The Weekly DIALogue: The AOM Revolution Affects All, The Case for GMOs, and the Gold & Black Fund
May 16, 2024
Welcome back to the Weekly DIALogue!
The Weekly DIALogue covers industry happenings, entrepreneurial wisdom, advanced agrifood analysis, and so much more. We help YOU stay in the know for everything ag-tech.
One quick note to start. I created a brand new Airtable to host interesting articles that I find. Be sure to check out the newest stuff, as well as recommend other interesting pieces you find missing!
Now to the action!
In today's Weekly DIALogue, you'll find:
Industry Articles:
Making Money Off the Weight-Loss Revolution Has Even Wall Street Befuddled - The Wall Street Journal
Should our future food be genetically engineered? - The Washington Post
ReposiTrak adds dairy and egg suppliers to traceability network - Agriculture Dive
Sweetgreen says regenerative farming will offset adding steak to its menu - Fast Company
E-grocer Thrive Market records revenue boost with EBT acceptance - Grocery Dive
Industry Report: Q1 Supply Chain Tech Report - Pitchbook
Featured DIAL Content: LP Spotlight - Insights from Purdue Gold & Black Agri-food Fund Investors - Matthew Bushery, Ryan Larcom, Colin MacDougall
Featured Startup: Crisp
Industry Articles
Making Money Off the Weight-Loss Revolution Has Even Wall Street Befuddled - The Wall Street Journal
When Walmart’s CEO mentioned that there was a “pullback” in spending for users of Ozempic, the markets took notice. Some companies, like Dominos Pizza and Mondelez, fell nearly 10%! (See graphic below)
It’s becoming increasingly clear that weight-loss drugs will impact the food consumer nexus. Goldman Sachs estimates about 15 million adults in the US alone will be treated with AOMs (anti-obesity medications) by 2030. And besides a 30% reduction in calories among these patients, they’re also consuming different food categories. (See graphic below)
As well as different restaurant categories:
Mattson Innovation also conducted a large study of 100+ current and past AOM users and confirmed this massive affect on the food system. Their recent webinar overviews their research, and they share some alarming statistics:
93% of users said portion sizes decreased
61% of users say they spent less time thinking about food
Exercise frequency increased
And much more.
On an interesting note- the food system aren’t the only people affected by the whole thing. One robotics company blamed a sales miss on AOMs like Ozempic. Kidney-dialysis company DaVita crashed by 17% after Ozempic was shown to slow kidney disease. Jeffries predicts that industries as far out as airlines could be affected because they’ll transport lighter passengers.
How will AOMs affect the future of food (and other industries)? Well, no one’s entirely sure. But what is certain is that it will cause a significant amount of disruption.
Further Reading:
Downsizing Demand: Obesity Medications’ Impact on the Food Ecosystem
This report is lengthy, but it’s broken down into sections that highlight different sectors like Packaged Food, Restaurants, Fitness Clubs, Food Retail, and Beverages. Their executive summary section is also quite good if you want one-liners for people.
A Year on Ozempic Taught Me We’re Thinking About Obesity All Wrong (paywalled, but free through Purdue email)
Here’s a first-hand account of an individual who has used Ozempic. An interesting perspective if you want to understand the mind of an Ozempic user.
Webinar: Obesity Medications: Understanding Their Impact On Food & Beverage Behavior
This is the webinar I mentioned above regarding Mattson Innovation’s research. If you have time, I’d definitely recommend you watch. But if you can’t, I asked ChatGPT to summarize it for me (and you) in 5 points below.
Consumer Dietary Changes: Patients on anti-obesity medications are experiencing shifts towards healthier dietary habits, with a notable decrease in "food noise," leading to more mindful eating and a focus on nutritionally rich foods.
Portion Control and Preferences: There is an increased demand for smaller portion sizes and specific food textures, such as fresh, lighter foods that are easier to digest, which are less likely to cause discomfort given the medications' effects on gastric processes.
Hydration Needs: Increased hydration is crucial, with a preference for non-carbonated and low-sugar beverages to avoid discomfort and enhance the feeling of fullness.
Food Industry Opportunities: The food industry needs to adapt by offering products that cater to the specific needs of this demographic, such as smaller, nutrient-dense meal options and snacks that align with their altered appetite and digestion patterns.
Restaurant Menu Adjustments: There is significant potential for restaurants to revise menus to include smaller, healthier options that suit the dietary restrictions of patients on these medications, ensuring they can still enjoy dining out without overindulgence.
Should our future food be genetically engineered? - The Washington Post
Imagine someone told you that they’d invented a seed technology that would
Lower emissions by 7.5%
Increase yields by 22%
Have no side effects (as reported by the most reputable scientific agency)
Solve global health problems like Vitamin A deficiencies
Cost effectively the same
I’m guessing you’d be demanding that technology be in every field you own (and that everyone else owns)!
The “hypothetical” technology is genetically modified crops. Better than traditional crops in nearly every dimension (ie. they’re using GMOs to increase public health in the Philippines), yet public perception is so negative that most farmers are afraid to use them. According to this article, consumers are willing to pay up to 20% to avoid GMOs.
But this shouldn’t be the case, argues the Washington Post (and me). Our society has been blessed with this extraordinary radical technical innovation called CRISPR, yet we’ve been hesitant to use it to cure some of the food system’s most dramatic problems. But I suppose everyone has their own opinions for a reason.
