Cultivating Conversations with... Luboš Grepl, AgTech Business Consultant

Our Global Account Manager Steve Collins sat down with Luboš Grepl, an experienced AgTech Business Consultant.

Luboš has developed the Crop Protection and Seeds business for Monsanto and Syngenta in Central and Eastern Europe for 30 years and now runs his own Executive Consultancy helping AgTech start-ups reach their goals.

Luboš talks about how he handled the volatility of the Eastern Europe market in the 80s, how he found the move to a competitor company, how agriculture can combat climate change, and the best advice he would give to AgTech start-ups.

You can also listen on SoundCloud, Spotify and Apple Podcasts.

STEVE

Welcome to Cultivating Conversations. This episode, I'm joined by someone who is a business leader in the AgTech industry, Luboš Grepl. Sorry for exposing you, Luboš, but your career stretches back to the 80s, and you've developed business for some huge companies like Monsanto and Syngenta, working specifically in Crop Protection and Seeds. Today, I'd love to discuss your career, your strategies for business success, climate change, and how you help agricultural startups with their business through your executive consultancy.

Perhaps if we were to just start by discussing your career to date, I think it's always really interesting to hear how the journey began, and why you got into agriculture in general. And more than that, what made you stay in agriculture?

LUBOŠ

Thank you, Steve. You're right, I’ve enjoyed my time in agriculture and I'm still enjoying this global business space where production and supply of safe food is provided to the nation and growing world. It is true that agriculture does not get a lot of mainstream attention. Despite the public opinion, agriculture is important today for global food supply. Many farmers receive mainstream attention when something goes wrong and there is disruption to the supply, or food safety is discussed as a public issue, but we must continue to remember the key role of agriculture and maintain the strong economy of it. Also, agriculture doesn't only provide food, but it provides livelihoods for millions of hardworking individuals dealing with the great challenges in this diverse environment.

So, in terms of my inspiration to get into agriculture, I would need to make a step backwards to a former Czechoslovakia, where I was born and studied Agricultural Economy at the University in Brno. At the time, the principal government goal was to encourage large scale farming that could benefit from modern technologies and powerful farm equipment. Consolidation of farms accelerated back in the 80s, and most of the large cooperatives encompassed several villages and raised a variety of crops and livestock. During that period, some achieved excellent yields. However, inadequate farm management contributed to large discrepancies in performance between farms, in addition to the lack of access to the modern technologies and innovation. And that's why, after graduating university, I decided to step into a local large corporate farm with intensive crop and animal production, which was strategically focused on exploring the newest technologies, including the utilisation of high performing hybrid crops or implementing conservation tillage practices. On the animal livestock side, utilising embryo transfers to increase milk production.

So that was my world when I started my career. The cooperative was running an enterprise management system based on its own digital platforms, and moreover, was able to provide a wide range of services to their partners in the country. Well, an exciting starting role but after a few years of enjoying it - supporting the technology implementation in the cooperatives and with their partners - I became more and more interested in joining those on the supply side, those who are leading the first-year supply of crop inputs and knowhow, and I really was thinking how I could become a part of the broader business expansion of those. And when the offer came from Monsanto to join them in the former Czechoslovakia, I did not hesitate. I started back in 1986 as a sales rep and after almost 20 years supporting the company expansion and strengthening its presence in the markets, I accomplished my career as a Head of Central Europe, leading several local organisations and managing the consolidated P&L of the combined Crop Protection and Seeds business of the company.

STEVE

Fantastic, and obviously, you had great success at Monsanto, and as you say, rose through the ranks over those 20 or so years. And it turned into a really impressive career. Obviously, you worked specifically in the Central European market. Can you describe the market conditions when you joined in the 80s, and how they changed over the decades, Luboš?

LUBOŠ

It is probably interesting to start by describing the impact of the overall micro-economic reforms back in the early 90s and then the whole transition process of the agriculture sector in Central Europe at the time. Most of the countries took their journey towards the economy and land privatisation was a key. With all of them trying to achieve the right pace in the intensification and to be self-supplying agriculture, food and production. However, each country had a unique past. Some had a more favourable starting point for large operations, which was an assumed advantage to drive efficiency and productivity. Take for example the Czech and Slovak Republics or those dealing with millions of traditional growers such as Poland and Romania. The whole transformation process was characterised by changes in the employment, production and other structural attributes. However, the most important dynamic was based on the ownership transfer from the former state and collective farms into other corporate or private structures, where assets were based not anymore on the collective but on the private ownership. In essence, the land and assets property restitution involved the return of the property expropriated by the state to its owner, and this affected all countries in Central Europe.

