Trace minerals are essential to maintaining health and productivity in livestock animals. Traditionally, trace minerals were fed based on the minimum level required to overcome a deficiency symptom and not necessarily to promote productivity. Feeding adequate amounts and sources of trace minerals is essential to optimize production, health and feed costs and to minimize effects on the environment.

The growing uncertainties associated with trace mineral requirements and supply puts nutritionists in the dilemma of balancing the costs of either underfeeding or overfeeding trace minerals. A deficiency will impair health in dairy cows, leading to problems such as retained placenta and mastitis, and can decrease reproduction and lactation performance. On the other hand, excess supply will inflate feed costs and increase the risk of environmental pollution and toxicity, and it may also result in unwanted antagonistic interactions among minerals, leading to poor absorption.

Dietary trace minerals are supplied from feedstuffs and mineral supplements. The National Research Council (NRC) requirements are based on both sources of trace minerals, accounting for their absorption coefficients. Feed trace minerals usually have lower absorption coefficients compared with supplements. Furthermore, mineral supplements differ in their bioavailability. The NRC (2001) requirements appear to be adequate for most minerals, except for manganese and cobalt, for which new data suggests higher concentrations.

Inorganic minerals generally have lower bioavailability compared with organic minerals. Inorganic minerals become free in the rumen and can interact with other feed components. They can also bind to other minerals and pass through the gastrointestinal tract unabsorbed. Inorganic minerals may also include a source of contaminants, such as the heavy metals cadmium and lead. The presence of inorganic trace minerals in premix feeds can negatively affect the stability of enzymes and vitamins. To circumvent these bioavailability and absorption uncertainties, inorganic minerals are often supplemented at multiples of NRC requirements, which may further reduce their absorption and may reduce animal health and performance.

The Total Replacement Technology™ (TRT) mineral program at Alltech offers trace minerals (Bioplex®, Sel-Plex®) to provide highly available and traceable sources of minerals that support the animal’s requirements.

Most lactation diets will supply adequate to excessive amounts of iron, while other trace minerals will be supplied at amounts below NRC requirements, ranging from 40 percent to 85 percent. The TRT program should accommodate most situations but may need to be adjusted for specific situations in which extreme dietary concentrations are found. Regular assessment of trace mineral levels in forages is critical to building a more efficient mineral nutrition program.

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“You are what you eat” might strike you with a bit of fear or guilt depending on what it is that you are munching at the moment. While the origins of this phrase are probably as old as mankind, fundamental research now supports the importance of eating the right things, at the right time, both in humans and animals. 

Our genes are the blueprint that defines who we are. How genes express themselves in the presence of nutrition, to produce proteins, is called “gene expression.” The science that defines how we understand this interplay between what we eat and how our genes function is called “nutrigenomics.”

A small chip, representing all the genes in the tissue of the individual being examined, allows scientists to predict precisely what effects to expect from dietary changes by showing which genes are activated and deactivated (in other words, turned “on” or “off”).

Just over ten years ago, Alltech opened a first-of-its-kind facility dedicated to the study of animal nutrition’s impact on gene expression. This study of nutrigenomics has allowed scientists to determine what outcomes to expect from feeding specific foods, feeds and dietary supplements to animals without waiting the months or even years that are typical in traditional farm trials. Additionally, nutrigenomics is minimally invasive research, requiring little from animals, such as minor bloodwork tests.

Over the 10 years since the Alltech Center for Animal Nutrigenomics and Applied Animal Nutrition opened, nutrigenomics has been used to:

• Understand how specific foods and diet structures change gene expression.
• Quickly screen and identify new nutrients with similar benefits to existing elements of the modern livestock diet.
• Predict responses to novel nutrients or foods.

10 Nutrigenomics Breakthroughs

1. Truly Amaize-ing

Although considered “amazing” by some farmers who use it, Amaize® from Alltech was a product with an elusive mode of action.

