Innovation in animal protein production

The Kestria Agribusiness & Agriscience Global Practice Group has convened esteemed experts from various fields including genetics, animal feed, farming, food processing equipment, meat and poultry production and consumer end products. The collaboration of these diverse professionals is essential and exciting, bringing together a wealth of knowledge and experience to drive forward sustainable agricultural practices.

Key takeaways:

Agribusiness Innovation: The article highlights ongoing innovation in agribusiness to meet global food demands, integrating technology and sustainable practices to address challenges like climate change and population growth.

Collaboration and Expertise: Groups like the Kestria Agribusiness and Agriscience Practice Group facilitate collaboration among diverse experts, ensuring effective navigation of challenges and harnessing of opportunities in the industry.

Comprehensive Solutions: The industry focuses on speeding up innovation, reducing CO2 footprints, and ensuring food security by integrating different perspectives and fostering collaboration among stakeholders for sustainable agricultural practices.

Introduction to innovations

Cristián Meyer from Chile, Innovation Director at Agrosuper, a leading animal protein company from Chile, offers a diverse product range including pork, turkey and chicken. Agrosuper exports nearly 40% of its products internationally, with net sales of $2.7 billion, operating in over 50 countries with eight sales offices. Agrosuper's innovation model focuses on internal and open innovation. Their collaboration with startups over the past 5-6 years emphasizes building relationships with small companies for technological advantages, rather than pursuing venture capital. This venture client model has yielded $3.9 million in purchase orders from startups, mostly from Chile. The company’s vertically integrated structure allows startups to work across the value chain. They aim to enhance their startup scouting globally, focusing on the US, Mexico, and Israel. Agrosuper’s commitment to leveraging innovation and technology to drive growth and efficiency worldwide.

Giovanni Cennini from the Netherlands, Director of Research and Development at Moba represents the manufacturer's perspective on equipment used in processing and packaging consumer products. Moba is renowned globally for egg processing equipment, generating around 200 million euros in annual revenue due to the growing demand for eggs driven by population growth and the expanding middle class. An estimated 1 to 1.2 billion eggs are processed daily, using data collection and mining to enhance value across the entire value chain. Their focus is on driving sustainable profitability, offering solutions that minimize resource usage, such as reducing water consumption and addressing labor shortages to lower environmental impact. In the Netherlands, the government’s push to reduce emissions poses new challenges for farmers, which Moba sees as opportunities. Innovation in agribusiness involves leveraging technology like AI and automation to meet these challenges and improve processes. Their philosophy is to continuously create value for their customers and themselves by addressing these challenges head-on.

According to Mariane Acordi from Brazil, the Latin America & MEA Director at M-tech Systems, it's not just about market share or innovation; it's about combining IoT, AI and extensive data to improve processes. M-Tech Systems is a software company, that started 30 years ago and quickly focused on global operations. Today, 98% of US poultry companies use M-tech, 75% of chicks in Brazil are produced with M-tech, holding a 65% market share in Latin America. This reflects the company‘s responsibility to enhance how its partners navigate industry challenges. With evolving technology, M-Tech collaborates with startups, invests in their innovations and integrates them for their customers. The market's fast pace requires a mix of internal development and external collaboration. Operating globally allows them to combine insights from different regions, driving essential innovation. Facing climate change and increasing food demands, the company strives to improve and support both animal and broader agricultural processes.

As per Nayara Tavares Ferreira from Canada, Director of Poultry Technology Application at Trouw Nutrition, the unique requirements of different locations necessitate varied investments in software, data analysis and other resources. Trouw Nutrition, a part of Nutreco, operates in over 105 countries and strives to integrate the best solutions tailored to their each location's specific needs. While Nayara specializes in poultry, she highlights the collaborative efforts of their innovation team across various sectors. Regarding innovative ideas, successful strategies from sectors like swine or dairy farming can be adapted for poultry and vice versa, as there are commonalities in animal nutrition, such as nutrients and ingredients. Additionally, Skretting, another Nutreco company, includes an important division for shrimp and fish, facilitating the exchange of information and best practices across all sectors.

