Innovation in the seed and agri-food business

The Dutch innovation climate

The Dutch seed and agri-food market is very mature and well-known worldwide.  Which elements in the Dutch innovation climate are most important for the business of Vegetable Seeds?

‘From an R&D perspective, the Netherlands has a very strong and long-lasting agri-food knowledge infrastructure’, says Jan van den Berg. ‘Dutch specialists in the field of vegetable seed technology and breeding are part of a close-knit network of specialists that goes across national borders.’

‘This network of expertise is crucial, but we must also realise that the meaning of innovation has changed over the years’, Michael Brenner adds. ‘In the past, we had a non-hybrid seed market and introducing a hybrid seed variety was considered innovation. But innovation is no longer about R&D engineers spending many years in a laboratory to come up with a solution to push to the market. Innovation is what provides value to the consumer.’

‘Today, innovation is about global players like us collaborating with, for instance, (tech)start-ups and universities to achieve things together. The Netherlands has this ecosystem of specialised parties along the value chain and is therefore the right environment for innovation.’

‘Dutch tax incentives, like WBSO, and other subsidies to promote innovation have a large influence on our investment decisions. In that context, we appreciate the partnership with PwC, which enabled us to increase our innovation in the Netherlands. On top of that, together with PwC we’re continuously monitoring developments within our global R&D operating model and the way it may impact our yearly subsidy claims globally.’

A shift towards the end of the value chain

Talking about innovation throughout the value chain to develop new products. Which factors determine what is eventually being developed? The wishes of consumers about taste and colour? A large and consistent yield for growers? Or wishes of the general public regarding sustainability?

‘None of them and all of them’, Carin Stroeken says, laughing. ‘All these audiences are part of the value chain and that is also our biggest challenge. A simple example: better taste means less yield. You need to find a balance between many different factors when creating new products.’

Traditionally, companies like ours were very much focused on growers, as they are the ones that buy seed. That focus has shifted more towards the end of the value chain where decisions are made about selling and buying end products. Growers are more focused on yield and disease resistance – which are still very important – but developing new products is now also driven by for instance taste, shelf life, transportability, health and safety.’

Brenner: ‘In the future, there will be more varieties of vegetables we already know. As a company, we must ensure products are available that are easy to use, colourful and taste good. But I think the key is not bringing fancy superfoods to the market that only grow in warmer climates. We need vegetables that grow closer to home. Thanks to hybridisation and modern technology, we can offer consumers what they want.’

‘The need for increased collaboration and integration throughout the value chain is something we at PwC also recognise’, says Gielen. ‘Higher standards of living across emerging economies and changing dietary requirements of consumers is an important driver for this as we need to feed more people who also have higher standards in terms of what they consume. At the same time, the integration of supply chains and the increased collaboration can improve safety, traceability and the quality of products. Moreover, the impact on the environment and climate can be mitigated, which then contributes to a more sustainable world.’ 

Concerns about biodiversity and climate change

New varieties must contribute to resilient crops, which is crucial for our future food supply in view of climate change and associated weather extremes, with less use of pesticides. At the same time, there is a great deal of concern about biodiversity and its consequences for the environment. What is your view on this?

‘In vegetable crops biodiversity is less of an issue, especially not in greenhouse and indoor farming’, says Van den Berg. ‘These types of farming relieve the pressure on our ecosystem. Indoor farming is also more efficient, more controlled and requires less land. The issues in indoor farming are more about energy consumption and less about pollinators.’

‘Gene banks are crucial when it comes to conserving agricultural biodiversity, because they contain genetic resources of wild relatives of vegetable crop plants. Together with partners in the industry, BASF helps multiply gene bank accessions and we also have our own gene bank to make sure we keep variability. Within Vegetable Seeds there are several gene bank initiatives that are focused on nature preservation.’

‘Problems vary per crop. Field crops have different needs and challenges than greenhouse crops, Brenner adds. ‘A lot of European farmland has historically developed into unequal shapes and sizes, which is perfect for creating flower strips for pollinators. We are actively promoting this and BASF is part of a network of biodiversity farms. Many small things added up can also achieve big goals.’

Biodiversity, climate change and other sustainability issues mutually influence each other. Does Vegetable Seeds see climate change as an opportunity or as a threat for business?

‘We focus on the opportunities of climate change’, says Stroeken. ‘Crops for warmer climates now grow more and more northerly. At the same time, technological developments and climate change accelerate the development of indoor farming, even without natural sunlight. This will increase energy costs but will also give you more control of product consistency and even of the nutrients inside the product you are growing.’

Brenner: ‘BASF is the biggest chemical company that is committed to becoming carbon neutral. As a chemical company, we are inevitably huge consumers of energy, but in our sites around the globe we’ve created efficient value chains where by-products of one production process, such as heat and energy, can be used in other production processes. This is how we make sure we save energy and minimise emissions. For us, sustainability is not just lip service as we have been working on it quite some time and are committed to it.’

Gielen: ‘We share a similar value here with BASF. At PwC we have committed to net zero by 2030. We also believe that cooperation and collaboration accelerate the transition to a net zero future. The AgriFood industry at large has a very important role to play here. There are also opportunities because being ahead of the game could provide strategic advantages compared to competitors.’

Possibilities of open innovation

To accelerate innovation and new types of products, have you ever considered open innovation, for instance by putting your gene bank at the disposal of the general public?

‘We’re more lenient about gene bank material than we have been in the past but sharing it with the general public is a bridge too far’, says Van den Berg. ‘But I do see an opportunity for more open innovation when it comes to thinking about new vegetable concepts for instance. Why not involve GenZ students at the Brightlands Campus in thinking creatively with us about how to develop new products? This would also mean we must share some information about our products. Experimenting and working at the campus showcases, let’s say, our value chain approach.’

Brenner: ‘We give start-ups, universities and others much more insight into our products, but let’s not forget that it takes years of substantial investments before you have a product. As a company, we must ensure returns on our investment. That’s why we can’t just make everything publicly available..’

Partners along the value chain have a joint benefit but probably also have their own agenda. What is the main challenge in bringing parties together in order to achieve innovation?

‘Time is a big challenge’, says Stroeken. ‘We work with natural material, so developing new products takes a lot of time. Failure is always part of the innovation process and sometimes it can set you back several years. Successful collaboration requires that you find partners that really have a shared vision of where you want to go and how to work together. That is not an easy thing to achieve. What also makes it challenging is that most parties involved are businesses that also need to make money one way or the other.’

‘We believe that all stakeholders should be involved and contribute’, Gielen concludes. ‘That means that the government and institutions have an important role in facilitating collaboration. Also incentivising certain ways of collaboration through for instance subsidies or tax related incentives play an important part. Who knows what surprising business models will be developed but we know for sure that individual companies cannot do this on their own’