Welcome to another edition of SFTW Convo. This week’s edition is a treat! It includes my conversation with Adam Bergman of EcoCapital. Adam is an investment banker in the Agtech, CleanTech, and FoodTech space and he has been doing it for 30 years.
He has great insights on what works, what doesn’t and how we can chart a better path forward to solve some of the pressing current and future problems. Adam is not afraid to take contrarian positions and have a reasoned conversation about his rationale.
I hope you enjoy this conversation.
Summary of the Convo
In this conversation, Adam Bergman discusses his transition from covering the technology sector to clean tech and the trends and challenges in the ag tech and food tech sectors. He highlights the cyclical nature of investment bubbles, the importance of automation and robotics in agriculture, and the pressing issues of food security.
Adam also critiques the current venture capital model for ag tech, suggesting that long-term investors may be better suited for this industry. He emphasizes the need for innovation in seed genetics and the potential of vertical farming, while cautioning against the risks of overcapitalization in these sectors. I push back on Adam’s excitement about vertical farming and we discuss the critical breakthroughs needed to make vertical farming work.
Adam and I explore the similarities and differences between solar energy and agriculture, the global landscape of food security, and the innovations shaping the future of food production.
I used my background of growing up in India to discuss the unique opportunities in India, with Adam expressing his optimism of India becoming a powerhouse with collaboration and investment from the middle east, and Africa. Adam also highlighted the importance of distribution, technology, and policy in addressing the challenges of modern agriculture.
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From pure finance to “farm to fork”
Rhishi Pethe: Till around 2005, you focused purely on finance. Then you made a decision to commit your career to clean tech, sustainability, and food tech. Was there an aha moment?
Adam Bergman: I’ve spent my entire 30-year career in investment banking. I started out doing healthcare, then moved into tech and the internet. One day, a solar deal came across my desk. The company made a flexible solar panel. My colleague and I worked on it, not expecting much, but it turned out to be wildly successful.
A couple of months later, we helped their biggest customer. They took that flexible panel, integrated it into a white roofing membrane, and rolled it out onto rooftops. If you drive through L.A., you’ll see those big warehouses near the airport with white roofs, they were rolling solar onto those, and onto school roofs in San Diego too.
That’s when I realized something was happening. This was around 2004-2005. A trend was forming that I don’t think many people saw at the time, and I jumped in.
I like to joke that I’ve always been ahead of where the trends are. The challenge is, these sectors often turn into bubbles, they surge, then implode. First, it was solar. Then biofuels. Then electric vehicles, LED lights, energy storage. More recently, it’s been plant-based protein, indoor farming, Ag biotech.
Over the last two decades, I’ve worked at the intersection of tech innovation and climate change. And for the last ten years, I’ve focused on what I call “farm to fork.” I don’t cover traditional food and ag companies, but the technology companies that are disrupting them.
I have watched sectors rise dramatically, get overcapitalized, then crash. And then I stay around to see what comes next, what survives and the next generation of companies that emerge.
Trends and Megatrends
Rhishi Pethe: When you look at some of the current trends or consensus views in the investment community, are there any that you fundamentally disagree with? If you do have a contrarian view, what’s driving that perspective?
Adam Bergman: We just watched another bubble burst a couple of years ago. Candidly, there aren’t many bubbles left, because ag tech, clean tech, and food tech, the three areas I cover, all followed the broader economy and went straight up.
From 2020 onward, we saw huge amounts of capital flood in. Valuations shot up. It was very clear to me at the time that we were in a bubble.
I’m not against companies taking in a lot of capital, they’re going to need it. What concerns me is when they raise that capital at sky-high valuations and then have to deliver on business plans that are, frankly, unachievable. And that’s often the only way their investors can justify those valuations and achieve the returns they promised to their LPs.
I believe capital and valuation dynamics have played a huge role in creating these bubbles, and in the failures that followed. It’s not just that valuations are too high. The business plans just aren’t getting delivered.
It’s not unique to ag tech or food tech. It happens in tech all the time. It happens in biotech too. The difference?
Those sectors have a track record of exits and strong investor returns. So investors are more willing to take risks because they can point to ten companies that delivered 100x returns.
In ag tech, clean tech, and food tech, you can count on one hand the companies that returned even 10x, let alone 100x. And if you’re reaching for a 1000x return, it's Tesla, and that’s it.
So the challenge I see is this:
We keep making the same mistake, overcapitalizing companies and industries that just take a long time to scale. And if you’ve worked in software, you know it’s a completely different game. Scaling a software company is nothing like scaling the companies we’re talking about here. Most of them are hardware, or the equivalent of hardware. I say this all the time: it’s a misnomer to label a lot of these companies ag tech, clean tech, or food tech, because when we say “tech,” we think of software - Facebook. Google.
Software scales faster, is more capital efficient, and, if it’s going to fail, you find out early. You don’t need to raise $50 or $100 million just to prove it won’t work. That’s not true in the sectors I cover. Here, you raise $50 million to go from a pilot plant to a demonstration plant. And sometimes you get to that demo plant and realize you were wrong. The tech doesn’t work. And now that $50 million is gone.
