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In the rapidly evolving world of agriculture, innovation and sustainability are no longer mere buzzwords but critical components for the future. ProAgni, an Australia-based company expanding in the United States, is leading this transformation with a focus on enhancing farm productivity while addressing environmental challenges. 

In this episode of the Spilled Salt podcast, Warren Lee, ProAgni’s Commercial Director, and Lachlan Campbell, a fifth-generation farmer and ProAgni co-Founder, shared their journey and vision for the future of farming.

From Kangaroos and Cow Burps to Farming Innovation

Warren Lee’s transition from mergers and acquisitions law to agriculture might seem unconventional, but his business acumen has been pivotal in ProAgni’s growth. Initially unfamiliar with farming, Lee quickly learned the industry’s nuances and the deep-seated commitment farmers have to their land. 

This understanding shaped ProAgni’s approach to put farmers at the center of their innovation. “Farms are intergenerational businesses,” Lee notes, emphasizing that sustainability and productivity are crucial for passing the farm down to future generations.

Lachlan Campbell’s deep agricultural roots provided a unique perspective. His realization about the efficient feed conversion and low methane emissions of kangaroos sparked an idea: What if cattle could be as efficient as kangaroos? 

This question led to a collaboration with Professor Athol Klieve from the University of Queensland, whose research on kangaroo digestion became the foundation for ProAgni’s technology. Unlike cattle, kangaroos do not produce methane during digestion, presenting a model for reducing greenhouse gas emissions in livestock farming.

Addressing the Methane and Antibiotic Challenge

ProAgni’s core innovation lies in reducing methane emissions and eliminating the use of antibiotics in animal feed. Antibiotic use in livestock not only contributes to antimicrobial resistance but also disrupts the vital microbial population in the animals’ stomachs, which is essential for efficient digestion. 

ProAgni’s products nurture these microbes, enhancing feed conversion efficiency and reducing environmental impact. Yet, the bottom line for the farmer is always feed cost and animal health.  “If we can get the economics right first, we almost don’t have a right to talk about the other stuff yet,” Lee asserts, highlighting the company’s farmer-first approach.

Real-World Impact and Farmer Adoption

ProAgni’s success story is one of practical, on-the-ground impact. During a severe drought, their ProTect feed supplement flew off the shelves, helping sheep reach target weights faster and more efficiently. 

Farmers quickly saw the economic benefits, driving nationwide adoption. Campbell recalls initial skepticism from farmers, including his own brother, but the product’s performance won them over. Some customers were so impressed that they became investors.

The journey has not been without its challenges. The agtech investment landscape is tough, particularly with the industry fallout from failed ventures in vertical farming and artificial protein. 

However, ProAgni’s focus on optimizing the existing food system rather than overhauling it has attracted investors. “We’re solving a problem for us,” says Campbell, reflecting on how ProAgni’s customer-centric approach has resonated with both farmers and investors.

A Sustainable Future Rooted in Farming

Winning the prestigious Grow-NY food and agtech innovation competition marked a significant milestone for ProAgni, validating their technology on a global stage. This achievement has opened doors in the U.S., where ProAgni is starting trials with local feed yards. Campbell emphasizes the importance of understanding regional market differences and adapting their solutions accordingly. 

ProAgni’s future lies in deepening its impact in the U.S. and continuing to work with partners across the supply chain to solve environmental challenges without burdening farmers. As Lee aptly puts it, “The solutions have got to be about affordable, abundant protein.”

By keeping the farmer at the heart of their mission and focusing on practical, economically viable solutions, ProAgni is paving the way for a more sustainable and prosperous future in farming. For entrepreneurs and agtech innovators, ProAgni’s story underscores the importance of listening to the end-user and creating solutions that align with their needs and realities.

Transcript

This transcript has been edited from its original form to support readability.

Maureen Ballatori: Thank you for joining me today. I’m very excited to have both of you here. And so we don’t typically have two guests at once on the podcast. And so for all the listeners, I told Lachlan and Warren that I’ve practiced herding some cats before today’s episode so that we can keep everybody on track, but it’s going to be a great episode. 

