Industry 4.0 – Transforming the Feed and Feed Ingredients Industry
• Industry 4.0 – the current trend of automation and data exchange in technology - is finally penetrating into one of the last bastions to have resisted this disruptive change: the Animal Feed Industry.
• As Blockchain, IoT, and Artificial Intelligence (AI) take centre stage in “updating” the feed industry to Version 4.0, the sector is embracing the power of Big Data, beckoning in a new age of analytics.
• Innovative solutions: Further developments in this evolution include Sensor Technology, Diagnostics, Precision Feeding and Variable Rate Technology. Coupled with cloud-based IoT solutions and tech such as Satellites, Robotics and Drones, the industry is now able to target some of the gravest demand, environmental and sustainability challenges facing the sector, whilst optimizing yields and animal health/ performance.
• Huge Investment: It is of little surprise that private AgTech investment has grown tenfold since 2010, from US$200 mn to US1.5 tn today, while a number of national governments have been pro-active in accelerating and supporting the industry’s tech pivot and keen to lead the charge of this inevitable force.
Revolutionizing an archaic industry
• Opaque and Long Value Chain – Disrupting the Status-quo
Animal feed is a multi-billion dollar industry that involves numerous stakeholders linked across a complex, sprawling, and opaque value chain.
• Emergence of new players: Today, harnessing the power of Industry 4.0. Technologies, a new group of AgTech players are emerging as synergistic partners, acquisition targets and/or competitors to current Agribusinesses. The result: a fast changing feed landscape.
• Agribusiness: Innovate or Stagnate
Companies operating in this ecosystem cannot afford to be static and must strive to innovate and adapt in order to survive. This will involve adopting key technological innovations to drive and constantly innovate “business as usual”
Animal feed key trends, challenges, and drivers
We see three major categories that are driving huge change in the industry:
1. Market Dynamics: Unprecedented protein demand is putting huge pressure on resources and therefore on prices (e.g. fishmeal). Moreover, customer demands (through health awareness) are changing: quality, freshness and sustainability of products are key.
2. Sustainability: As animal performance drives profitability, enhancing performance and managing the waste (thus emphasizing animal health) is driving industry growth, feed innovation, and the demand for AgTech.
3. Environment: The livestock sector uses 1/3 of global arable land and 8% of available freshwater. It is also largely responsible for deforestation, and 15% of CO2 emissions as well as the main driver of eutrophication challenges.
Through the advent of AgTech, Industry 4.0 can help mitigate these damaging consequences for our planet while helping the industry increase productivity and margins whilst improving animal health and welfare.
Figure 1. Animal Feed: Key Trends
Agtech innovation clusters in animal feed
• Defining AgTech:
Broadly defined, AgTech refers to transforming the ‘global food sector through technology’.
• Key Benefits:
Aims to address key trends and challenges through: reducing costs, enhancing productivity, addressing sustainability challenges and mitigating environmental issues.
• Key Innovation Clusters:
Industry 4.0 in the Agri Sector can be split into 3 core clusters. These should not be seen in isolation, as they are interlinked and synergistic.
1. Smart Tech: leveraging Tech such as IoT and Blockchain to improve the application of targeted feed, diagnostics, and variable rate technology to optimize the use of scarce resources, reduce costs and improve animal health/ performance.
2. Data & Analytics: Applying AI to harness the power of Big Data to help farmers make better/ more informed strategic decisions. An increasing trend is to leverage such technology to focus on extracting smart data that is biologically relevant, to measure feed uptake and change components if required to subsequently monitor changes in animal response. Smart data coupled with self-learning algorithms, is a key factor in precision livestock farming (PLF) to monitor the impacts feed in real time, providing actionable insights for farmers.
3. Systems & Infrastructure: Together with smart tech and data analytics, smart farm management systems using robotics and automation can apply cloud-based ICT solutions to support precision feeding and enhance animal performance, health and productivity.
Figure 2. Mapping out Industry 4.0 in Agri: Clusters
Agtech case examples: live examples of industry 4.0.
Blockchain – Transparency from farm to fork
Startup Food Blockchain XYZ has formulated a plan to create Food Supply Chain 2.0 by using blockchain. They will leverage series of interconnected sensors, blockchain and smart contracts to introduce comprehensive foood quality assurance, without the intervention of humans.
IOT / Sensors – Cow monitoring & alert solution
Afimilk has produced a smart neck collar to monitor cow herd behaviour / health. This connected wirelessly to transmit data to a farmers mobile device so that they can respond to issues and enhance cow performance.
Farm Management System: herd management software
Bovisync provide herd management software. Services include a data analytics and reporting software that allows farmers to track and access cow records. Such software allows farmers to place cows showing health distress on a watch list, to track which cows need attention.
Conclusion: industry 4.0. – embracing an unstoppable force
- The global farming and feed sector faces unprecedented challenges: surging produce demand, resources pressures, evolving (and high) customer demands amidst glaring environmental pressures.
- There are a number of novel solutions arising to confront these very real and impactful issues.
- Yet, no solution offers more potential benefits than the innovation stemming from AgTech. With the technology available, backed by the private and public sector, Industry 4.0. is an inevitable force
- Industry 4.0. has the potential to usher in an Agricultural renaissance and support the growing ‘sustainability revolution’ force. Agribusiness in the feed sector must embrace this force or face becoming irrelevant.