If you're wondering whether to pursue IoT for the AgTech (agricultural technology) industry, consider this: It's now a $7.8 trillion industry making up 10% of the global GDP, according to Forbes magazine.
Compare that to the global transportation industry which makes up just 6% of GDP with $4.7 trillion in global revenue. (Plunkett Research) Bottom line: It's a hot industry with plenty of growth ahead and many investors and startup entrepreneurs have taken notice. Your opportunity here lies in being a connector.
Be the Connector and Reap Solid Results
To get the most out of IoT and AgTech you'll need to connect farmers, logistics managers, operational technology experts, IT professionals and the like with each other to provide solutions that make sense. Do this by helping them lower costs and increase revenue for all involved.
It sounds like a big task, because it is, but when you look at the size of this market, the time, effort, and knowledge it takes to implement a workable and sustainable IoT solution for AgTech isn't outside the realm of possibility for you.
2 Key Verticals for Growth in AgTech for IoT
We've identified two key verticals to concentrate your efforts. Transportation, warehousing, and processing offer growth in ways you may not have considered. When many people hear AgTech they immediately think of field operations, soil testing, and humidity sensors.
The field does hold a substantial area for growth, but drilling down into the less obvious can give you incremental wins that accumulate into consistent, recurring revenue for your business. Here's how:
Some agricultural managers must chart the quality control of pallets from the time they leave the processing center until they reach their final area for distribution. There's a focus now on the quality of the food supply chain, hence emerging laws such as FSMA (the Food Safety Modernization Act).
Managers will need IoT solutions for tracking shipments such as real-time measurement and reporting of moisture and temperature within shipping containers. That's in addition to tracking the amount of time it takes to ship produce from the field to the shopping center. Solutions for transportation can be as simple as vehicle placed sensors that monitor cargo health, driver behavior, and vehicle health. All of the data from these systems is sent to a cloud-based platform which aggregates the data for visualization or more in-depth prescriptive actions.
Free-range livestock presents a unique problem for farmers because these animals can get lost in fields or get eaten by predators.
With the per-head cost of free-range cattle averaging $2500, farmers need to have visibility into the health and location of their herd. The type of tracking system for livestock will vary based on the animal type, terrain, and the range of the field. Your customer may not be aware of the differences between cellular, RFID and LoRa (long-range radio), so your opportunity and value are helping them determine what is the right solution to fit their specific needs.
Similar to transportation, the value of the livestock tracking solution is in the insight gained from the data produced from the sensors. That insight needs to be viewed on a mobile device, be easy to read, and have alerts set up based on preferences. This gives the stakeholder fast decision making capabilities that can save them losing a revenue producing asset, as well as an asset cost.
Where to Find Customers
Once you've identified the right vertical, it's time to find customers within those verticals. The best place to start is right inside your own customer list. Look for companies that may have relationships within the vertical of the agricultural industry you've chosen.
In addition to your own customer list, consider:
- Become known at AgTech trade shows.
- Seek out university agricultural programs.
- Create relationships with the people who wear hardhats (operational technology people).
With this mix you’ll present yourself as the expert you are, not because you have all the answers about their industry, but because you show a willingness to understand their day-to-day operations. This gives the prospect a chance to reveal where they’d like the business to go.
Then you can present the primary ways you can help get them there.
AgFunder's AgTech Investing Report, 2015,