FOA 216: Investing in a More Distributed Food System

07/29/20 • 32 min

What does a more distributed regionalized or even localized food system look like at scale? How can producers capture more of the value of that type of food system? What is the right type of investor to help fuel that sort of system?

Stephen Hohenrieder spent his early career in capital markets and has an agricultural background. Stephen now works for family offices. These are investment entities that invest on behalf of a single-family. In this episode, we talk about investing in regenerative agriculture, what a distributed food system looks like and how the family office investor can be a great fit for making these ambitions a reality. Stephen began by combining different food source experiences in Hawaii to support his regenerative agriculture goals through investment.

“The goal was to develop a perspective on each of these different areas of food and then use my background in investing to deploy capital in ways that would support a regenerative food system that I hope to be a part of.” - Stephen Hohenrieder

The investment profile of a family office and the amount of risk they are willing to undertake varies between each family office. His mission is to “figure out how we could steward the vision of that operation into the future and bring in aligned capital that had a very long term perspective.”

“As I explored this thesis for how I believe our food system is evolving and really increasingly being redefined by fragmentation after a period of consolidation and centralization, I have focused on four pillars that are really authenticity, connection, traceability and transparency.” - Stephen Hohenrieder

In many of Stephen’s investments he looks to not only add value to the food chain process but also the farm itself. Stephen believes people are “reconnecting with the source of their food” leading to a consumer driven cultural shift for producers. Consumers are now more interested in connecting with a set of values than a third party certification and producers are needing to communicate these inherent values to gain consumer loyalty.

This Week on The Future of Agriculture Podcast:

Meet Stephen Hohenrieder, an investor supporting regenerative agriculture
Explore how he views the cultural shifts in the supply chain
Learn about where he sees the future of the agriculture industry heading

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This Week on The Future of Agriculture Podcast:

Meet Stephen Hohenrieder, an investor supporting regenerative agriculture
Explore how he views the cultural shifts in the supply chain
Learn about where he sees the future of the agriculture industry heading

Share the Ag-Love!

Learn more about AgGrad by visiting:

Future of Agriculture Website

Previous Episode

FOA 215: Bridging the Gap Between Farmers and AgTech

What are the barriers to customer acquisition for agribusiness and agri tech companies? In10nt is a company that attempts to answer that question and bridge the gap between company and farmer. They focus on being able to create trials at the farm level to introduce a product and allow farmers to find the best fit for their operations.

Dan Poston is the Director of Agronomy for Pivot Bio. Sean Blomgren is a fourth-generation family farmer from Iowa and is the owner of Blomgren Seed. Both Dan and Sean join us to discuss the complicated process of developing, establishing, and managing an on-farm trial that will demonstrate the potential of a certain product's performance.

“We’re constantly thinking about how you test those products, where you test those products, and how close to the customer you get from a testing perspective.....We really want to have that footprint and that experience on a farmer field before we feel comfortable delivering to the customer.” - Dan Poston

Statistical analysis results in a specific number of trials in a specific size that will be needed to create confident data in regards to the product. Developing the plan is only step one. The logistics of shipping can be a very complicated process. The product needs to arrive at farmers in prime condition and be able to be maintained by them in order to develop the most valuable results. Farmers are then responsible for using the new product in an appropriate manner. A lot of thought is put into a protocol that is most “meaningful” in order to optimize for the most success. Sampling can also create variation in results and is therefore orchestrated. All of these facets have to come together to give the trial the best chance at being successful.

“I promise you there’ve been some great products that have gone through our farm that hasn't tested well because we didn’t build a proper test.... That should be products we’re using today but because we didn’t test them in the right way, we didn’t have the ability to understand what we should or shouldn’t do with them.” - Sean Blomgren

“It’s amazing how when it’s done right, the information is so valuable and how hard it is to get to that” shares Sean. “I think that is the great gap you have to get across with biological products, is just seeing them vetted out over a large enough area” shares Dan. A third party like In10nt allows companies to work with farmers to create the best planned and managed trial to find the best success. In10nts execution gives you the best opportunity for customer acquisition.

This Week on The Future of Agriculture Podcast:

Meet Dan Poston a Director of Agronomy for Pivot Bio that understands the value of a farm-based trial
Also meet Sean Blomgren, a producer who has benefited from well-executed trials
Explore the difficulty in introducing these products to new producers
Discover how In10nt manages that process to better serve their clients

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Learn more about AgGrad by visiting:

Future of Agriculture Website

Next Episode

FOA 217: Microbial Solution for Heavy Metals in Soil with MicroGen Biotech

We are back with another Fulcrum Global Capital portfolio company this week. The company MicroGen Biotech has produced a microbe that can help encapsulate and precipitate heavy metals in the soil. This process results in a gradual cleaning of soil pollution and reduces the amount of heavy metal uptake by the plant which in turn will reduce the amount of heavy metals consumed by the public. MicroGen recently won the award for the agtech category at Samsung’s Extreme Tech Challenge. Founder Dr. Xuemei Germaine was also recognized as the top female founder of the year.

Heavy metal toxicity in the food chain is a concern being recognized around the world. Forbes published a report from the USDA that described “95% of all baby foods consumed in the United States have heavy metal content levels that are harmful to the development of organs and brains in infants and children, et cetera.”

“We are probably just a couple of years away from not potentially being able to export some of our food ag products to Europe because of that. I think the United States frankly is lagging a bit in this....Food companies are going to have to begin to demand and expect solutions to the products that are going into the foods that they are selling to the consumer.” - Dwayne Cantrell, Fulcrum Global Capital Venture Partner

Dr. Germaine explains how naturally occurring minerals and chronic use of fertilizers and pesticides all contribute to increased levels of heavy metals such as cadmium, arsenic and lead in soils. The crops that are grown in these areas will have increased levels of these metals which are then introduced into the food chain. This is especially a problem for individuals eating a plant based diet and children that are more susceptible to heavy metal toxicities.

“It’s all about how do you block (heavy metals) to make the food safer and also at the same time improve the soil health and that will be environmentally sustainable, economically sustainable, is good for farmers, good for the government and is good for every consumer. It will impact every one of us.” - Dr. Xuemei Germaine

As an added benefit, reducing the heavy metal absorption by the plant will not only benefit the consumer of the plant but also the plant itself. The microbe has been shown to increase the crop yield and has been specifically selected to also serve as a natural bio-fertilizer to the crop. Increased yield and being able to charge a premium will entice farmers to use this product with little risk to their profitability.

This Week on The Future of Agriculture Podcast:

Meet Dr. Xuemei Germaine the founder of MicroGen Biotech
Explore the risks posed by elevated heavy metal content in our food chain
Learn about the effects these values can have on its consumers
Discover what the microbe produced by MicroGen Biotech can offer to farmers by way of cleaning the soil and creating a crop with reduced levels of the harmful minerals

Share the Ag-Love!

Learn more about AgGrad by visiting:

Future of Agriculture Website