I don’t think these industries have a higher failure rate than tech or biotech. But they absolutely require more capital to prove something will fail. And the number of successful exits is far smaller. Even when there are exits, the outcomes are just much smaller. That’s why I tell both companies and investors: we need to rethink how we raise capital, how we structure funds, the size of those funds, and their time horizons.
It’s tough to go to LPs and pitch a fund that’ll return like tech or biotech when, honestly, there’s no historical data that shows this industry can deliver those returns. Unless you backed Tesla early, you can’t point to anything comparable.
We’ve got two decades of lessons behind us now. If we keep making the same mistakes, it’s because we’re not paying attention.
Rhishi Pethe: Someone once asked Jeff Bezos: “What’s going to be next?” He said he doesn’t focus on what will change, but on what won’t change. Because if something isn’t going to change, you can double down on it and just focus on executing better. (“What is NOT changing?” SFTW article, March 2022)
Adam Bergman: I definitely agree with that. I’ll be the first to say, I’m not smart enough to predict the future.
I focus on trends that I believe will accelerate. I keep coming back to the areas where we’re facing challenges that are only going to get worse.
The “megatrends” are food security, health and nutrition, and sustainable food systems. These are real issues today, and they’re not going away.
Take food security, for example. One of the biggest issues is labor. And it’s not going to get better. That’s why I’m a huge believer in automation and robotics. And that belief doesn’t just apply to ag, food, or clean tech. It applies to society as a whole. Labor isn’t a short-term problem, and I’m not sure it has a long-term fix either. Digitization is another big one. Ag and food are among the least digitized industries out there.
What excites me is the potential to implement technology that delivers real ROI for farmers. I always go back to this: if you’re building tech for agriculture, you have to prove it delivers a return. If you can’t show a rapid ROI, you’re not even making it through the door.
On the health and nutrition side, the data is alarming. Around 65% of Americans are overweight, 40% are obese, and I’ve even seen stats suggesting 5% weigh over 300 pounds.
So what are we dealing with? A ticking time bomb on life expectancy, but even more, a massive economic burden. We’re spending one- to two-trillion dollars more on healthcare than we should be. That’s not sustainable. So when I look at movements like functional medicine or “Make America Healthy Again,” I see long-term opportunities there, because unfortunately, I don’t think the American diet is going to change much any time soon.
Will GLP-1 drugs help? Possibly. But I’m not convinced yet. I don’t think we have enough long-term data, especially if we’re asking people to stay on GLP-1s for life. And I’m not sure people will want to do that. Making bold predictions about the future is risky. But if you focus on the trends that are already clear and are only gaining momentum, I think you’re putting yourself in a much better position for long-term success.
Food security
Rhishi Pethe: How do you define food security? And what problems do you think are going to get worse over time?
Adam Bergman: First, everything happening with climate change and weather volatility is making it harder to grow food outdoors, year after year. Whether it’s extreme weather, limited water availability, or the spread of pests from other regions as temperatures rise, outdoor agriculture is only going to get more difficult. And society isn’t ready for that. Not yet. But it’s going to be a major challenge.
Second, if you look at how globalized the food system has become over the last 50 years, you can see the cracks starting to show, especially after Russia invaded Ukraine. For the first time in decades, countries began imposing export bans. They stopped sending out grains, beef, and other staples. That forced a lot of governments to rethink their strategies. If globalization no longer guarantees access to food, then they need to figure out domestic solutions, fast.
In some regions, especially parts of the Middle East and Asia, governments know that if people don’t have enough food, the regime won’t survive. So those countries are taking this seriously. Every country needs to be ready to feed its citizens. Even in the U.S., we import a lot of produce. Now, produce is different from protein, I don’t think people are going to riot in the streets over a shortage of apples or blueberries. But there will be backlash.
What really worries me, though, is the rise of zoonotic diseases. Whether it’s avian flu in the U.S. or swine flu in China, these outbreaks are happening more frequently, and they’re getting worse. That creates real risks for our protein supply. And here’s where I draw the line: if you go into a grocery store and there are no eggs, people get uncomfortable. But if the shelves are missing chicken, beef, or pork? Give it 48 hours and people will panic. I’m honestly surprised that more political leaders in the U.S. aren’t talking about this. I think Americans take food security for granted because we’ve always had it.
But if you look globally, the U.S. is in a strong position. We mostly have energy security. And we are probably close to achieving food security. But COVID showed us how fragile the system can be. The supply chain didn’t break, but it bent badly. And that was just a warning shot. Look at what happened with infant formula a few years ago. Look at the recent egg shortages.
Anyone who thinks the U.S. is immune from food security issues is mistaken.
Rhishi Pethe: If you can’t trade with your neighbor or with another country, depending on where you are, you might be able to grow some food domestically, but maybe not enough.
