Earlier this year, I met up with a friend for lunch at a restaurant out on the water. As I twirled fettuccine noodles and chunks of New England lobster around my fork, I couldn’t help but appreciate the connections that I’ve been able to form over shared meals.
Food is an integral part of my life—a means to explore new cities, a tool to bond with friends and family members, and a method to connect to the medley of cultures that make up my ancestry. As much as I try not to, it can be too easy to take these meals for granted, forgetting that 9% of the world, over 690 million people, do not have secure access to food and frequently go to bed hungry.
The friend I shared lunch with is an analyst who invests in small public corporations. He was particularly excited to tell me about one company, Raven Industries, that is taking on national and global challenges in food production, population growth, and agricultural sustainability with a mission to improve our world.
Global challenges in food production
The global demand for food is reaching peak levels. The world’s population is growing; it is predicted to reach 9.8 billion by 2050. At the same time, available farmland is diminishing. Our farmers are pressed to feed the world with fewer and fewer resources. According to Forbes, farms around the world will need to increase global food production by 70% in the next 40 years to keep pace with population growth. To meet the demands for global food supply, farmers and companies in the agriculture sector are turning to technology-driven solutions.
Sustainability in agriculture is another critical issue. Much of modern farming since the Industrial Revolution has contributed to this crisis in sustainability. Many of the techniques that farmers rely on to increase production are known for harming the environment. By 2050, harvests are projected to see an average loss of 17%. Arable land is expected to decrease by 20% per capita, and 5.7 billion individuals may be threatened by water scarcity. The agriculture sector is attempting to meet rising demands by using smarter farming techniques and regenerative agriculture.
Shifting consumer food preferences
Consumer demands around food production have shifted. Today’s consumers want to know more about the food they eat and where the ingredients come from. When it comes to animal products, they want to know where the animal was raised and the treatment it received during its lifespan.
Blockchain technology is making its way into food production to offer more transparency in supply chain. Climate change is also driving innovative change in agriculture. Eighty-six percent of consumers say they want food that is “good for the world and good for me.” Consumers are asking for food that is organic, fair-trade, and ecologically responsible.
American demand for plant-based proteins grew tremendously during the COVID-19 pandemic, with sales up by 264% at the beginning of May 2020. Conventional meat giants JBS, Tyson, Smithfield, Hormel, and Cargill have all begun to offer their own lineup of plant-based alternatives.
Overall, the retail food market in 2019 grew by 2.2% while plant-based foods saw an 11.4% growth spurt. Plant-based alternative companies such as Beyond Meat, Impossible Foods, and Good Catch Foods are receiving serious funding from private and corporate investors. Consumers and investors are looking to companies that have a strategy aligned with doing good for the world.
How companies are preparing for future challenges
In order to meet concerns around population growth, sustainability, and shifting consumer preferences, agricultural companies are embracing biotechnologies to support smarter farming and regenerative agriculture. Between 2018 and 2020, venture capitalists invested about $7 billion into agtech solutions. Companies like Raven Industries aim to improve the outlook for the future by using precision agriculture to solve widespread global problems.
In 1956 in Sioux Falls, South Dakota, a group of General Mills employees collaborated to form Raven Industries. The company was originally established as a high-altitude balloon designer and manufacturer for the American Space program. Since its inception, the company’s business product line has shifted to “creating technology (including precision agriculture) that leaves a positive impact on people and places around the world.” Raven has built its business model around doing good through corporate philanthropy, team member development, environmental initiatives, and volunteerism.
Raven contributes to innovating in agricultural technology by focusing on field computers, sprayer and planter controls, GPS guidance steering systems, logistics, and autonomous solutions. Their products help feed the world by empowering farmers to apply data and analytics at the plant level. Companies that use precision technology typically see 15% average cost reduction and 13% average growth in yields. Innovation in precision farming is expected to be a $43 billion market by 2025.
Raven Industries has become the leader in autonomous agriculture technology. Farms facing labor shortages depend on their automation, robotics, and driverless agricultural solutions.
Raven Industries has long been a pioneer in precision agriculture, and more companies are realizing the importance of developing solutions and a business strategy that do good for the world. A few weeks ago, CNH Industrial announced that it had entered into an agreement to acquire Raven Industries, valued at $2.1 billion. The acquisition continues a long partnership between the two companies and is expected to supplement CNH Industrial’s existing precision farming portfolio. The agreement is expected to close at the end of this year.