ReposiTrak adds dairy and egg suppliers to traceability network - Agriculture Dive
FSMA 204 hype strikes yet again. This time ReposiTrak captures that hype by signing on 20 new Dairy and Egg Suppliers. (If you aren’t familiar w/ ReposiTrak, see my profile here).
Clearly, the data-play surrounding the new FDA final rule is extraordinary, as gigabytes and gigabytes of analog data are now required to be immediately accessible by FDA request (w/in 24 hours!). For ReposiTrak, they’ve been making moves to capitalize on this by adding $9.6Bn grocery-distributor Spartan Nash as well as seafood, baked good, and meat suppliers, as they seek first mover advantage. It will be interesting to see how the FSMA 204 regulation tech plays out.
Sweetgreen says regenerative farming will offset adding steak to its menu - Fast Company
As DIAL plans to focus on regenerative agriculture for this fall cohort, this article reinforces how important the questions around regenerative farming are. Salad Chain Sweetgreen, praised for its carbon neutrality, fell victim to customer demand for protein and added carbon-intensive steak to its menu. To solve this dilemma, they said that “regenerative farming” makes it okay.
What this reinforces for me - consumers demand sustainability, but they aren’t that willing to capitulate too much on their preferences. Regenerative farming and improving the overall sustainability of the food system allows these two things to coexist.
E-grocer Thrive Market records revenue boost with EBT acceptance - Grocery Dive
I’ve written about how powerful SNAP and WIC are in our food system before, but this is a clear, tangible example on how much they effect the success of our agri-food value chain. Online grocers (in this case, Thrive Market) weren’t traditionally allowed to accept EBT. But when they were exempted from that rule, they saw record sales.
Don’t underestimate the power of SNAP and WIC. Definitely opportunity there to innovate (we’ll see who figures it out!).
Industry Report
Q1 Supply Chain Tech Report - Pitchbook
Of all agri-food verticals, supply chain has been the least affected by the macro funding dip (likely for the gaps shown by COVID). Pitchbook just released their quarterly report on Supply Chain tech in general, and I recommend the read.
Here’s an excerpt from their intro:
In the first quarter, global supply chain activity remained close to normal, as outlined by the Federal Reserve Bank of New York Global Supply Chain Pressure Index. Blockages through the Suez Canal stemming from attacks on shipping led to rerouting and curtailment. Tesla cited supply chain issues related the Suez Canal for production problems at its European factory. Drought in Panama led to low water levels in the Panama Canal, which forced significant shipping disruption through that vital channel. The drought is expected to last into May.
VC activity remained mixed in the first quarter. Deal value was up QoQ, but deal volume declined. The freight tech and last-mile delivery segments rose, while the enterprise supply chain management and warehousing tech segments declined. In this report, we highlight potential regulatory changes in tariff treatment that could impact major Chinese exporters, as well as startups that have enjoyed duty-free trade under the de minimis tax rule.
The report also highlights startups including online grocer Picnic, robot delivery company Starship, and drone cargo developer Elroy Air, which all received significant funding during the quarter.
Featured DIAL Content
LP Spotlight - Insights from Purdue Gold & Black Agri-food Fund Investors - Matthew Bushery, Ryan Larcom, Colin MacDougall
Matthew, Ryan, and Colin did an awesome job here outlining the Gold & Black Agri-food Fund (DIAL Ventures’ funding mechanism). They interviewed each of our LP investors to understand how they find value from investing in our fund. I listed a couple key quotes from them below, but I’d highly recommend you read the complete article:
“Dr. Allan Gray [Executive Director at DIAL], spoke to our board at an offsite meeting and laid out the plan for the venture studio and the creation of digital solutions for many of agriculture’s issues,” said Ryan. After meetings with the Gold & Black Agri-Food Fund, Premier’s board decided to take advantage of the investment opportunity.
“We were impressed with the idea, and the board voted to invest [in the Gold & Black Agri-Food Fund] and support this initiative” - Ryan Priest, COO at Premier Companies
"The DIAL Ventures model brings together talented Fellows with new perspectives from outside the industry who problem-solve alongside agriculture businesses and industry experts with diverse experiences to create startups that solve problems that we have and help us differentiate ourselves” - Harold Cooper, CEO at Premier Companies
“DIAL is exciting and important because it gives us the opportunity to become part of something bigger. For organizations that similarly struggle, DIAL Ventures is very efficient with your time while providing a lot of new ideas for your business.” - Doug Brunt, Sr. VP of Strategy at Keystone Cooperative
“The demands on a farmer's time and energy are ever-increasing, and digital transformation of our businesses, including those created through the Gold & Black Agri-Food Fund, represents an incredible opportunity for the AgriFood industry,” - Patrick Smith, CEO at Loftus Ranches
More great stuff in the full article. Give it a read!
Featured Startup
Crisp
Miami-based SaaS platform, Crisp, is designing technology to make the food supply chain more efficient. By ingesting and analyzing data from multiple data sources, food retailers and suppliers can navigate their inventory and operations more effectively. With a multitude of data pipelines that look like this,
Crisp is helping the world’s biggest companies (Mars, Hormel, Kraft Heinz) to better manage and trace their data.
Crisp recently raised an $85 Million Series B round that values the company at $350 million. Their investors include 3L Capital, 9Yards Capital, and Blue Cloud Ventures.
That’s all for this week!
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