Adam Bergman: I’m probably standing alone on some of these topics. But I don’t think in terms of 2025 or even 2030. I’m thinking ahead to 2040, 2050. And when I look that far out, a couple of areas stand out.
One is alternative proteins, not so much plant-based, but technologies like precision fermentation and biomass fermentation and mycelium. And if you go a little further out, maybe cultivated meat too. I also believe we’re going to see more and more food production move indoors. That just seems inevitable.
I’ve been vocal about my views on indoor farming. I’ve been clear that I have concerns about the short term. But over the longer term, I believe indoor farming is going to play a necessary role. There’s been a lot of backlash against indoor farming because it raised a huge amount of money and hasn’t delivered on expectations. And that criticism is fair, I don’t take issue with it.
What I do think critics are missing is the scale of the long-term challenge the sector is trying to solve. People often say, “Well, everything grown indoors is so much more expensive.” And I say, sure, today. But fast forward a bit. The amount we pay for food is going up. It’s not going down. So when you think about produce and protein becoming more expensive, and the cost of alternative methods like indoor farming coming down over time, eventually, those lines are going to meet. That’s why I say: is it 2035? 2040? 2045? Probably somewhere in that range.
Unless climate change magically disappears or we figure out a radically better way to grow outdoors, which I don’t see on the horizon, we’re going to need these solutions.
Is Genetics the Unlock for Vertical Farming?
Rhishi Pethe: I’ve criticized people for funding vertical farming. There are a bunch of cost drivers involved: energy, labor, capital, consumables required. What are some of the specific technological or operational solutions you think are actually credible when it comes to breaking down that cost barrier? (Relevant SFTW post: “Is Plenty (and vertical farming) the Juicero of agriculture?” January 2025).
If overall costs keep rising, maybe vertical farming becomes more competitive. But as a society, I don’t think we want food costs to go up.
Adam Bergman: We’ve lived through a very unusual period. Food prices stayed mostly flat from around 2000 to 2020. Then, from 2020 to 2024, we saw nearly 20 years’ worth of inflation compressed into just a few years. And people weren’t ready for it.
But I think the flat pricing we saw before was an anomaly. That wasn’t normal, and I don’t think it’s coming back.
What gives me hope? First, vertical farming still has a long way to go. The real opportunity today in indoor farming is clearly in greenhouses. The greenhouse players have proved the model works. The economics check out.
What makes the vertical side interesting is seed genetics. If we’re going to spend serious money on LED lighting in vertical farms, we’d better be tuning the light spectrum to match the seed. We need to make crops grow in fundamentally different ways, to improve taste, increase nutrition, or deliver some other kind of added value. In my view, if you’re building a vertical farm, you need to grow a high-value crop.
So far, I haven’t seen anything that fundamentally increases yield to the point where the vertical-farm economics beat a greenhouse. If someone cracks that, I’ll change my mind. But right now, it’s not a yield play, it has to be about quality, taste, or location.
And when it comes to location, I know people say you can put greenhouses anywhere. I don’t think greenhouses work in all environments. That’s where vertical farming could have a role, going into food deserts or areas where greenhouses just aren’t viable. In the short term, that’s probably the best use case for vertical: fill the gaps where fresh produce is lacking and greenhouses aren’t an option.
Long term, I’m more interested in crop innovation. I believe some crops that can’t be grown effectively in greenhouses today could be grown in vertical farms, and they could create real value. We’re already seeing early signs. Oishii is doing something compelling, though they need to bring down their cost structure. I’m curious to see whether Plenty can build out its strawberry farm successfully. There’s also some exciting work happening in pharma and forestry. For instance, growing plants under LEDs for the first few months before moving them outdoors, that might unlock new value.
But if the industry doesn’t get the seed genetics side right and create a real differentiation, I’m not sure vertical farming will deliver on the potential I think it has.
Rhishi Pethe: I was thinking about energy. We can drive energy costs down but that’s still the big difference between vertical farming and outdoor farming. Outdoors, you get sunlight for free. Indoors, you pay for it.
And now with everything happening around AI, you’ve got to ask: should I sell my power to an AI company or to a vertical farm? Who’s going to pay more?
We’ve already seen this kind of tension play out in Taiwan. They do some rice farming there, but their government stepped in and said, “No, we can’t give water to rice farms, we’re giving it to the TSMC foundry instead.” Because that’s strategic. That’s how they’ll stay protected, by staying valuable to the world.
Adam Bergman: Yes, but what’s interesting, and it ties directly to a concern about food security, is the kind of statement that prioritizes AI over something like rice. If someone says, “Rice is fine, but it’s not as important as AI,” that raises red flags.
Take Taiwan, for example. If that’s the direction they’re heading, then it sounds like they’re planning to become an even bigger food importer than they are today. And how comfortable should we be with that, especially considering Taiwan has China right next door?
If you become dependent on imports and suddenly face a blockade from China, having the world’s best semiconductors won’t help you much, because, as someone once joked, those aren’t the kind of chips anyone can eat.
