Investing in Regenerative Agriculture and Food

277 Keith Agoada, the regenerative landscape orchestrator

January 16, 2024 Koen van Seijen Episode 277
277 Keith Agoada, the regenerative landscape orchestrator
Investing in Regenerative Agriculture and Food
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Investing in Regenerative Agriculture and Food
277 Keith Agoada, the regenerative landscape orchestrator
Jan 16, 2024 Episode 277
Koen van Seijen

A conversation with Keith Agoada, CEO and co-founder of Producers Trust, a global network of farmers, farmer groups, and producer groups, about indoor greenhouse growing, aggregation, sorting, quality control, packaging, processing, and more.

From indoor greenhouse growing to founding a company, which is now turning into a regenerative landscape orchestrator, and why we are in the perfect storm at the moment. In the last 12 months, or even the last 6 months, we have seen an explosion of interest from corporates in value chain regeneration. Why now? A mix of shifting consumer demand, an European antideforestation law, and genuine massive long-term supply chain issues.

What does that mean for small holder farmers who are generally completely excluded from these global markets, how can they participate and benefit?

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Join our Gumroad community, discover the tiers and benefits on www.gumroad.com/investinginregenag

Support our work:

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More about this episode on https://investinginregenerativeagriculture.com/keith-agoada.

Find our video course on https://investinginregenerativeagriculture.com/course.

----------------------------------------------------

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Send us a Text Message.

https://groundswellag.com/2024-speakers/

https://foodhub.nl/en/opleidingen/your-path-forward-in-regenerative-food-and-agriculture/

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Show Notes Transcript Chapter Markers

A conversation with Keith Agoada, CEO and co-founder of Producers Trust, a global network of farmers, farmer groups, and producer groups, about indoor greenhouse growing, aggregation, sorting, quality control, packaging, processing, and more.

From indoor greenhouse growing to founding a company, which is now turning into a regenerative landscape orchestrator, and why we are in the perfect storm at the moment. In the last 12 months, or even the last 6 months, we have seen an explosion of interest from corporates in value chain regeneration. Why now? A mix of shifting consumer demand, an European antideforestation law, and genuine massive long-term supply chain issues.

What does that mean for small holder farmers who are generally completely excluded from these global markets, how can they participate and benefit?

---------------------------------------------------

Join our Gumroad community, discover the tiers and benefits on www.gumroad.com/investinginregenag

Support our work:

----------------------------------------------------

More about this episode on https://investinginregenerativeagriculture.com/keith-agoada.

Find our video course on https://investinginregenerativeagriculture.com/course.

----------------------------------------------------

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Send us a Text Message.

https://groundswellag.com/2024-speakers/

https://foodhub.nl/en/opleidingen/your-path-forward-in-regenerative-food-and-agriculture/

Support the Show.

Feedback, ideas, suggestions?
- Twitter @KoenvanSeijen
- Get in touch www.investinginregenerativeagriculture.com

Join our newsletter on www.eepurl.com/cxU33P!

Support the show

Thanks for listening and sharing!

Speaker 1:

Today a story that goes from indoor greenhouse growing to founding a company which now is turning into a regenerative landscape orchestrator. And while we are in the perfect storm at the moment, the last 12 months or even the last 6, we've seen an explosion of interest from corporates in value chain regeneration. Why now? It's a mix of shift in consumer demand, european entity forestation law and generally massive long term supply chain issues. What does it mean for smallholder farmers, who are generally completely excluded from these global markets? How can it participate and, more importantly, benefit? We talk again about the quote on quote, boring topics of aggregation, sorting, quality control, packaging, processing, etc.

Speaker 1:

Enjoy, this is the investing in regenerative agriculture and food podcast. Everything as if the planet mattered, while we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems, while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, where and consume, and it's time that we, as investors, big and small, and consumers, start paying much more attention to the dirt slash soil underneath our feet. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you, if our work created value for you and if you have the means and only if you have the means consider joining us.

Speaker 1:

Find out more on comroadcom slash investing in regen ag or find the link below Welcome to another episode Today with the CEO and co-founder of producerstrust, a global network of farmers, farmer groups and producer groups. Welcome, keith, thank you.

Speaker 2:

It's great to be here. I appreciate you having me today.

Speaker 1:

Absolutely. I'm looking forward to this one. And to start with the personal question we always like to ask why soil, why food? How did you roll into or ended up focusing so much of your time probably 90 plus of your awake time on this topic?

Speaker 2:

Yeah, it's a great question. I like to think I got subconsciously into it when I was about, you know, in third or fourth grade so around nine, ten years old I visited a cranberry bog, you know outside Boston, and I saw these cranberries in the pond and the people whose job it was is to move around cranberries and they had their whole suits on and it just blew me away.

Speaker 1:

I was kind of caught For anybody that hasn't visited any of that like pumps and suits and cranberries like how does it work?

Speaker 2:

It's like we're in an audio medium so make it a visual picture.

Speaker 1:

How does it work?

