Ariel, great explanation, which definitely will open the eyes to those not familiar with the sector. In my opinion the driving factors for change are going to be technology (especially digital), climate change, generational change and having access to innovative financing solutions. Your point "2" is a consequence and a need of the fore-mentioned factors. Developing technology is not that of a big challenge, it is more the implementation and proving that this new technology (including new processes/ag concepts) really generates the benefits to the farmers at first. And it is actually this point which creates this tremendous hurdle for all of us who are active in agro. To overcome it it requires a lot of people skills and patience. Many investors and startups think that they can jump over this hurdle with just putting more money into the business, but it won't. So with regards to Fernando's comment and your answer I think that there is little chance that the investments made into ag-tech companies will generate the payouts necessary for the investors. I do think, however, the likelihood of success is much higher for the ones like FBN, indigo, Bushel, Apollo Agriculture. Honestly, I was positive on ag-tech/digital agtech companies until I saw the IPO filing of Farmers Edge - not anymore.
I really like how you showcase examples of consolidation in each step of the value chain. I'm curious what you think the effects of this consolidation will be for start-ups - does that consolidation limits their exit/growth opportunities and forces them to be acquired, or is there still a viable path for startups to remain independent in this landscape?
Thank you so much for this article Ariel. This is exactly what I needed! From your understanding are there any big differences between the Ag value chain between the US and Canada?
Ariel, you might want to consider a few more circles on the left side depicting soil, water and nutrients? Or maybe as the basis for the whole endeavor?
This is great. Loving your recent articles!
Ariel, thanks so much for writing this. As someone who transitioned into this with no food/ag background, I wish I had this on day 1.
Ariel, great explanation, which definitely will open the eyes to those not familiar with the sector. In my opinion the driving factors for change are going to be technology (especially digital), climate change, generational change and having access to innovative financing solutions. Your point "2" is a consequence and a need of the fore-mentioned factors. Developing technology is not that of a big challenge, it is more the implementation and proving that this new technology (including new processes/ag concepts) really generates the benefits to the farmers at first. And it is actually this point which creates this tremendous hurdle for all of us who are active in agro. To overcome it it requires a lot of people skills and patience. Many investors and startups think that they can jump over this hurdle with just putting more money into the business, but it won't. So with regards to Fernando's comment and your answer I think that there is little chance that the investments made into ag-tech companies will generate the payouts necessary for the investors. I do think, however, the likelihood of success is much higher for the ones like FBN, indigo, Bushel, Apollo Agriculture. Honestly, I was positive on ag-tech/digital agtech companies until I saw the IPO filing of Farmers Edge - not anymore.
I really like how you showcase examples of consolidation in each step of the value chain. I'm curious what you think the effects of this consolidation will be for start-ups - does that consolidation limits their exit/growth opportunities and forces them to be acquired, or is there still a viable path for startups to remain independent in this landscape?
Thank you Kanupriya! I am so happy to hear that!
Do you differentiate between Supply Chain and Value Chain - or do you use the terms interchangeably?
Thank you so much for this article Ariel. This is exactly what I needed! From your understanding are there any big differences between the Ag value chain between the US and Canada?
Ariel, you might want to consider a few more circles on the left side depicting soil, water and nutrients? Or maybe as the basis for the whole endeavor?