Rhishi Pethe: I think the bet they’re making is if the world wants those chips, it’ll step in to protect them. And if that protection shows up, maybe it brings some rice along with it too.
Adam Bergman: The old policy of guns and rice; I hear you.
But these are real, honest questions people should be asking about food security. I think we’ve gone the last 50 years without seriously worrying about food. And I do worry that those conversations are coming back.
One encouraging shift, though, is how our thinking about population has evolved. When I first started looking at food and ag tech about a decade ago, everyone was focused on this idea that we were going to hit 10 billion people by 2050, and we wouldn’t be able to feed them.
Candidly, I don’t think that’s the main issue anymore. Now I think the bigger questions are: will we have enough arable land? Will the weather still cooperate enough to grow what we need? At the current trajectory, I’m not convinced that by 2050 we’ll be able to feed the world using the same systems and processes we rely on today.
Rhishi Pethe: I do have one concern about the seed genetics breakthrough: for a seed genetics researcher or company to actually invest the time and resources to say, “Let’s develop new genetics optimized for vertical farming,” the market has to be big enough.
I’ll give you another example. I was visiting some sweet potato farmers recently. It’s a small crop in the U.S., maybe a billion-dollar market at most, and they really struggle to get any university to do research on it. Because even if someone spends ten years researching it, it doesn’t move the needle enough to make it worthwhile.
Whereas with strawberries, people are spending a lot more time and money on research. So how do we get past that barrier?
Adam Bergman: So I was initially thinking about crops like strawberries.
I spent some time recently with someone I’d consider a leader in the genetics space. He told me they don’t even bother looking at vertical farms right now, because every company uses a different process and growing systems.
As long as everyone runs a bespoke system, it’s difficult to optimize the genetics. If you develop genetics for Company A’s system, they won’t work as well for Company B. Eventually, some of these companies are going to have to invest in the genetics side themselves.
I also believe these bespoke systems won’t be used forever. Over time, we’ll see more off-the-shelf technology emerge for indoor farms, which will make it easier to breed for those environments, because the genetics could then be used across multiple operations.It’s a fair challenge: how do you convince outside players to spend the time and capital when the infrastructure is still fragmented?
In some of these categories, the genetics market opportunity will be big enough to justify the investment. We’ve already seen it on the seed side, there are multiple players building seeds for the specialty crop market. What needs to happen is the sector needs to reach a point where it’s more viable and standardized. Once the technology becomes more uniform, it’ll make a lot more sense for someone to step in, develop the genetics, and know they can scale it across multiple farms.
So the question is: will the opportunity be big enough to attract that kind of focused investment?
Capital stack for AgTech
Rhishi Pethe: When I used to work at Bayer, the fruits and vegetables business was kind of the stepchild, while soybean and corn were treated like royalty.
As an investor, what would an investment stack look like that could actually fund the R&D for a new seed variety, something optimized specifically for vertical farming?
I had an SFTW Convo with Shubang Shankar, the managing director of Syngenta’s corporate VC arm. We were talking about robotics and other technologies that take a long time to scale.
He suggested maybe VC is useful in the early stages to de-risk the technology risk. Then corporate strategics, like Syngenta, could step in later to de-risk the commercial risk: things like scaling, distribution, and getting the product to market.
Adam Bergman: Personally, I don’t think the traditional VC model works for many of these industries. The return profile doesn’t make sense, and the time to market is too long. I’m not talking about VCs who specialize in AgTech, cleantech, or foodtech, I’m talking about generalist VCs.
Typically, they don’t know the industry well enough. What often happens is they get excited by the potential, they jump in, and then reality hits. I saw this firsthand in cleantech back in the 2000s.
When the financial crisis hit in 2008 and things got tough, the VCs walked away. I often joke: when the going gets tough, the VCs get going. And honestly, it made sense for them. They’re managing portfolios with 20 companies, maybe 12 are software, 7 are biotech, and one AgTech, cleantech, or foodtech company. So when something needs to get cut, it’s pretty easy to walk away from that outlier.
The kind of funding these sectors need has to come from long-duration investors, people who are willing to take a generational perspective. In my view, that’s corporates, family offices, impact investors, and maybe PE, pension, and sovereign wealth funds investing at a later stage. I just don’t think a generalist venture fits the model at all. And like we talked about earlier, it’s not just the timeline, it’s the lack of blockbuster exits.
If you’re a VC who’s used to getting in and out in five to seven years with the chance of a 50x return, why would you invest in a sector where even the best companies take 10+ years to mature, and if you’re lucky, return 10x? It just doesn’t align with how that business is built to operate. That’s why I believe other types of investors need to take the lead. I often say this sector needs to be led by corporate strategics.
