Innovation AgTech Ecosystem in Central Mexico Resists and Thrives Despite Continuing Global Challenges
Editorial: Adrian Garcia-Casarrubias
It never stops to amaze me the resiliency and degrees of innovation of entrepreneurs in the food value chain specifically in Latin America and a recent reminder of that was the “AGTECH SUMMIT MEXICO 2022” that we held this summer. The event presented by the Kirchner Impact Foundation in collaboration with the Innovation Directorship of the municipality of Leon Guanajuato Mexico showcased a mix of very promising early stage startups and international speakers in what after a couple of complicated years caused by the COVID pandemic was described as an “inspirational and motivating experience”.
The event was held in the “Green Museum” of Leon, a beautiful facility that keeps a great collection of endemic plants from central Mexico. Leon Guanajuato is recognized for its economic development and importance in the food and agricultural industries in North America. The State’s entrepreneurship ecosystem is robust with many centers designed to help train more than 19,000 entrepreneurs in the region every year. It has also developed specialized academic programs designed to meet the needs of industries and has optimized its science-technology infrastructure, creating innovation and business clusters. Specifically related to AgTech, some pioneers in the region include Agrobioteg Innovation Park in Irapuato, Guanajuato, a business incubator, accelerator and lab co-working space devoted to the sector, and FIRA, a Trust Fund Instituted by the Mexico Central Bank for agriculture and food industry development, that gives loans to ag-entrepreneurs at low rates allowing them to further develop their ideas.
During the pandemic, agricultural activity did not stop; it is not only an activity that employs millions of people, it is also essential to meet the food needs of Mexico and the world. This year, despite the adverse circumstances, agricultural and agro-industrial exports from Mexico increased by 9.1%. This sector remains strong and with excellent performance, especially when it comes to exporting products such as avocado, tomatoes, berries, beef and pork, among other items. Overall, it was possible for Mexico to enter the list of the 10 most important ag-food exporters for the first time in 2019. This places Mexico in a strategic position talking about agriculture. Some determining factors for the primary sector to be so dynamic recently are investments in technological innovations for irrigation, safety, quality and nutrition of crops, as well as genetic improvement in the livestock sector. All this coupled with other competitive advantages of the region has given as a result a very promising environment for the Mexican AgTech ecosystem.
The COVID-19 pandemic has had differentiated impacts for different types of farming systems. Medium-scale agricultural systems were the most affected, but according to an international study by CIMMyT in 2021, large-scale and small-scale farming systems showed greater resistance to the effects of the pandemic. The reduced effects in large-scale systems can be explained by the availability of resources and infrastructure that allowed them to resist the different sanitary and social restrictions, however the resistance of small farmers, especially in Latin America, has been explained by their lack of connection with international supply and trading systems and their rapid capacity for adaptation and innovation. Among these innovations were the development of alternative value chains, delivery systems for food and agricultural products, and the exponential use of digital media to adapt to changes in consumer behavior both in demand and in operation, with implications in agricultural systems.
To identify these kinds of innovations in the space the Kirchner Impact Foundation put out a national call for innovative AgTech projects and companies (pre and post-revenue) to apply to pitch their companies during their 3rd annual event that had its first edition on 2019, paused on 2020 and had a virtual edition last year because of the meeting restrictions and guidelines. It was a painstakingly difficult selection process done by a panel of industry and ecosystem experts to select the top 15 companies from a group of 50+ applications. Those top 15 teams each gave a 5-minute pitch during the event to a judging panel comprised of the 2021-2022 Kirchner Food Fellows.
The quantity and quality of the pitching companies surpassed every expectation ranging in focus from biotech to vertical farming to drones, to molecular diagnostics and everything in between.
Thanks to the support of the primary sponsor the Kirchner Impact Foundation and its various initiatives this year the competition grew, giving 3 main prizes:
- Most investment ready project: Verde Compacto (https://verdecompacto.com/), a container vertical farming company that offers up to 100 times more crops per square foot in any place without worrying about the season of the year and all in a controlled environment.
- Most Impact (Social and/or Environmental): Axolotl, an early-stage project that designed a water purification product, made from moringa and nopal, utilizing their coagulating, flocculant and disinfectant capabilities.
- Most Innovative: Reb X (https://rebxbio.com/), a company that produces next-generation, high-quality stevia sweeteners without plants by taking advantage of agro-industrial residues and modified filamentous fungi.
The event also featured talks from well renowned experts in the impact investment field like Steve Dauphin from Kirchner Impact Foundation and Hector Martinez from LOOM Capital and Grupo Paisano. The event also included a panel with winners from past events where they discussed the opportunities and challenges in the local ecosystem.
Other sponsors of the event included “Beristain + Asociados” a law firm from Mexico City that as part of the awards offered a full due diligence and corporate advisory to the winning teams and a legal workshop to all the finalist teams, “Merck”, that offered a design thinking and innovation workshop to all the finalist teams and Solena Ag a pioneering company in soil technology that is also part of the Kirchner Impact Foundation portfolio.
I am confident in saying that the ever growing Hi-tech AgTech sector in Central Mexico is beyond promising and it has allowed the ag-food ecosystem to resist and thrive during these complicated years, not just maintaining but increasing food production in the benefit of Mexico and the world. As new challenges take hold, like the war on Ukraine and challenging economic conditions amidst a continuing pandemic the strain on the global food supply chains will remain. International events like this one that brings local companies and projects on the leading edge of innovation to present their projects to a diverse and international audience of fellow entrepreneurs, potential partners, and investors will be fundamental to develop solutions to global challenges. We can´t wait to see the amazing companies and projects we see next time.