Agtips: Commercial Viability
29 January 2020
This edition’s agtips will cover the commercial viability section of your submission. While the technology section describes the technological maturity of your product and the sustainability section explains how your idea makes optimal use of natural resources, the commercial viability section demonstrates that your proposition has the potential to become a commercially successful business in the UAE. Business plans come in many forms, but for The FoodTech Challenge, we recommend you include these 7 points: Target Customers Who are your target customers? Target customers can be segmented by age, location, background, income, and lifestyle. Defined customer segments translate to defined sales and marketing strategies, which achieve stronger commercial results. Read more here. Opportunity Sizing What is the market opportunity and growth potential? Understanding the market dynamics for your product or service, relative to your competitors, is crucial to forecast how your business will sustain its growth. Read more here. Competitor Analysis A strong competitor analysis establishes what makes your product or service unique in order to attract the market. There are various frameworks to evaluate competitors; check out this article from Entrepeneur Middle East to learn more. Value Proposition/Competitor Edge The value proposition of your business drives your competitive edge. It defines the unique value that your product delivers to the customer, compared to what the market offers. A strong value proposition makes your product or service an irresistible idea to invest in. Cost As the saying goes, “you have to spend money to make money”. It is important that your business model takes into consideration the required fixed and variable costs to set up and maintain operations. The business model ideally forecasts when revenue will begin to recuperate the initial costs and begin generating profits (i.e., the breakeven point). Funding Each winning team is eligible to win up to $250,000 in prizes – how do you plan to use it? What are the key areas where you will invest in your product or service (e.g., R&D, new hires, capital expenses)? Describe how funding from The FoodTech Challenge will be used to grow your product or service over a defined period (e.g., 12-18 months). Throughout that defined period, what major milestones do you think you will reach with the funding? Revenue How do you make money? A robust revenue model is the foundation for a sustainable business. Here are 10 common revenue models for startup companies to get you to start thinking, but there are unique business models out there as well that have proven success in the market. Get Inspired! There are many resources out there to help you think about how to structure your commercial viability section. We recommend you to take this 8-point test from Investopedia to determine whether your business model is viable. Once you have all the business plan components together, read this article from Forbes about the important do’s and don’ts for investor pitch decks to make sure that your business case is in the best shape possible.
Meet Our Judges: Stuart Oda
27 January 2020
We are proud to announce that we have partnered with an incredible panel of experts to judge The FoodTech Challenge submissions. Our panel is comprised of local and international experts on agriculture from academia, private sector, and policy circles. We spoke with Stuart Oda, Co-Founder and CEO of Alesca Life, to talk about his thoughts about food technology trends in the UAE and abroad. What is your favorite memory related to food? All my favorite food memories are related to family and travel. My most recent incredibly food experience was eating a fresh fig for the first time in Venice, Italy with my wife. All of the figs I had eaten until then were dried or preserved, and I remember being amazed by the vibrant color and flavor of the fresh fruit. What makes you excited about food technology? I’m excited that food technology has the potential to improve environmental, economic, and social outcomes across the world. Not only will the development and maturity of food tech make the agricultural industry more sustainable, but it also has the opportunity to improve farm productivity and profitability and modernize dated notions about what it means to produce food. One of the most valuable tool for future farmers will undoubtedly be a smartphone. In your opinion, what key technologies have promising applications for UAE food security challenges? Controlled environment agriculture and precision farming technology both hold incredible promise for application in the UAE to address challenges related to food and nutritional security. In terms of scalability, other promising technologies include products and processes to extend food shelf life and services to upcycle food waste. Surveys have shown that youth are increasingly disengaged from food and agriculture work. How do we renew youth engagement in this area? In order to inspire the youth and our next generation of food producers and agritech engineers, Alesca Life has launched several initiatives, the most successful (and fun) of which has been our urban indoor farming experiential tours. We’ve welcomed thousands of participants to learn about the basics of indoor farming and plant seeds, transplant saplings, and harvest vegetables just like our professional grow operators. By showcasing how technologically advanced and beautiful farming can be and giving each participant the opportunity to plant a seed and build a relationship with the food that they eat, we’ve been able to engage and educate the youth and even convert picky eaters into vegetable lovers. One of the only compliments that I can remember in the 6 years since founding Alesca Life was during one of these experiential tours. After completing the program with friends and classmates, one of the students said to my team, “When I grow up, I want to be an urban farmer.” What are books, papers, and/or articles that you’re reading about food security that you would recommend? Food security is an incredibly multi-disciplinary and multi-faceted topic, and I try to stay up-to-date on the latest tech and trends by engaging frequently with various civil society, government, and non-governmental organizations. It’s incredible to learn about the simple, elegant, and hyper affordable initiatives being deployed across emerging market countries as well as the super high tech solutions being launched in more developed geographies. There are a lot of opportunities for cross-pollination of ideas, and it’s always exciting to think about a future in which products, services, and processes to improve the agricultural industry can be shared and implemented faster, better, and cheaper.