Cattle and other ruminants rely upon their first stomach (the rumen) to break down fiber. Enzymes such as Amaize should help with this digestion process. Using traditional techniques, researchers demonstrated that adding Amaize resulted in carcass weight gain for beef and greater milk production in dairy.

Examining tissue samples using gene expression, however, added much more to the story. The enzyme’s impact on the animal’s metabolic system showed that Amaize optimizes animal growth.

Several key changes were noted in particular. Genes relating to the expression of insulin-like growth factor (IGF-1), insulin receptors and the growth hormone were affected positively. These genes all have a direct correlation to increasing metabolic activity and therefore body growth.

Nutrigenomics allowed scientists to precisely understand the true function of Amaize, making it possible to issue specific recommendations to farmers of how and how much to incorporate into their cattle’s diets to maximize production and profitability (primary scientist: Dr. Ronan Power, Alltech). 

2. EconomasE: An economical alternative to vitamin E

In essence, EconomasE is an antioxidant supplement, demonstrating similar biological functions to vitamin E, but more economically.

Vitamin E is known throughout the world for its powerful antioxidant properties. Antioxidants inhibit the oxidation of other molecules, which can produce free radicals. Free radicals, unpaired loose electrons, cause damage to cells in the body. Generally, therefore, a person who consumes antioxidants will be healthier and in better shape to fight off illness, which is why doctors advise eating antioxidant-rich foods like leafy greens, nuts and certain berries.

Humans aren’t the only ones to benefit from antioxidants; all animals do, and this is why vitamin E is routinely included in the diets of all production animals. Vitamin E, however, is very expensive, and producers often seek ways to minimize its inclusion in their feed. The caveat is that reduction of vitamin E can increase the likelihood of requirement for antibiotics.

Using nutrigenomics, researchers were able to identify vitamin E’s mode of action and then set about identifying other compounds or combinations with similar effects. EconomasE proved capable of replicating the gene expression changes seen with vitamin E, and this was confirmed in 46 subsequent trials with poultry, swine and cattle. EconomasE maintained meat quality and the beneficial, protective antioxidative effects of vitamin E without the high price tag (primary scientist: Dr. Karl Dawson, Alltech).

3. Using zinc to facilitate development

Zinc is a trace mineral required by all animals to grow and develop properly. It supports immune function, allowing the animal to overcome immune challenges. In animals, through optimizing the immune response, it reduces risks associated with a severe infection known as necrotic enteritis (NE), which costs the poultry industry alone an estimated $5 to $6 billion globally and has mortality rates of up to 1 percent per day.

Necrotic enteritis is caused by the pathogenic bacteria family of Clostridium perfringens, resulting in lesions of the intestine that inhibit the absorption of nutrients, further weakening the sick animal and sometimes leading to death. In the last few years, scientists have been searching for ways to reduce the effects of necrotic enteritis in production animals such as poultry, pigs and cattle.

Nutrigenomics also confirmed that the form of zinc used is important. Forms such as zinc oxide and zinc sulphate that are typically used in animal diets, and in human supplements, are less effective than those connected to mixed peptides, which impact how the zinc is absorbed. Treating the animal in a holistic manner, supplying it with nutrients in the optimal form, enables that animal to be far better prepared to fight off potential infection, resulting in less antibiotic use and better efficiency of food digestion, both of which will save poultry producers (and consumers) billions of dollars annually (primary scientist: Dr. Daniel Graugnard, Alltech).

4. Mitigating myopathies in meat

As recently as five years ago, a condition known as “woody breast” wasn’t even on chicken producers’ list of concerns. Now, it is credited with losses conservatively estimated at $200 million dollars in the U.S. and affects chicken producers in Brazil, Spain and Italy, amongst others. An affliction of the chicken breast, it results in tough, chewy and otherwise inedible meat.

While genetics certainly play a factor, woody breast is generally considered to be directly correlated to how fast producers grow their chickens. Consider that in 1930, the average chicken was slaughtered at 2.5 pounds (1.1 kilograms) and took 50 days to gain each pound of weight. Less than 100 years later, we grow chicken to 6 to 8 pounds live weight, and they can put on a pound every eight days!