Take digitization, automation, robotics, none of that is new to the broader economy. But in food and agriculture, we’re still in early innings. Strategics bring a level of validation that’s critical. They can help test, de-risk, and commercialize technologies in a way generalist VCs simply can’t. From my perspective, a lot of companies chase the wrong kind of investors. Sure, if you’re a founder and you land a big-name Sand Hill Road investor, it sounds great at parties. It makes a nice headline. But in this space? If I had to bet, I’d say those companies don’t tend to fare well in the long run.
Rhishi Pethe: Is this more of a timing issue in terms of where we are in the evolution of the industry?
You mentioned robotics and digital technologies aren’t new in other parts of the economy, but they’re still relatively new to ag. So let’s say 10 to 15 years from now, if we see more automation, more digital infrastructure built into the industry, do you think VCs will make more sense then? Or do you think it’s more about the nature of agriculture itself, the long, natural cycles of crop growing and product development, that just doesn’t align well with the typical VC model?
Adam Bergman: Until the ag sector can make decisions faster and adopt more technology earlier, I think it’s going to be tough. We’re talking about a sector where, even if a farmer wants to adopt your technology, the rollout is incredibly slow. In year one, maybe they’ll try it on 5% of their operation. Year two? Maybe 10 to 15%. Year three, they might get to 25%. And if everything’s going great, maybe by year four they’re at 50%. But getting to full implementation? That usually doesn’t happen before five years, and honestly, it probably takes longer.
Now, compare that to software. If you’re selling enterprise software to a company, are they going to roll it out everywhere on day one? Probably not. But if it works and the economics make sense, it’s likely fully implemented by year two. So the time horizon in ag is just fundamentally different, and I don’t see that changing anytime soon. That said, I often go back to my time working in the industrial sector more than two decades ago.
I used to visit big manufacturing facilities that were incredibly labor intensive and lacked much technology. They weren’t very efficient, but the people running them thought they were. You’d ask how well they were operating, and they’d say, “We’re at 97% capacity.” But were they really? Or were they just hitting 97% of their best month ever? That’s a very different metric. Then you’d visit a newer facility, one that was built around robotics, automation, IoT, AI, machine learning. You’d ask the same question: “How efficiently are you running?” And they’d say, “We’re at 97%.” Again, 97% of their best month, but that best month might be 125% better than what the old plant ever achieved.
That’s how I see the farm of the future.
Farms are going to run on robotics. They’ll use automation, AI, machine learning, IoT, it’s all going to be integrated. The farmer will carry an iPad that shows what’s happening, and honestly, the system will probably do it for him. That’s where I see the sector heading over the next two decades. So could ag become a better fit for venture capital down the line? Possibly. But unless the adoption cycle speeds up, I’m not convinced a generalist venture is the right fit.
Not yet.
Rhishi Pethe: So is the takeaway that for the next 15 to 20 years, generalist VCs should stay out of this space?
Adam Bergman: I’d say generalist venture capital should think very carefully before investing in this sector.
And this isn’t a new perspective for me. I saw it firsthand during the first wave of cleantech, from 2005 through 2008.
Back then, generalist VCs poured money into solar, into biofuels; it didn’t work out. They went big into electric vehicles, into energy storage; again, didn’t work out. Then they jumped into alternative proteins and indoor farming. And once again, we saw the same story: overcapitalized, under-delivered. So this isn’t theoretical. There’s a pretty consistent track record here. Generalist venture capital doesn’t typically specialize in slow and steady. If you go back to the old analogy of the tortoise and the hare, agriculture, food, and cleantech are the tortoise. Venture capital is the hare.
And to me, that’s a misalignment.
It’s not that either one is bad, it’s just that they’re built for different types of races. Venture tends to push companies to move faster than the market, or the underlying technology, can actually support. And that pressure usually leads to a bad outcome.
Analogies with Solar
Rhishi Pethe: You’ve brought up solar a couple of times now. If you asked me to name the top five solar companies today, I’d probably struggle. But when I look around my neighborhood, almost every house has solar panels on the roof and a battery pack in the garage.
A service provider can just come in, buy panels off the shelf, install them, and make money on the service. It’s become a very distributed system.
In solar, or even more broadly in energy, you have purchasing power agreements (PPAs). You know there’s a buyer lined up, and that gives you the confidence to invest in infrastructure.
Do you think there’s a parallel structure that could exist in ag? Maybe something like a PPA for vertical farming or controlled environment ag more broadly?
Adam Bergman: Sure, that’s a fantastic question, and it’s something I’ve spoken about before. While I’ve shared my excitement around indoor farming, my biggest fear is what I call the solar corollary.
When I started working in solar, there was just one gigawatt installed globally in 2004. Fast forward 20 years, and today we’re at around 2,000 gigawatts. I don’t know the exact CAGR, but that’s clearly explosive growth. And yet, almost no one today can name a major solar company. At the beginning, there were a few recognizable names. In the U.S., it was SunPower and First Solar. Germany had a few players too, but many of those went bankrupt or got acquired in fire sales.
Then came a wave of Chinese manufacturers. They used solar manufacturing as a jobs program, often operating at limited gross profit, sometimes just breaking even. And the pattern repeated: one Chinese company would rise to dominate global solar sales, only to go bankrupt five years later, then the next one would take its place.