Sustainability in Agtech
19 January 2020
At the heart of The FoodTech Challenge is the UAE’s commitment to cultivating sustainability in the country’s relationship with food. Water and energy are food’s main ingredients; without it, food production will suffer. This is what the Food and Agriculture Organization (FAO) calls the water, energy, and food (WEF) nexus, and sustaining all three within this nexus is important in establishing long-term food security. Strong submissions in The FoodTech Challenge, therefore, make improved use of natural resources that protect the WEF nexus. The technology and commercial plan behind your idea will drive the overall sustainability of your project. Let’s revisit the example of aeroponic farms from our previous agtips on technology. These farms use sensors, IoT, and AI technology to accelerate growth. Together, these technologies determine optimal amounts of water, nutrients, and energy for their plants to grow in speed and abundance. Meanwhile, from a commercial perspective, these farms can improve sustainability by finding sources for water, nutrients, and energy that are renewable and local. Installing technology can limit reliance on electricity typically drawn from non-renewable gas power plants. Finding local suppliers of equipment and fertilizers can limit the carbon footprint that transportation has on the environment. In other words, these farms leverage technology and business strategies to sustain the planet while generating profits for the company. You can demonstrate sustainability in your project in a similar way. International organizations have developed many indicators to assess sustainability of food security projects. FAO has published a paper that explains the WEF nexus further, breaks down the components of a nexus assessment, and offers six case studies to illustrate the framework in action. We invite you to explore how these indicators and case studies can apply in enhancing sustainability in your FoodTech Challenge submission.
Meet Our Judges: Cinar Kurra
30 November 2019
We are proud to announce that we have partnered with an incredible panel of experts to judge The FoodTech Challenge submissions. Our panel is comprised of local and international experts on agriculture from academia, private sector, and policy circles. We spoke with Cinar Kurra, CEO of Catalyst, to talk about his thoughts about food technology trends in the UAE and abroad. What is your favorite memory related to food? Grandma’s cooking – both were marvelous, my grandma and her cooking! What makes you excited about food technology? Food, if organically produced, is an innovative way of minimizing hunger and obesity. In your opinion, what key technologies have promising applications for UAE food security challenges? Food monitoring when importing, in order to give the best deals to consumers before expiration, are so far the best ideas that I have witnessed. The FoodTech Challenge will certainly discover great startups utilizing new tech ideas. Surveys have shown that youth are increasingly disengaged from food and agriculture work. How do we renew youth engagement in this area? Perhaps gamification of cultivating and reward mechanism for production could engage youth in a positive way. What are books, papers, and/or articles that you’re reading about food security that you would recommend? The Fate of Food: What We’ll Eat in a Bigger, Hotter, Smarter World.
What's the "tech" in "agtech"?
15 November 2019
The UAE’s food security challenges have several environmental, policy and economic elements that make them complex to tackle. Technology is the vehicle to address these challenges, but what is technology, exactly? In our modern world, technology is everywhere around us, and its potential applications to food security are equally diverse. “Technologically-driven” solutions have a clear grasp of what methods currently exist to solve food security issues and propose a way forward to achieve better results. Below are a few examples of technology applications to get you thinking into how this works in practice. Sensors What is it? A device that gathers information about its environment and sends the information to other electronic devices. How is it applied? Aeroponic farms install sensors to monitor nutrient uptake for different kinds of plants Internet of Things What is it? The system of interrelated computers and devices with the ability to transfer data over a network without requiring human interaction. How is it applied? These sensors transmit information about plant growth rates to computers that house data for the entire farm. Artificial Intelligence What is it? The simulation of human intelligence processes by machines through the process of learning, reasoning, and self-correction. How is it applied? These computers can be taught to adjust levels of light and water to maximize agricultural output, tailored for each kind of plant. Strong ideas use a combination of the technologies above to maximize the benefits of each. An example of a company leveraging multiple technologies is Winnow Vision. Through cloud technology, vision-enabled artificial intelligence, and data analytics, Winnow Vision helps chefs track food items routinely wasted and adjust their production to slash cost. As a result, Winnow Vision was able to cut food waste by half and saved up to 20% of total food costs. Technology is an essential component in a strong application. If you are looking for a technical person to join your team, we encourage you to connect with other participants via our social media, where you will find a community who are passionate about food security just like you!