Speaker 2:

Yeah, yeah, great question. So imagine it's a, you know, it's a fall day and there's changing colors on leaves outside of Boston, and then the United States and there's this big pond and you walk up to the pond and a beautiful day, and there's these guys in these kind of waterproof suits, kind of like you know, overall waterproof suit, and they have these rakes and they have these huge rakes and they're kind of moving cranberries, like those little reddish berries, on the top of the water, just moving them around and pushing them into place, harvesting them. And as a ten-year-old I never really liked being in school, listening and reading and being told what to do, so to go outside and see people working in the water, in the land, it caught my attention and I think I've always been attracted to nature and just being in the forest, being in nature, visiting farms. But when I was in university, I started getting inspired by local food production. I was working in the Botany Greenhouse at University of Wisconsin-Madison and it was the middle of winter and there was snowing out and we were growing pineapples and corn and other things inside the Botany Greenhouse. I started asking myself why the food tasted so horrible and learning about how it was trucked from Mexico, California to Wisconsin and I started thinking about how food could be produced locally in greenhouses and how could we localize food production.

Speaker 2:

So as a it's about a 20-year-old I started getting down the rabbit hole and how could we localize food production? Ended up studying business but also took many horticulture classes and wrote a business plan for how to localize food systems with hydroponic greenhouses. So this was about 17, 18 years ago and submitted it to the campus-wide competition at University of Wisconsin and I somehow won first prize for this business plan called Sky Vegetables, which is about localizing vegetable production using hydroponic greenhouses. And from there I kind of got catapulted into being an entrepreneur in agriculture value chains. So the last 17, 18 years, day and night, I've just lived and breathed how to solve for food systems and especially agriculture, supply chains and farmers. So that's what got me into it. And as I went from hydroponics and then got very into soil and how did that happen?

Speaker 1:

Because I think when you started the hydroponic piece maybe it wasn't super hot yet, but there's definitely been like a 10 plus years like extreme interest in hydroponics, vertical farming, like anything that takes the soil out of the farming, and it has its role. We're not going to debate that here, it just seems extremely overhyped. But you didn't ride that wave. I think, Like why did soil come back into, or come into the picture?

Speaker 2:

Yeah, it was way before any waves even existed. It was really studying Dutch greenhouse hydroponic systems and there's a few examples in the US at the time growing lettuces and tomatoes. But what happened was I got really into thinking about every square foot because when you have limited space in the urban area doing hydroponic greenhouses you have to think about the profitability per square foot. So I always had this look at agriculture strategy and food systems around how do you optimize production per square foot? And about three years in I exited my venture.

Speaker 2:

I was initially bought out of majority ownership by an investment group and kind of butted heads a bit.

Speaker 2:

I was very young, very ignorant around how business entrepreneurship worked.

Speaker 2:

I was very idealistic, ended up going separate ways from the investment group and as my original dream of scaling a hydroponic venture started to dissolve and moved into the hands of those folks who were running the business, I started going back to my roots and was reading Masunoba Fuguaqa and getting into other forms of regenerative agriculture in terms of looking at like holistic grazing and really fell back in love with soil as the solution.

Speaker 2:

So as my career shifted from hydroponics I went into actually doing large-scale organic development, looking at the marketing and finance side in Latin America with some groups down there. So since that shift happened over 10, 12 years ago, I've really fallen in love with soil as a solution. But really, when we say like, why soil, I really look at it always through the lens of farming farmers. And how can we enable or work with farmers for them to be more successful as business people? And I think soil holds the key to that to so many benefits to farmers, and so I always look at soil as one of the greatest tools that we have for farmers to be successful and to thrive.

Speaker 1:

And double clicking on the investor piece or the button heads with them. How have you organized things differently now? Or how do you maybe do things differently now compared to Dan, when you said I was young and naive?

Speaker 2:

Yeah, and I think it's an investor's nature that once they have influence or control over the venture and the decision making and the CEO and the board of directors, they're going to do what's in the best interest of their capital and their investment and their returns.

Speaker 2:

And oftentimes they trust their own opinions over other people's opinions, no matter how much someone might have a clear vision or be well informed or industry expert.

Speaker 2:

A lot of times this concept of control and if your own capital or other people's capital that you've brought to a venture is at stake, you're going to want to live and die by your own sword.

Speaker 2:

And I think that maintaining the voting rights and the board of director control early on in a venture makes a clear statement to those investing that they have to trust your vision, at least in the short to midterm, that it's not necessarily a dictatorship, but if there's a very clear vision of a founder and they might want to do things that are not fully aligned to short term profitability or short term cash flow, but more is falling a vision of where they believe the puck is going and where the industry is moving and how you can achieve your mission and scale a great business, it might go against.

Speaker 2:

What a short term profitability model or product market fit model or lean startup model that has really dominated investor thinking. So, in short, the simple way is, if you want to make sure your vision keeps moving forward, maintain the control over the decision making and leadership of the venture until you feel there's enough structures in place to maintain that. And secondly, just making sure you have investors who are truly mission driven and aligned to the same vision you have and trust in you as the entrepreneur who ultimately has to live and breathe and work every single day to make this a reality. So, as an entrepreneur, how do you?

Speaker 1:

ensure that, Like on the mission, alignment always seems nice when signing term sheets and when the sky is blue and the sun is up, but when it rains and storms and like, do you have any tips on the filtering or how to make sure? I mean, we're now in a time where money is scarce or it's not so easy to raise, but it's still definitely possible and you have to be picky to pick. How have you picked your investors now? Or how do you go about that to make sure the values are also aligned when the times are not that easy?

