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Insight: AgTech & FoodTech Predictions for 2024

By Adam Bergman, Managing Director, CitiClean Energy Transition Group, Global Head of AgTech (January 23, 2024)

At the start of 2023, there were hopes that the challenging investment environment experienced throughout 2022 would improve and the financial markets would rebound. However, despite a few positives, like an improved IPO market and the Dow Jones Industrial Average hitting an all-time high at the end of 2023, the investment climate for earlier-stage private companies remained challenging. As we enter 2024, activity is expected to accelerate as companies look to raise capital in advance of the upcoming presidential election. Although the capital markets outlook will remain gloomy for most agtech companies in 2024, there is optimism for those companies that can generate commercial revenue, achieve positive unit economics, and inch closer to EBITDA. Additionally, the megatrends underpinning the need for innovation throughout the food and agriculture sector, including increasing food insecurity, the need to develop a more sustainable food system, and consumer focus on health and wellness, have only become more pressing over the past couple of years. This will keep a few areas in the spotlight this coming year: advanced irrigation; ag biotech; alternative proteins; automation and robotics; digital agriculture; and indoor farming. 

Water was a prominent issue at COP28, including being the subject of a symposium co-hosted by the UN World Food Programme and Citi on the nexus of food, water, and climate change. Farmers are being forced to implement more efficient water irrigation technologies given the decrease in freshwater availability, prices rising, and regulators becoming more active. However, the primary constraints to mass adoption are that water remains highly subsidized in many parts of the world, the high cost of drip and other advanced irrigation technologies, and financing being a challenge for smallholder farmers globally. As water resources decline and costs rise, pressure will increase throughout the food and agriculture supply chain, including on lenders and insurance providers to provide upfront financing so that farmers can implement more efficient irrigation technologies.

The ag biotech sector is benefiting both from regulatory changes and technology improvements that are making biologicals and bio-stimulants more cost competitive and effective. Brazil is a good example of a market that has embraced the adoption of these products and had success. There is optimism that in other regions, like Europe, regulatory changes involving these products will have a positive impact. CRISPR also received a boost recently when a cell-based gene therapy for the treatment of sickle cell disease became the first FDA-approved product utilizing CRISPR/Cas9 genome editing technology. Even though it is in the medical field, this success should provide a boost for investment in companies  utilizing CRISPR in animal and plant genetics  as the regulatory landscape looks more favorable. 

After rapid growth from 2019 – 2021, alternative protein consumption plateaued during the past couple of years as consumers grew disenchanted with plant-based products following complaints of inferior taste, limited nutritional value, and higher price. As new products hit supermarket shelves, including those made through precision fermentation and using mycelium, along with improved plant-based formulations, consumers will have better product options and demand is expected to increase. In addition, whereas most of the first generation of alternative proteins (mainly burgers and sausages) were sold directly to consumers, many of the next generation companies are selling their products directly to consumer packaged goods (CPG) companies as ingredients that are mixed into existing products, providing not only better taste, texture, or a more environmentally sustainable product, but also more consistency of availability, quality, and pricing for CPG companies. 

Another issue for the food and agriculture sector is labor availability. Automation and robotics remains the most viable solution being introduced on farms, especially with permanent and specialty crops, which remain more labor intensive. In addition to automation and robotics, there is a growing demand for farm electric vehicles (EVs) which, when coupled with a growing incentive for supporting energy transition in different countries, implies that electrification on the farm is expected to accelerate. 

Agriculture is one of the least digitized sectors of the economy. However, that is about to change. With more sensors and robotics on the farm, the ability to implement platform technologies that can drive positive return on investment (ROI) will quicken. Although farmers often are hesitant to implement new, expensive technologies for fear they won’t, in fact, help their bottom line, many of the digital technologies available today, including artificial intelligence (AI), data analytics, and machine learning (ML), are used effectively in numerous other sectors of the economy and have shown instantaneous ROI for users. Farmers will be able to implement these technologies to drive profitability as their margins continue to get squeezed. 

The indoor farming sector experienced a very difficult 2023 with several high-profile bankruptcies.  Despite much negative press, we are seeing the emergence of industry leaders who have a proven business model and are poised to achieve profitability. Those companies that survive will be able to grow more rapidly with access to less expensive capital, either bank debt, mezzanine finance, or project debt and equity.  The indoor farming sector also is poised to benefit from an expanding product portfolio to move beyond leafy greens and tomatoes to higher priced berries and specialty ingredients. 

The agriculture sector is making strides in adopting technology. As we enter 2024, these innovations will continue to gain more acceptance as their use increases and efficacy improves. Each year, more technology arrives on the farm, and as more of these products show an improved ROI, they are likely to become more widespread. The megatrends underpinning the agtech sector show no sign of abating and the adoption of technologies created to take advantage of inefficiencies in this sector will continue to accelerate. Profitability will be a key focus for investors. For those companies that have achieved profitability, growth capital will be available and at a much more reasonable cost. Even as capital markets improve in the coming years, the new reality for agtech companies will be prioritizing profitability over revenue growth to demonstrate long-term economic viability.


Adam Bergman is a managing director in the Clean Energy Transition Group at Citi and Global Head of AgTech investment banking where he works at the intersection of technology innovation and climate change. Bergman is a sustainability executive leader with over 25 years’ experience raising capital and executing M&A transactions. He also provides strategic advice and financial guidance to senior executives and boards on partnerships and growth strategies. As one of the first investment bankers to focus exclusively on the CleanTech sector, starting in 2005, Bergman is recognized as a leading subject matter expert and is a frequent speaker at industry events and publisher of articles on sustainability. Bergman has built an industry leading AgTech investment banking practice creating a broad ecosystem to help drive adoption of technology and innovation throughout the broad food & ag value chain. Prior to joining Citi, he established the AgTech cohort for Wells Fargo’s innovation incubator (IN2), which was launched at the Donald Danforth Plant Science Center in St. Louis, Missouri, in 2018.  Bergman sits on the technology advisory board for the Danforth Plant Science Center, as well as the Western Growers Association, which represents local and regional family farmers who grow over half the nation's fresh fruits, vegetables and tree nuts. He also is a technology advisor for farmer-owned Landus Cooperative, headquartered in Ames, Iowa, and SeaAhead, a bluetech startup platform in Boston, Massachusetts, whose mission is to support new, innovative ventures, with a focus on sustainability and the oceans.

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