That’s the fear I have for controlled environment agriculture (CEA): the sector could grow rapidly and become a massive success story in terms of scale, but never produce standout, profitable companies. There’s a real risk that we end up with an industry that thrives on volume, not margin. And that’s not far-fetched. I often remind people: if you’re running an indoor farming company, and your end product is produce, you’re playing in a brutally tough, low-margin business.
The traditional produce industry struggles to hit double-digit EBITDA margins. So I’m not sure why anyone expects a CEA company to deliver 25% EBITDA margins with 50% gross profit, just because it’s growing indoors. Now, if you’re building a tech company that sells systems, infrastructure, and/or recurring services to CEA operators, that’s a different story. That business model has a shot at scale, higher margins, and profitability. But if you're farming lettuce or strawberries indoors, and trying to compete on produce margins? That’s a much tougher path to success.
Rhishi Pethe: But what’s happened with solar is the tech and the product you need have basically become commoditized.
So maybe something similar could happen in ag: the tech, the robotics, the know-how to set up a system, could all become commoditized too.
And once that happens, the real competition shifts to operational efficiency, customer acquisition, and service delivery. It becomes a distributed system, you could place it wherever you want.
Adam Bergman: Without a doubt. But I’d argue that if CEA becomes as wildly successful as people hope, it may actually start to resemble outdoor farming in many ways. You could have brands, outsourcing models, or integrated supply chains, just like we do in traditional agriculture. So expecting CEA to end up looking fundamentally different from outdoor agriculture might be a mistake.
In fact, I think the two are going to converge.
Look at Taylor Farms, they’ve already started investing in indoor farming. I know Tanimura and Antle (T&A) has indoor-farming operations too. Once the technology proves itself, and if you’re Taylor or T&A and your top priority is delivering the best product to your customers, you're going to explore every possible method for growing leafy greens.
It’s the same story with alternative proteins. That’s why Tyson has invested so heavily in what I call “future proteins.” They’re not betting that it’s going to take over in two, three, or five years. They’re thinking generationally. They’re buying optionality. And where some people view technology as disruptive or destabilizing, I tend to believe the long-term winners will be the incumbents.
Energy, transportation, mobility, power–outside of Tesla, it’s hard to name another company that came in, disrupted the sector, and won. The incumbents almost always find a way to adapt, or make an acquisition to stay relevant. So I think it’s wrong to assume the incumbents won’t change. They will change, either by choice or by force. And the ones that don’t? They’ll go out of business.
Will AI disrupt or strengthen incumbents?
Rhishi Pethe: When people talk about how AI is going to disrupt everything, I actually think it’s going to make the incumbents even stronger. Because even if you build the best technology, you still need distribution to get it out into the world.
And the incumbents control the distribution. So at the end of the day, you still have to go through them.
Adam Bergman: Absolutely, 100% correct. When I look at where most of my clients fail, or at least where much of the failure happens, it usually comes down to distribution.
They can’t get to the end customer.
Whether you're selling biologicals to farmers or future proteins to consumers, the challenge is the same: you're in one place, your customer is in another, and the traditional distribution system in between doesn’t work in your favor. Why? Because you're a small company. You’re not going to move the needle for the big distributors. So they don’t prioritize you. And that disconnect becomes a major issue. It stops a lot of promising innovations from ever scaling.
Rhishi Pethe: You talked about food security and how different regions experience it differently. I grew up in India. We never really faced food security issues, we always had what we needed in the market.
But my parents used to talk about times during the wars with Pakistan in the 1960s and ’70s, when the government asked people not to eat rice one day a week so they could reserve it for the soldiers. People followed it as a patriotic duty.
Given your global experience, where do you see the most interesting market opportunities outside of North America?
To give one example, when it comes to payment infrastructure, India’s UPI system is light-years ahead. You can just scan a QR code and pay, whereas here in the U.S., we’re still behind on that front.
Where do you see those kinds of leapfrog opportunities happening in ag or food?
Adam Bergman: You’re leading the witness a little, because I’ve said this before: India is probably the most interesting country to me when it comes to AgTech innovation. In fact, I might even put it ahead of the U.S.
I often say India is a first-world country when it comes to digitization and information technology, but a third-world country when it comes to agriculture.
And at some point in the next decade, those two realities are going to merge. I’m confident agriculture will rise to meet the standards of the first world, not the other way around.
I’m optimistic that India has the potential to be a major agricultural producer, but it currently operates with small farms, a highly inefficient distribution system, limited cold chain infrastructure, and a lot of friction. That’s going to change.
When I’ve traveled there, I’ve seen the agricultural system up close, and what stands out is how different it is from the U.S. Most Indian ag startups focus on making the supply chain more efficient, fintech, logistics, aggregation. Compare that to the U.S., where my clients are more likely working on ag biotech, alternative proteins, or indoor farming. India sees a massive economic opportunity by fixing systemic inefficiencies, especially around food waste.