At a scientific level, fast-growing chickens are being affected by hypoxia (low blood), increased oxidative stress, inflammation and an increase in fibrofatty tissue.  From a consumer perspective, this results in chewy chicken and a generally unpleasant eating experience. However, understanding gene expression changes through nutrigenomics has enabled the development of a feed program that decreases the oxidative effects within the bird, resulting in normal tasting breast fillets for consumers (primary scientist: Dr. Rebecca Delles, Alltech).

5. Actigen: A stronger next generation of a proven success

For many years, Bio-Mos® has been a star ingredient in animal feed. It supported animal performance naturally by reinforcing the function of the digestion system and enhancing feed efficiency.   

The challenge was that the nature of natural is variation: color, odor and particle size relating to the natural process of production. Producers wanted the benefits of Bio-Mos, but they wanted it to be more concentrated, make it more economical and make it traceable.  

Nutrigenomic research quickly confirmed Actigen®’s similarities to Bio-Mos but also showed it to be 2.5 to five times more powerful.

Subsequent animal feeding trials later proved Actigen’s ability to help animals achieve their genetic potential. However, nutrigenomics confirmed its biological value much earlier, in a matter of weeks rather than months or years (primary scientist: Dr. Colm Moran, Alltech).

6. You are what your mother ate: The science of epigenetics

Epigenetics, or how an environment impacts the expression of inherited genes, is the next science that we expect will revolutionize the way we think of nutrition. In this case, what the parents ate, and what the parents of their parents ate, affects gene expression. And, it goes beyond nutrition. Studies have shown that overeating, undereating, exercise and smoking all have potential benefits or deleterious effects on future generations.

Pregnant sows at the world’s largest pig farm were fed Actigen during the last trimester and demonstrated epigenetic benefits. Tissue samples from their offspring exhibited gene expression changes suggesting stronger immune systems and enhanced nutrient uptake. So, as epigenetics suggests, feeding the mothers Actigen resulted in pigs that were much better off than those whose mothers did not receive it.

Healthier piglets will grow better, be more efficient, have stronger immune systems and less likelihood of disease infections/need for antibiotics (primary scientist: Dr. Kristen Brennan, Alltech).

7. Programmed nutrition: Conditioning gene expression

Within the lifetime of a person or animal, genes can be conditioned. In other words, we can design specific feeding regimes that prime the genes so that when a second diet is introduced, those genes express in ways that are more beneficial for the animal. This can be especially of benefit in the cattle industry, where cattle are bred and born in one location and often exchange hands three or four times.

Programmed nutrition shows that when newborn animals are fed supplements at specific levels and specific times, their bodies can better learn to utilize and retain these nutrients. As the animal grows, they become more efficient and require fewer nutrients than animals receiving excess supplements.

One example is EPNIX®. Part of a feeding program designed for genetic conditioning, the timing of feeding EPNIX to cattle is critical. It is a two-part process: the first part conditions the animal’s body to utilize nutrients better and the second part involves feeding the optimal nutrients.

EPNIX is a natural feed program that can positively improve cattle performance, meat quality and even reduce the environmental impact of beef farming (primary scientist: Dr. Vaughn Holder, Alltech).

Check out this podcast by Alltech research scientist Dr. Vaughn Holder to learn more about EPNIX.

8. In ovo feeding: Feed the egg before the chicken

Typically, the time from when an egg is laid to when it hatches is 21 days, almost the same amount of time it takes the chicken to grow. So it’s not surprising that poultry producers are increasingly wondering what nutrition a chick receives inside the egg.

Using nutrigenomics, scientists can look at what happens when different nutrients are introduced into the eggs. When used correctly, in ovo (Latin for “inside the egg”) feeding methods can be a powerful way to improve the development and health of the animal.

