GAIN cultivates innovation and promotes capital formation for agtech by facilitating strategic partnerships, meetings and networking forums. It provides exclusive resources to members and tracks major trends driving future investments in agriculture, including increasing global population and food demand, decreasing available farmland, and weather variability reducing yields. The document outlines challenges and opportunities in animal health and food production, including new technologies, products, and market changes presenting opportunities for innovators. It encourages joining GAIN to access resources and networking supporting agtech investment and innovation.
2. Cultivating innovation
• Strategic partnerships and affiliations
– BRDG Park, Danforth Plant Science Center,
Canadian Consulate, iBIO, MHIN, Missouri
Technology Corporation NVCA, RCGA, St.
Louis Economic Council,
• Meetings and networking forums
GAIN cultivates • Member-exclusive resources:
innovation and – GAIN Innovation Cache™
Promotes capital
– Ag Explorer™
formation for
Agtech • Other public resources
– GAIN 50 Stock Market Index
– GAIN Insight™
3. Mega-Trends in Agriculture
• Increasing demand • Increasing demand
for food for biofuels and
• Decreasing amount renewable energy
of land per capita
Increasing
Growing need for alt.
world energy
Future population feedstock's
investments in
agriculture
will largely be Growing
wealth
Weather
variability
driven by four
trends • Increasing meat
consumption, need
for feed
• Yield losses due to
adverse weather
• Requirement to
• Decreasing stocks reduce greenhouse
gases
Meta analysis, Crop America, Elanco, WJS, other readings
4. Global Challenges – Population Growth
By 2050, population will grow by 37%, reaching more than 9 billion
Billions or … three more Chinas
More Developed Regions
.
United Nations, World Population Prospects: The 2004 Revision (medium scenario), 2005
5. Global Income Growth Per Capita
2000-‐2030F
Growth
Shares
Africa
India
2%
3%
South
America
Middle
East
7%
Eastern
9%
Europe/
Russia
11%
12
Thousand
real
2005
US$
Per
Year
China
14%
10
5.00
EU-‐27
8
23%
North
America
6
-‐0.05
27%
4
6.37
Other
Asia
2
4%
0
1970
1970-‐2000
2000-‐2030F
Source: IHS Global Insights, Agriculture Division
6. Revenue Growth
Sub Segments
CAGR of 37% 2003-08
Expected to continue at 21%
2009-13 (to revenue of $90B)
Capgemini
7. The Demand - Supply Gap
Area of land under cultivation
M’s hectares
USDA
Year
8. The Demand - Supply Gap
Cultivated land per capita
USDA
9. The Demand - Supply Gap
70% of this food must
come from efficiency -
Improving technology
Food
Demand
2050
2X
Food Biomass
Demand
Today
Plus
U.N. FAO
10. Population and Income
Drive Food Demand
180
160
140
120
100 Grain
Vegetables
80
Meat
60
Milk
40
20
0
1975 1980 1985 1990 1995
Taiwan Council of Agriculture, China Statistical Yearbook and Nomura Global Economics
11. • New Challenges
– Variable stringency of legislation
in various countries
– Changing and possibly divergent
perception of GMO’s and
agrichemicals
Challenges – The need for product
In addition to the traditional differentiation between
challenges in agriculture such expanding markets
as weather and prevailing
economic conditions,
– Shifts from product to service
agriculture in the future will based offerings
face new and increasingly
complex hurdles.
12. • Success will require….
– Capacity to be flexible
• Adjust from measurable plans
– Planning methods that allow for
multiple outcomes
– Working with all stakeholders
Meeting Challenges including political decision
Companies must be able to makers, retailers, consumers and
adapt to their increasingly importantly growers
complex environment and
capitalize in established and – And……
emerging markets.
INNOVATION!!!!!!
