Good morning Soren. Could you please tell us what you have been doing since you left Bunge?
I left Bunge in June 2019 after six years as CEO, and after 36 years in traditional agricultural trading and processing with Continental, Cargill and Bunge.
Over the past year, I have been trying to use my experience to help emerging companies across the full spectrum of the agricultural value chain. I have provided advice, directorship and, in some cases, capital to support these new companies in plugging into the existing food chain, to avoid mistakes, and to develop their thinking and their products.
I started with a blank page, but my premise was that food and health are inseparable and that agriculture should not only be sustainable but regenerative.
Where did you start?
I started with Vindara, a company that produces seeds for indoor agriculture. It is a sector that is snowballing. For example, Singapore has a project called ‘30 / 30’ whereby the city-state aims to grow 30 per cent of their nation’s food by 2030. They can only do this through investment in vertical agriculture.
The technology in the indoor sector is changing rapidly. For example, Vidara has reduced the breeding cycle for new seeds from 5-7 years to 18 months and can essentially tailor-make seeds to suit a specific outcome.
What other companies have you become involved in, either as an investor, director, or external advisor?
I am an advisor to Gro Intelligence, a company that curates and assembles global digital data around agriculture and food and provides sophisticated analytical tools to help draw supply chain conclusions. It is my ‘go-to source’ for market intelligence and analytics. The company is also developing various indices relating to climate disruption.
I am on the board of Kultivat, a company that has developed the technology to extract high-quality latex – natural rubber – from dandelion roots. It is a sustainable and economically competitive alternative to synthetic and plantation-grown rubber. Remember, synthetic rubber is produced from fossil fuels, while natural rubber is currently grown on plantations in South East Asia; it has the same environmental challenges as palm oil. Dandelion is an excellent alternative crop for farmers.
I have worked closely with Locus Agriculture Solutions, a company that makes micro-biological products that improve yields, reduce the need for inputs, and increase the ability of plants to capture carbon. They recently completed the first circular deal in carbon capture in row crops. The $250,000 sale was between a prominent Iowa farmer and Shopify, a Canadian-based technology firm. They did the deal in partnership with the Nori Carbon Removal Marketplace.
I’m on the board of Telesense, a company that has developed low-cost, remote sensor equipment that monitors grain quality. It uses data and AI to predict how grain quality will evolve during storage, helping to reduce spoilage. It also allows you to optimise merchandising decisions and improve processing yields for a range of raw materials from malting barley to oilseeds.
You have several diverse but complimentary themes here. What other arrows do you have in your quiver?
The one thing that all these companies have in common is that they are about optimising existing agriculture using modern technology.
Tilray, where I am on the board, is a publicly listed Canadian company that grows, processes, and distributes hemp and cannabis products. I learned about the efficacy of medical cannabis through close friends who have been able to improve their quality of life through the use of medical cannabis. The applications are wide-ranging – from pain management to epilepsy. It has had a significant impact on me.
The Hemp plant, which is in the same family as cannabis, produces seeds and what are called “hemp hearts”, protein-rich superfoods in the same category as chia, flaxseed or chickpeas. The world is moving quickly towards plant-based proteins and healthy oils. Hemp is right on-trend.
Tilray is a pioneer in Cannabis and Hemp. It is still ‘day one’ for the industry, but the company is well-positioned for the significant growth which lies ahead.
Many trade houses have been investing in start-ups in high-growth areas, while at the same time running their legacy trading businesses. Does starting with a blank page give you an advantage?
Yes, although it has been a massive advantage having the understanding and appreciation of traditional agriculture and food. Those traditional value chains will still dominate the way we produce and consume food for many years. These other areas will initially develop in parallel, but they will eventually converge.
Do publicly quoted trading companies have more of an incentive than private companies to seek growth in new areas?
Public companies have to balance short-term results with long term strategy and investment. There can be a conflict between these two goals, whatever sector you are in. The cyclicality in agriculture and food can amplify this pressure, which is why many try to diversify into more added value activities.
Being public does have its advantages. You can access capital in a way that you can’t when you are private. As long as your investors understand what you are about, and they know the industry, being public does not have to be negative.
I am concerned that investors are looking to ‘revolutionise’ agriculture without realising that agriculture has been in a state of continual revolution for the past 75 years. Won’t investors in these new sectors ultimately be disappointed?
Over the past 75 years, the focus has been on increasing agricultural yields, while at the same time reducing costs. It has been about growing enough calories.
We still want to grow enough calories, but we now want to develop the right kind of calories in a way that doesn’t harm the environment, repairs the soil and produces nutrient-dense food.
It is a new revolution: using technology to find ways to improve existing production techniques and to regenerate soils. If you haven’t already read it, I recommend the book An Agricultural Testament by Howard Albert. It was first published in 1940 and explained the power of regenerative practices known already then. Imagine those ideas powered with current technology. The goal is to harness the power of ‘Production Ag’ without all the adverse side effects.
Will farmers buy into this?
Yes. Farmers love what they do, and they love their land. Contrary to popular opinion, farmers are open to change. When you present them with a suitable alternative, they will go for it. The Locus-Nori deal is an example of that.
Up until now, many farmers have not had many other choices than improving yields and lowering costs. There is a way forward where farmers can get the results they need while consumers get the quality of calories they want. It is about producing sustainable, nutrient-dense products.
That’s one side of it. The other side is that investors are looking at the interface between food and health – the notion that you are only as healthy as the food that you eat.
The 15 to 35 age bracket is driving this movement; they will ultimately dictate the future of agriculture. There is a lot still to be done. There is room for a lot of investment, and the future is full of promise.
Thank you, Soren, for your time and inputs! And good luck with your presentation to the Geneva Grain Conference!
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