Careful egg injections of tiny doses of water-soluble sugar called MR8, from a probiotic yeast, resulted in baby chicks with stronger immune systems at birth and more efficient digestive systems. Not only that, but their hatchability increased, with more chicks born and improved survivability in the first week. Additionally, nutrigenomics showed a more developed digestive system physiologically and structurally, giving the bird a strong head start when compared to chicks that didn’t get the sugar from the probiotic yeast.

Today, implementing in ovo feeding requires special machines for use in hatcheries incubating thousands of eggs. However, the technology is quickly emerging to make in ovo feeding a strong part of poultry nutrition’s future (primary scientist: Dr. Rijin Xiao, Alltech).

 9. Serving salmon sans sea lice

Fish have never been more popular with consumers. As such, fish farming, or aquaculture, has become very important. In fact, more fish now come from farms than are caught in the sea. Yet, aquaculture presents its own challenges, including managing diseases and parasites. Sea lice alone cost the aquaculture industry an estimated $1 billion dollars a year. The threat of sea lice to salmon is not new, and salmon have developed their own protection by the secretion of a mucous layer encompassing its scales. This works, but when the sea lice are big enough, they can harm the fish and sometimes even kill it.

Until now, no annotated gene chip for salmon existed. The only fish species available was zebrafish, which is more likely to be found in your child’s aquarium! Now, a new salmon gene chip allows researchers to test all kinds of nutritional changes from a nutrigenomics perspective, and already evidence has been generated showing how to reduce the threat of sea lice to salmon.

Scientists have learned how to harness the natural immune system of the fish. Dr. Keith Filer and the research team at Alltech have discovered how to help fish produce more of the mucous-producing cells, making them slimier and thus more difficult for the sea lice to attach. For more on sea lice and the salmon industry, check out “For salmon’s sake: Seeking solutions to sea lice” (primary scientist: Dr. Keith Filer, Alltech).

10. Retooling our approach to Alzheimer’s

From humankind’s perspective, the most important work at Alltech’s nutrigenomics facility is with a selenium compound called AT-001. Nutrigenomic studies have indicated this specific selenium has the ability to change biochemical pathways associated with many serious diseases such as Alzheimer’s or other neurodegenerative diseases.

In collaboration with the late Dr. William Markesbery, the former director at the University of Kentucky’s Sanders-Brown Center on Aging, Alltech began testing AT-001, using a well-established mouse model of Alzheimer’s disease (AD) to evaluate its effects on neurodegeneration.

AT-001 reduced the incidence of clumps of misfolded proteins, known as amyloid plaques, often associated with Alzheimer’s, by 45–50 percent in the brains of these AD mice. Furthermore, the overall destruction caused by oxidative damage in the brain tissue of these same animals was reduced. For example, oxidative damage to both DNA and RNA was reduced by 35 percent and 60 percent, respectively.

Now tested in other animal species and other tissues, AT-001 has been found to significantly increase mitochondrial activity. Mitochondria are the organelles responsible for producing energy in cells and are thus essential for life. It is well documented in scientific literature that even small decreases in mitochondrial activity are linked to the occurrence of at least 50 different illnesses.

These initial results have opened an entirely new field of research, evaluating the physiological impact of more than 100 individual sub-components of AT-001. Three small selenium compounds have displayed remarkable activity in cell culture and animal models with type 2 diabetes. In addition, the compound in AT-001 that is responsible for the reduction in amyloid plaques has been identified and characterized. AT-001 is currently in Phase II human clinical trials in a population of elderly subjects who are at risk of developing AD (primary scientist: Dr. ZJ Lan, Alltech).

The past 10 years have seen incredible scientific and technological advancements in our understanding of nutrigenomics. We believe these breakthroughs are only the beginning as technology and data analytics continue to advance. For humans, animals, and livestock and food producers, the future looks optimistic.

Big data is ready for the farm. But is the farm ready for big data?

Agriculture is the least digitized major industry in the United States, according to a recent study by the McKinsey Global Institute.  

Farmers sometimes struggle to see the benefits of new technologies. Some have been burned by investments that they feel did not deliver, making them reluctant to commit and invest again, according to Alltech chief innovation officer Aidan Connolly.