Speaker 2:

Intuition, the gut feeling, the intuition that goes beyond all the other variables that can confuse you, all the other disguises. So getting very in touch and tune with your intuition and just the feeling space of knowing when something feels right or not right, that's ultimately the greatest tool I feel I have. I'd say secondly is look at track record. What other things are the investors investing in? If you can get in touch with those entrepreneurs that they are currently working with to see what it's like with them as an investor, I think anything that sounds or looks like or is a VC or venture capitalist is very important.

Speaker 2:

I find that those folks often have a lot of pressure to show returns and to have a certain way of doing their investing. I find that family offices, high net worths, foundations and just people who literally care a lot about the topic, who in their free time go to farmers markets or have their own regenerative farms or invest in farming that these are the folks that tend to usually be there, not in a short-term mentality, but understand if you're applying the regenerative principles into business and venture, it's going to take some time to build that healthy soil and to bring to market the right product in the right way. It could take time. Some trees are 10 years and some crops are six months. That would be my recommendations, or at least my own wisdom to myself that I've gained.

Speaker 1:

Going to producer's trust. We're recording this beginning of 2024. What is it now, or how do you describe it normally when you're in a trade next to someone or at a dinner party and somebody asks what do you do?

Speaker 2:

Yeah, we're a global network of farmers and farming groups. We work with them to organize their products and data to help bring it to market more effectively. If you think about both let's say an avocado farmer they have avocados that they need to sell. They also have the impacts that their farming practices create. We work with them on their primary data capture, so understanding what are their practices, what are their outcomes and how can we connect that data downstream to those brands, retailers, carbon credit buyers, groups that are going to value their sustainability practices. We holistically onboard producers onto a producer's market and then strategically work with them to organize their data and their marketing based around downstream buyers and ecosystem stakeholders that they engage with.

Speaker 1:

The market side of thing. Producer markets is not like how much of the sales is happening there or is it a storefront, but actually you're working, trying to work mostly with larger brands. It's not that me as an individual do my regular shopping there, or what's the split there or what's the normal use case.

Speaker 2:

Yeah, great question. So when we started producers market seven years ago, the vision was hey, we're going to onboard cooperatives and small farmers and added value producers all around the world and then people are going to come in and buy from them. And even though I was working for distributors and was built into the system of containers moving, pallets moving getting to distributors, getting to brands, getting to retailers, then getting to the consumer, I really believe in this disruptive power of individuals and small businesses connecting more directly with small producers, especially those in the global south. So producers market has scaled to over 5,000 organizations and some of these organizations have over 100,000 or even close to a million farmers represented in them.

Speaker 2:

What we've grown to learn is that we're still, I think, years away from an international digital model, or even localized digital model, of being able to go onto a site just buying from one farmer and getting it delivered.

Speaker 2:

There's examples of like CSA boxes, farmers markets, localized shopping, but for the most of us about I think 95 to 98% of food purchases is through food service, it's through the supermarkets, through these types of supply chains, and so what we are using producers market for today is as a digital visibility tool.

Speaker 2:

It's a business card digitally for a lot of farmers, farming groups, and it's a way for downstream businesses to connect with them. But the online transaction aspect of it is still part of our long term vision, but we feel like there needs to be more hand holding on the logistics, the aggregation and the going to market that will enable producers market as a direct to consumer, direct to small business platform that we've always envisioned. In the short term and even mid term, we're focused on scaled supply chains, so it could be domestic retailers, brands, in some cases traders or international retailers and brands who are looking to get closer to their source of their supply chain. And the local economy is something we're looking to scale into in 2024, where we can enable farmers to access their localized distribution channels in order to get to localized markets more directly. So we're definitely looking at these wholesale B2B channels and we're definitely focused initially on the offline transactions.

Speaker 1:

And what currently holds farmers or farmers groups back to do that themselves, especially if it's more local. I can understand you're not going to set up a storefront and logistics to send wine from southern Italy to the US or coffee from Colombia to somewhere else if you're small, but that's not happening yet Like what holds local supply chains back that they need you to enable that.

Speaker 2:

So if we can put it into two categories, and then maybe I'll break down into more, there's fresh and there's non-perishable, of course, so, already, when you're doing fresh, when you go to the store you're going like, do you buy a whole case of oranges?

Speaker 2:

or like a whole case of apples, of 24 apples or 25 pounds or 12 kilos of oranges? So when you go and shop you're going to buy one or a few of a bunch of different things right in your normal shopping experience. And so when it comes to fresh, there is a value of the aggregation of many farmers products together to then get a complete box. You know, in terms of a retail shopping experience. And most small farmers don't have the marketing you know or the sophistication to organize a community of people around them who are going to come and start to buy directly from them. Or maybe they'll have the logistics or a local market to go do a farmer's market. And so I think there's barriers in terms of logistics and aggregation, there's barriers in terms of local market access and there's barriers in terms of just cash flow. When there's an uncertainty of needing to harvest, bring to market, you know there's losses that can be a issue for a lot of farmers. And so knowing that there's a secured purchase, even if they're not getting good value for their goods, it can be better than the uncertainty of not knowing where your goods are going, and I think on the perishable or the non perishable side. So the dry goods, think like dehydrated or processed products, nuts, you know, oils, frozen products. There you just have to have an infrastructure in order to be able to add that value.