And what’s interesting is that food waste in India, and in many less-developed countries, happens much earlier in the value chain, between the farm and the consumer. In contrast, in the U.S., food waste tends to happen at the supermarket, the restaurant, or in households.
So in India, solving distribution is solving food waste. And that’s where a huge opportunity lies. That change may come through policy or regulation, but even if it doesn’t, Indian entrepreneurs are incredibly resourceful. That’s why I’m so optimistic.
I also see a lot of innovation continuing to come out of Israel. Countries that face major constraints tend to find solutions. And I think the Middle East will fund much of this innovation, both in India and in Israel. Why? Because they have some of the biggest food security challenges in the world.
Countries like Saudi Arabia don’t want to become the next Libya or Egypt, where food shortages led to riots. They’re acutely aware of what happens when people can’t access basic food. So we’re going to see continued Middle Eastern investment in AgTech, food innovation, and efficiency. India, in particular, has the potential to become a major food supplier to the Middle East. And there’s a regional dynamic forming, a triangle between India, the Middle East, and Africa. Bring in Israel’s technology, and you have the potential for a powerful innovation engine.
Now, I often compare this to solar. Industries like food, ag, and energy are centuries, or in ag’s case, millennia old. They’re essential, massive, trillion-dollar sectors often dominated by a few entrenched players. Those incumbents have capital, brand power, and distribution, and they resist disruption. But in these less-developed regions, innovation has room to grow. India has the talent and the entrepreneurial drive. The Middle East has the capital. Africa has the land and the demographic advantage with a young, growing population.
I think all three regions offer a very exciting path forward. The last region I’ll mention is China. I haven’t spent as much time on it, but I find it fascinating. In cleantech, one universal truth used to be: whatever the hardware product, China would eventually dominate it. They did it in solar. They did it in batteries. They’re leading in EVs. But food and ag? That’s a different story.
When I walk into a U.S. grocery store, if I see food labeled “Made in China,” I’m not buying it. And I don’t think most U.S. consumers will either. In most people’s minds, food and safety don’t naturally align with “Made in China.” So unlike cleantech, where China dominated because it was largely about hardware, I don’t think they’ll play the same role in food tech. That opens the door for a much more geographically distributed innovation story in agriculture and food, and I think that’s a good thing.
Rhishi Pethe: India tried to change some of their farm policies a couple of years ago. But it turned into a complete mess. (I talked with Venky Ramachandran about this topic in 2021)
In every other country, the farming lobby is strong. Even here in the U.S., where farmers make up just 1 or 2% of the population, they still hold a lot of influence.
When you think about policy, what are one or two of the most impactful changes, maybe at the federal or state level, that could really accelerate the adoption of technology in agriculture without distorting market fundamentals?
Adam Bergman: Interestingly, there’s a bill that’s been introduced in Congress, I believe it’s the 2025 Agriculture Innovation Act. (It offers a 30% tax credit for qualified investments in innovative agricultural technology projects.) The proposal includes an investment tax credit that can be used for new equipment. And it’s not limited to indoor farming, any farmer purchasing new equipment could take advantage of it.
I think that’s a great step. The more we can do to support a 21st-century agricultural policy by integrating innovation, the better. That kind of policy has worked really well in other sectors. Take solar, for example, the investment tax credit has been one of the biggest drivers of solar adoption in the U.S.
Why we wouldn’t apply a similar incentive to agriculture is beyond me.
That said, we still have some policy issues to figure out. I think our current subsidization of corn and soy, and our ethanol policies in particular, are economically flawed. And here’s what really concerns me–I’m a huge supporter of agriculture and farmers, and my in-laws were dairy farmers, so this is personal–I’m afraid we’re going to wake up within the next decade and realize no one told farmers what was coming.
As electrification of vehicles ramps up, it’s going to reduce demand for ethanol. That, in turn, could cut corn prices significantly, possibly by 50% from where they are now, and farmers are already unhappy at current price levels. So we need to start having those conversations and rethinking our agriculture policies now, not later. Because if we don’t, it’s not just the farmer who’s going to suffer. The whole country could feel it.
We could be one or two policy missteps away from food insecurity. And that’s a real risk we shouldn’t take lightly.
Rhishi Pethe: Here in California, water is a huge challenge. With SGMA, people have strong opinions, and a lot of them hate it for different reasons. I really believe water is going to be one of the defining issues of the 21st century.
Maybe that’s shaped by growing up in India, where water scarcity has always been real. Even today, my parents get only one hour of running water each day. That’s how it was when I was a kid, and honestly, it hasn’t changed much.
People talk a lot about irrigation efficiency, but beyond that, are there any other compelling, investable approaches in ag-related water technology?
Adam Bergman: So you mentioned advanced irrigation, and that’s spot on. And it’s not just advanced irrigation, it’s digitized irrigation. The amount of water you can save just by linking your system to a weather forecast is huge. If it’s going to rain in 48 hours, you can skip irrigation, and that alone could prevent a lot of unnecessary water use.