In Connolly’s view, however, agriculture, with its inefficiencies, offers greater opportunity for improvement than any other industry.

And there is recent evidence that the sector is now racing to catch up at a supercharged pace, spurring innovation that is virtually transforming farming.

However, as drones, sensors, artificial intelligence, autonomous vehicles, smartphones and high-speed mobile internet gather and analyze data, growers and producers are struggling to manage the resulting deluge of information.

Eighty-four percent of U.S. farmers who responded to a recent Stratus Ag Research (SAR) survey said they have high-tech equipment that captures reams of data from livestock, planting, harvesting or crop protection operations. Yet only 42 percent of them are actually transferring this information to a field data management software program for further analysis. 

Connolly has observed that technological solutions are sometimes over-engineered, capturing a lot of information that the purchaser doesn’t see as beneficial. He suggests that these technology companies would benefit by narrowing the focuses and applications of their innovations.

“Entrepreneurs are throwing out a lot of information and analysis and hoping some of it will stick, most of which doesn’t, and indeed it ends up distracting from the real value that they provide,” he said

Establishing that value creates an enormous frontier of opportunity.

For technological entrepreneurs like KEENAN, the Irish feed mixer manufacturer and Alltech acquisition, those circumstances invited a response: expansion into farm data analysis.

“We've been involved with the internet of things (IoT) since about 2011,” said Conan Condon, director of KEENAN’s InTouch. “At that stage, there wasn't much connectivity. There were about 12 million connected devices. Today, there are about 6.4 billion connected devices. So you can see the growth that has happened within six years.” 

Today, more than 2,000 livestock operations, ranging in size from tens to thousands of cows, use the InTouch system, a live review and support service that helps producers apply actionable intelligence to their operations, giving them the benefit of KEENAN’s access to data on more than 1.3 million monitored cows.

Data-gathering technology represents a profound departure from “the way it’s always been done.” John Fargher is a fifth-generation Australian livestock producer and the co-founder of AgriWebb, a late-stage startup producing farm and livestock management software.

“I identified the problem on our own family farm, which is a simple one: farmers and ranchers running their business off pencil and paper,” he said. “We can now track all the inputs and all the outputs across that business and then facilitate data-driven decisions.”

Who sees my farm’s data?

2016 saw investments in data-driven agriculture fall 39 percent from 2015, according to the SAR report.

“It plateaued for one reason: the inability of everybody to share data,” said Condon.

“We're very open to sharing data,” he continued. “Always have been and always will be. Too many people are holding onto what they think is their farm data, and the farmer is not benefitting from the sum of all data.”

Some farmers express concerns about the security of their information. How might companies and government officials exploit and profit from their data? Who gets to access it? Who owns it? Does having data somewhere in the cloud leave it vulnerable to attacks and misuse?

All these questions remain largely unanswered, even as the technology pushes ever forward. Yet Connolly believes it is essential that data clients “are willing to trade this level of privacy in return for gaining greater value from what they are using.”

“Certainly, individual farm data is first in importance, especially to make proper variable-rate decisions and to build data on individual fields,” said SAR survey project manager Krista Maclean. “Better long-term decisions, however, may come from incorporating aggregated data into the decision mix.”

Farmers responding to the SAR survey consider data specific to their farm more useful than aggregated data. But, as application of the technology evolves, observers are seeing room for both.

Aggregated data can predict weather, report the condition of soils and crops, and alert to the presence of pests on a sub-regional basis.

“However, if the data is to be truly actionable and valuable, we need to drill down to the farm level,” said Connolly. “There is no reason to dumb down our offering by trying to make it into something that is not specific to the decisions being taken on an acre-by-acre or even an inch-by-inch basis.”

He suggests machine vision technology as an example. The monitoring and analysis of cattle and pig behaviors, especially in large-scale operations, is challenging, but vital. Pig and cattle behavior can provide information about the barn environment, food and water adequacy, health, welfare and production efficiency. Imaging-based inspection and analysis can offer an automated, non-contact, non-stress and cost-effective option.