UAE Food Security Challenges
15 October 2019
The UAE faces significant challenges to producing food domestically. Only 0.5% of the land mass is arable, extreme heat limits the capacity to cultivate and store food, and the country receives very minimal rainfall. As a result, the UAE currently imports roughly 90% of its food supplies. 1. The UAE’s soil composition is predominantly made up of sandy soil, which is difficult to cultivate without additives and fertilizers Sandy soil (75%) has low nutrient retention and requires large quantities of irrigation water to cultivate Salty soil (8%) affects the plant’s uptake of nutrients and has reduced microbiological activity important for plant growth compared to other types of soil The remaining 10% are other types of soil not suited for agriculture 2. Only 7% of soil (~490k hectares) is rich in gypsum and lime and has suitable properties for agriculture use Total agricultural area in the UAE has decreased by 3% annually over the last 14 years as a result of steady desertification and soil degradation caused by natural and manmade causes: Natural causes: Wind erosion: Major cause behind irreversible land degradation (1.1m hectares in total lost to-date) Natural salinization: Increasing salt content in soil due to seawater infiltration in marine sediments, degrading soil in coastal areas mainly in Abu Dhabi Harsh climate conditions: High temperatures and low rainfall leads to low soil moisture and accelerated desertification Manmade causes: Irrigation malpractice: Overwatering of plants or use of saline groundwater for irrigation, increases vulnerability to pests, diseases, and root degradation Excessive use of additives: Fertilizers containing excessive nitrogen dehydrates soil and leads to high emissions of greenhouse gases Overgrazing: Plants are exposed to intensive grazing for extended periods without sufficient recovery periods, reducing land productivity and increasing desertification 3. The majority of UAE’s water supply is from groundwater and desalinated water , resources that are becoming increasingly scarce or costly to produce: Groundwater (44%) is being extracted 25x faster than the natural recharge rate due to hot climatic conditions, inefficient irrigation techniques, overpumping, and cultivation of high water use crops such as date palms and Rhode grass Desalinated water (42%) is increasing as a substitute for UAE’s depleting groundwater; however, producing desalinated water increases greenhouse gas emissions, soil salinity, and contaminates groundwater if production and disposal is not done properly Treated wastewater (14%) is an alternative source of water for agriculture purposes; however, only 52% of water is currently being recycled due to an underdeveloped transmission and distribution system The UAE Ministry of Energy & Industry launched the UAE Water Security Strategy 2036, which aims to reduce total demand for water resources by 21% 4. Pests continue to spread and reduce post-harvest yields, and chemical pesticides have exacerbated the stress on agricultural land Pests in the UAE (e.g., red palm weevils, locusts, beetles, moths, and rats) feed on crops, contaminate stored food, and sometimes even damage infrastructure, resulting in the overall reduction of post-harvest yields Common pesticides contain toxic chemicals that harm crops and humans as well, while also breeding pesticide-immune pests that are more difficult to exterminate The pesticide consumption in agriculture is much higher in the UAE than other parts of the world: 9.86kg/ha in the UAE, 1.9kg/ha in Europe, 1.5kg/ha in the US, 0.5kg/ha in India To reduce chemical pesticide use, the UAE is increasing its regulation and developing environmentally-friendly pest control techniques, such as pheromone traps , light traps , and drone technology 5. Production of plant and animal products has limited complementarity with domestic consumption patterns: Plant production: Field crops comprise 60% of UAE’s overall production Staple crops such as wheat, which is responsible for a third of calorie consumption, is not commercially cultivated in the UAE due to its water-intensive requirements Animal production: – While livestock supply has increased steadily since 2012, only a small share is used for commercial meat production due to preference for personal use Production of fisheries has been relatively stagnant; less than 2% is produced through aquaculture due to lack of awareness, regulation, and incentives to shift technologies 6. Farmers and investors are hesitant to integrate production technology due to limited training and advisory services The majority of youth are disengaged with the agriculture industry; in a recent survey of 141 farm owners in the UAE, 90% of them were 41 years old and above The study showed that willingness to adopt technology into their agricultural production is positively correlated with three main factors: farm income, level of education, and water salinity; however, only 50% of farmers introduced to hydroponic technology incorporate this into their operations UAE University (UAEU) is the only university with a dedicated faculty for food and agriculture innovation, limiting the country’s capacity to train its next generation of farmers 7. There are gaps in food handling throughout the supply chain, leading to food waste in all stages of production Production: Pests infest farmland and storage facilities, contaminating the supply Distribution: Hot weather, especially during the summer, causes food to spoil quickly, adding stress to distributors to keep food cool and clean Consumption: Food is not consumed by the customer often due to oversupply, but artificial intelligence technology is helping accelerate food waste reduction efforts. “Winnow Vision”, an AI-powered food technology company, installs smart cameras at hotels and restaurants that detect unpopular dishes being thrown away to inform future food purchases. Waste management: Converting food waste into commercial opportunities such as biofuels and fertilizers remains an emerging market with a few players (e.g., Dubai Carbon, Imdaad, and Etihad) 8. Adoption of food waste management policy and technology has been slow Despite strong policy interventions, the UAE is consistently ranked as one of the top producers of food waste Federal and emirate-level laws and regulations focus on agricultural operations, food safety, water use, and food standards; whereas food waste laws and regulations are limited