Speaker 2:

And if you're a small scale producer, the idea of having a multi hundred thousand or multi million dollar infrastructure in order to add that value and to keep that infrastructure operating in order to have a thriving post harvest processing, packing business, that adds a whole another level of complication that smaller scale farmers usually can't do. You get to a cooperative level. Maybe on coffee they're packing, obviously green. You know cases of coffee bags or cocoa. You know olive oil producers on a smaller scale can go to the mill and get their own olive oil packaged.

Speaker 2:

But for the most part these are activities that are challenging for a small scale producer and then having to pay a third party to go do that and then having to go make the sale and then wait for the terms that could be 30, 60, 90 days to get your cash back. Most farmers are rude on how am I going to invest in my next crop? So there's a lot of infrastructure, logistics and marketing and finance complications that allow for these more direct localized or even international transactions today. And where do you then focus your?

Speaker 1:

your energy, because these are issues that are everywhere, on Ibiza, in Spain, in France, in Colombia, in the Midwest Like this is not. But yeah, you cannot do this at the same time everywhere. Like, how do you, how do you pick? And because there are many, many producers on the marketplace, let's say, or on the visual, the business card side, but how do you, where do you focus your to also move significant numbers, that it makes sense for the small producers and it makes sense obviously for you, for you as a business. Like where, how do you, how do you focus? Or how do you pick your, your battle? Yeah, great question.

Speaker 2:

Yeah, we have about 40 people on our team, so we can only do so much right, and what we look for are the best aggregators in the world that we can find and, in a way, producer's trust is an aggregator of aggregators. So we look at for you say the best like how do you, how do you select good aggregators?

Speaker 1:

What are, what are your good signs?

Speaker 2:

Good signs. There is mission alignment, like their values are all about. How do we regenerate the earth, how do we support small farmers to be more successful as business people and how do we do that in a collaborative way. And we look at groups who've already taken the first steps over the last three, five, 10 plus years to organize a ground game, to start to aggregate the outputs and start to bring them to market in a scaled way. They've already transitioned a certain scale or number of farmers to better practices, more sustainable practices, maybe organic, maybe regenerative, and they have networks where they can pack significant scale of outputs to bring to market.

Speaker 2:

So when we look at geographies across West Africa, south America, central America, indonesia, india and in the global south, and then in Europe and the US there's, there's many examples, but in the global south we find that there are just shining star examples of individuals and people who have had the foresight and the vision to start aggregating small farmers or being a scaled farmer themselves doing these practices. So they've already created a successful agricultural and aggregating model. Now they can benefit directly from the digital tools and the data in order to enhance the profitability and scale their model through more direct access to markets, more financing, maybe new alternative ways to get revenues, like carbon credits. So we're looking for groups of already created successful models and then investing our energy and resources into them to help them to grow and to help them to grow and to help them to help them scale and accelerate the growth and hopefully this becomes these are models for many, many other groups around the world to replicate and be successful with.

Speaker 1:

And why is now the time, apart from the need and the urgency, to do this? Like, is there more demand? I mean, we've seen a lot of attention, energy on fair trade for a lot of years and always felt like it didn't really go through that critical mass. Of course we keep buying it, et cetera, but it never really. What is different now, would an investor ask, like consumer demand, or maybe the bigger brands and larger ones that are looking for but cannot find what's different than 10 years ago or even five years ago, if any.

Speaker 2:

Yeah, I'd say the difference is in the last 12 months, even the last six months, we've seen a huge difference, and part of the focus on corporate clients to find solutions and their supply chains is the unlocks of financing that are needed at the source, the unlocks of capacity building, of grants to actually work with small farmers at the source and their transition from monoculture coffee to agroforestry coffee, for example. That these de-risking mechanisms are first started with there being a secured offtake and a secured buyer. That resonates with the grant making facilities, that resonates with the debt investors, the equity investors, the insurance groups, is the corporate offtake. Whether you like it or not, whether you agree with it or not, this is kind of how the system works today for the most part that we're finding, especially in the global south. And right now I think it's a unique moment because of, first, compliance and regulation with EUDR and more regulations with having to have accurate defrostation of your Exactly Law in Europe, right yeah.

Speaker 2:

Exactly. And then with net zero reporting and having to have accurate reporting and knowing that having a source that you can identify, that you can track, that you engage in, is no longer a nice to have but it's becoming a requirement. And so, on the compliance level, there's this rapid shift happening where there's now a demand to go beyond the commodity trader to the source or to work with the commodity trader to make sure that there's an accurate representation or accurate reporting of who that source is. So one is this compliance regulatory which is really coming into action, and around that is brand reputation right when a large brand has in the news that they've deforested the Amazon or have children in slavery in West Africa or in South East Asia.

Speaker 1:

I remember Kit Kat Nestle being hammered 10 years ago I think, at the Sheridan meeting, with orangutans coming from the ceiling, greenpeace activists and Kit Kat's with orangutan fingers in it and things like this. This is not something of the last 12 months, and yet they seem to have woken up now.

Speaker 2:

I think it's the combination of all of them. And then when you look at Gen Z social media and how information spreads, today so virally but you add in compliance.