Warren Lee: We’re pretty much house-trained. It’ll be fun.

Lachlan Campbell: We are so not house trained, we’ve interrupted you twice.

Maureen: It’s going to make for a lively show. I love it. I always like to start with a little bit of background because I’m a big believer in everything that came before what you’re doing now is of course impacting your current work. And so why don’t we have you start Warren and just talk a little bit about your background leading up to the work that you’re doing at ProAgni and then Lachlan will have you do the same.

Warren: Sure. I’m Warren Lee, ProAgni’s Commercial Director. I’m one of the only people initially involved in the business who had no background in agriculture at all. 

My background is in mergers and acquisitions law and investment banking. And then I went out from that and started running businesses and starting businesses. So a bit of startup operational and management expertise as well.

It’s been super interesting coming into a very agriculturally focused business where we try,  obsessively, to put the farmer at the center of everything that we do. And,  as the guy who five or six years ago didn’t know the difference between a cow and a sheep, I know that now. That’s been a great journey.

Maureen: What’s one of the most surprising things for you in terms of a discovery about agriculture?

Warren: I think I probably came with some inbuilt bias that farms were kind of production systems and a lot of farmers were really indifferent to the environmental impact of what they do. And I think that was completely 100 % wrong. I mean, they’re often intergenerational businesses and  the health of that business going forward is based on productivity of the land and land management and animal management and everything else and…

You know, they care deeply about that. Maybe not exactly the same way as the kind of,  black, skivvy-wearing hipster does, but they care really deeply.

Maureen: They might not talk about it in the same way, but they certainly know that it’s the life or death of their business,  for them to have to care about the land and sustainability for the long term. 

Warren: They take a multi-generational approach to that because often their greatest ambition is to pass the business on to their kids. It’s not just a milk-it-while-I’m-alive thing.

Maureen: Right, right, yep. And how about you Lachlan? I know that you do have a background in farming, so completely opposite from Warren, but talk a little bit about your background before ProAgni.

Lachlan: Well, I am the farmer in this conversation. Fifth generation. I live in rural New South Wales. So for your listeners, I’m about 350 miles west of Sydney. It’s an 18,000-acre ranch, with sheep and cattle and two feed yards. And so my background is actually in agricultural consultancy. I did 18 years in succession. So the relevancy of this story is the relevance of choice.

Being able to hand that farm down is probably one of the most challenging things that farmers face. And to do it with either debt or to leave the generation handy it down with some freedom is probably the hardest thing you see. So if we’re not making farmers money, it hurts personally.

Maureen: Speaking of the life and death of the business,  it is right from a different perspective of what we were just talking about with Warren. But so Lachlan, it was, what were you, what is on the 18,000-acre ranch?

Lachlan: Well, there’s a bunch of sheep, around about 10,000. There’s around 10,000 cattle and around 15,000 kangaroos. 

It’s the kangaroos that really are the genesis of this story, Maureen. 

And just by way of background, my brother and I are still in partnership. So it’s my brother that does all the farming. He has done for the better part of the relationship and particularly since I left farming to move to ProAgni. 

Back to the kangaroos, the genesis of this story is really around an extraordinary animal that sits in our paddocks and lives a pretty unique life because they don’t burp methane. My sheep and cattle do. Now that has a profound impact on your ability to thrive in what is traditionally a very dry seasonal environment. 

We get very long droughts and when we do get breaks, it breaks quite significantly. We have a 24-inch rainfall, but that can double. And those droughts can last upwards of 18 months. 

Now those animals, so we talk about a thing called a feed conversion ratio. A feed conversion ratio in my world is the ability to convert grass to protein or red meat. And that feed conversion ratio represents six, for example.

You know, six-to-one. So that’s six pounds of grass to put on one pound of red meat, live weight. Now that’s basically what kangaroos do. They sit there day in, day out, in the middle of a drought, under a tree, pretty relaxed. While my sheep and cattle are doing around 20-to-one. So that’s a really inefficient animal struggling to survive in that environment. 

If we could turn cattle into kangaroos, what would the world look like? You’ve got less methane, better resource use, and at the end of the day, animals that can survive in one of the most challenging environments on earth and make farmers more money. 

