Agent of Disruption

Rob Appleby, Founder of the Cibus funds, explains why agri-tech gives him hope for the future of food.  

As humans, we all secrete pheromones, semiotic chemicals which pass messages to other members of the species, triggering a response, including sexual attraction.  

Insects do it too, such as the Amyelois moth, the larvae of which – the navel orangeworm – can lay waste to nut and citrus crops, much to the chagrin and financial disadvantage of farmers in Florida and California.  

Farmers have responded to this threat with toxic pesticides. But the moths have a short lifespan, meaning they adapt quickly to their surroundings, rapidly developing resistance. Rather than protecting their crops, the farmers’ actions are only causing damage to non-threatening pollinators, the local water course and those reliant on it.  

An increasingly viable alternative is to spray synthetic pheromones, just as the female moth is looking to attract a male, lay eggs and give rise to a new generation of hungry caterpillars. 

“When the male comes along, he finds himself in a discotheque full of avatar females, can’t find a mate, and in 24-48 hours, he dies naturally. You’re disrupting the mating behaviour of insects by using biological equivalents,” explains Rob Appleby, Founder of the Cibus funds,  

private equity and venture capital funds which invest solely in sustainable food production and processing, also known as ‘agri-tech’.  

Biological equivalents of agricultural chemicals can help farmers to effectively and efficiently protect and support their crops without polluting the local ecosystem, thus improving sustainability. But there are also short-term reasons for their adoption.  

Soaring fertiliser costs have hit the headlines since Russia’s invasion of Ukraine, as sanctions against the former have cut off supply. According to the UK government, agricultural input costs for British farmers rose a third in the year to June, with fertiliser the single largest factor. The situation worsened in August, due to suspension of production at a major UK supplier. But reduced access to Russian gas is also impacting the cost and availability not only of fertiliser, but also insecticides, herbicides and fungicides.  

Price spikes in these inputs have left the agriculture sector with steeply higher input costs that they will struggle to pass along the food chain to food producers, retailers and consumers.  

“Given that so many [agricultural] inputs are fossil fuel-based, if you can start looking at biological equivalents, you’re ticking a big box on the sustainability and impact side,” Appleby says, asserting that biological equivalents can play just as big a role in replacing fertilisers as insecticides.   

Cibus’ investments include French firm M2i Life Sciences, which develops pheromones as biological crop protection products.  

No compromise 

Appleby is a zoologist, a farmer, and a fund manager. He is also a debt restructuring specialist who spent a large part of his career witnessing Asia’s economic transformation as it became the world’s manufacturing hub.  

As he attempted to sort out the balance sheets of over-borrowed firms in the aftermath of the 1990s Asian financial crisis, Appleby also gained first-hand experience of the resulting ‘externalities’ of a rapid and sometimes reckless industrial revolution, which has shaped his personal philosophy and investment outlook.  

“We are looking to marry doing good with making commercially realistic returns. Long gone are the days when you’ve had to compromise returns for doing good. It’s my staunch belief that a sustainably run company is worth more than one that is run unsustainably,” he says.  

Appleby has established a foundation which today supports around 50 projects aimed at addressing these externalities, such as air and water pollution, deforestation, and over-exploitation of endangered species, as well as advocacy work.  

But he also ensured that the activities of his investment firm, ADM Capital, were informed “top to bottom” with considerations of sustainability, including the Cibus funds (Latin for food), funded seven years ago.    

“Cibus exists to channel capital towards companies that are charting the future of food,” he says. “Our focus is on companies and entrepreneurs that are embracing innovative technology to disrupt food production, increase resource efficiency, and ensure sustainability.”  

Cibus is also focused on demonstrating impact, and included details of alignment with UN Sustainable Development Goals in its recent sustainability assessment 

Desperately seeking disruption  

Appleby, who estimates that Cibus has invested around half of the US$1 billion it has raised to date, believes disruption is desperately needed.  

The post-war global food system has delivered plentiful, cheap and high-quality food for much of the world, helped by innovations such as artificial nitrogen fixation and disease-resistant crops. 

But the externalities resulting from the techniques and practices developed to satisfy consumer demand – including factory and monoculture farming – are coming home to roost. The food system shares a good deal of responsibility for many of our biggest systemic problems, from climate change to plastic pollution to over-exploitation of natural resources.  

