive Species Corporation, calls it “a challenging fundraising environment” for organic startups. “There is a bifurcation in the status of companies: some great successes and some great failures,” she says.

Some of these recent victories include the first RNAi biopesticide product registered with the U.S. Environmental Protection Agency (EPA) and the first new class of peptide biofungicides receiving “biochemical type” status with the EPA.

A major loss this year was the demise of AgBiome, once an agtech darling whose assets were recently acquired by Gingko Bioworks.

Marrone, who is also an early pioneer in the organic produce industry, will take an in-depth look at the latest market developments at the Salinas Organic Summit 2024 taking place next week in Salinas, California.

Sometimes called “the salad bowl of the world,” California’s Salinas Valley region is home to much of North America’s specialty crop production, including leafy greens, strawberries, and tomatoes, as well as nuts like almonds.

Co-presented by the Western Growers Association and New Zealand-based agri-food technology consultancy Wharf42, the Salinas Biological Summit is designed to meet the needs of multiple stakeholders in the specialty crops industry: growers, investors, regulators , startups, large agribusinesses and dealers, among others.

Adapting to a changing environment (and supporting producers in doing so) is the main theme of this year’s summit, and Marrone and others will examine the key opportunities and biggest obstacles when it comes to a greater adoption of organic products in the specialty crop sector.

Customers need ‘compelling financial justification’ to switch to organic products

It is of utmost importance that, despite the changing environment, those who manufacture products still need a solid strategy to access the market and to avoid the long-standing stigma of “bugs in a pitcher” that haunts the organic sector.

There are two key points that startups and innovators should keep in mind, says Elliot Kellner, director of business innovation at the Donald Danforth Plant Center: “Strive for efficiency at least equal to that of existing chemicals and focus on the value proposition for existing chemicals. producers. »

“We heard directly from farmers that they were ready and willing to try new organic amendments, but that their effectiveness had to be at least close to that of the products they already use,” said Kellner, who will speak on the subject during the conference. Salinas Organic Summit. “The adoption of new, significantly less efficient products will be a challenge, regardless of the associated environmental benefits.”

His assertions echo those at last year’s summit, where a panelist, Naturipe Berry Growers’ technical and research director Hillary Thomas, reminded the audience that organic products “have to pass the test of effectiveness , the economic test. The average producer doesn’t have the bandwidth or capacity to test these things.

As for the value proposition, particularly for producers, Kellner says there must be “a compelling financial rationale to stop using synthetic chemicals, given the agricultural sector’s notoriously tight margins, margins which, in fact, are tightening as we speak due to climate change.

“We cannot rely on a call for environmental/climate philanthropy from our agricultural producers to drive the adoption of alternative organic products,” he continues. “The adoption of environmentally friendly organic amendments could improve our management of natural resources, but this progress will only occur if the use of these products is supported by a strong business model. »

Investors are looking for ‘strong business models’ rather than ‘impact-driven plays’

Of course, investors also look for these strong business models. Or as investor and Organic Summit 2023 panelist Kirk Haney puts it: “We’re looking for reasons to say no.”

The Salinas Biological Summit 2024 will once again look at organics from a financial perspective, analyzing who is really investing in this market.

Despite the purported planetary benefits of organic produce, investors are more likely to back solid companies with profitable prospects than those touting the environmental and health benefits of organic produce, Kellner suggests.

“The investment community is increasingly looking for solid business models to invest in, given the current situation and market sentiment, and is less likely to support more ambitious, impact-focused plays” , he notes.

As AgFunder’s Global AgriFoodTech investment report noted earlier this year, funding for overall agri-food technology is down nearly 50% in 2023; Nowadays, organic startups are no more immune than other markets when it comes to getting support. (Disclosure: AgFunder is the parent company of AgFunderNews.)

The 2024 summit will look at what investors are looking for and how startups should adapt to this new reality.

In Canada and beyond

California may be home to the world’s salad bowl, but it’s not the only place the organic produce industry should be watching when it comes to specialty crops, says Dennis Donohue, director of the Western Growers Center for Innovation & Technology.

“We are particularly pleased to add the Canadian perspective to this year’s conversation,” he notes. “Canada is an important market and exerts a great influence on the maritime transport sector. It is especially important that producers, investors and dealers understand all of the market dynamics at play.”

Finally, to further accelerate innovation in the organics sector, agrofoodtech VC The Yield Lab is launching a Global Biologicals Challenge in 2024 which will identify and select innovations that address regional and global challenges around organics.

Delegates joining the Salinas Organic Summit will have the chance to participate in the challenge during a 30-minute lunchtime workshop hosted by California State University Monterey Bay.