13. Venture Capital Investment in Agriculture
Innovation
The need for innovation in
agriculture requires capital
which can come from
corporations, venture capital
and of increasing importance
angel investors
PWC Moneytree, NVCA
14. Animal Health as a Component
of Agriculture
• Animal health is of growing importance to the
world
– Meat and dairy production to double by 2050
• Meat consumption in China doubled from
1985 (44lb/person) to 2000 (90lb) and is
expected to dbl again by 2030
– Concern over Zoonotic diseases!
• Not well publicized, but a huge threat
• 80% of animal pathogens are multihost*
• Ex. The next smallpox (cowpox)
– Food safety, “farm to fork” tracking, new
handling and packaging,
• NVCA – industry tracking spotty at best, fragmented
*Michigan State University
investor segmentation, reporting incomplete or
inaccurate
15. Animal Health as a Component
of Agriculture
• $13B spent on animal health products
– 40% companion, 60% production
• Animal health product FDA submissions and
approvals are down.
– 2007 – 12 of 18 submissions were approved
– 2010 – only 2 of 6 approved
• R&D lacking, large companies cutting back,
looking to start-ups for innovation
• Structural changes in industry include
emergence of generics, changes in distribution,
the internet
Brakke Consulting, FDA
16. • Examples of innovations
impact on food production and
agriculture
– Milk production now requires
65% less water and 90% land
than in 1944
Innovations Importance to
Animal Health/Production – 76% less manure is being
Innovation has been produced/gallon of milk
important to the production – Genetic selection and
of meat and dairy for
centuries, however, over the improvements in nutrition has
last 70 years huge advances increased the slaughter weight of
have been made and need to chickens 4-6x since ‘57
continue.
Elanco report
17. • Companion animal industry is changing
rapidly
– Vet practices trends 2001 -2009
• # of clients/vet down 17% (1299 –
1070)
• # of patients seen/week decreased 12%
(75 – 66)
• Decreases cause vets to increase fees to
Market Change cover fixed costs
There is a lot of change going
– 30% of pet owners use internet to self
on in both companion and diagnose pets symptoms
feed stock animal health. • Vets are seeing much sicker animals
These changes should • Owners get “sticker shock” at the cost
represent opportunity for of care
innovators and investors – Internet medical supply/pharmaceutical
providers impacting business
18. • Food animal market changes
– Food shortages (high prices) and dry
conditions are causing cattle and calves
to be slaughtered at record numbers
• Short term supply issues, husbandry
opportunities
• Meat prices projected to remain high
• Stress on herds increases disease and
Food Animal Changes infection
Increasing demand for meat • Pressure to reduce use of antibiotics
and dairy products is place in feed and other ”un-natural”
new stresses on the market
which causes changes to additives creates animal growth,
occur. Weather variability food safety and market issues
also forces change
19. • New animal uses for “old” human
therapies
– Human pharma seems to be largely
ignoring this opportunity
• Conversion of well known and
effective drugs to OTC
• Technologies to help Vets analyze
practice trends to maximize revenue
Companion Animal opportunities
Opportunities – Most Vets do not analyze practice
Despite changes in the trends and missed revenue
provision of care for opportunities!
companion animals, many
opportunities for innovation • Nutritional products with another
and new products abound function, such as….
– Joint, cardiovascular, ophthalmic and
coat quality health
20. • Genetically engineered meat
animals
– Higher protein, vitamin content,
other healthy components
• Cloned animals
Food Animal – FDA guidelines 2010
Opportunities
• New packaging, convenience,
Increased demand for meat
and dairy are presenting both
keep fresh
challenges and opportunities • Food safety
for growers, innovators and
investors – Tracking, POP diagnostics
21. • Agriculture is not an
optional industry!!!
– Every person on earth must
eat and drink, hopefully,
clean water
• Favorable demographics
Reasons to be bullish • Increasing wealth
There are many reasons to
be excited about the future • Innovation is required!
for investing in agriculture
• Food prices increasing,
more income to spend on
innovation
22. Join GAIN
• Become a member of the Global
Agtech Investors Network.
• Visit aginvestors.com/join-us.
OR
• Contact Dan Broderick, president
and founder, at
dan@aginvestors.com.
