Editor's note: What follows is a look at key points offered during the Bayer Global Media summit held recently in Leverkusen, Germany. While Bayer is in talks concerning Monsanto, this was not discussed during the event. If you want more on that process, the company advises visiting advancingtogether.com.
Liam Condon has a big job ahead. As member of the Bayer Board of Management and Head of the Crop Science Division, he's charting a course for the future with an aim to take on some major global challenges. During a global media event last week in Germany, Condon outlined some of those challenges, which include keeping on course as the world ag market remains soft. Theme of the event – Future of Farming Dialog.
But to start this was a business report on division performance, and Condon offered these details. "We have had strong relative growth," Condon says, looking over the past four years from 2011 to 2015 where growth averaged about 9%. "Looking at the current year we're expecting the market to decline." The result is that Bayer will perform at about the same level it did in 2015, and he adds that the company is expecting a slow upturn by the second half of 2017.
But the head of a company can't wallow in the market as it stands, it must look to the future and the opportunities it can capture. Condon sees three major challenges for agriculture – innovation, sustainability and collaboration.
Condon notes that no company has all the pieces so collaboration will be important, but it starts with innovation. He joked that it's difficult to excite scientists with sales numbers, but that they all want to make a difference. "At Crop Science everybody is working for this every day...this for us translated into innovation that something, somehow improves farming," he says.
It's this focus that drives innovation, rather than simply talking about the numbers. And innovation will be crucial given the challenges facing farmers (see graphic below)
WHAT'S AHEAD: The challenges facing agriculture require innovation, sustainability and collaboration to overcome, according to Liam Condon, who heads up the Crop Science division at Bayer.
The focus is on integrated solutions and that seldom is there a single solution to a problem like weed resistance. "It's never only about one herbicide," he says. "It's not about herbicides and traids, but also about agronomic advice. It's about something that we do very actively in the field promoting diversity in active ingredients, rotation, rotation of crops and rotation of ag methods."
What does that mean for Bayer? It means a pipeline of products on the way between 2016 and 2020 that includes biological, chemical, seeds and trait products. He notes that the pipeline could add, at is peak, another $5.6 billion to overall sales in the coming years.
To get there requires a continuous investment in research and development, which Condon says has been about 10% of sales over the past five years, and that this will continue. But that that doesn't include the investment in capital purchase like labs and infrastructure.
That investment in infrastructure, helps support the R&D, and that burgeoning product pipeline. Yet collaborations are in the works too as Condon explained. From working with Targenomix on plant metabolism and genetic markers to Embrapa a Brazilian firm working on a range of ag technologies, Bayer is developing partnerships.
And the company is supporting open innovation with programs like Grants4Targets and Grants4Traits. The firsts is encouraging the search for novel molecular targets for drugs and crop protection. Grants4Traits seeks to work with firms that can help innovate the trait development too.
There's more as the company moves ahead. In traits, for example, new tech tools like CRISPR-Cas for gene editing will be important, as will more computational life science work – where in fact the company will target genome work to match specific challenges faced.
RICH PIPELINE: The product development cycle at any company often means looking at what's coming. This is a look at the Bayer pipeline for the next five years.
Digital farming is also part of the conversation where Bayer is developing its own approach to this business. "At the end of the day we want to get the right products and treatments on the right acre with customized solutions," he says. The aim would be for farmers to see higher output with ideally less inputs, and that will involve working more closely with data from satellite images to sensor technology.
Innovation is driving a lot of decisions for Bayer, but sustainability is top of mind and Condon says the company is turning its attention to the more than 500 million small holder farmers in the world. Yet Condon sees the issue as one where multiple issues need to be addressed and that no single company can take on the challenge. From access to finance to basic agricultural training, these small holders will need support for the future, and while technology may have a role, Condon adds: "With smallholders the tech comes last, there are basics to address first."
Condon didn't set a small goal for Bayer in his presentation and when he wrapped up his comments he emphasized where the company is heading: "I come back to what I said at the beginning, our purpose is shaping the future of farming," he says. That future that includes working with outsiders for innovation, finding internal and externa partners and making a huge commitment to sustainability and collaboration. Not a small challenge.