That’s the background thinking. But it’s a much deeper and much more scientific story than that.

Maureen: Before we get into the science of it, this idea of, what if we could turn cattle into kangaroos in terms of their efficiency? Tell me more about where that idea truly came from. 

Was that you and your brother kind of kicking ideas around? I know you’ve got a number of co-founders in the business. Where did the actual idea come from?

Lachlan: In 2015, one of our business partners, Robert Bell, attended a conference in Queensland. And at that conference, Professor Athol Klieve from the University of Queensland stood up. Now this man’s been studying kangaroos or macropods his entire professional life. And at that conference in front of a whole lot of farmers, he turned around and said, do you know kangaroos don’t burp methane?

And Rob, at that time, was our nutritionist to our feed yards. And the next week he came home and he said, have you ever heard this? 

I’ve lived with these animals all my life. I did not know that. And I turned around and said, look, there’s actually a business in that because this is about methane. This is about sustainability. And over the course of about six months, we met the good professor at his university.

At that stage, that technology was stranded science and ProAgni was formed. We licensed that science and, well, the rest is history.

Maureen: Warren, how did you come into the business from M&A and you’ve got your lawyer hat on and you decide methane sounds fun?

Warren: So I’ve, this is going to date us a little bit, Maureen, but Lachlan and I have known each other for over 55 years.

While I lived that very urban city life and Lachlan eventually went back to the farm,  we’ve always kept in touch. As he got more interested in this kind of project and this technology, the phone would often ring with, do you think there’s enough here for us to set up a company? And then there’d be questions about IP or something like that.

And then as it progressed and gained momentum, it just made sense to come into the business. Initially a couple of days a week and, for many years now, full time. It gave me an opportunity to learn something new, do something different and contribute something in an important and meaningful business.

Maureen: I love that. And that’s exactly why I ask people about their backgrounds too, because like I said, there’s this wild trajectory that leads people to a place together, right? 

If your crystal ball that you looked at 20 years ago said that you’d be working in agriculture and methane,  I’m sure you would have said, this can’t be my crystal ball.

Warren: That old model where you kind of started a job at 17 and then you leave 50 years later with a gold watch, it’s just gone. 

Maureen: I do think that that’s a bit more common still in the States in the legal field. I worked at a law firm for five years and many of them had been there for 45 years and the newcomers planned to be there for equally as long. And so I think in that part of industry there is still some longevity.

Warren: Right. Well, the secret is that most of them can’t do anything else.

Maureen: They don’t have a friend starting a crazy methane agriculture startup, huh? So, all right, so you decided on this idea, you decide that you’re going to move forward with it. How did you bring the other co-founders in? Like what was the determination there in terms of the formation of the various co-founders all coming in together?

Warren: Yes, that’s right. That’s right.

Lachlan: Yes, what was he thinking?

Well, there’s another fun fact to this apart from kangaroos not burping methane is the issue of antibiotic use as growth hormones in our feeding systems. 

So we’re sitting there around about, I guess, February 2016 and going, okay, so we’ve got an issue with methane. We have an issue with the fact that we feed antibiotics on a daily basis that could and do contribute to the issue of antimicrobial resistance, AMR. So we’re about to lose our social license. 

And in Australia, that’s actually quite interesting because we use the word social license with a pretty frequent, almost off-handed use. In Australia, what that actually means is losing access to markets. We export 80% of most things we grow, dairy, wool, beef, and lamb.

So when, when our customer says no, that’s actually an in time real risk. So the challenge for the company was really around the fact that, well, you’ve got this social license issue, but you’re not going to see adoption. Farmers don’t have the margins to take risks. They don’t have the bandwidth to turn around and go, well,  this is about the greater good.

They’re trying to start at the beginning of the day and they work towards the end of the day and go, well, I hope I can do two jobs at once. And that’s usually the frequent thinking, but they’re also commodity-based businesses. 

When the supply chain said, look, we can’t take your lamb, we can’t take your beef because you’re feeding them with antibiotics and your carbon footprint is really high. We’re going to go and get them from somewhere else. That’s actually a black swan event.

