Experts highlight agtech's ability to tackle biggest problems in animal health
At the recent Animal AgTech Innovation Summit in Amsterdam, Animal Pharm analyst Sian Lazell listened to a panel of experts as they discussed the challenges agtech can address in the animal health world and the constraints on innovation.
While the definition of 'animal agtech' varies among different stakeholders, panel members were in agreement over the issues new technologies can address. These obstacles include: a disconnect between consumers and producers; bridging the gap between R&D being carried out in animal health and society's needs; and generating the solutions of the future.
Agricultural raw materials specialist at Nestlé, Robert Erhard, said: "There is a disconnect between consumers and what happens in animal protein production. Agtech can reconnect the two and help drive efficiencies and create the proof points that we need for consumers, which is a license to operate."
Eleanor Riley, director of the UK's Roslin Institute, added: "I also recognize a disconnect but probably at the other end of the chain, which is us sitting in our labs doing, what is very often, 'blue skies' research but with an anticipation that we can translate that into something impactable in the livestock industry. Agtech can help us bridge that gap – figuring out what's relevant out of what we do and what society needs."
Global head of livestock at Boehringer Ingelheim, George Heidgerken, commented: "The traditional way of approaching animal agriculture has changed significantly. Today, the way I see it, our old technology is not going to satisfy either these food crises, disease, the expanding population or the environmental concerns we have around how we produce food. Animal agtech is the solution of the future – a solution that we don't have today."
Drees Beekman, senior vice president of Benelux, Africa and the Middle East at Zoetis, said: "We are in an exciting time in the agricultural industry. There are opportunities now, with new technology, to improve significantly productivity and at the same time to connect with the wellbeing of animals."
Drees Beekman: "The veterinarian remains key in the decisions of healthcare but we need to partner with vets, farmers and other stakeholders to bring these technologies to reality."
According to the panel, other challenges agtech can address include the growing and differing demands for protein, the reduction of antibiotics and the need for traceability.
Maarten Goossens, principal at the Netherlands' Anterra Capital and panel chair, asked Dr Riley specifically: What is the role of livestock in future societal needs?
Dr Riley replied: "That is a huge question. I think from where we sit, we see two very different societal drivers happening. One – in Europe, the US and high income countries where we could probably for health benefits and environmental sustainability actually reduce the amount of protein we eat – we could eat higher quality and higher welfare protein.
"But if we look at the rest of the world, there's a completely different agenda underway, which is increasing populations, increasing individual wealth and increasing demand for animal protein. In many parts of the world, even a little bit more animal protein would make a huge difference to many people's nutritional status and their health."
Turning to the pressure to remove antibiotics from animal production, Mr Erhard stressed antibiotics should not be eradicated but also highlighted the amount of work left to be done in reducing their use and how veterinarians need to adapt their business models to fit the changing landscape.
"Antibiotics are very important for animal welfare and it's wrong to say that antibiotics should be simply removed from animal production systems. But there is a lot of room to reduce the amount of antibiotics that are being used," he said.
Mr Erhard explained one major factor that plays into the changing scene surrounding antibiotics is veterinarian incomes. He said a lot of vets, like farmers, are struggling to make ends meet and have to look at different business models. Vets need to shift to a scenario where their income becomes reliant on whether animals are maintaining health, rather than relying on whether they can issue treatments.
Mr Beekman added: "It's about moving from treatment to prevention. We believe the role of the veterinarian remains key in the decisions of healthcare but we need to partner with the veterinarians, with farmers and other stakeholders to bring these technologies to reality."
Robert Erhard: "We can talk about sustainability, animal health and welfare, and deforestation as much as we want but without traceability, we have absolutely nothing."
In terms of new solutions being developed, Mr Heidgerken said digital technology, the microbiome, diagnostics and monitoring are key areas that are seeing investment – all areas that can help with disease prevention.
Mr Erhard pointed out one of the biggest challenges digital technology in particular can tackle is traceability.
He said: "We can talk about sustainability, animal health and welfare, and deforestation as much as we want but without traceability, we have absolutely nothing. That's really the starting point. So, creating those links throughout the chain makes a lot of sense."
However, he also said industry needs to be sensible about the technology and consider the infrastructure needed to establish efficient and sustainable traceability throughout the production chain – noting the imminent introduction of a 5G network will enable work in this area to advance rapidly.
Big Pharma 'rushing' into digital
In the digital space, the largest deal to date has been Merck's acquisition of Antelliq. Mr Goossens said: "People could say Merck paid quite a hefty price for Antelliq – was it worth it?"
Mr Heidgerken cautiously answered: "I think they paid too much. It's hard to know. I think all of us, all Big Pharma, are rushing into this integrated health management approach."
Commenting on the digital tech space more generally, he said: "What I would say that I'm hugely frustrated about is that when Big Pharma grabs these investments, all of a sudden this innovation slows down."
The panel disagreed on how drug development would play out over the next decade. Whereas the human pharma sector has seen a significant shift to production from small and medium-sized businesses, the landscape in animal health is less clear, with the panel split over whether smaller firms would have a 50% hold on drug development in the next 10 years.
However, there was a consensus that in five years, artificial intelligence innovation will "dominate conversation" in the industry. Additionally, the panellists noted the alternative protein market is now moving five times faster than industry thought it would three years ago. Yet Dr Riley pointed out only a small, elite part of society is buying into the sector. She said the key driver of the space will be if alternative proteins are made cheaper.
The panel also agreed the construction of facilities to further R&D in agtech is currently one of the biggest constraints facing the space. Despite this, Mr Erhard said the current investment going into agtech in China is "nothing short of amazing". He commented: "They might not have a 'green box' but they definitely have an 'agtech box'."
All the experts said the growth of agtech innovation is "definitely happening in emerging markets". Africa was highlighted as one key region where companies should have a foothold.
Nevertheless, Mr Heidgerken encouraged a shrewd approach – explaining how 10-15 years ago businesses had invested in developing countries like Africa, but the situation did not turn out as expected, when they lost money because of failed returns on investment.
Given this view, where then are the crucial markets for successful agtech investment? Mr Heidgerken concluded: "You've got to win in the US and you've got to win in China."