Speaker 2:

And then the third piece is just securing supply chains. When you start looking at how climate change is going to impact our ability to grow food, how it's impacting freshwater resources, how it's impacting the need to go higher altitude or changing environments in order to grow the same products or at the same yields, it becomes more important for brands, retailers, traders to actually secure supply chains. And if you want to secure the commodity, you have to go to the source and start building genuine relationships with farmers. So I think it's the combination of these factors and, of course, others that are creating this urgency to engage in models that are more vertical, so more vertically integrated supply chains. And part of it is when you start going to organize data of your, let's say, scope through emissions of your carbon emissions at the source, which could account for 70 to 80% of the total emissions of a food company.

Speaker 2:

And it's not like the data is the problem to start with and you need to get accurate data. But then, when you get the data, what are you finding? You're finding that your supply chains are broken. So it's an even bigger problem if you don't have product on the shelf or if the price of your commodity is so inflated that average people can't buy a product, and so I think this is creating a perfect storm of urgency. And then, on the financing side, there's capital that just has to go towards climate change mitigation, adaptation, and so there's this perfect storm that's coming together, these factors, that seems like a moment where food systems are investable and can be shifted towards this regenerative or more sustainable moment.

Speaker 1:

And how do you see that concretely in your day-to-day work? Like, are they knocking on your door since six months or 12 months, making finally serious questions on, okay, what are we going to do about our supply chain? Like, how does that translate into action through you or for you?

Speaker 2:

Yeah, the most tangible way of action is hey, we want to buy off-take over a long period of time. We don't want to necessarily work with a commodity trader, we want to organize directly with producer groups to buy from them and we're looking for producer groups that have regenerative or more sustainable practices across these specific outcomes of impact and we're looking for data to validate it. So I'm wondering is just this demand to buy the products and licensed data around those products to de-risk? I think the more conceptual development which we're really excited about is this concept of the regenerative landscape and that you see, now that corporate brands alongside nonprofit partners, consulting partners, governments, they're looking at how do we, as a buyer of commodities or a buyer of products, start to look more holistically at networks of farmers or larger geographies of land and together start to say, well, on this property of coffee, there's also black peppers, there's also bananas, there's also root crops, there's also carbon credits, and we all need data. And how do we start to work together to invest money or to unlock resources, capacity building, to engage these networks of farmers and how do we measure the outcomes more holistically and how do we incentivize and purchase and work together to drive this change.

Speaker 2:

So I think the willingness of public and private sector actors with, I think, brands and commodity manufacturers at the lead of it, saying we need to work together to help farmers get access to better markets across all of their goods If we want them to switch from a monoculture into a polyculture and agroforestry system. How do we guarantee the purchase of all these products? How do we incentivize them with carbon credits or other ecosystem services, and how do we unlock public private financing, grants and other instruments to help them in these transitions? I think that's the conceptual shift that we see happening. Is these types of landscape commitments.

Speaker 1:

Like then, barbara, the rotation that he's up to, I think was like don't buy my one cash crop and help me as a farmer to make that as regenerative as possible, and I forget about all the other things. I need to grow in rotation to grow that one cash crop for you. We need to talk about the full spectrum and that's even word, or even more urgent in agroforestry. And do you see it leading Because I think it was one of the outcomes of the Ellen MacArthur big food redesign to discussions within these corpus as well? To change? I mean, they buy so much. We talked about it, actually, with Nestlé a long time ago. They can probably find a place for many things, but to change recipes or to change products based on what a landscape could grow, is that conceptually, maybe a step or a few steps too far?

Speaker 2:

Yeah, that's a great question. It's all about markets and so to think a big corporate is going to go through their like three year product development cycle and getting their marketing teams engaged and everyone else and finding the right price points, to think that's going to be accelerated, I don't know. I'm not too optimistic about that. But if we can find markets for products, specialty, local, commodity and start looking at a more holistic map, and I think by financing infrastructure, what it does is allow the aggregation of local products to. So this is where the global and the local come together. Is you have a global buyer that's going to guarantee the purchase of some commodity more sustainably grown but aggregated? That same infrastructure can now be used for the small farmers to also aggregate their fresh produce, their cassava, their plantains or whatever those local crops that can go to the local market for food security.

Speaker 2:

And I think there's going to be a major growth of indigenous or more well adapted crops that can be grown locally and sold in the local market or even specialty markets internationally. So we're seeing millets and and phony and grains that have been lost as wheat and rice imports have flooded these markets and the ability for farmers now go back to these crops that are very well adapted to their environment and be able to sell them locally. And maybe over time it can start getting into the formulations of a big brand or a retailer to start buying it. But today, if I brought bags of package phony into the retailers in Italy or London, unless somebody was from West Africa, they'd probably be like, okay, what is this thing? Right? Like it took how many years for quinoa to become a mainstream product, right?

Speaker 1:

Quite a few, yeah, and so what's the role of money in this transition now, or this moment, this perfect storm as you call it? What would be your main, of course, without giving investment advice, but your main message to investors? I always like to ask. Let's say we're in a theater or we're doing this in person and the room is full of family offices, foundations, high net wealth, high net wealth individuals. What would be your main, the main seat you would like to plant?

Speaker 2:

Yes, it's a great question. My message is relatively simple. It's let Silicon Valley and tech investors invest in technology. They will always be excited about AgTech and about the next AI satellite remote sensing drone thing that's going to solve for agriculture agriculture generative act, and there's plenty of capital to do these proprietary tech investments. Where they're showing a hockey stick curve, the key investments are the ones I feel there's a bus coming here.

