Aidan Connolly is the Chief Innovation Officer at Alltech. Aidan graduated from University College Dublin with a master’s degree in international marketing. He has been with Alltech for over 25 years, initially in Ireland, and then in France, Brazil and the United States.
Founded in 1980 by Irish biochemist and entrepreneur Dr. Pearse Lyons, Alltech is a leading global biotechnology company whose mission is to sustain and nourish the world’s plants, animals and people.
1. Can you tell us a little bit about what Alltech does?
Alltech’s primary business is as a nutritional supplier to the animal feed industry. We produce supplements based on our expertise in areas such as yeast fermentation and algae technologies. We are present in more than 120 countries globally. We work with all aspects of the nutrition of animals and crop production and are also increasing our attention to human health through our Life Sciences division.
2. Given the success of the company to date, in which markets do you see the main opportunities for further growth?
Animal nutrition is growing in Asia and Africa, so those are regions where we are increasing our focus. For example, Dr. Mark Lyons, the son of our founder and president Dr. Pearse Lyons, has been based in Beijing for the last five years. The African market, while small to date, has been growing rapidly. From a species perspective, we also see the continued growth of poultry, globally, and of fish production (aquaculture). In fact, for the first time in history, the production of aquaculture has exceeded that of fish caught from the sea.
As always, the concerns over removing the antibiotics from feed, the use of sustainable and added value ingredients such as DHA omega-3 algae, how to better tackle disease of animals naturally and not least doing so while reducing the environmental footprint of animal agriculture are all challenges on which we believe we can make a positive impact.
3. How important is innovation to Alltech and to the wider agri-food sector?
Innovation is absolutely critical. Many would say that for the past thousand years we effectively haven’t changed much in the way of agriculture. That would be grossly unfair. However, in recent years, the pace of innovation has been quickening, and those innovations are delivering larger benefits to agriculture than they would to other sectors of the economy. We believe that being more precise in the nutrition of animals is very important. Using digital technologies and nutrigenomics (the science of understanding how nutrition impacts the gene) allow us to understand better what animals require. This enables us to create diets that improve agricultural productivity and minimize environmental impact. The same technologies can be used for the precise delivery and timing of nutrients in plants or crops. This level of precision nutrition is critical to the development of those organisms and their ability to resist disease and to maximize their productivity.
4. Is the sector lagging in terms of investment in innovation?
Traditionally, agriculture has been slow to embrace innovation and from that perspective the investments within it have also been smaller. However, I believe that’s changing. It is also true that farmers struggle to see the benefits of new technologies and in the past have been burned by investments that they feel did not deliver and therefore are reluctant to commit and invest again.
We are starting to see that the farmers who embrace technologies in the areas of robotics, blockchain, AI and sensors can make huge improvements in productivity, sufficient enough to make them far more competitive. I think that will be a major driver to the speed and implementation of innovation.
5. New technologies are driving change across the supply chain, be they sensors on animals or drone deliveries – which area of the supply chain do you feel is changing/driving change quickest? (e.g. on- farm, retail, supply chain).
Many observers are focusing on the consumers or prosumers (consumers who are proactive in their choices when it comes to their food), including Millennials, being the driver of change. Consumers are certainly asking more questions of the food chain today and voicing their likes and dislikes through social media.
However, I believe the greatest driver of change will be profitability and the abundance of data that will be found through the use of some of the technologies you mentioned. I believe we’re going to see farmers farming data, rather than simply farming the land. The thought process with respect to how new technologies are embraced must focus on the benefits that can be seen at farm level. They must have a dollar amount associated with them so it’s understood what the investment will be and what the benefit obtained will be to the producer. With that in mind, I think many of the technology companies are focused on too many benefits and too many financial opportunities. They need to pick the best ones they have and to make their case based on that.
6. What impact are consumers having on the changes that we are seeing and the rate of change?
The consumer/prosumer movement has been quite rapid already. We have seen that up to 30% of consumers in the US have food purchase preferences that go beyond the traditional price availability and food safety.
The prosumer movement is looking for food producers to provide information on sustainability, the footprint of the food, particularly with respect to miles, but also water usage, what’s happening with respect to the welfare of animals and workers involved in the food chain and also asking questions about the use of technology and data... all of these are part of what we can expect to see moving forward.
I have been involved in a piece of research which involved reviewing what the top 50 food and beverage companies of the world believe is required to future proof their business. That research uncovered a wide range of subjects and questions from food suppliers and producers that many of us had not considered before, including water footprint, worker welfare and recycling of packaging.
7. Innovation and technological advances are changing the market, increasing the range and availability of convenience products for the consumer, however the demand for natural and organic remains - there seems a dichotomy between the two, is there room for both?