The end effect of the process was encouraging the new rightful owner to move basically in three different directions. The landowner could take the land back from the state and establish their own farming unit, they could sell the land to other farming operations or a local investor, but what happened in most cases was they leased the land. Keeping ownership while leasing for a long period – in many cases 10-20 years – to private farmers or private cooperatives. As you would expect, this journey resulted in a huge variation of farm structures. Nowadays, we have some markets where you have a few hundred privately-owned cooperatives or groups operating on the majority of the arable land. In some cases, even more than 80% of the country, take Czech, Slovak or Bulgaria as an example. Or markets with thousands or even millions of small growers, which are working on the land, but mainly for their own family or own individual consumptions or for a specific speciality production, like vegetables, fruits and so on. Certainly, the privatisation of upstream and downstream industries participated in the entire system shaping up quite dramatically.

The adoption of this agricultural transition required a mindset shift. So that was the next point to having your own land. Now, what do you do with it, coming from the old time where you were just asked to make the volume? What is the mindset shift needed to an entrepreneurship attitude? Farm managers making profit-based decisions, having the management capabilities, having the proper operational excellence in place and having the ability to access the innovative technologies. So, going back to the question regarding the changes in the market conditions, I can try to summarise the period being on the board of Monsanto and even Syngenta at the time: there was a really challenging journey while driving the execution of the strategy in the space of ongoing changes to the market diversity and volatility.

STEVE

I think that's probably one of the really interesting things about your journey. Over the last 30 years, there are very few regions that have changed so much, and the markets have changed so much. Can you tell us a little more?

LUBOŠ

As we know, diversity and volatility create complexity, and that limits predictability. So, this learning triggered me to establish kind of my own mantra – in terms of how I can manage the volatility, diversity and inherited complexity – by turning this into an opportunity. So, how can I make it simpler. To manage requires innovative solutions driven by our strengths, of course, the customer understanding, the grower, the channel, the right focus, but simplicity and flexibility and agility whenever the opportunity appears. Let me give you a few examples from Central and Southeast Europe from my largest leadership role.

The territory I was managing consisted of seven different countries, 14 different languages and four major religions, different holidays and customs across the whole territory. The political and economic diversity is characterised by a difference between the EU and non-EU countries, or where the GDP ranged from almost 80% of the EU average to around 17%. In terms of agriculture, anything can be grown there that is grown on the continent, from the most common field crops like wheat, corn, sunflower – by the way, this territory had the highest production of sunflower in the world – to fruits and vegetables, down to exotic plants such as cotton or tobacco. Farming, as I tried to address before, was very polarised. You get farms ranging in size from a few hectares to 100,000 hectares like you get in Bulgaria. Technologies from basic generic crop protection programmes to the utilisation of the newest fungicides and insecticides technologies, or even high-tech seed treatments. Machinery from a tractor with a few horsepower up to the John Deeres at more than 400 horsepower. You had growers using the most modern sprayers, drones, satellite-navigated harvesters.

Important when it comes to the volatility and complexity is the financial risk, which most of the suppliers’ concerns are associated with. There are many of them. Lack of local credits, the country default risk – remember the situation in Greece a couple of years ago – or general currency risks as we are dealing with nine different currencies including the euro. So, when you take all of these, it is difficult to have one model to address it. Such complexity requires deep understanding, innovative approach, but unique in its process of addressing it. Next to that, and it is very important these days, is the rising needs for more food, hence the intensification driver in overall agriculture. The main game changing factor in the last decade, and it will also be going forward, is climate change and its volatility impact. But we will probably talk about that later on.

STEVE

Yeah, we will circle back to that later on. So, whilst we're on the journey of your career to date, Luboš, obviously you took the opportunity to leave Monsanto and move across to Syngenta. What inspired that move? And what were you brought into Syngenta to do?