TC Tan from Singapore, Senior Advisor at Bits & Bites, his experience as an executive leader with Danisco Dupont and Novozymes spanned Asia-Pacific to the Middle East and Africa, managing operations across various time zones, cultures, languages and industries, particularly enzyme technology. At Novozymes, a leading enzyme producer based in Denmark, TC Tan led sales, marketing and innovation teams, focusing on high molecular and close-to-market innovation. Close-to-market innovation, which involves tailoring molecules to meet customer needs and tweaking production processes, drives short to medium term sales. Recruiters should seek innovation management talent experienced in this area, beyond basic R&D. TC Tan started his own consulting company, providing advisory services. Bits and Bites is a venture capital fund backed by Temasek Holdings, focusing on agro-food tech. As senior advisor, TC Tan reviews numerous startup pitches for funding, a role that is highly engaging. He also provides guidance to several companies in which Bits and Bites has invested. Typically acting as an executive coach to CEOs and their executive teams, advising the CTO on innovations and the marketing team on commercialization strategies. In addition to his consulting company, TC Tan started a business in the nutrition sector, focusing on both animal and plant nutrition. Regarding the sourcing of interesting technologies and addressing industry pains and needs, while Singapore is not like the Netherlands in terms of agriculture industry development, it is an excellent pollination ground. Leaders like TC Tan, who has led MNC business operations, understand the ag-tech and food-tech businesses and know where to find and match technologies, innovations with industry needs.

For Marko van Asten, Owner at Van Asten Group and Member of the Supervisory Board at Topigs Norsvin, northwestern Europe has unique agricultural demands, requiring to constantly innovate. Due to high local demands and stringent regulations, they always seek new solutions. For example in animal nutrition, the development of a fermentation process with Nutreco which reduces the need for raw materials, improves piglet health, cuts antibiotic use and lowers their CO2 footprint. Their focus on the Corporate Sustainability Reporting Directive (CSRD) is crucial. Within five years, CSRD will be essential globally. Our farm’s CO2 footprint is now lower than tofu’s, thanks to investments in solar, biogas, fermentation, and genetics.

At Topigs Norsvin, the goal is to be the most sustainable pig genetics company. Using advanced breeding techniques and CT scans, they manage a database of over 50 million pigs, making them the fastest-growing swine genetics company globally.

Cross-sector innovations and practical implementations

As Mariane Acordi shared, in 2015 M-Tech Systems began working with swine. Their genetic solutions is prepared to use IoT and data analysis to assess the impact of weather and temperature changes on key performance indicators. ‚We conducted a program in Brazil with Embrapa, a respected government institution. We tested climatization using IoT and software in nursery and termination farms to evaluate the benefits. The study, to be published in August, covers the Southern Hemisphere and complements existing Northern Hemisphere studies. We pursue innovation by rigorously testing new technologies. Our approach is to innovate with purpose and practicality,‘ says Mariane Acordi.

As per Cristián Meyer, their innovation model includes both internal and external sources, with suppliers being the main source of past innovations. Specific challenges are addressed collaboratively, such as the avian flu crisis last year. Current efforts focus on working with existing suppliers, not just startups. ‚Our process involves a funnel system, starting working with many startups. We study the team leaders, the technology and execute proof of concept (POC) to understand the value they offer. Startups that show good results are then considered for partnerships, where we execute a pilot and integrate their technology into our business operations. Several factors influence our choices, including the specific needs of our different business units and environmental issues. Waste management and animal welfare are among the challenges we address by collaborating with startup teams,‘ adds Cristián Meyer.

TC Tan notes that when startups are shortlisted, hundreds of candidates with promising technologies are narrowed down to about half a dozen. ‚Statistically, about two out of ten startups will succeed, meaning eight will likely fail. This trend is similar for private equity and venture capital firms. There is no magic formula; investing in a pool of companies and aiming for a 20% success rate is essential for good returns. However, failures often stem from issues in execution rather than the technology itself. Challenges include poor market insights, competitive barriers and restrictions and the startup team's lack of expertise in making the right market assumptions and scaling up. A successful startup will need leadership talent that encompasses skills not just in managing functions like research, production, and marketing, but ability to envision, strategize, build team and leading team to sell and transform the industry,‘ states TC Tan.

Agreeing with TC Tan, Giovanni Cennini emphasizes that technology itself is never the failure. Even if new technology initially falls short, with effort, it will eventually fulfill its potential. The problem lies in incorrect initial hypotheses. ‚The right leaders and a multi-dimensional team view challenges holistically. New technology offers opportunities, but markets may need demand creation and may not have sufficient pull. Thorough analyses can show positive results, but products may fail to fit customers' workflows. Success depends on a team's holistic understanding and leadership's commitment to selecting the right ideas and reducing risks. Successful innovation can raise success rates from 2 to 4 out of 10. When big companies acquire or license startup technology, cultural integration is crucial. Startups often fail in larger companies due to cultural changes. Careful attention to this phase is needed, as many initiatives fail due to cultural and behavioral differences, not technology or business issues.‘ says Giovanni Cennini.