I think consumers are very attracted by the organic proposal, the offering of something that seems inherently good and safer. Perhaps they have been disappointed by what is actually offered, which has had challenges of food safety and sometimes questions over the actual environmental footprint and health benefits of that organic food. Labels depicting “natural” also evoke a sense of purity and nutrition, and because it is not a term that is standardized nearly as much as organic is, it can offer the good feelings without the high price. Many consumers cannot distinguish between the two.
Where the opportunity lies in the food industry today is to produce something that has the attributes and benefits of organic, but not at the same price. I think that’s the very sweet spot for the food industry and certainly the food retailers and food companies are very focused on that at the moment. That will continue to be very important moving forward as will the credibility of those companies perceived by the consumer and the trust consumers have in the promises made by those organizations.
8. Innovation for the industry will require vertical integration or at least collaboration across all areas in the supply chain. In a competitive marketplace, how can companies bring their stakeholders on their journey of innovation?
I am very convinced that the competition of the future is moving toward competition between supply chains versus individual organizations. I think that bringing your suppliers and your customers on the journey requires transparency and trust within the system. Of course this can only be built up over a number of years and with the phrase trust, the word verify always comes to mind. However, all of the attributes that we are looking for from price and security to safety, availability, sustainability, and prosumer values cannot be achieved by one organization alone, but only through collaboration between trusting partners.
9. Alltech’s innovation story showcases some fantastic organic innovative solutions as well as acquisitions of companies who have developed innovative technologies or processes like Keenans. What are the pros and cons of acquiring innovation versus organic innovation?
Of course, organizations like to produce all of their own ideas. Within Alltech, we have been very lucky that this has been the case. However it’s also true that you can find ideas from other organizations. Keenans is a good example, but we have others we have acquired because of their innovations or the innovation comes as part of the package, such as Alltech E-CO2 which helps farmers and producers collate and analyze their emissions to improve their profitability and reduce their effect on the environment. A third area we have been involved with recently is that of startups and getting innovation through entrepreneurial ventures, either externally or internally, it is something we at Alltech have embraced and it has become a third angle to our innovation pipeline. I think there are benefits to each of the three as indeed there are challenges, but being open to all opportunities to gain insights and innovations creates the opportunity for greater profitability and sustainable business models for the organization as a whole.
10. Agri-food is a key sector for the Irish economy and a sector which is heavily exposed to Brexit. The introduction of a “Knowledgebox” by the government is a positive step. Is enough being done to incentivise innovative companies such as those who participated on the Dr. Pearse Lyons Accelerator Programme to locate in Ireland?
I think that the design of these publicly funded or supported knowledge based systems is very laudable. However, organizations such as our own must be concerned with the nature of trade secrets and intellectual property and from that perspective must be careful when collaborating, even when doing so through ventures sponsored by the state. I also appreciate the need to combine what occurs at the university level with what occurs in entrepreneurial environments. The nature of innovation has changed and where most innovation was created by large companies’ research departments and more recently by the acquisition of smaller companies by larger ones, the startup economy has become extremely dynamic. The sponsorship by Alltech of its Pearse Lyons Accelerator in Dublin was part of that same thought process and from our perspective any support that can be given at the government level to the transfer of knowledge in agriculture or agtech is something that should be supported.
11. What is the secret to the culture of innovation at Alltech?
The “secret sauce” of Alltech is perhaps something we shouldn’t share with other organizations. It is clear that we bring tremendous strength in terms of speed in decision-making, which many organizations fail to replicate even though they can recognize it when they see it. This sense of speed comes directly from the president of Alltech, Dr. Pearse Lyons. Through all levels of the organization, we seek to avoid the bureaucracy and complex decision making, and to favour action over inaction.
12. How fundamentally different will the industry look in 50 years’ time?
When we do these discussions about what the food industry will look like in 50 years’ time, none of the scenarios are easy to comprehend without being able to see the world in such a dramatically different manner and some of us might be frightened by what we see. It’s clear to me that technology is going to take over in a manner which is probably incomprehensible to the average person.
We can expect that agriculture with, what looks like massive inefficiencies in what we feed to plants and animals and what they produce in terms of crops and meat, milk and eggs offers greater opportunity for improvement than any other industry.
However, I think most observers would probably be happy with a ten-year timeframe rather than a 50-year one. We will face the opportunity to feed an increasing number of people, perhaps 10 billion and it may be even greater than that depending on what happens with respect to technology such as gene editing (i.e.,CRISPR) but what is clear is that consumers want food to be produced naturally, we need to minimize the food footprint, that is the environmental impact of producing that food, and to become as efficient as possible in converting one type of nutrient into another, such as animal feed into protein.