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May 1, 2015

AG TECHNOLOGY: WG Announces Major Investment in Future

Western Growers and Silicon Valley Global Partners (SVG Partners) have entered into an exclusive strategic alliance agreement to find, accelerate, advance and invest in innovative solutions intended to solve critical challenges to production agriculture through technology and produce more with less water, labor and inputs.

The two companies will collaborate on innovation centers in Salinas and San Jose and both are involved as sponsors of Forbes’ Reinventing America: The AgTech Summit in Salinas July 8-9, 2015.  Other mutual efforts will include participation and collaboration in the SVG Thrive Accelerator program and the SVG Technology Growth Fund.

The involvement in the Forbes event, and the new partnership, was not lost on that nationally acclaimed magazine as it touted that fact on its website this week.  SVG Partners is a co-host of the Summit. Other mutual efforts will include participation and collaboration in the SVG Thrive Accelerator program and the SVG Technology Growth Fund.

“With population growth reaching nine billion in 2050, the only way to feed the world will be through technology,” said Tom Nassif, president and CEO of Western Growers. “We are also in an era of diminishing natural resources, especially in California where water is a serious concern because of an ongoing four-year drought.  In order to create a sustainable food chain, technologies and innovation must be developed and promoted.  The purpose of this partnership is to accomplish just that.”

Nassif said because of the current California drought and the pressing needs created by lack of water, irrigation advances will be a top priority for the association.  But he noted advances in robotics, drone technology and other areas that can benefit agriculture are equally important.

He said Western Growers will be creating and staffing the Salinas Valley Innovation Center and the plan is to have it operational by the time the Ag Summit is held in July.  The center will consist of office space and communication equipment that will help entrepreneurs and innovators incubate new ideas.  He said the office space will be an excellent location for these technology experts to be “mentored by Western Growers’ members who produce approximately half the fresh produce in the country.”

Nassif explained that creating a collaborative effort between innovators and agriculturalists is key to creating new technologies that are useful to the industry.  Something might seem innovative on paper but may not stand up to real world scrutiny.  The goal is to foster that communication during the developmental process.

John Hartnett, CEO of SVG Partners, stated,  “We are delighted to partner with Western Growers to invest and accelerate technology in agriculture and also to co-host Forbes’ Reinventing America: The AgTech Summit.  The intersection of technology and agriculture will pave the way to solve the exploding food production challenge as well as deliver an incredible investment opportunity in the 21st century.”

Forbes Media Chief Operating Officer Mike Federle also weighed in.  “From biotech and precision farming to big data’s role in feeding a planet of nine billion people, Forbes’ AgTech Summit promises to be the definitive gathering for leaders at the intersection of technology and agriculture.  We welcome Western Growers as a co-host of this event.”

Nassif told WG&S in mid-April that while the details of the official collaboration were still being worked out, WG and several members have already played an active role in the Thrive Accelerator program that was launched last year.  The Thrive Accelerator is a selective mentorship and investment program intended to connect technology-enabled startups with leading agricultural companies.  Other sponsors of the program include Taylor Farms, JV Smith Companies, Chiquita, Dole, Mann’s and Rocket Farms.

In the first phase of the Thrive Accelerator program (which was explained in the April 2015 issue of WG&S), about 30 companies initially applied for inclusion.  Ten start-ups were selected for incubation.  Those companies have been working with mentors from agriculture, including WG members and staff, to vet their ideas and develop business models and plans.  Award winners and results from this initiative will be featured at Forbes’ Reinventing America: The AgTech Summit.

Hartnett said the Thrive Accelerator program is indicative of the innovation that can come from this SVG/WG partnership.  “We are already seeing progress being made which will be on display at the Ag Tech Summit.”

Nassif said the collaboration will include investments from Western Growers as well as independent participation by many of its members.  He characterized the joint investment by agriculture as being in the multi-million dollar range.  Much of that will be as an investment in the SVG Technology Growth Fund, which is a venture capital fund organized to invest in agricultural technology companies with strong leadership, high utility to industry and strong return potential for investors.  The fund is separately led by an independent investment group which includes Western Growers as a strategic investor.

Nassif said innovation centers and technology funds have proven to be very successful in many different industries to both develop ideas and brings new technologies to market.

“Farmers today know they need to increase the quantity and quality of crops using less water, labor and inputs,” said Nassif.  “This increased efficiency demands greater precision which could be facilitated by new and better technology.  Western Growers is taking the initiative to shape the future of the fresh produce industry by partnering with a respected and experienced Silicon Valley technology innovation firm.  Our mutual aim is to advance technology innovation in the fresh produce industry thereby improving the ability of our members to produce more food in more efficient ways.”

SVG Partners is an investment and advisory firm that partners with public and private organizations on strategy, innovation and global expansion.  The investment focus is on early stage companies with disruptive technologies.  “Our team consists of accomplished technology leaders who want to apply their experience and passion to help portfolio companies succeed,” said Hartnett.  “We also leverage our vast global network allowing us to connect portfolio companies in meaningful ways to accelerate their success and exit opportunities.”

Hartnett said the partnership with Western Growers is very important to the success of this effort for a variety of reasons, including access to ag industry experts as mentors and collaborators.  He also noted WG’s economic involvement adds “financial muscle” to the endeavor and illustrates that this is not just a feel-good program but one designed to produce results.

Though he expects to see results in a timely manner, Harnett did warn that “this is farming, not hunting.”  Seeds have to be planted and nurtured before a crop emerges.  “This is a great first step,” he said, speaking of the partnership, the Thrive Accelerator and the Ag Tech Summit, which in conjunction have moved this ag technology effort to the forefront.

Nassif said Western Growers’ proactive involvement in this effort is representative of the direction the association has taken over the past decade.  In the mid-2000s, it established a partnership with C.H. Robinson to promote transportation solutions for its members.  The result has been the establishment of a transportation program that leverages the volume members ship in aggregate to improve service and decrease rates.  And in the past several years, Pinnacle Claims Management, Inc., a Western Growers company, has leveraged its resources as a third party administrator for self-funded employers, to become a contractor for the state of California and share their expertise in the health insurance sector.

Like those efforts, Nassif said this one was hatched by the WG Board as it discussed industry issues and ways to be part of the solution.  “At the end of the day, we didn’t get into this technology endeavor for it to be a profit maker for the association.  We are involved because agriculture has diminished resources, higher costs and no forthcoming solution for immigration reform.  We have to do something to remain competitive.”