I’ll say something that might not align with everyone’s view. I live in San Francisco. I can look out my window and see the Bay, and if I head seven miles across the city, I see the ocean. So I’m less concerned about water here. Yes, there’s a debate to be had about the cost and energy requirements of desalination. Is it viable today? Maybe not. But I think it will be over time.
Now, if I lived in Texas, or parts of the Midwest, I’d be far more concerned about water and agriculture. In California, I see it more as a cost and energy issue than an existential threat. And I believe costs will come down. That being said, I am not sure water will be a long-term concern in California, as I’ve joked before: if you told me that in 15 years, a lot of California’s farmland had been converted into greenhouses surrounded by solar fields, I wouldn’t be shocked. That setup could address both water use and energy supply. You’d irrigate efficiently and power the system with solar. It’s a logical shift.
But there’s one big question I keep thinking about, something I don’t hear enough people talking about: the salinization of our aquifers. In California, we’ve drawn them down so much that seawater has started to seep in. That’s a major issue. And here’s the real concern: do we have the seed genetics to grow crops in increasingly saline soil? That’s a different question than the one you asked, but honestly, I’m just as worried about that as I am about water availability itself.
Rhishi Pethe: I guess everything comes back to seed genetics, doesn’t it?.
Adam Bergman: One thing I often say to people, and I find it fascinating, is this: If you look at the $40 billion that’s been invested into ag and food tech over the past decade, almost none of it has gone into seed genetics. It’s shockingly low. For all the excitement around automation, robotics, and digital tools, the foundational layer, genetics, has received very little attention or capital.
Rhishi Pethe: But most genetics investment sits with the incumbents. The $40 billion figure doesn’t even include all the billions that a company like Bayer is spending.
And even then, most of their focus is on corn and soy. So maybe that doesn’t really count when we’re talking about broader innovation in seed genetics.
Adam Bergman: But even where we have seen investment, the results haven’t always panned out. Take Unfold, for example, that was the indoor farming genetics company that got spun out of Bayer. It didn’t work out, and they ended up bringing it back in-house. So yeah, it’s always interesting to me. I think genetics is just hard. And getting people to change what they plant or how they grow is even harder.
That said, we do have examples where it’s worked. Everyone points to Roundup Ready corn. It’s the classic case, year one, you didn’t use it, but your neighbor did, and suddenly your yields were falling behind. By year two? Everyone had adopted it.
But beyond that, there aren’t many other slam-dunk examples. And that’s why I keep coming back to it, because we’ve actually seen what success looks like in this space. It’s rare, but when it hits, it’s transformative.
Rhishi Pethe: What’s one innovation or technology trend that seems niche or struggling today, like vertical farming or cultivated meat, where it feels like there are 99 people screaming, “This is never going to work,” and only one Adam quietly saying, “Hold on, give it time”?
What’s something which you think could turn out to be unexpectedly transformative for the global food system?
Adam Bergman: I think the breakthrough is going to come from the alternative protein sector, or what I often call the future protein space. And the reason I say that is pretty straightforward. Like I’ve joked before, if you’re building out indoor farming infrastructure in the Middle East and a food crisis hits, I don’t think the rulers of Saudi Arabia are going to calm the population by saying, “Don’t worry, we’ve got salad.”
You can offer all the cucumbers, tomatoes, and lettuce you want, but that’s not going to prevent unrest. They need something protein-based. It could include grains, sure, but protein will be the focal point. That’s where I think the evolution of technology becomes critical.
I’m a big believer that technology gets figured out, eventually. I always say: it takes longer to develop than people expect, but once it’s ready, scaling up tends to happen faster than anyone predicts. Right now, we’re still facing real technical hurdles in optimizing precision fermentation, biomass fermentation, and cultivated protein. These challenges aren’t going away overnight, but over the next decade, with focused investment and research, I think we’ll solve them.
One of the structural problems in the space today is the use of equipment originally designed for biopharma, which is incredibly expensive. And sure, we want our food to be clean and safe. But the bar for biopharma is significantly higher than it needs to be for food. So we have to figure out how to bring down infrastructure costs, especially for scaling up production.
I’ve heard something fascinating: if we wanted to produce just 10% of global protein through fermentation using bioreactors, we’d need every single bioreactor that exists in the world today.
That’s just 10%.
So if you think about what’s really required, we’ll need a massive scale-up effort, and we’ll need to radically lower infrastructure costs. Of all the areas we haven’t touched on yet, I actually think this is one where we could see success. But let’s be honest, we’re nowhere near that point yet. There’s real work to do. It’s going to take time, meaningful time, to reach the scale, cost, quality, and taste required for mass adoption.
That said, if we get there, and I think we can, this could be one of the most important transitions in the global food system.
Rhishi Pethe: Thank you Adam for this fascinating conversation! The food and Agtech sector is definitely in for an interesting ride!