Speaker 2:

My feeling is that there's trillions of dollars of transactions that need to shift to regenerative, ag and more sustainable production. Invest in those groups who are doing the work to actually grow and process and pack these supply chains, and invest in the groups who are actually scaling disruptive, innovative models of how to get more farmers transition into sustainable, regenerative practices and getting their products to market in a more direct and more uplifting, transparent way. So I'd say tech there will always be investors. So if you're excited about regenerative or organic or supporting farmers, my recommendation is, if you want to make the greatest impact, don't invest based on technology, because there's always tech investors. Invest in the supply chains and the supply chain disruption activities and the actual groups who are doing the work to either organize and aggregate farmers in regenerative or the ones who are actually doing the farming work themselves.

Speaker 1:

Do you see a growing interest in that part of? I think we've heard processing and aggregating quite a few times on the podcast, but not necessarily from the investor perspective. So much I've seen. We've seen a few. I think Dan Miller is doing a lot in the US and with Stewart and we have color rows of Terraria and Capitol, like a few people now make it explicitly about processing, but they're one in a thousand or one in a million. Maybe Do you have you seen a growing interest in the quote unquote missing middle. So not necessarily the farmland, but everything that happens on and after over the last year, year and a half as well. Or has it still been crickets?

Speaker 2:

I think it's pretty slow. I don't feel that there's a big movement there yet, but today I was speaking with one of our producer partners, crowdy, and they have a very innovative way in Indonesia of working with small farmers, getting them access to finance, capacity building, and they're scaling. There's investment that wants to come in to scale their platform and they can invest in infrastructure now to help their same farmers are helping with finance to help pack process quality control, get to market, maybe get them better access to sustainable inputs, nursery items and groups like this that are doing innovative and disruptive work to support farmers and their well-being. There could be venture investments there that could give investors great returns as a high risk, high return type of investment. And I think these models are just scratching the surface.

Speaker 2:

Groups like Twigga when that came out in Kenya years ago, where they're oh wow, they're organizing farmers and they're distributing it to the you know, and they raised a bunch of capital. These types of models. I think it's still really early, but I believe that's going to be a growth area for investment in finance. I think the actual infrastructures are more of project finance, so it's more going to be from banks different type of investor.

Speaker 2:

Yeah, it's not family office, it's not individual. It's more like a bank or a fund, a group that's looking for climate mitigation, adaptation, infrastructure investments and needing to find operators with a track record who can serve as these aggregation processing packing hubs. Which really is a missing link in many supply chains globally is how do we organize small farmers outputs and then bring them to market efficiently?

Speaker 1:

And do you get approached by, let's say, more infrastructure type investors or investors in general that would love your help to put money to work, because you know these producer groups and you, of course, know which ones to pick because you've been working with them for a while and you've been looking, quote unquote, in their kitchen Like have you been approached yet by money that wants to work with you, let's say to deploy, as they cannot do it themselves? Just as you're being approached by big buyers that want to buy and cannot do that work on the ground by themselves.

Speaker 2:

Yeah, I mean when we started the company. If you told me that infrastructure investors would be contacting us to deploy capital, I would have thought you were crazy. But as funds are getting allocated for the purposes of distributing capital to infrastructure, to secure supply chains, food security, transitioning farmers, to sustainable practices and nobody has the life of view flow.

Speaker 2:

They start knocking on your door, yeah we've just been building these partnerships last seven years, so we know which ones are doing great work and which ones are ready to scale, and we just need infrastructure in order to make more impact. So, yeah, I mean, we are doing that and what we've realized is our role as a regenerative landscape orchestrator or facilitator, because there is this need between the downstream brands, you know, and retailers to secure the purchase, the infrastructure, investors and the debt finance that wants to give capital base around that. And then the NGOs, the UNDPs, you know, the USAIDs and groups who actually work on the ground as NGOs, building the capacity of small farmers and how they connect in, and then, finally, how do the farmers access local markets to drive food security, and trying to look at a landscape approach across these different stakeholders. So we've found ourselves in this role by accident, but we're feeling very honored and fortunate to, you know, be able to create a business around it.

Speaker 1:

And let's flip the question what would you do if you were in charge of a billion dollars to put it to work?

Speaker 2:

Well, first, who are my investors of that billion and what do they want to have happen?

Speaker 1:

Extreme long extreme, like it has to be put to work, but the investors are very flexible. I mean, this is the radio investor. It could be extremely long term and there needs to be a return, but that return is also flexible and negotiable, like it's this is looking for. How would you, if you woke up tomorrow morning, let's say and you, you won a lottery what would you do?

Speaker 2:

Yeah, I would invest in the aggregator and groups of farmers, cooperatives who have a proven track record that are ready to scale to either more farmers or more crops. I would definitely put capital towards the existing groups who are ready to scale. Number one I would put capital towards the implementing partners, the groups who will work with these farming networks to help them scale through access to better inputs, access to nursery crops, access to markets, so that ecosystem of implementing partners around these producer groups. And then I would put some of this capital for de-risking facility. How can we de-risk other investors to put capital into high risk geographies?

