Date: Jan 17, 2018
Magazine:
January/February 2018

With Western Growers as one of its significant sponsors, the inaugural Organic Grower Summit was held in Monterey, CA, in mid-December, with a lively audience and a tech-heavy trade show.

The summit was co-hosted by the Organic Produce Network and California Certified Organic Farmers, with Western Growers serving as the technology sponsor, including hosting “Tech Alley” during the trade show portion of the full-day event. Also featured were six breakout sessions and three keynote addresses, which largely served to quantify the increasing impact organics are having on the food industry.

One of those keynote addresses featured a round table discussion on the organic industry’s attractiveness to investors. Moderator Scott LaRue, an investment banker with Piper Jaffray, told the crowd, which represented all links in the organic produce supply chain, that a stunning amount of capital is heading to the organic sector. He noted that the sector is “on-trend” as it is a central focus of millennials and capitalizes on the healthy eating mega-trend.

While not a perfect fit for public companies because of the volatility of agriculture, LaRue said there is a huge amount of private investment money looking at the organic sector as the next big thing. “It is a very, very active sector on Wall Street,” he noted.

His panelists consisted of three of the larger growers in the western organic produce industry: Grimmway Farms, JV Smith Farms and Mission Ranch. Those firms were represented respectively by Jeff Huckaby, Vic Smith, and Stan Pura. Smith noted that one of the problems with investment money in the produce industry is that investors are typically looking for a quick return while at JV Smith Farms decisions are made with a vision five-15 years down the road. Smith said his firms have done well with traditional bank financing.

Huckaby told the story of how Grimmway has become the largest organic grower in California and probably in the United States. The firm currently has 42,000 acres of organic vegetables under cultivation. He said it is all about using top notch land and finding the right crop rotation to enhance the soil, which improves quality and yield.

Pura discussed Mission’s evolution to become one of Earthbound Farms larger grower partners. The growing entity specializes in organic salad blends. He believes the organic sector has much more room for growth on the supply side as growers are becoming much more efficient. He said 20 years ago, they had 20 percent waste in getting a crop from the field to market. “Now we are looking at only 5 percent.”

Another keynote speaker, Don Barnett of the meal kit firm Sun Basket, discussed why he believes food in general, and organic food in particular, is ripe for disruption. He said many other sectors—from books to electronics to laundry soap—have seen a significant percent of market share grabbed by on-line suppliers. That hasn’t happened yet in the food industry but Barnett believes it will soon.

He argued that his firm answers the question that is top of mind most afternoons for most people: “What’s for dinner?”

He said statistics show that 80 percent of consumers cook at home three to five times a week. With their proportioned meal kits, Sun Basket makes that easier. By January 1, Barnett said all of the ingredients in the Sun Basket kits will be organic. The company is moving in that direction because organic food sales are growing faster than conventional foods and is an on-trend category. With its three distribution centers strategically placed throughout the country, Barnet said Sun Basket reaches 98 percent of the zip codes in the United States, including food deserts that have little access to organic offerings.

Another keynote address witnessed Miles McEvoy, the retired former head of the USDA’s National Organic Program, give a full-throated endorsement of that program. However, he did say it was under-resourced, both by lack of money and people. He said NOP has only a $9 million budget and 35 employees to oversee the 39,000 organic operations around the United States. Last year, they conducted 4,000 investigations, including one that uncovered thousands of tons of grain crops coming into the United States from Eastern Europe falsely labeled as organic product.

McEvoy said the USDA organic seal is extremely important and its integrity must be protected.

The workshops covered a variety of topics with the session on cannabis drawing the largest crowd. Because it is still illegal nationally, cannabis doesn’t qualify to use the USDA’s organic seal, though legitimate growers must use organic methods in their production. No crop protection tools—synthetic or natural—have a cannabis use on the label so a zero residue level of all products is required. The panelists noted that regulations are still being written for the legal production of cannabis and so much change will occur in the coming years. Currently, the crop is regulated by county. Thus Kern County doesn’t allow cultivation, Monterey County requires all cannabis crops to be grown in greenhouses and Humboldt County allows for outdoor crops.

WG Senior Vice President of Strategic Planning, Science & Technology Hank Giclas moderated a workshop on “Clean and Renewable Technology” featuring three firms that are part of the Western Growers Center for Innovation & Technology in Salinas. He said clean ag technology has the promise of offering a positive ROI utilizing such 21st century concepts as getting credits for environmentally-sustainable inputs. He defined clean technology as any product that does not negatively impact the environment.

Solar and wind energy are in this category, which was the focus of the remarks by session panelist Aaron Enz of Alta Energy. His company works companies through the process of interfacing with the 3,000 utility companies around the country. Alta Energy analyzes the energy needs of a company and makes recommendations with regard to their clean energy use, determining what makes sense for each operation. He noted that it is possible to participate in the clean energy world with off-site solar and wind installations. To get energy credit, the installation does not necessarily have to be on your property. He also said that the use of batteries—the same kind that fuel cell phones—will become more prevalent as a power source in the years to come.

Robert McBride of Boost Biomes discussed his firm’s work to harness the power of microbes and microbiomes to protect crops and attack other farming challenges. This technology resonates well with producers of organic crops.

The third speaker was Sean Lyle of PowerGrow, a company that has patented a high-tech glass greenhouse configuration. The facility results in zero waste using waste as an energy source. He said a five-acre installation can produce the same volume of crops that would come from 93 acres.

Other sessions were devoted to sustainable packaging, funding issues facing research in the organic ag sector, soil health and precision agriculture.

WG Executive Vice President Matt McInerney said it was an excellent show from a Western Growers perspective. Many of the organization’s members have added organic acreage and were in attendance. In addition, “Tech Alley” was populated with firms working with Western Growers and its members to use technology to solve some of the industry’s most vexing problems. Technology has made great inroads in many industries and Western Growers is on the leading edge of facilitating technology development in agriculture. He said the firms participating in the show were very pleased with the quality of show attendees.

 

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