“It appears to be capable of generating a benefit of up to $300 per cow,” Connolly said. “It is inconceivable that a producer would not consider using this technology if they are competing with a neighbor who has a $300 benefit over them on a per cow basis.” 

Grape growers and winemakers are also gravitating to high-tech solutions, contracting with firms like the drone-based SkySquirrel of Halifax, Nova Scotia, to keep watch over their grapes using a unique disease detection technology.

“Grapevines infected with disease produce lower quality wines and can cost a winery up to $40,000 per hectare in lost profits,” said Emily Ennett, marketing and business development manager of SkySquirrel. “Our disease detection is 100 times more efficient and significantly more accurate and cost-effective than scouts on the ground.”

SkySquirrel also provides triple-calibrated “Vine Vigour” zone maps for fertilizer applications and to improve the aromatics of wines, drive homogeneity and optimize harvest segmentation.

Big data, from seed to salad

A key driver of farming’s embrace of digital technology is the depth of transparency enabled by data collection and analysis.

Increasingly, Connolly said, consumers — millennials, in particular — are demanding this traceability in their food, such as: where and how it was produced; its environmental footprint; and its benefits with respect to the welfare of animals and farm workers.

“With that in mind, I believe that these technologies allow farmers to connect directly with the end user in a manner that can only be good for both sides, giving the consumers more confidence in the food chain and hopefully allowing producers/farmers to capture more of that value for themselves,” said Connolly.

With the arrival on the farm of big data, the work of the 21st century grower or producer is rapidly being fine-tuned like never before. Out with the guesswork and the questions left open to interpretation, in with unassailable hard facts, an entirely new degree of precision and a sense of reassurance that only a decade ago might have been dismissed as wishful thinking.

"I see a lot of changes in our area of expertise, IoT; the ability to use the cell phone network to transfer data back to the farmer’s phone so he can act on making informed decisions,” said Emmet Savage, co-founder of Moocall, a calving sensor that signals a farmer’s smart device when a cow is going into labor.

“There’s so much happening,” he continued. “It’s all about data. It’s all about recurring revenue. And it’s all about making the farmers’ lives easy.”

The 20-somethings were from all over the world: the U.S., England, Ireland, Turkey, Brazil, Kazakhstan and Peru. And if they had one thing in common, it was their view of the supermarket.

“Do you think grocery stores are important?” they were asked by Alltech Chief Innovation Officer Aidan Connolly.

“Yes, they’re very important,” replied one young woman, “for old people.”

Leading Alltech’s Corporate Career Development Program, Connolly was hearing in this next generation of consumers a receptiveness for the sweeping, fundamental changes in the production, distribution, purchase and consumption of food heralded by the $13.4 billion Amazon acquisition of Whole Foods.

“When we buy our groceries, we mostly buy online,” one student told him.

The huge e-commerce company had already been dipping its toe in the food delivery market when it turned its eye toward Whole Foods.  AmazonFresh, a subsidiary of Amazon.com, is a grocery delivery service currently available in some U.S. states, London, Tokyo and Berlin.

The announced intentions of this mega consumer product distributor to take a step further into the brick-and-mortar premium grocery business has made waves all along the food chain, from retail to agriculture.

“I think it's an extraordinary moment,” said Mary Shelman, former director of Harvard Business School's Agribusiness Program. “This could truly be a disruption rather than a change."

“Disruption means you do something in a completely different way rather than just making some incremental changes to it,” Shelman continued. “Amazon, which had historically envisioned a world without brick-and-mortar stores, is now, in one fell swoop, making a significant run into that brick-and-mortar world.”

The deal, providing Amazon access to Whole Foods’ 466 stores in the United States and the United Kingdom, hasn’t yet closed, and there is plenty of speculation that competitive bids could materialize. But Amazon has its reasons to pursue the acquisition with determination.