So we placed a bet on that and we understood very quickly that the rate of that adoption of any type of technology would really be around providing the primary beneficiary an independent economic value proposition. That is, if you can’t make their money, it doesn’t matter what the rest of the supply chain does. 

Then the second part of that puzzle was how do you do that and not disrupt behavior? How do you actually come in and provide a product that looks and sounds and is pretty much the same price as what you were using on a Monday and ensure that adoption works and the animals are safe. 

We’re talking about vitamin and mineral premixes in yards to begin with. So that part of any feeding ration requires those in a feed yard. So that’s where we started the business. And so we took our first products to one of our local stores about 50 miles west of where I am.

We went up to one of the resellers and that’s how we sell in Australia through retail. So that’s where most farmers buy their produce or product from. And they’ve come in and we’ve gone into that store and went, we’d like you to do us a favor. We’d like you to arrange a bag of ProTect and see how it goes. And we didn’t talk about social license. We didn’t talk about antibiotics. Warren’s got a really lovely lens on this.

We want you to arrange it because it’s part of a diet they’ll need and tell us how it goes. Well, in the first six months during one of the worst droughts we’d had in the last hundred years, that product flew off the shelf. So we went from one store in Australia with no one knowing us to national distribution and manufacturing.

Maureen: And why did that happen? Why did it get so much traction?

Lachlan: So that sounds very, very big. We started with sheep and sheep in feed yards have a much shorter stock term. So these guys were selling their animals far faster. They were getting to target weight much faster using ProAgni’s products than our competitors. 

That is, and was the primary driver. So we made, we effectively made them more money. It was a lower, what we call lower cost of gain. Now, that really started to amp up towards the end of 2016 as a result of that.

Maureen: So before you move on from that though, you have to get the sale first, right? So there’s no question that it works. There’s no question you’re saving the farmer money that you’ve got the efficiency in the feeding and everything like that.

But you’ve got to get the farmer to change it first. How did that happen?

Lachlan: Well, here comes the risk. We went around to all our next door neighbors who were feeding at the time and said, we’d like you to buy this product through these stores. 

Rob and myself, in particular, who effectively live in this community, turned around and said, look, to our customers and our clients. At this time, I was still a consultant and said, try this, just do us a favor and try this. 

And if it hadn’t of worked, we wouldn’t have got a beer within 200 miles, including my brother. He was just as cranky about having to switch across from the product. This better work, Lachlan, was the response. 

Interestingly enough, some of those customers have gone on to become investors. They were so delighted with the performance.

Maureen: Wow. That’s fantastic. I like to focus on a high moment and a low moment. So I’d love one of those from each of you, a high moment and a low moment from the time you opened your doors to now.

Warren: I’ve got a great one and it’s related to what Lachlan was talking about before and it’s both moments rolled up all in one. 

So Lachlan’s loaded up the truck and drove to this rural supply store and they sold a million bucks worth of product. So I go and I’m still in full investment banker mode here. I go, gee, this is interesting. I’m going to go up there and take a look.

So I go up to Dubbo, New South Wales. Now, Dubbo, New South Wales, makes Syracuse look like a metropolis. Even Binghamton. And I’m kind of amped to find out why this product is selling. 

I found the sales manager, a guy called Donny Haggins, and I’m sticking out like a sore thumb here. I’m probably wearing a coat and tie, I’m just looking kind of ridiculous.

Maureen: That makes Syracuse, New York look like a metropolis? Wow.

Warren: And I go, Donnie, it’s so exciting that this antibiotic-free story is really resonating here. And he looks at me like I’m insane. And he goes, they’re buying it because it works.

Now, what was really interesting about that is, at that moment, I felt more deflated than I can possibly tell you because I’m kind of going, so our whole reason we get up in the morning isn’t working. But then maybe two days later, it sunk in that that’s exactly what success looks like. 

If you can get them to buy the product because it’s good for them and irrespective of the fact that it reduces methane and has no antibiotics and everything else. That is exactly what success looks like. So, in that two day period, I went from this kind of almost existential crisis of why have I chucked my lot in here? Because no one cares to going, wow, this might actually just work. So there’s a two in one for you.