LUBOŠ

Well, Steve, it was not that straightforward. So, before that, I took another opportunity to support the local agriculture industry, but it was shown to be a step aside, fortunately for a short period of time - the expectations were just not met. So hence, I continued to be open for other challenges and opportunities in the global industry. And, as you know, corporate companies are always announcing major changes in the strategies - mergers, merging or acquiring, ready to undertake restructuring, providing resources for the growth and expansion stats. You follow this when you're close to the market. All of these types of messages going through are certainly creating organisational challenges internally, as I know from my own experience, but also providing big opportunities for individuals outside of the market ready for such a challenge.

So back in 2006, Syngenta made noticeably clear to its stakeholders that while having an extraordinarily strong position in its Crop Protection business, would move to unlock the Central & East European market potential with its Seed business. And me, inspired by that, I was invited to Germany and took the role of Commercial Lead of Syngenta’s Seed business in Central and Eastern Europe in early spring 2007. You would understand that joining a competitor or rival in the marketplace can be a challenging dilemma, a rollercoaster in your mind. But full belief in the vision and strategy, combined with trusting and counting on the people in your new environment provides a lot of encouragement for the first big steps.

STEVE

I think that's an interesting point to pick up on really, Luboš. Obviously, with them being rivals, did you find there was a huge overlap in company setup and ambitions or was it a completely new learning experience for you?

LUBOŠ

Interestingly, in the first few months, people were constantly asking at every opportunity like “how is it there,” “what is different” and I think it was expected. I should expect that due to the fact of the rivalry syndrome and genuine interest to find out whether the competitor or rival is better or lacking behind them. Certainly, I could elaborate on my observations about American or European ways of doing business, the marketing or the company structures. I noticed there was quite a striking difference between the European appreciation of discussions under the umbrella of various steering committees, the necessary evaluation of different options, potential risks, perceived challenges. This was opposite to taking direction and moving towards quick action and correct afterwards. I think you would recognise what I'm addressing here.

But each company is different and unique in its ambitions, strategies, portfolio and the people and processes. I tried to adopt and support as much as I could or challenge what I saw too much of – unwanted complexity or inefficiency or process heaviness. So yes, the ambition to become market leader is always there. The key is how realistic the ambition is and most importantly, do you have the necessary ability to execute and drive the profitable implementation of the strategy, and that's what we try to do.

You will probably not join the company settled in your comfort zone and build on overlaps or similarities, practically going into the same water. You want to build new values based on something which is great and unique by utilising your own knowledge and competence and bringing that strength to the next level and helping the companies to grow.

STEVE

Fantastic. And I think as a kind of grand summary of your career then, what did you see at Monsanto and Syngenta that enabled them to keep up with the pace and volatility of the Central and Eastern European market?

LUBOŠ

You can be sure that every day something new is happening. In general, the answer would be to be close to the market, to the customer, have outperforming products, have an entrepreneurship mindset throughout the whole organisation and the right leadership behind. I have a very specific view: when the wind of change is coming, some people are building a shield, some people are building windmills, and this was actually driving me through all of those. So, whenever change appeared, I was just thinking ‘what is the opportunity here.’

However, this can only be done effectively through strong focus during ambiguities, during the uncertainties, the ability to operate through the global ecosystem, understanding its challenges, and at the same time seeing and smelling where the opportunities are. But understanding usually is not enough. The key is the ability to design your business model and the organisation with the freedom to do that and to be empowered to drive the implementation. And I think that was something which both companies have very much in common. When the market was emerging, you know, all these people are looking at the huge opportunity coming with the development. I remember there was a lack of a financial means for the necessary investment for the adoption of large capacity technologies to farm holdings. On the other side, there was a strong appetite for innovations in the sector, for modern mechanisation, for modern technology, highly productive hybrids to produce crops for export. And it served as an invitation to the key industry players to develop new operating models, introduce innovations, not just in the portfolio but also in financing the businesses. Invest in the local organisation to develop necessary competencies to manage ambitions, but also to manage that type of volatility. So, it was a major strategic decision on the side of the global agricultural powerhouses to get close, to invest, to finance and to provide the most adaptable innovations. And for me, as a leader, make sure that the growth and the risk balance of the companies was managed correctly.

STEVE

I'm definitely going to pinch the ‘shield versus windmill’ analogy off you, so don't be surprised if you hear me using that in the future, Luboš! So, after 30 years in agriculture, you must have witnessed the impacts of climate change first-hand. What would you say has been the biggest impact you've seen and how has that affected your work?

