Leading Australian venture capitalist Matthew Pryor of Tenacious Ventures shares his insights and experience with growers and advisors at the Australian Cotton Conference this week. He believes the industry’s climate-adaptive technologies can attract global collaboration and multi-million-dollar investment. And now is the time for cotton growers to engage with consumers in the digital realm like never before – to drive opportunity and ensure rightful representation.
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Cotton growers should seize the opportunity to innovate, collaborate and deliver a ‘whole new level of engagement’ with consumers, in a similar way to the cocoa and coffee industries.
I see opportunity for collaboration in two key areas. While it’s certainly true that the cotton industry has innovated and delivered significant results like productivity, lower emissions of GHGs and lower inputs, perhaps the focus up until now has been on actual on-farm practices. How do we collaborate in a new opportunity, to turn that into a story that consumers engage with?
Consumers are digital natives and they’re very used to taking all their decision-making and brand engagement online. Industries like cotton that have come under scrutiny for safe ecological practices and fair trade, like coffee and cocoa, have direct connectivity to growers and regions. Comparatively there’s much more specific detail connected to your retail experience or cup of coffee, like the QR code on the packaging, which directly relates coffee to the people involved in growing it. That’s pretty powerful.
We need to engage with the property that the cotton product came from – the sustainability story and regional economic story that sits behind each farmer. There’s a whole new level of engagement that could be delivered.
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We’re starting to see these areas being actively worked on, but they’ll need collaboration that extends the length of the value chain, from ginning to fibre to garment to retail, and all of these links require investment. A lot of building blocks and cornerstone infrastructure are already there but it’s a case of drawing that together and asking, ‘How do farmers want themselves represented?’
If we talk about ag in general, environmental and ecological sustainability is a big trend but it has to get up to scale. The cotton industry needs to be an exporter of climate solutions. So that at the industry and farm level, there are economic benefits in ecosystem service marketplaces through water and nitrogen credits as well as innovation at the plant genetics and science level. We call this tech digitised biology, and it allows us to go much faster in achieving genetic improvement.
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As an investor we think about progressing towards a profitable sustainable food system. Lower intensity production is a theme – how do we use the absolute minimum of herbicides and pesticides? Are there biological alternatives? But there is progression. Water availability will be a real problem and a challenge for social licence, so continued improvements in efficiency and transparency will be essential. Obviously, all that supply chain attribution will help people make choices, but the financial services industry is becoming increasingly more demanding of information that shows the credit that they extend is being used in ways that have good financial and ecological returns.
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Agriculture is complex. In the end Australian farmers are beneficiaries of innovation, but they need stable reliable companies in the next decade if they’re to make this transition. There have been very significant increases in food tech innovation and it’s a growing area. We used to be the only dedicated investor in Australia, now there are two, and other funds and investors interested in agrifood tech. And even though there’s some nervousness about making technology available to potential competitors, for us it’s a resounding ‘Yes’. Australia needs strong partners to achieve the next step.
Research must be focused on farmers’ problems, but imagine the outcome with the knowledge of how companies and investment work. The more growers understand what founders and investors look for and how they can get more actively involved in being available and open to collaboration, the more founders we will have that know a cotton farmer. And the more likely it is that when they start a company, it’ll be a better company. Ideas will be better from the outset if everyone knows how things work.
For example, if it’s to do with cotton, is it going to be similar or different in how it’s done in the US or other cotton-producing parts of the world? A decade ago, I would’ve said ‘we’re a dry continent,’ but now many other parts of world are facing the challenge of climate variability. Climate adaptive agriculture, which is what Australia is world expert in, is a highly relevant issue for the majority of food and fibre production in the world. Tenacious Ventures has farmers who are active investors, and there are a lot of paths that work similarly enough to other agriculture paths that have good scalability.
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This is also an interesting way to reframe the rural Research & Development Corporation (RDC) system. The Cotton Research & Development Corporation (CRDC) has made early-stage investments and we’re now seeing the Grains Research & Development Corporation (GRDC) investing as well. While the basic idea is to say let’s spend a lot of money to help Australian farmers be more efficient because of the variability of rainfall and soils, another way to look at it is we already have three decades of climate adaptive technologies, so we can participate in a multi-hundred-million-dollar market of products and services globally.
Farmers worry they may be left holding the baby. But companies can still support customers in Australia, even if they’re based overseas.
It is levies that pay for research but what’s not so well understood is that the outcome of successful research goes 20% of the way towards helping people benefit from innovation, so we need a better shared understanding.
I know it feels like farming is getting harder. The answer is you have to lean in to this challenge. We’re increasingly seeing in Australia and internationally, in conversations we have with companies in this area, that as generational change progresses so does the level of comfort of growers moving into the digital realm. There’s a lot of psychology.
As part of the 2022 Australian Cotton Conference, AgriFutures growAG. is sponsoring ‘Innovation Alley’, an activation showcasing 12 innovations, each supported by CRDC, with nine of those featured on growAG.. The activation enables event goers to learn more about the innovations, involving multiple RDC partners, cross over industries, universities, corporates and growers.
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Innovation Alley features:
Learn more about the collaborative research projects, commercialisation opportunities in Australia’s cotton industry, and check out some of the Innovation Alley participants, via growAG. here.
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