Maureen: I love it. If your primary messaging points are not resonating and they’re only buying it because it works, then it’s how do you scale? How do you go into new markets? Right. How do you continue to bring in new customers, which is the fear?

Warren: Yes, and what we found over time is,  without being vaguely duplicitous about it, there are different audiences that are interested in different parts of your story. 

So, if you’re talking to a meat processor who mainly exports to Europe, which has banned the use of most antibiotics, the thing they want to talk about is antibiotics. If you’re talking about a guy on a small-to-medium sized farm, who just wants to get by, what that person needs is production efficiency. 

Now, sometimes those things crossover and we have had customers literally go, thank God you got me onto this antibiotic thing because my meat processor only buys antibiotic-free now. 

At the time, all they were buying was the feed efficiency. And yet what happened along the way is that it future-proofed their business. And, that’s a pretty good day at the office.

Maureen: Absolutely. How about you, Lachlan?

Lachlan: Two for one. In October ‘22, which was a pretty big month for us for two reasons. 

I was presenting at a farmer conference in Northern New South Wales and we proudly were part of a guest speaker list. The lead speaker on that day was a buyer from one of the largest landpackers in Australia. So that company processes 25,000 lambs a day. This guy’s name’s Andrew Jackson, but no one calls him Andrew or Jacko. They actually call him The House and he’s a big guy. He’s about six foot five. He’s about 65. And it’s not because he’s a big guy. He’s called The House because The House always wins

So from a commodity-based point-of-view, what he says goes. So we take the price he gives us and we sell him our lamb. He stands up there and he says, as of today, my company will be sourcing 80% of all its lamb, antibiotic- and ionophore-free. 

And he then pointed to ProAgni to explain what I just said and walked off stage. 

Now that at that moment, what was, there was this just deathly silence across the room because the farmer’s customer had just said no. And the second thing that happened was most of the room turned around and said, what is an ionophore?

So there was this “holy smokes” moment. So the highlight for us was at that point in time, we just had product market fit. So we were gold.

Maureen: And the other thing about that, too, you had product market fit from somebody else talking about you, which is way stronger, right? Than you saying, I’ve got this solution. 

Lachlan: Here’s your problem, here’s our solution. We didn’t need to do any of that. 

So then Warren and I jumped on a plane and here comes the two for one. We then stood up at Grow-NY. And for an Australian, this is a really pivotal moment. So you’re talking about one of the largest and most prestigious agricultural pitching competitions in the world, virtually invitation only, 20 get through.

Warren: 100%.

Lachlan: It’s run by the state. It’s funded by the state of New York and run by Cornell University. And first prize is a million dollars and ProAgni won. Now we’re the only Australian company to ever achieve that. And that piece of social capital has just been extraordinary. 

For me, it’s validation of, we’ve got something very special here. We are unique. The technology is unique and we’re delivering.

Maureen: So exciting. What a time. October, November, because Grow-NY awards are in November. So that was bang, bang one after the other. You’re on this high. 

Lachlan: On the plane. I remember after the presentation at this conference in New South Wales, Rob Bell and I were both in the room and we should have recorded that. 

Anyway, Warren and I were due to fly out two weeks later to join the competition. And it was the first phone call I made, because we didn’t have a lot of phone coverage. I said, Hey Warren, you’ve got to hear this. You’ve just got to hear this. 

And I think that was for me the inflection point. Well, this, this is going to work. We’ve actually got a chance at this competition.

Maureen: And so, Warren, you pitched for Grow-NY in October or November of 2022. Talk about that a little bit. What was that experience like?

Warren: It was a super interesting experience. I mean, the competition is extremely well run.

It provided us, before we even turned up, with the opportunity to embed deeply in that New York market. We took that opportunity, even though it was difficult for us, needless to say.

Lachlan had spent a lot of time on the ground, meeting producers there, spending time with the people who ran the competition and really making use of that time. 

That investment was super worthwhile. The competition was completely professionally well run. I mean, it’s kind of like the Olympics of pitching competitions. And I mean, it was just a great experience. It was just a great experience. And one for which we will remain grateful. It was completely awesome.

