Reflections from a Year of Agri-Tech Conferences: Key Insights Shaping the Future at AgriSound

As the conference season draws to a close for 2024 and our projects begin to slow down for the winter period, I have been reflecting on some of the common messages and insights about how to encourage greater use of agri-tech within the supply chain, to meet the demand for healthy, sustainably produced food.

From all of the panel sessions, presentations and chats with other entrepreneurs, corporates and farmers that I’ve had the pleasure of being part of, I’ve boiled this down into 6 key points which the AgriSound team and I will be looking at in more detail. I wanted to share this for any other founders that are also in similar positions in their own businesses and hope that this might be useful to you too!

1. The benefits aren’t clear or strong enough for lots of agri-tech solutions

One of the clearest messages was of weak value propositions and a poor understanding of ROI by start-ups. Farmers have been clear that they generally are not yet seeing the tangible benefits of agritech solutions (or at least not enough to justify their investments to date). This is compounded by needing to leverage external funding e.g. grants/subsidies to make tech offerings viable (at least within the UK).

To make things worse, there seems to be growing scepticism (by farmers) about agri-tech after being disappointed by unmet promises by companies long since gone. Whilst there are lots of reasons for this (as we all know…), the barriers to large-scale adoption seem to be higher now than ever.

But how can we equate ROI? Farmer feedback suggested that conveying the benefits of technology through either cost reductions (labour, inputs) or increased yields is essential for on-farm sales. If focusing on other players within the value chain, things are less clear e.g. tools to demonstrate sustainability improvements but this will be a difficult sale to farmers who are time poor and operating on tight margins.

2. Farmers want practical solutions – not data itself.

Farmers are willing to invest in solutions that address their specific challenges. The products and services gaining traction aim to solve a clear problem – not just provide data and expect farmers and growers to know what to do next. 

The integration of technology into existing services to provide a value-added service which farmers are already paying for seems to be more attractive than new costs.

3. Balancing hardware sales with flexible business models

The wider agricultural market is still heavily driven by hardware sales e.g. tractors, machinery, but there’s a noticeable shift towards subscription-based models, especially for sensor products or those with consumables. 

While subscriptions offer steady revenue streams for start-ups and support better enterprise valuations, they risk alienating some users who prefer one-time purchases or are hesitant to commit to ongoing costs in the face of volatility within the market. When markets are volatile, many farmers are reporting that they don’t want large ongoing costs!

Finding a ‘one size fits all’ approach is almost impossible – instead, it may be best to offer multiple models to meet the different requirements of agribusinesses. 

4. Building strong partnerships is key

I was surprised that some companies and farmers were open to sharing the risks and rewards that come with the introduction of a new agri-tech solution. However, operationalising these partnerships remains challenging. Profit sharing from increased yields sounds great on paper but in practice may require each party to share more data than they naturally feel comfortable with (i.e. are farmers OK with sharing yield data? Not always it seems…).

5. The appetite to invest into early stage innovation is limited and relies on grant funding

Start-ups in the UK seem to be increasingly reliant on grant funding, as traditional investment options may not always accommodate businesses with a longer lag period to prove the technology. VC funding remains difficult to secure and I think it’s likely that we will see more consolidation in the industry as start-ups look to scale through large incumbents or reach profitability by merging with competitors.

6. Embracing early adopters to drive innovation

Despite the uncertainties and challenges, an increasing number of early start-ups are entering the agri-tech market. These pioneering groups stand to gain the most from agritech innovations, driving progress and setting the stage for broader acceptance and integration of new technologies. Their enthusiasm and willingness to experiment are crucial for testing and refining solutions, ultimately helping to pave the way for widespread adoption.

Looking ahead

The agritech industry is at a juncture point right now, with immense opportunities coming into play, alongside the same challenges we’ve always faced. There is still a lot of work to be done and the agri-food sector remains complex (at the best of times!) but the promise of technology within farming remains great – and driven by structural challenges around labour shortages, growing demand and reduced inputs which compounds the need for solutions.

Let’s see what 2025 has in store!

Get in touch with us at [email protected] to learn more about what we’ve got coming up in the near future…