LUBOŠ

Yes, Steve, there is a great challenge of volatilities and recent studies are showing or suggesting that many countries in Central and Eastern Europe are most affected by global warming. Let's take a few examples from the region in 2011-2012, big droughts. 2013, damaging freezing waves in the spring. 2014, massive floods. And if you take the latest example in 2018, crop vegetation was impacted by extreme droughts in Central Europe, mainly in Germany and Czech Republic. The average temperature increased significantly, and the yields were devastated, literally devastated by up to 80%. Drought and heat waves, such as in 2018 are expected to become common, I'm afraid, and will probably appear more frequently than in the past decade.

It seems that most of the farmers think ‘well, it was an extreme’. I keep on saying ‘be prepared, it could become normal’. High volatility prevents predictability, but you as a farmer, you need to get prepared for that. I ask myself the question, where can we see the opportunity? When you combine this with a competitive environment, which is already historically competitive, given the intensification which has undertaken in the market, this place is seen as a battlefield requiring significant differentiation and efficient, pragmatic solutions. This should trigger companies to invest in abiotic stress resistant crops based on seed breeding, but in the local conditions. It's very important to underline the local conditions. Otherwise, deep exploration of biostimulants, biofertilizers, crop management systems based on big data. However, coming back to the basics, we need to ensure first the restoration of soil health. That's where it all starts – with the soil.

STEVE

And of course, we spoke about this at length, in terms of sustainability being a focus for agriculture and AgTech going forward. Do you think we can combat climate change through agriculture?

LUBOŠ

Yes, it’s a complicated question. Well, yes, everyone somehow needs to contribute. Combating climate change and warming effects are on the forefront of many institutions, organisations as well as industries and farmers in the world. There is no simple answer, but there can be and there is a great start to that already. In some countries, for example, organic agriculture systems achieve equal or even higher yields, compared to the current conventional practices. That translates to a potential important option for food security and sustainable livelihoods in times of climate change.

Soil quality is degrading. The limited presence of life in the soil is a calling for strong revitalization strategies. There is a strong need for significant and sustainable transformation towards effective regenerative agriculture practices to improve all aspects, such as soil structure, water retention, soil health and fertility. So within the ag sector, I believe that everyone can. The point is how quickly and how dramatically you really get on with it. I believe, coming back to my point, going back to basics – the soil, the place under our feet – should be one of the first focuses next to nutrient management dedicated to reducing nitrogen dioxide emission from the soil. I would mention the Carbon Farming solutions are important to consider. There is a high mitigation potential in agriculture in general, and very often nowadays, we hear about carbon sequestration in the soil. I believe that agriculture could be a massive contributor to overall carbon sequestration activities in this world.

STEVE

I agree and I think also, it's important to remember that climate change isn't the only challenge facing agriculture. Obviously, there are lots of challenges facing agriculture today aren’t there?

LUBOŠ

You're right, Steve, there are a lot of challenges that farming – and the entire agriculture ecosystem – are facing. Farmers are under huge pressure and they must use all available technology to sustain in these turbulent seas. We can debate and talk about the fertiliser runoff and the consequent water pollution which is so important for the general public. Pesticides residual level are under permanent reviews and scrutiny of policymakers, but also in the attention of the consumers. The food industry and consumers are driving the demand for healthy food. Agriculture uses the most water out of all industries, that’s a fact. And finally, a well-recognised issue in recent times is solid degradation which has reached more than 60% of all soils. This all is about sustainability.

All those challenges we mentioned are impacting the ecosystem and specifically, growers must respond to it. Adopting the newest technologies, I mentioned biostimulants, biofertilizers, even biocontrol and using all kinds of regenerative practices. But also, exploring other aspects like the digital space and so on. But this is not only growers, but also the policymakers and how policymakers set the new framework such as the Green Deal or Farm to Fork programmes in the new agricultural policies of the EU. But here, I need to say that fast and effective registration processes are key accelerators that enable the growers to benefit from the industry’s R&D investment. That was not always the case in the past, so I'm glad to see that more attention is paid by the policymakers to fast and effective registration processes when it comes to innovations in the market.

STEVE

I agree. Interestingly enough, Luboš, you touched on a couple of topics that kind of brings us to where you are now, operating your own executive consultancy supporting and mentoring various entrepreneurs. Many of which, as I understand, are tackling sustainability problems. What made you decide to go solo and what's your main focus now?

