From donuts to data, here’s how to build a successful AgTech business

Heather Marshall moderated a Tech Thursday discussion with Marlise Hunter, Erik Westblom, Cole Powers, and Glen Price (left to right) on November 14. Photo by Jennifer Friesen, Digital Journal

“So far in 2024, we’ve spent $16,000 US on donuts,” said Erik Westblom at a Tech Thursday panel on opportunities and challenges in AgTech last night. 

Why was he telling a story about donuts to the packed audience at this Calgary Innovation Week event? They’re a key part of his company’s sales strategy, it turns out.

Westblom, co-founder & CEO at Provision Analytics, explained how his team uses donuts as a lead-generation tool in the highly relationship-driven agricultural sector. 

“We map out all of the packers in a given state. We send our sales team in. Everyone gets a rental car and fills the back seat with donuts. And we go in cold, drop donuts at every single packing house.” 

The result? “We closed three of the largest almond companies in California in less than two months by going in, name-dropping a person from LinkedIn, with a business card on the inside of a donut box.” 

The anecdote drew laughter from the crowd, but the message was clear: creativity and making personal connections matter in an AgTech business.

Westblom’s fellow panelists — Cole Powers of IntelliCulture, Glen Price of Sunterra Farms and Marlise Hunter of Tall Grass Ventures — echoed the sentiment that building trust and relationships is crucial in AgTech. 

Powers, whose company develops equipment management software for farmers, emphasized the importance of going where the market is strongest. 

“The long, slow ‘no’ in Canada is a massive challenge,” Powers said. “You go to the States, and you can make a few hundred thousand dollars in a couple of weeks with the right product market fit and the right relationship.” 

Westblom agreed, noting that 85% of his company’s revenue comes from the U.S., even though 60% of their customers by logo count are in Canada.

Both entrepreneurs highlighted the necessity of in-person interactions. 

“The majority of our sales — I would say, 80% of our sales engagements — have to be face to face,” Westblom said. “We spend $600,000 to $700,000 US per year on travel, sending our sales and marketing team all over North America, primarily the U.S. So I’ve been to 35 states in the last two and a half years.”

Besides strong relationships and tapping into the American market, what are other secrets to success for Canadian AgTech companies?

For early-stage companies, Hunter offered insights from an investor’s perspective: “You need to show what [your] technology does to [a producer’s] bottom line. This is a business. You have to demonstrate that it’s going to generate a higher margin or create an additional source of revenue.” 

Price added that demonstrating measurable impacts, such as improvements in productivity or sustainability, can also help overcome skepticism and land clients.

Opportunities and challenges in Canadian AgTech today

Canada’s AgTech industry is ripe with opportunity, but it also faces its share of hurdles. 

In terms of “pros,” panelists emphasized that the potential to apply technology across the entire agricultural supply chain is vast. From on-farm operations to areas like finance, food safety and traceability, technology is transforming how agriculture operates for the better. 

Hunter pointed out that AgTech has traditionally been narrowly focused on farms, but this overlooks a massive opportunity to digitize and optimize other parts of the supply chain.

“We have vast amounts of data that exist within our agriculture and food supply chain,” Hunter explained. “And how we start to take that data and make sense of it to create efficiencies and optimize resources is just a massive opportunity across the board.” 

Price noted that while the industry has always had a tremendous amount of data, it wasn’t able to process it in a useful way until recently. 

“Ten years ago, we didn’t have the horsepower to actually deal with the data, and surely we’ve got the horsepower now,” he said. “So it’s now about getting the industry to understand how to apply the knowledge that we can gain from that.”

He also highlighted the value of genomics to enhance the quality and durability of plants and livestock. “Genomics provides our ability to DNA basically anything on the plant side — and even livestock — to determine disease prevention or susceptibility or productivity or even quality of plants,” he said.

But of course, there are challenges too. 

Slow adoption of digital solutions, even in the face of major issues like food recalls, remains a barrier in the industry, Price observed. “Historically, the big guys are buying commodities, and they’re buying it the same way, but from all kinds of multiple suppliers,” he said. To tackle their struggle to implement technology across operations, they need a solution that’s simple that’s also reaching out to the primary producer.”

The difficulty of proving a clear return on investment (ROI) for new technologies is another sticking point. Farmers are running businesses with extremely tight margins, and, as Hunter noted, any technology that doesn’t directly impact their bottom line is a tough sell. 

To compound the issue, each farm is unique, requiring highly customized solutions to fit its operations. Powers explained that this need for configurability adds complexity for technology providers, who must strike a delicate balance between usability and adaptability.

A one-size-fits-all approach often falls short in the agriculture sector, he said, suggesting that rather than forcing customers to adapt to a pre-built technology solution, there is a big opportunity in developing platforms that can be easily configured and customized to fit the specific needs of each agricultural operation.

Labor shortages and regulatory hurdles also pose challenges. Price shared how his company has faced difficulties attracting talent to rural areas, despite offering diverse and rewarding career opportunities as well as the benefit of cheaper cost-of-living. “It’s not just about the technology; it’s about the people who can implement and maintain it,” he said.

What does the future of AgTech look like?

Despite these challenges, the panelists had plenty of points they were excited about, looking ahead at the future of AgTech. 

Hunter sees financial technology as a transformative area, noting that the tools currently available for managing finances in agriculture lag far behind those in other industries. 

“Take the technology that’s already there and apply it to a massive space like agriculture,” she said. The potential for fintech solutions to streamline everything from commodity trading to farm-level accounting could unlock new efficiencies across the industry.

Hunter is equally enthusiastic about biological advancements. “We can turn on and off switches that are already naturally occurring within plants without actually modifying anything,” she said, describing innovations that could make crops more resistant to droughts and pests. 

Westblom is captivated by a different frontier: aromatics. 

“Last week, a company in California fully mapped smell,” he shared. “You could take all of the breakdown of smell and how the human olfactory system works, and they’ve got it broken down through AI. And also, machines can smell things.” 

This advancement could revolutionize industries like winemaking, floriculture and even food production by quantifying aromas in unprecedented ways, he said.

Price, meanwhile, is focused on traceability and sustainability. He sees an urgent need for systems that can prevent food recalls and improve transparency across the supply chain.

“It seems to be such a simple solution,” he remarked, “but it requires the industry to embrace it fully.”

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