Lachlan: Yes. The easiest way to explain it back in my hometown is that it’s the US Tennis Open. Yes. We’ve gone to Flushing Meadow and we’ve actually come back with the trophy and, and at that point, . And Aussies get that.

Maureen: With the top prize, yes.

There’s two things I don’t want to miss. One is the science, which we really haven’t talked about a lot. And so I want to give you an opportunity to speak to that a little bit. And then I’d also love for you, one of you to talk about the investment landscape because there’s been some reference to the fact that you’ve brought in some investors, you’re seeking continued investment, I believe. And so I’d love for somebody to address the current landscape.

Warren: What did I take the, when I take the science thing first, because there’s a neat segue back to grow New York. So what, one of the things that happens in the growing your competition is you get a kind of pitch mentor and, and I come up with the first version of the pitch and it’s about half science. And he just kind of grumpily looks at it and goes, take all that out.

And I kind of go, no. And a degree of tension ensues, frankly. Then it gets whittled back to one slide eventually. He’s grumpy that there was even one slide left. I’m grumpy that the other six got taken out. And guess what? He was right. It worked out. 

The core of it is basically that humans digest their food and it’s a physical process involving enzymes and everything else. And ruminant animals, cattle and sheep don’t. They basically chew up grass, they put it into their stomach, which is like a big ass holding tank, and they ferment it. And they ferment it through the same process that makes sauerkraut or makes beer. But here’s the thing, we say the cows ferment the food, well, that’s not actually true.

Literally billions and billions of bacteria and other microbes do the fermentation. And without those microbes, there would be no food produced by the animal, no food produced for the animal. 

And here’s a super fun fact. Those bugs create about 100 % of the methane that creates the methane from ruminant problems. So all of our science is based around the simple principle that if we look after that bacterial population, that bacterial population will look after animals and the environment. 

So everything we do weirdly is about feeding and nurturing that microbial population and kind of ignoring the cow. Because that microbial population is humming, they look after the animal.

And that’s the core of the science. And then it comes down to promoting the bugs that we want, discouraging the ones that we don’t. And here is the ultimate scientific proof point that that works. We recently did a large study where we were doing PCR analysis of that ruminal microbiome. So,  what were the actual bugs? And there was a control group and a group being fed ProTect.

There were four times as many unique species of bacteria in the group being fed ProTect.

So we have promoted that microbial biodiversity and that microbial biodiversity completely works. And then you kind of step back and you go, wow, that’s pretty cool. How did you do that?

And step one of that is not actually that complicated. We didn’t feed antibiotics because guess what antibiotics do? They kill bacteria. They kill the bugs. They kill the very bugs that the animal is looking upon to thrive. So that is kind of the shortest and most interesting version of the science story, I think.

Maureen: Right. They kill the bugs. Right.

Lachlan: Yes, kill the bugs.

Warren: My old, Grow-NY pitch coach probably would have shouted at me and said that was too long.

Maureen: Hey, I know you worked with Brad Gouldthorpe and he’s a very smart guy and clearly gave you great advice. 

Warren: He was right. 

Lachlan: I think he’s three from four, isn’t he, in the pitching comp in terms of mentoring?

Maureen: I think we’re headed into year five, right? I believe he’s had at least two million-dollar winners. Agency 29 has had at least one winner every single year since the competition started for Grow-NY.

Lachlan: He’s a bit of a minimalist when it comes to communication and those one-liners for my colleague here who’s a professional communicator. Turns around and goes, it’s just driving me mad. But I mean, in the world of presenting,  if you’re going to present a line of horses, you need a rhino. And I think the kangaroos are really that, that really unique story.

Maureen: So what’s the connection there? Like, bridge that gap for me. Do kangaroos also have little bugs that help them digest? Like, what’s the bridge?

Warren: Yes, that is also super interesting. So they are not ruminants, needless to say, but they are four-gap fermenters. So they use exactly the same process of ingesting grass and then bacteria fermenting that to provide energy for them. 

The bacterial population though is quite different and it’s just much more efficient. Now, and here’s the super interesting bit. Many of the same bacteria are found in cattle and kangaroos. They’re just in smaller numbers, numbers in cattle. And they can actually transfer species between animals. 