“Food is the least penetrated category from the online shopping standpoint,” explained Shelman. “Amazon clearly wants to bring that into the fold. I think the realization is that it takes some different skills and infrastructure in food than perhaps they are set up to deal with, so this gives them a tremendous opportunity to learn from that, and to run with that.”

Addressing widely held consumer perceptions may also play an important role in this odd-couple marriage.

As Shelman sees it, “For Amazon, the biggest challenge in delivering fresh products to your home is what everybody always says: ‘Oh, I don't trust them. I want to go pick out my fruits and veggies and my meats myself.’ Whole Foods brings in that brand name that has value, so it’s: ‘I trust Whole Foods, so now I trust Amazon bringing me Whole Foods quality. Do I trust Whole Foods to deliver for me? I don't think they're very efficient. But Amazon delivering Whole Foods is like, wow!’ So both sides win from the opposite brand name.”

What might this mean at some key points along the food supply chain?

Producers and growers in an Amazon/Whole Foods world

The biggest obstacle for producers trying to access markets through the food retail industry today is the enormous power held by the supermarket and big box chains as gatekeepers to the consumer.

Control of in-store product positioning provides an enormous source of revenue for traditional supermarkets. So-called “slotting fees” must be paid to win premium space in order for a product to appear on the shelves of Krogers, Safeways and other major chain stores.

“Only big companies can afford to do that,” said Shelman. “Even if you are a small company and can find the money to pay a slotting fee to get on the shelf, the ongoing costs of the promotion and support that it takes to actually get your sales up to a level that is acceptable to that retailer is a staggering number — something like $100 million, $10 million to introduce a new brand today.”

A major casualty of this, she notes, is creativity.

“We see that in the big packet food industries: They just bring out yet another flavor, another line, another variation in that brand, and they keep blocking up that shelf,” she explained. “You really don't get any true innovation there.”

Shelman believes the evolution of the “Amazon marketplace” is providing new opportunities for smaller producers to bypass those costs and directly reach the consumer.

But Connolly believes “Big Ag” and smaller farmers alike have some concern.

“It's part of seismic changes taking place in the food chain,” he said. “The top 10 food companies have seen a decline in their sales, profits and share prices as consumers reject traditional famous food brands built around processed foods.”

Every day these shifts are reflected in the news: Nestlé being a $3.5 billion target by an activist investor; Kraft’s attempted takeover of Unilever; Amazon gobbling up Whole Foods; and Wal-Mart’s purchase of Jet.com 

So, if traditional “Big Food” players are in trouble, how should agribusiness respond?

“It must adapt to the new reality,” says Connolly, listing the top three strategies food businesses must take to thrive in the changing landscape:

1. Become lean: Big Food that is merging or being acquired will seek to drive costs out of the system.
2. Deliver prosumer values to address the prosumer and millennial agenda of traceability, transparency, sustainability, welfare and removing unwanted additives.
3. Go direct and to build your own brands again.  

Connolly notes that “this is a new era with the food business re-fragmenting, and smaller brands will be faster to build and sell direct. Consumer sales over the internet offer an opportunity for ‘Big Ag’ that was not available 20 years ago.”

In this new coupling, who will take the lead? Shelman expects that Amazon will pull Whole Foods toward its brand promise and mass appeal: convenience and reasonably priced items across quality levels.

“I don't believe Amazon will broadly adopt the same positioning and values as Whole Foods across their broader food portfolio,” she said. “I can't imagine them not selling Cheerios or Kraft Mac & Cheese online. They may initially adopt a higher quality approach in fresh products — meats and produce, since those seem to require a stronger brand to sell.” 

Consumers in an Amazon/Whole Foods world

Photo Credit: Whole Foods

Today’s consumer is swimming in a sea of options and information. The innovation of the “food kit” has given rise to the home-delivered packages offered by Blue Apron, HelloFresh, Plated, Purple Carrot and Home Chef. Nestlé has invested in the prepared meal delivery service Freshly, and Sun Basket has attracted Unilever capital.

It takes time to complete a merger with all the complexities brought to the table by Amazon and Whole Foods. So what's going to happen to the rest of the food industry while t’s are crossed and i’s are dotted? Views differ about the extent to which the merger will cause change.

