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The 'Soil Valley': The Ag Industry is Primed for the Next Tech Bubble

July 20, 2016

The farming and produce industry is on the verge of the next technology bubble. This is fueled by the growing demand for fresh local produce and the aging demographic of farm owners. Today the average age of a farmer is around 60, which has grown over 10 years in the past 2 decades. When you take into account that the average retirement age is 63 years old, you can see that the industry is primed for a major demographic shift. As farming operations are handed over to the next generation, the demand and need for new farming techniques and technology increases. Here are 2 of the most influential emerging farming technologies. Futur Farm W109 2048x1078 Simplified Layers Adobe Rgb

1.BigData- With the advent of cloud computing and storage, more data has been created in the past 2 years than the history of mankind. As a result of all this data creation, a need for data storage and analysis tools has materialized. The agriculture industry has been a little late to the data party, but we are beginning to see the adoption of some new technologies. Here are just a few examples.

  • Drones – The agriculture industry was one of the first industries to test and adopt the use of drones, but it wasn’t until recently that farmers have actually used them as a data collection tool. Farmers now utilize drones to map out fields and collect vital soil data. This data is automatically uploaded into built-in software platforms and a soil prescription is created. This allows farmers to create a seed, fertilizer, and chemical program that decreases costs and ultimately increases their yield.
  • Infrastructure health sensors run on the cloud- Large farming conglomerates often have multiple produce houses, coolers, and storage areas. These health sensors could be placed in all buildings and provide farmers with feedback on conditions at each facility. For example, a humidity and temperature sensor could be placed in each cooler giving the farmer instantaneous data on temperature, humidity, and supply levels. Such a technology will ultimately decrease waste and increase turnover of produce.
  • Farming Management Systems- With the data follows the need for an integrated platform that collects, analyzes, and reports important information. These systems have been around for a decade, but many are beginning to use advance data analytics in order to increase yield and decrease cost. We will continue to see advancements in this software, with an increased emphasis on user flexibility.

2.Automation- In 1900 over 40% of the population worked in the agriculture industry; in 2000 that number was only 2%. This, combined with today’s farm labor shortage, has fueled the demand for farming automation. Many farmers are turning to robots to take over some of the harder labor on today’s farms. The robots, affectionately referred to as agbots, have taken over tasks such as harvesting, plowing, picking, weeding, and seeding. In the more distant future there will be swarms of theses robots utilizing sensors in order to implement precision farming techniques. While swarms of agbots may be a distant thought, automation is definitely not. In fact, the agriculture robotic industry is expected to grow from $3 billion to $17 billion by the end of 2020.

While the farming industry has never been considered ‘sexy’ in the eyes of technology enthusiasts, the industry is primed for the next technology revolution. This revolution is fueled by the demographic shift in the industry, the increase demand for fresh local produce, as well as, the current farm labor shortage. It will be exciting to see what farming region will be the next ‘Silicon Valley’ or what I like to call the next ‘Soil Valley’.

Netflix vs Blockbuster Repeated: It's Adapt or Die in the Grocery Industry

July 07, 2016

In the early months of the year 2000, Netflix CEO and co founder Reed Hasting had a meeting with Blockbuster’s CEO John Antioco about forming a partnership. During the meeting, John all but laughed Reed out of theoffice, citing that Netflix was still a niche business. Fast forward 16 years later and Netflix is a billion dollar company with 75 million subscribers, while Blockbuster is just a fond memory in many early millennials minds. This is one of the biggest “adapt or die” failures in recent history. The grocery industry is going through a similar trend. This “adapt or die” mentality has forced big grocery chains into acquisition, forced some into bankruptcy, and left some lost, tirelessly searching for a winning strategy. 2016 is a big year for the grocery industry. Here are 3 evolving market trends in the industry.            

                                                                                                      Future Grocery  

1.Smaller Stores- Traditional grocers have lost 15% of market share over the last decade and are forecasted to lose another 2.8% by 2018. As a result of this decline, traditional grocers have turned to smaller more intimate stores. Square footage of the American grocery stores has steadily declined in the past 20 years. This has caused stores to have fewer produce and product offerings. Even big box stores, like Costco, have begun consolidating and searching for new markets to enter. In fact, Costco has secretly been testing selling supplies specifically tailored to small business. You can read about it here.

As a result of this smaller store trend, many chains are looking for ways to conserve space. This is beginning to be more and more important because of the growing demand for prepared foods and customer satisfaction. This is fueled by the emergence of the buying power of the millennial generation. 9 out of 10 millennials prepare dinner at home 3+ times a week and 75% want to be better cooks. This generation values experience and demands a personal touch, which is why many stores are adding high end coffee shops, grills, bars and cooking classes. We will see more and more investments in the shopping experience in the next couple of years.

2.Authentication of Fresh Food- It is no secret that people love fresh food and produce, but now shoppers want evidence of the freshness of the food. This has caused many chains to both search for ways to provide that evidence, as well as, improve the efficiency of their processes to keep their items fresh. Enter BigData. BigData is basically large sets of data that needs specialized tools to organize and analyze. With the advent of new technologies, especially the cloud, grocery chains are now able to analyze all of their data throughout the supply chain. This means that they will have higher transparency with their customers and will increase the importance of the relationship with their suppliers.

3. Bioregions- Local food continues to be an important trend in the grocery industry. The problem is there is no specific definition of what “local” actually means. Does buying an apple from Washington, while in Washington count as local? Or does buying a Washington apple, while in Oregon count as local? This has heightened micro regional competition as local growers are pitted against each other and are excluded from opportunities in other regions. As a result, the emphasis on bioregions is beginning to take root in the industry. A bioregion is a region, whether it is a state, group of states, or geographic region that is known for growing a certain produce. This is not a brand new trend as we already have Idaho Potatoes and California Raisins, but we will start to see new regional branded items emerge.

It is an exciting time to work in the produce and grocery business. After years of static growth, grocers have begun to develop new technologies, new stores, and new strategies. This is all centered on the changing demographics and demands from the Millennial Generation. Many new grocery stores have changed their overall strategy and store layouts to make grocery shopping more of an experience rather than a chore. I am excited to see where the industry is going in the future as new innovative companies enter the market, like Amazon and Uber. As I like to say, innovation breeds change and without change there is failure.

Sweet Potatoes an American Story

June 29, 2016

It's almost 4th of July and I have always wondered what was more "American" sweet potatoes or apples. Not sure of apples place in America history, but check out this timeline and facts on sweet potatoes in America.

  • The cultivation of sweet potatoes began in Central and South America in 2500BCE
  • Columbus brought sweet potatoes back to Spain in 1500's
  • The early colonies adopted the sweet potato and it became a popular food and trade item
  • George Washington was a sweet potato farmer prior to joining the army
  • Sweet Potato Biscuits were served at the First Continental Congress
  • U.S. historians say easy-to-grow, highly nutritious sweet potatoes were a major factor in keeping hunger from the door through such tough times as the early European colonies, Revolutionary War, Civil War and Great Depression.
  • George Washington Carver was born a slave, but revolutionized Southern agriculture as well as introduced 100's of new uses for sweet potatoes

                                            Timeline For Sweet Potatoes