Earlier this month, Western Growers Association and Reservoir Farms announced a $1.5 million, three-year partnership to continue joint efforts providing R&D space, commercially grown field acreage, equipment from partners such as John Deere and real-world grower feedback. Western Growers will provide Reservoir Farms $500,000 in partnership funding each year for the next three years, in addition to the $250,000 the organization previously provided.
Reservoir Farms CEO Danny Bernstein says this announcement is a continuation of a partnership with Western Growers that dates back to Reservoir Farms’ infancy and the need to better fuel the ag tech startup pipeline. He says Western Growers helped connect growers of all sizes to ag tech startups to better assess gaps and priorities.
“We began to realize, maybe about a year and a half ago, that we were involved in something strategic together, that this was a slightly different thing, and that we could rely on them and they could rely on us, which is really the definition of strategic partnership,” he says.
Early interactions with Western Growers solidified this partnership, Bernstein says. As Reservoir Farms began to take flight, both organizations saw it as the right time to assess what a long-term relationship would look like. He says having buy-in from members of Western Growers was a key linchpin in the relationship.
“We began to realize pretty early on, that in order for this to work, Western Growers really needed to be bought into what we were doing,” he says. “And they were, because they have funding for innovation, because they have prioritized innovation, because they have the buy-in from their members.”
Eliminating Ag Tech Roadblocks
Bernstein also says this partnership is a sign of the need within R&D in ag tech. He says the specialty crop industry faces serious challenges where ag tech can help fuel the future of the specialty crop industry.
While Reservoir Farms has grown from idea to action over the past few years, Bernstein notes that their progress has successfully debunked the myth that it is impossible to accelerate ag tech development, adding, “We see it every day.”
Bernstein points to a tangible example of how Reservoir Farms accelerates development. In the past, an ag tech startup had to bring an innovation to a farm, test it and then haul it back to an off-site workshop if changes were needed. By placing a shop directly next to the testing field, Reservoir Farms dramatically reduces travel time and allows for immediate modifications.
“If you have a farm that’s available to a startup, and you have a shop where they can do modifications on their machine, they can just go back and forth all day long,” he says of the shop to the nearby testing field. “There’s a startup at our incubator now that probably goes back and forth 15 to 18 times a day.”
Navigating a Shifting Venture Capital Landscape
This efficiency addresses a critical macroeconomic shift in the agriculture tech sector. Walt Duflock, vice president of innovation with Western Growers, says he sees Reservoir Farms meeting a critical need of both a change in investment strategies from venture capitalists, where more money goes toward late-stage tech development and less into seed rounds. He says Reservoir Farms helps those early startups do more with less and get in-field experience. He notes this funding shift means fewer early-stage ag tech startups will make it to A, B and C funding rounds in the future.
“In three to five years, when those next set of A-, B- and C-round companies are supposed to be raising — they didn’t get started or they couldn’t raise or any number of things could have happened — we’re going to have a very small pool of A, B and C rounds.”
Duflock estimates that while it might take around $50 million to $100 million for an ag tech automation startup to reach commercialization today, that figure will hopefully change in the next five to 10 years thanks to the work of Reservoir Farms.
“We believe that we need to get that $50 to $100 million number down by at least half — $25 million on the low end, $50 million on the high end and you can get to product 1.0,” he says, adding, “We think this is one of the best ways to reduce cost and time for startups to get to product 1.0.”
Building Regional Hubs and Ecosystems
Looking ahead, the next phase of the partnership will focus on scaling this acceleration via specialized, regional hubs tailored to unique local commodities. Reservoir Farms plans to partner directly with producers and specialty crop commissions to ensure startups are targeting exact regional priorities.
“If the table grape world has five ag tech priorities, are we beginning to scout and validate solutions in their specific priorities?” Bernstein says.
Duflock echoes the necessity of this regional approach.
“People always ask, ‘How many reservoir farms do we need?’” he says. “Every time there’s a growing region with capital that can support a Reservoir Farms location, we’re going to try and do it, because again, there’s no better path to better economics for startups than shared resources and shared tools that can speed up all the work I need to get to product 1.0. Because a lot of the startups, they’ll tell you, product 1.0 is two years away. But we know it’s only two years away if they get a lot faster and get a get a lot of the right stuff done.”
Bernstein envisions Reservoir Farms evolving into high-density ecosystems where researchers, students, startups, mechanics and growers work side by side.
“We want this to really become a destination where people can be testing ag tech all day long,” he says.
Bernstein says this partnership is a natural progression of the relationships formed with the team at Western Growers.
“As a result of being mission aligned, when we sign this long-term partnership, it doesn’t feel like a betrayal of our mission. It’s just a continuation,” he says. “That’s really now where we’re going ... to deliver on those initial promises and fulfill them for the ecosystem.”
And as for what’s next for Reservoir Farms, Bernstein says a big focus is building bridges between Silicon Valley and agriculture. This summer, Reservoir Farms will host a deep tech conference at the end of August called Ruggedize. This technical gathering will bring together engineers, founders and technical teams building robotics and artificial intelligence systems.