In Australia, cattle and kangaroos sharing a drinking trough will actually transfer some of those species and make the cattle in that environment more efficient. So, we could keep flogging what kind of started as an analogy and idea to death. And what we’re actually finding is there’s more truth and wisdom in it than we possibly thought when we started.

Maureen: That’s great. Let’s go to the investment landscape. And then I’ve got one more question for you about what’s next, and then we’ll wrap up. But there’s been a lot of discussion in every major ag conference that I go to, especially those where startups are in the audience, that the ag investment landscape is atrocious right now and incredibly difficult. So what’s your perspective on that?

Warren: Can I lead off of that and then I might throw it to Lachlan, because Lachlan has some really pertinent observations on it. The fact that it’s not a great landscape is 100% true. I mean, vast amounts of money got set on fire in artificial protein and vertical farming. And unless the money comes back, it doesn’t kind of go around.

It’s ironic that for us who are basically trying to optimize what’s more or less the existing food system, so much money got hosed trying to create a new one.

So that is kind of interesting and ironic for us.

Maureen: So you think that that approach has not only eaten up a lot of the ag tech capital that was out there, but has also perhaps made investors skittish on continuing to invest in the industry?

Warren: I think it has, although the lesson to be learned from that is you don’t change consumer behavior overnight. You don’t change a very complicated food production system overnight.

And yet the problems that they were trying to solve still exist. Now, enter stage right ProAgni, who is not trying to change consumer behavior, who is not trying to change the food system overnight, and is trying to find meaningful and cost-effective ways to address the same problems that vertical farming and artificial meat were trying to solve. And those problems still exist. They were just stupid solutions.

So that kind of core narrative is still very much there. A lot of that money got set on fire, but the problem is still there and that problem still needs to be solved. So like how, what are you seeing kind of out there knocking on doors? And we split up the knocking on doors task. It’s just Lachlan is better at it than I am. He just is.

Lachlan: I think when we first started, startups are startups, they’re always in capital raise mode at some level, right? I think one of the things that really appealed to both our current investors and the investors that we’re speaking to is that when we first started, we were solving a problem that the industry did not know it had. 

We knew it was going to turn up, well, we placed a bet on that. And in that moment, we had to do two things really elegantly. We had to be able to be scalable and we had to have applications across jurisdictions that allowed us to do that scaling without the regulatory compliance. 

I mean, the products we’re talking about here are actually on the grass list. So the Regional Investor Foundation came from high net worth family and friends who went, this is really unique. And then from customers who’ve gone, hang on a minute, can we actually be part of this process as well? 

We’d love to follow and be part of this journey. And that is, you’re solving a problem for us. We know that works. And then that story became amplified and it still is a methodology that works. So we’re in a conversation with a really large feed yard who we did some trials with.

Actually, it’s not a conversation anymore, they’ve committed to investing. They’ve done a really large trial with us and went, hang on a minute, I’m looking at these numbers, these are unique. 

So investment in our world is really about strategics who amplify what we do and where we do it. But it’s also the congruency of the story. At the end of the day, if you can’t deliver what the customer’s seeking in the right way at the right time, because they’re not going to ask you about the science.

They just want to know, is it going to kill my animals? And is it going to make me money? So you’ve got to tick those two boxes.

My preference has always been to raise money within the industry because the industry has domain experience. It understands that this has got to be the solution. 

There’s no silver bullet. They’re very complex to solve. You’re dealing with a system solution, which is what ProAgni brings here to a systems problem. This is just not only about taking out methane and removing antibiotics. This is about providing value right through that supply chain. So in essence, that’s where the greater draw of most of our investment’s coming from.

Maureen: Makes sense. 

Warren: And, and related to that, I’d kind of add that Lachlan and I sometimes joke about this and it is an exaggeration, but it is also true that if we have to start a pitch by explaining what a feed conversion ratio is, we are probably wasting our time.

Maureen: Right. Wrong room. Wrong room. Great point. 

Lachlan: We’re in the wrong room. Yep. Absolutely.

Warren: Wrong way.