For Nayara Tavares Ferreira adoption is crucial for success, as is proximity to the user. ‚Innovative startup ideas can fail if customers don’t understand or use them. R&D can generate great ideas, but they must be user-friendly to succeed. Sales teams may also mishandle products, hurting their potential. For instance, in Brazil, Salesforce is seen as a tracking tool rather than a customer service tool. To prevent such issues, we form diverse teams from commercial, R&D and finance sectors to ensure synergy and improve innovation. An idea might be great for R&D or publications but may not suit the final customer,‘ notes Nayara Tavares Ferreira.

According to Marko van Asten, for good cooperation, you need two or three parties with different views and open-minded people willing to collaborate. ‚One party must take ownership; not all can. We took ownership of the fermentation project despite lacking know-how, believing it would advance animal health, reduce feed costs and meet CSRD goals. We needed partners like Nutreco and the liquid feed system manufacturer for the right process. Innovation takes time and belief. There are no excuses. We had vision, passion and action, but faced many challenges. The new mindset helped us ask, "How can we make the next step?" With belief and support, we achieved our goals over a few years. Now, we are gradually progressing. Scaling up is difficult, but we are happy with the tools and progress we have made. It's rewarding to see our efforts are slowly paying off,‘ adds Marko van Asten.

Future directions in sustainability

As Cristián Meyer highlights, the current focus is on animal protein, but there is also awareness of the emerging alternative proteins being launched globally. Efforts in this area include the launch of a plant-based burger five years ago in collaboration with Alfa Chilena. Currently, there is cooperation with Done Properly, a startup specializing in fungi-based products, on developing a plant fungi burger. Additionally, cultured meat is being explored as an alternative. ‚We are transitioning from being solely an animal protein company to a broader food company, which is why we are open to working with alternative proteins. It's an interesting and innovative way to produce protein. We are learning a lot from our interactions with various companies and startups in Chile and around the world. Although this market segment is currently small, we are gaining valuable insights into its trends and potential,‘ says Cristián Meyer.

For TC Tan, the industry's shift towards alternative proteins is often considered. However, for the foreseeable future, animal protein will still be desired by many populations worldwide. ‚We all acknowledge this business trend and are satisfied with it. Although it is predicted that alternative proteins will become more prevalent in 30-plus years, the population will continue to grow and so will the consumption of animal protein. Therefore, it is crucial to substitute unsustainable animal-based protein feed with alternative proteins. This is a significant aspect of sustainability, technology and innovation,‘ adds TC Tan.

Mariane Acordi states that investing in both animal products and the long-term sustainability of companies is crucial. She emphasizes the importance of anticipating future challenges, such as climate change, which will impact every aspect of production. ‚When focusing on innovation, we need to address these issues too. Sustainability, animal welfare, nutrition and genetics are important, but additional challenges must be considered. For example, recent events in Brazil, a lot of people were affected, highlight the impact of climate change. This new reality demands attention and action. We have a responsibility to measure our carbon footprint and improve production channels. Ignoring these issues is not an option. Prioritizing sustainability in our innovation efforts is essential,‘ states Mariane Acordi.

Historically, as Giovanni Cennini points out, society's grand challenges have been addressed in silos: governments focus on policy and are often late, consumers have their demands, and industries have their views. The real challenge for innovators is to break these silos and look at problems holistically. Innovation involves not just new products and technology but also different perspectives. ‚Achieving this requires collaboration among stakeholders in the value chain. By sharing knowledge and data, we can develop comprehensive solutions. We need to bring more stakeholders together to solve these problems collectively,‘ says Giovanni Cennini.

What happened in Brazil, Marko van Asten emphasizes that we must focus on two things: speeding up innovation and reducing the CO2 footprint worldwide. ‚There are huge possibilities in the agricultural sector, so don't dismiss them. Instead, embrace and leverage these opportunities. We need to make progress faster than we have in the last 10 years.‘

Summary

Agribusiness is innovating to meet global food needs by integrating advanced technology and sustainable practices. The industry is shifting towards comprehensive solutions that address climate change, resource efficiency, and population growth. This evolution requires breaking down silos and fostering collaboration among stakeholders. Emphasis is placed on speeding up innovation and reducing the CO2 footprint, while ensuring food security and adapting to new market demands. The focus is on integrating different perspectives to develop practical and sustainable agricultural practices for the future.

The Kestria Agribusiness and Agriscience Practice Group understands the industry’s dynamics and provides clients with local market knowledge on a global and region-specific basis. Search mandates are executed in every functional area of agriculture, agribusiness, and agriscience. Agri leaders that understand innovation are placed all over the world. The group connects with industry leaders to stay tuned with the fast-paced innovations in agribusiness. As industries serving these sectors prepare for a future marked by both promise and complexity, expertise within the group ensures effective navigation of challenges and harnessing of opportunities.