Trend Spotlight: AgTech (Agriculture Technology)
First there were cleantech, greentech, fintech and biotech. Now one of the latest tech sectors to see fast-growing venture capital investment is agriculture technology, or AgTech, and it could spell the beginning of an agricultural renaissance.
AgTech is the use of technology to improve agricultural productivity and commerce. After several stagnant decades, interest and investment in the industry has jumped in recent years, with AgTech garnering $2.36 billion in investment in 2014.
So what’s driving the AgTech boom and what does it mean for the food industry?
NEED FOR FOOD SUSTAINABILITY AND EFFICIENCY SPURS INNOVATION
As Barbara Grady writes for GreenBiz, “With responsibility for a third of global warming and needing to feed 9 billion people by mid-century, agriculture is feeling the heat—and opportunities—to change.”
Like most industries, agriculture is under pressure to develop environmentally sustainable business practices and increase production to meet the needs of the global population. Much of the latest wave of AgTech innovation is being driven by startups that are applying new hardware, software and data technologies to address age-old farming challenges.
For instance, one company, e-connectivity consortium AgGateway is working to improve the sharing of data between machine systems and farm management information systems, to foster efficient decision-making and increase production.
EDUCATED CONSUMERS DEMAND HIGHER-QUALITY PRODUCTS
People are increasingly informed about agriculture’s impact on the environment and their own health. More consumers are seeking out local produce, avoiding GMO crops, and opting for organics to avoid pesticides. In fact, a 2015 Nielsen survey of more than 30,000 people worldwide found that 33 percent said organic ingredients were very important to their purchasing decisions and that they were willing to pay a premium for organic products.
As public awareness of farming practices rises, businesses are pivoting to new tech tools to better meet consumer demands. For example, insects do an estimated $20 billion worth of damage to U.S. crops each year, so companies like Spensa offer precision pest management software, helping farmers automate pest control processes so they can reduce pesticide use and save more crops.
TECHNOLOGY ADVANCEMENTS ENABLE SMARTER FARMING
While agriculture clearly hasn't been devoid of the latest in technology, recent advancements have really spurred the boom. As other industries have begun to take advantage of developments in mobile technology, e-commerce, big data and the Internet of Things—along with better hardware sensors and the rise of drone and robot technologies—the world of agriculture was ripe for innovation.
New mobile technology has made the hands-on nature and sheer scale of farm work more manageable. A host of ag-related mobile apps have launched to help farmers do things like record field notes in real time with precise geo-tagging, get up-to-the-minute field-level weather information, calculate soil nutrients—and much more.
Drones and robots are being deployed to efficiently gather aerial-based data and reduce labor costs. Using smart new sensors, a probe from AquaSpy precisely measures soil moisture and sends growers data they can use to increase crop yields. The field of precision livestock farming uses sensors to monitor animals for reproduction events and health problems.
This is just the beginning of what promises to be a fruitful next decade in AgTech. Food professionals and consumers alike can look forward to the ways technology will be applied to the most pressing challenges in global food production.
Just as new tech solutions are energizing the agriculture industry, they’re also bringing new insights and efficiencies to food supply chains. Learn how traceability software can help your business better meet consumer demands with our free guide, Selling the C-Suite on Supply Chain Traceability Software.