Maureen: All right. What’s next? What’s next for ProAgni? What can you talk about in terms of some of what’s coming down the pike?

Lachlan: It’s really, I guess, taking the wind from Grow-NY and using that social capital. We’re already working with customers in the US. We’re already working with significant influences in that supply chain to actually start the process of those trials. And we’ve got feed yards who are currently purchasing protectors at ease.

But it’s really using that social capital from Cornell to create that beachhead in the United States. 

The last 12 months has been going out understanding just by way of an example, or probably easy to understand this way, Australia is not a smaller version of the United States protein market. It has some very significant differences and we’ve needed to spend at least 14 months or the better part of the time since Grow-NY was one. Understanding that market and understanding those customer needs. So that will never finish, but it’s probably been the best use of our time.

Warren: And I think another part of it, particularly in the US, is a lot of the corporates involved in the food supply chain, from the quick service restaurants to the meat processors, there’s a lot of pressure on them to try and solve some of these environmental issues. 

I think they’ve been told that they can’t be solved without great economic cost. And I think that a lot of our next year looks like working with those guys to try and help them solve the problems they want to solve without putting a burden on their supply of the farmer. 

Maureen: Tell a different story. It can be possible.

Warren: That is exactly right. And working with those guys, they buy a lot of meat and milk. And while it’s one conversation with a very long sales cycle, the net output of that conversation is kind of potentially game-changing. So part of it is knocking on farm doors. And we’ll have some little trials coming up in New York that came out of knocking on farm doors.

Lachlan: Yes, and not.

Warren: But a lot of it is also trying to get that pull through. And,  it comes back to what the point when the customer says no, the game changes. So we’re beginning to work with the customer.

Lachlan: Yes. I mean, at the end of the day, you can’t make a hamburger more expensive.

You just don’t do it. It doesn’t work. You’ve got to, the solutions have got to be about affordable, abundant protein.

Warren: Affordable abundance.

Maureen: What I’ve always loved, I mean, about ProAgni’s solution, too, is that it keeps the farmer first, right? It is the solution with the farmer in mind, that doesn’t sacrifice the farmer.

Whereas I was at World AgriTech in San Francisco in March and the majority of the conversation was about regenerative agriculture and sustainability and climate change and how do we incorporate those into what the farmer is doing and yet the farmer was not part of the conversation, right? 

Everyone understands that the farmer cannot spend more to farm, the farmer cannot be paid less,  and two, in fairness,  there was a lot of discussion about the fact that the United States can provide subsidies, through USDA and other agricultural programs that support the farmer trying these new initiatives, but what they’re looking for, is exactly what you have tried and trusted, doesn’t cost more, and in fact can actually save you money because of the efficiency that’s being created over time and checks the boxes for future proofing as you said, Warren, for the continued growth and success of the farm. 

So that going back to the beginning of our conversation, it is something that can be passed down to the next generation and sustainable in the business sense as well as in the agricultural sense.

Warren: And that I think is the key point here that sometimes the sustainability debate leaves off one of the legs of that stool, which is economic sustainability. 

Unless it’s economically sustainable, the rest is going to be really, really tough work, really tough work, because the same person who cares deeply about the pandas and the environment doesn’t want the price of milk to double and doesn’t want the price of a burger to double and doesn’t want farms to turn into parking lots because there’s not a living in farming anymore. 

We’ve got to get all of this right. 

And I think that one of the keys with ProAgni has been because it has always been so farmer-centric, we really work on the premise that unless we can get the economics right first. We almost don’t have a right to talk about the other stuff yet.

Lachlan: Through the four founders of farmers. So we started with the end in mind. 18 years of consultancy, ask a farmer to define sustainability.

It’s a completely different frame of reference.

Maureen: Right. You’re absolutely right. It is. Thank you both for joining me today. I appreciate you talking about your backgrounds and more about the in -depth components of the pro -agny story that I wasn’t aware of. I thought it was great to hear some of that from you. Our listeners can learn more about ProAgni and proagni.com and stay tuned for future episodes. Thanks for joining me guys.

Warren: Thank you.

Lachlan: Thanks, Maureen.