Speaker 1:

And just like looking at the network you have now, like off a billion, how much would you be able? You're like, oh, that's a few hundred, like easily out of the door quickly because we have these networks and they, we just know that these are the amounts. And just to get a sense of the amounts, of course I don't need to know exact dollar amounts, or you're saying actually in the tens of millions. And then we, we, we, we shouldn't flood the market as well Like, if you're talking to the current network you have, like the need for infrastructure, the need for for more processing, packaging, etc. Like, is it in the hundreds of millions of the people you work with or the tens of millions?

Speaker 2:

No, it's in the billions. I mean in India alone. In Andhra Pradesh India there's right now there's 850,000 small-scale regenerative farmers in the government program called RYSS and they're doing regenerative practices and they've hit a scale.

Speaker 2:

They're doing this all with zero market premium. The entire program is built around no subsidies, no market premiums, and so they have all these commodities and products that are going into these trader markets, going into downstream markets, receiving no premium because there isn't yet an aggregated infrastructure set up to bring this to market more efficiently. So in that India community alone there's 100 million that could go to work in kind of like regional scale packing, processing, quality control centers. In West Africa, one of our partners, olo, who is the founder of Alaphia and Ayaya. He has 250,000 harvesters, mainly women, who are Shia harvesters, that he's put into cooperatives and he's working on many impact activities around them.

Speaker 2:

The next program is around helping train them and bring to market their products as natural farmers, so making small boutique businesses at home around growing food in addition to the harvesting. And so in that example, across Togo, ghana, burkina Faso, one of our other partners, who does also shake collection and is now doing phony or processing. He's in Mali and Senegal. Just those five countries and the need for localized scale infrastructure that capacity building extension services can work from, you could put another 50 million to 100 million to work quickly. So those are just two examples, and there's groups across many geographies that I think are ready to scale rapidly. But it's not just the investment. It's the investment plus the grants and the capacity building partnerships, because if you invest in the infrastructure but you're not investing in the farmers to move into these practices and learn how to grow regeneratively, then you might have infrastructure with not enough raw material.

Speaker 1:

So I think it goes hand in hand. A nice shiny building with new machinery, that yeah, let's say, we've done that, tried that many times in all places and yeah, without the training and the usage it just never works Exactly. So I think it's going hand in hand.

Speaker 1:

Yeah, and then you mentioned inputs a few times. We're exploring an input series. I'm starting to get more and more interested. I've always been interested but never had. I've never had, let's say, the BS radar to understand what is the snake oil and what is the interesting piece. What's your view on inputs and seedlings? You mentioned as well on inputs in the regenerative transition.

Speaker 2:

So the most rebellious concept which we're seeing in Andhra Pradesh, India, is all of the inputs come from the farm level and if not the farm level, the very local community level. So it's about fermenting cow dung, cow urine, you know, with rice flour and jaggery exactly sugar cane and doing fermentation, and you're saying we don't all starve.

Speaker 1:

If you do that Like this is like the example of people say yeah, but it doesn't scale Like 850,000 farms in transition right now. Probably way more like this is yeah, but what happened in Sri Lanka, then we get that interesting out of discussion which we're not going to hear. But let's say it's definitely possible. But that's the most labor intensive. Very context specific for India works amazing in those regions. But inputs are fundamental there, of course, biostimulants right.

Speaker 2:

It's all about building healthy soil and allowing the healthy soil to feed the plants. Like I said, that's the rebellious, that's the range, right, that's the extreme way of doing it super localized, rebellious, making all of the inputs themselves, with the farmers in the community lowering cost by maybe up to 90%.

Speaker 1:

But then there's other ways, just lowering costs. Lowering costs 90%, just just putting it out there. Yeah, okay.

Speaker 2:

Yeah, lowering costs by 90% without reducing yields yeah, and having multiple crops, because there's some of these farmers growing 10 to 15 things. As long as there's a market, they can make significantly more money. But India it's hard to compare anything to India because it's such a culture that's so rich and smallholder farmer and using the local resources. But even in India they had to relearn and come back to the source and they're using practices of the future. It's not just reclaiming practices of 50 or 100 years ago, but it's also being innovative. And then, if you looked at other geographies, biochar.

Speaker 2:

Biochar is a technology to enhance the nutrients in the soil and be able to grow higher yields just composting. Or maybe there's a more scaled manufacturing of biological inputs, using fermentations and creating biologicals. In Brazil, you see a huge movement now of taking out synthetic chemicals and putting in biological fertilizers, biological pesticides, biological herbicides. So I think there's many scales. One thing that I've learned in the industry is there is no one size fits all for any of this. Within a community, within crops, within geographies, within farmer philosophies, there's no one size for this. But I think, generally speaking, there's opportunities to localize input production to a regional scale, simply by using fermentations, using biochar, creating compost and on the farm level. If you can do the biological fermentations, then there's a lot that can be replaced.

Speaker 1:

And in need of significant investments as well, and, I think, completely neglected until now. I have a hunch or hypothesis that it's also because most investors don't understand biologicals at all, and like myself, and when these decks come across they always sound amazing. But then how do you pick which one is interesting, like the side-by-side pictures always seem like magic, which makes me suspicious, and then I don't think anything happens because you're like I don't fully understand this enough to make a bet left or right or something, but anybody I talk to keeps repeating the essential piece of localized inputs that somebody has to make. Could be the farmer or in a corporate day or something, but money is needed to do that and to do it professionally and consistently and not sell snake.