At the same time, the inequities and inefficiencies of food production and distribution has left different parts of the world with chronic levels of obesity and malnourishment.  

“To me, that system is fractured at best or broken. We face an existential crisis where we have to produce more food in the next 40 years than has ever produced in the history of mankind,” says Appleby.  

Critically, the raw materials of the food system are exhausted and ebbing away. Fertile soil and fresh water are disappearing at alarming rates, partly due to inefficient use. As Appleby notes, research has shown that 77% of all agricultural land is used to produce livestock which only produces 18% of our calories. Such waste and inefficiency, to be blunt, must be eliminated for the sake of human survival.  

“Technology took me out of a dark place. Just as it has disrupted other industries, technology is at last disrupting every aspect of food and agriculture in a very exciting way,” says Appleby. 

Meaty matters 

From a sustainability perspective, much investor and regulatory attention on agriculture stems from the externalities and inefficiencies of livestock farming, from the planet-warming methane produced by ruminants, and their consumption of precious water and land resources, to the destruction of rainforests and extensive use of chemicals to grow their feed.  

Appleby believes meat and dairy farming can have a long-term future – not least due to the role of soil in carbon sequestration – but he is also a strong proponent of technology-developed replacements for animal protein.  

While firms such as Beyond Meat and Oatley have grabbed attention and market share by developing plant-based alternatives that taste, smell and sizzle like the real thing, their fortunes have stuttered more recently. Appleby believes two other approaches – based on precision fermentation and cell biology – have better longer-term prospects.  

Examples of precision fermentation include generating albumen (egg white), casein and whey (the components of milk) from yeast, or producing proteins, lipids and amino acids from bacteria such as E. coli. Through the use of powerful bioreactors, these techniques are already delivering at a commercially viable scale and price, asserts Appleby.  

Similarly, the use of bioreaction to grow myoblasts (to form meat) and fibroblasts (fat) from stem cells is rapidly enabling the replication of natural animal growth, to produce meat or fish without the need to grow, feed and slaughter animals.   

“It’s now being done at a price that’s equivalent to the real thing, offering the potential for a massive reduction in water, land use and other inputs,” he adds.  

Step inside  

Technology is revolutionising fruit and vegetable farming too, while also reducing reliance on the global supply chains that have been battered over the past five years by pandemics, populism and geopolitics.  

“If we look at what’s going on geopolitically, these rather frail, long and complicated just-in-time supply chains have been left wanting. That will give rise to more localised food production for local consumption,” suggests Appleby.  

Russia’s invasion of Ukraine has heightened concerns over food security in many countries, increasing pressure on governments to more urgently examine policies with support local food production for local consumption and restoring resilience to supply chains.  

Appleby insists the technology exists today to produce fruit and vegetables in-country “very effectively and cheaply, and healthily”, and suggests UK farmers need not look far for a solution.  

Despite being only the 133rd largest country by area in the world (at just under 34,000 sq km), the Netherlands is the second largest exporter of food and agricultural produce, thanks largely to its investment in greenhouses and vertical farming, which cover perhaps 100 sq kms.  

Farmers have always been at the mercy of climate and disease, but the indoor environment allows much greater control over these cruel fates, as well as other sustainability benefits.  

“You use 90% less water, no herbicides, no pesticides to speak of. And you limit the carbon footprint because you’re providing fruit and vegetables at the place of consumption,” he says, noting that industrial CO2 production in the UK can also be utilised to support soft fruit farming.  

While farmers globally have faced similar cost pressures this year, the UK agriculture sector has had to weather additional pressures due to the challenges of sourcing seasonal workers in the aftermath of Brexit and the Covid-19 pandemic.  

After Russia’s military action took Russian and Ukrainian workers out of the equation, UK farmers have looked further afield to Indonesia, but unscrupulous local recruitment processes have added to their difficulties. The National Farmers Union estimates £60 million of fruit and vegetables have been lost in the first half of this year due to a shortage of pickers.  

Appleby believes AI-based robotics are already proving their worth. But, as investors and farmers explore technology-based opportunities to improve productivity and sustainability, indoors and out, he says policy intervention is also necessary.  

“The UK government has been making moves in the direction of [indoor farming], but it hasn’t yet been given the impetus that’s needed to make the change.” 

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