Speaking to analysts and investors at a conference in Boston, Kroger CFO Mike Schlotman said he doesn’t envision a major shift to people ordering groceries online for delivery to their homes.

“Part of me refuses to believe that everybody is just going to sit at home and everything is going to be brought to their doorstep and nobody is ever going to leave home to do anything again,” said Schlotman.

But, according to Connolly, “the United States has been slower to the party than other parts of the world,” and there is plenty of evidence that significant change is already well underway.

“Maybe there are some of us that take joy in walking up and down the grocery aisle and doing that as our chore, but what consumers are saying is that they're voting with their feet,” Connolly said. “They're saying, ‘If you give me a better alternative, I won’t go to the store.’"

Connolly recalls the observations of a friend who is involved in the food industry in the U.K., working with Marks & Spencer, Sainsbury’s and Tesco, who forecasts that we're in the last five to eight years of the big box model of the supermarket.

“What we're going to see in the future, according to him, is much more of a Starbucks version of a grocery store,where you can buy the small produce, organic, the pieces that you want to have hands on, but for the most part, you're going to pick it on your cell phone, ordering it directly, and it will arrive today by delivery in a half-an-hour increment,” he explained. “So if you say 4:00 p.m., it'll be between 4:00 p.m. and 4:30 p.m. In the future, that will be delivered by robots, which is already happening in England, and eventually it'll happen by drone.”

One of the world’s largest pork producers, Smithfield Shuanghui of China, has a strategic cooperation agreement to sell packaged Smithfield meats through JD.com, a Chinese version of Amazon.

“They’re creating a cold chain system from the warehouse to the customer, selling fresh chilled foods, including packaged meats,” says Michael Woolsey, senior strategic manager for Alltech China. “If a customer in the morning decides they want to have hotdogs from Smithfield for dinner that night, they take out their cell phone, dial up JD.com, order the hotdogs and the truck shows up later that afternoon. Chilled distribution the entire way to the consumer’s door. So, it’s a superior product. It’s what consumers want. It’s an exciting development.”

Shelman says today’s marketplace “is just fundamentally different” as consumers are being conditioned to a whole different set of solutions.

“I think for everybody now, the fun of thinking about these different scenarios and letting go of the old retail model is leading us all to be very challenged to think about what that future is going to be like,” she said. “How are we going to get our food 10 years from now?”

Connolly sees profound change arriving even sooner.

“If we think of machine vision, where you use a camera with artificial intelligence, you can teach your camera to recognize what you want in your meat, what you want in your produce,” he said. “It can learn to smell the produce. It can learn to recognize the color that you want. It can probably even, using these internet of things-type devices, give you all of the origins of and the pesticides used in the products, all of the things that might cause allergies.

“So, your drone, equipped with the right camera and the right artificial intelligence, can do these things,” continued Connolly. “And we are not talking about something that is going to happen in the next 30 years. This can happen within the next 12 months.”

And 20-somethings from Brazil to Kazakhstan can hardly wait.

In the Middle Ages, farmers would put a bell around the neck of the lead ram (a wether) in a flock of sheep. The movements of the flock could be tracked by hearing the bell, even if the flock was not in sight. More than 1000 years later, we still use the term ‘bellwether’ to refer to an indicator or a predictor of something.

Drawn on data from 130 countries, including visits to more than 30,000 feed mills, Alltech’s annual Global Feed Survey (GFS) report has become a bellwether of global economic trends, sometimes flagging changes before other indicators do. The market for animal feed has a direct impact on food prices, making the relative health of the global feed industry an interesting proxy for the health of the agricultural sector and by extension the overall global economy. Although the U.S. and China are the two biggest markets, and there are lots of interesting nuggets from around the world, this year the big stories from the GFS are found in the Southern Hemisphere.

Discover the eight wonders of the world, according to the Alltech Global Feed Survey, in Aidan Connolly's full Bellwether post on LinkedIn.