Speaker 2:

I agree, I get overwhelmed too with all these biologicals and I hear the stories, though, of farmers and networks of farmers who say it works for them to move into these and it seems better. But I think, when it comes to inputs, I'm not on a soapbox saying get rid of all synthetic chemicals. They're all horrible, they're all bad. I just feel like I know examples where it works without synthetic chemicals, where farmers are having success as business people and their health and well-being of their communities are improving. But I do also understand that this is not a transition that should be night to day. Get rid of all the chemicals and all of a sudden, everything's going to be a fairytale perfect. I think this is going to be a 50-year transition into reducing some bettas.

Speaker 1:

And if you had, let's say, the fairytale power of a magic wand and you could change one thing overnight? What would that be?

Speaker 2:

Yeah, it's an amazing question. I think it would be a greater respect and admiration towards farmers. I just feel that farming can be very romanticized, especially in the West. I know a lot of the listeners are in the US, europe and Australia.

Speaker 2:

Beected of it I think of it as an organic farmer and I think of my hippie friends in upstate New York and Sonoma, california, and they're having this great lifestyle of farming. The reality is in much of the world, especially the global south, farming is not a choice. It's just what you were born into. It's your only option. It's either that or move to a city and struggle in a city. These folks stay out in the rural areas and they work really hard. Their lives depend on a harvest. I think this overly romantic view of farming while, yes, it's the case when you go to Italy and parts of France and you're like this is so beautiful, this is amazing For the small scale farmers who make up so much of our food system.

Speaker 1:

Even there, it's not roses and sunshine.

Speaker 2:

Right, but it can be. When you do the agritories you see some beautiful farmers and happy people.

Speaker 2:

But for that the small scale farmers are really struggling.

Speaker 2:

If we can, I want to enable more people who buy to be able to purchase with their vote, to be able to say I'm buying this rice, I'm buying this coffee, I don't necessarily have to pay more for it, because everyone is struggling with their budgets not everyone, most people.

Speaker 2:

If we can make it a price competitive thing to support supply chains that are good for farmers, supporting their economic well-being, supporting their transitions to more sustainable practices and making it price comparative I would love if I had my magic wand is for that product to have a shiny star on it or a halo on it. People would know hey, this coffee is 10 euros, that coffee is 10 euros too, but this one has the halo of hey, it's really benefiting farmers, it's benefiting soil, it's benefiting biodiversity and it's benefiting a better supply chain. I think today there's so much marketing and noise and certifications it's hard to know which product really supports my values as a human and my vision for the future of humanity. I think it would be great for people to be way better informed and be more able to access the information of their supply chains.

Speaker 1:

And how do we prevent that it becomes another checking the boxes for a farmer, like another form to fill or another burden on already a very, very full week? Who pays for that work eventually, to get the data accurately and then aggregate it up to my halo star when I choose my coffee?

Speaker 2:

Yeah, I think in the short term, unfortunately, I think, brands, retailers, those that have highest risk traders, they should be funding it through their overheads, not as cost of good soil, but through their compliance, their marketing, their finance, different buckets of capital. They have to organize data. I think in the long term, that's where AI and technology come in. Once you have enough data aggregation, once you have enough farmers inputting data and you're bringing the AI and satellite and other functions, field extension, agents, organizing data.

Speaker 1:

Hopefully this becomes part of the price.

Speaker 2:

That's right Now. You plug them in. Once you have good data, let's use technology. There should be great businesses that are successful organizing tech and data and AI and satellites. I think that's the three to five year cycle. I think in the short term it's going to be costly. Someone's got to pay for it. The farmers already are barely making a profit in many cases. It's not going to be them who pay for it. It should be the groups that have the highest risks. I think that's in the short term and we make it as efficiently as possible. Our feeling is capturing a bunch of data just because we can get more accuracy on the product and the impacts is a nice to have. The reality is we should be organizing the data that someone's willing to pay for and just having a marginal cost based upon this data organization. Over time, I think it will be built into the price. I think it needs to be.

Speaker 1:

How much of your company now is a data company? How much do you spend on that piece?

Speaker 2:

I'd say it's 75% to 100%. Our way of organizing data is actually about being in service to farmers. Our mission is about farmer well-being and organizing networks of farmers. We just see data is an incredible tool to enhance farmer well-being. When we look at commercializing products like selling coffee or selling cocoa or selling bananas, what we're really selling is bananas, coffee and cocoa, with data attached to it. Whatever we do, we're always thinking of the lens of how can data enhance the profitability of a farmer, how can it enhance the experience of a buyer or, ultimately, a consumer. We don't look at ourselves as a pure tech data play. We really look at ourselves as an aggregated network of farmers and producers and creatively finding solutions for how to add more value to the source and how to incentivize these scale transitions to natural farming or regenerative ag.

Speaker 1:

I think it's a perfect end to this conversation. I want to thank you so much, keith, for coming on here and sharing your journey from green houses to a data company, with all respect and the whole spectrum in between. Thank you so much for the work you do and for coming here to share about it.

Speaker 2:

Great, thank you. Thanks for having me.

Speaker 1:

Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investing in RegenerativeAgriculturecom. Forward slash posts. If you liked this episode, why not share it with a friend or give us a rating on Apple Podcasts? That really helps. Thanks again and see you next time.

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