LUBOŠ

Following my departure from Syngenta, I had a discussion with the placement support team, and I was asked about my list of what I want. But I was also focusing on the list of what I do not want, and somehow, I concluded what my preferences were. Hence, I decided to establish my own consultancy to provide my contribution in an individual way, inspiring with insights and providing pragmatic advice you can implement to a large organisation or start-ups or even individuals in management, to help them make strategic decisions, but also standing by and supporting them when it comes to the implementation of it.

Overall, the innovative and I should say also the disruptive technologies, development of new business models, development of new value capture mechanisms for innovations, operational efficiency, but still great appetite to support introducing more simplicity in these complex environments were the key areas of my professional attention. Somehow, naturally, supporting the ambitions of evolving and growing start-ups and helping them to claim space within the global agriculture market became my priority.

STEVE

I imagine it's been somewhat of a culture change for you, Luboš, after so many years in in Monsanto and Syngenta. I'm sure it's really exciting working with start-ups on the disruptive tech, but also came with, as I said, quite a culture change for you.

LUBOŠ

Well, it’s definitely been an exciting journey for me and a learning journey, I need to say. You have to learn a lot when you do this, try to change, and adapting myself into the new business environment, moving from a leadership position to an advisory position, which requires a different type of skill and competence. But start-ups have accumulated a huge popularity in the last decade and a lot of entrepreneurs dream of launching a start-up on their own. I heard somewhere that more than 100 million start-ups are launched annually, but I am sure that only some of them are having an impact of changing industries. In the agriculture sector, there are disruptive start-ups, quite a lot who change or kill the existing technology, replace or displace the conventional products. The key for me is working together with them on building the strategic and tactical value of the product, the concept and the offering in the market.

What I'm trying to do is to bring the history and experience to the table in a complimentary way. Also, understanding the frictions you need to reduce. They come with a lot of impatience, with a lot of energy and you need to say, ‘hey, wait a moment, let's really work on the impact and how we're going to introduce this piece’. It is important, and this was my natural skill, to be transparent and tell them about the real concerns I have about their business. That's very important, but also asking what they will do if the dream becomes a reality and give them understanding about what may happen after.

STEVE

Fantastic. Now, I know you normally charge for this, Luboš, but what would be the most important piece of advice you would give to an AgTech startup?

LUBOŠ

Well, you should have an advisor with hands-on experience, but also who is very skilled at the art of advising. So, it's not only knowing what but also understanding how to communicate – that's very important. The technologies, the innovation, backed by the intellectual property, its protection. The right business model fuelled by investment provides a great opportunity in the space. That would be another piece of advice – look at the intellectual property. Look at how most start-up models are sold. While most entrepreneurs hope to take their companies public like Apple or Google or Facebook, the reality is that most successful founders will eventually sell their start-up to a strategy buyer. Having said that, the planning, the aiming point set at the beginning, and thinking ahead is really key. Me, if I was a mentor, would say that selling the company is one of the many ways to achieve the liquidity event. Alternatives to merger and acquisition include venture capital for further development, continuing to build for a larger buyout. Utilise your financial resources for the fast and rapid development of critical, convincing and credible data. It's so important to support the claim of technology or product performance and its scalability. Data, data and data.

Also, it is important, as mentioned to get the IP and finally, to get commercial success to be noticed in this space. Following this, you will be probably facing the decision to either remain on the early sell trajectory or to build your own business further, or even when the time comes and the company is attractive enough, to sell to a large industry player at the right time utilising the M&A capabilities offered in the market.

Finally, there are a lot of ways to approach a strategic buyer. There are some simple and straightforward strategies. I think that by engaging an advisor in the process of identifying a buyer, you will be able to understand the buyer's interests, its needs and requirements to proceed together with your own inspiration.

STEVE

Fantastic. That brings us to the conclusion, Luboš. So, thank you very much for your time. I certainly learned a lot and I’m sure our listeners will have taken tremendous value from your experience. I wish you the best with your consultancy, it’s a real shame when people come up with innovations but just can’t get the business side off the ground, so I think you’re doing great work. Listeners, be sure to check out our previous episodes if you found this one interesting and stay tuned to our social channels so you don’t miss future episodes.

LUBOŠ

Thank you, Steve. Thank you for having me.

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Steve Collins

21st April

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