A check-in interview with Marcus Link and Mark Drewell, founders of New Foundation Farms (NFF), about how they went from trying to raise £20M to buying 1000 acres in the UK, building their stacked enterprise on leased land and ending up going almost full circle back to the beginning.
Having learned a lot in the past 3 years, Marcus and Mark realised that in order to build a highly profitable and ecologically sound business, they don’t need 1000 acres, but only 250. So, they are back in fundraising mode to raise £5m and to show the world that we have passed the iPhone moment of regenerative agriculture. What if they are right? What if we can build profitable abundant regenerative companies? If that is the case, that will put the food and ag world upside down, and those are enough reasons for us to follow this story closely.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
A check-in interview with the founders of new
foundation farms about how theywent from trying to raise 20
million to buy 1000 acres in theUK to deciding to focus on
building their stackedenterprise on Leesland and
ending up going almost fullcircle back to the beginning.
Now, having learned a lot inthe past 3 years, they realized
that in order to build a highlyprofitable and ecological sound
(00:21):
business, they don't need 1000acres, but only 250.
So they are back in fundraisingmode to raise 5 million to show
the world that we have passedthe iPhone moment of
regenerative agriculture, whichmakes me wonder what if they are
right?
What if we can build profitable, abundant regenerative
companies, if that's the case,that we put the food and ag
world upside down?
(00:42):
And those are enough reasonsfor us to follow the story very
closely.
This is the investing inregenerative agriculture and
food podcast investing as if theplanet mattered, where we talk
(01:02):
to the pioneers in regenerativefood and agriculture space to
learn more on how to put ourmoney to work to regenerate soil
, people, local communities andecosystems, while making an
appropriate and fair return.
Why my focus on soil andregeneration?
Because so many of the pressingissues we face today have their
roots in how we treat our land,nrz, grower food, what we eat,
(01:25):
where and consume, and it's timethat we as investors big and
small and consumers, startpaying much more attention to
the dirt slash soil underneathour feet.
To make it easy for fans tosupport our work, we launched
our membership community and somany of you have joined us as a
member.
Thank you.
If you have our work createdvalue for you and if you have
the means and only if you havethe means consider joining us.
(01:46):
Find out more on comroadcomslash investing in regener ag,
that is, comroadcom slashinvesting in regener ag or find
the link below Welcome toanother episode of the podcast,
(02:10):
a very special one, as we areback with Marcus and Mark of New
Foundation Farms and we haverecorded quite a few interviews
with them before, so specialseries.
I will definitely put the linkbelow in the description or the
show notes, and we also recordedan update interview in November
2021, but we never released itbecause there were so many
(02:31):
things happening in NewFoundation Farms over that time
that it just didn't feel rightbecause it wasn't up to date
anymore.
Things were changing and thingshave been pivoting, merging,
changing, coming full circle.
Let's say it's safe to say, alot has happened at New
Foundation Farms and I'm verymuch looking forward to release
this interview first of all, butfirst of all to actually record
(02:52):
it and checking in with Markand Marcus, who I don't think we
ever had together on thepodcast at the same time in an
interview that we actuallyreleased.
So it was great to see atGroundswell and to meet actually
Marcus for the first time inperson and Mark we've had met a
few times and to check in andnow we're recording this the end
(03:12):
of summer 2023 and I'm so muchlooking forward to unpack what
has happened, what is movingforward, your insights and
what's going to happen on theground and so much more.
So welcome, welcome back bothof you.
Speaker 2 (03:25):
Thank you very much.
It's great to be here.
Speaker 3 (03:28):
Wonderful to be here.
Thank you, Kuhn.
Speaker 1 (03:32):
And let's say somebody is listening to this
relatively soon, so somewhere inautumn of 2023.
What would you say as asnapshot of where New Foundation
Farms is now?
I remember I think I put theheadline a long time ago you're
raising 20 million and buying athousand acres and, like large
(03:55):
numbers, always do really wellin title.
So we, of course, put it thereas well, but it was your goal.
Where would you say you're now,as we are recording this, at
the end of August 2023?
Speaker 2 (04:06):
We're going to have that funny moment where whenever
both of us are on anyconversation, we look at each
other to try and sense who'sgoing to respond.
So let me dive in and say wherewe are is we're about to launch
a 5 million pound fundraiseafter an extraordinary 20 months
(04:27):
or so since we last were liveon the podcast, and with that
we're going to acquire our first250 acre site and lots to tell
about that and build the firstvertically integrated field to
(04:49):
home hub in the UK for deepregeneration and the basis for
the transformation of the foodsystem.
Nothing modest about that.
Speaker 1 (05:02):
And what's the biggest surprise?
I would say we get to lessonslearned over the last 20 months
as you have been trying tofundraise, came to the
conclusion that probably in thatmarket and now the market is
changing more 20 million andbuying so much land was a
thousand.
Now you're back to 250 and Iknow you were on a path for a
(05:23):
while to lease land of others.
Like, how has the journey beenover the last 20 months and what
was the biggest surprise?
Speaker 3 (05:31):
There's been a number of different pivots in the
process, and the pivots haveboth been brought about through
our own developing thoughts.
People who've joined the teamthere are now 10 of us.
At the same time, theconversations we've had with,
especially organisations thatare interested in bringing
(05:54):
finance to this emerging market,as you want, have obviously
hugely influenced us, and one ofthe pivots was this change that
we pursued for nearly two yearsof leasing land instead of
buying land.
(06:14):
That was inspired by a largefunder who saw great potential
in the lease opportunity, and sowe worked that through in great
detail and we explored thatopportunity with major
landowners in the UK.
In fact, we've worked through aholistic planning process with
(06:35):
six landowners of differentsizes, but the ultimate outcome
of that journey was thatactually the organisational
constraints of large landowners,or, in fact, the established
world of institutions, has areal hard time as an institution
(06:56):
not as the change agents in theorganisation, but as the
institution itself, with itsembedded policies and decision
making frameworks and so forththat those organisations really
struggled to engage with thenecessary change that we're
facing.
People get it, they love it,they engage with it, they want
(07:16):
to see it, and then it comes tothe crunch point where you have
to make a decision making.
Committees have not been up tothat task.
That's been one of the majorlessons and the reason for
several of our pivots, since thefirst 1000 acre fundraise, and
(07:36):
then the pivot to leased options, and now our final approach to
buy 250 acres, which is so muchsmaller than the original 1000
acres and another big pivot forus.
Speaker 2 (07:54):
Kuhn, can we jump in?
Because, as I was thinking, thegreat thing about being two of
us on this is one can talk andthe other one can come up with
an even cleverer answer.
But the big surprise for me,actually as Marcus was talking,
was that the big plan hasn'tchanged at all.
So here we are four years afterwe started Newfoundation Farms,
(08:18):
and our clarity of vision to be, within a decade, operating on
60,000 acres of land and havinga supply chain ecology of
600,000 acres in the UK hasn'tchanged.
It's all been tactical.
It's all been how do we getthere?
We have not had a scenario inwhich we've said, oh, hang on,
we've got the wrong big ideahere.
(08:40):
This doesn't make sense.
It's been all about tacticalsolutions to move forward.
Speaker 1 (08:45):
So forever didn't listen to our original series.
What's the big idea?
Speaker 2 (08:52):
We're looking at each other and to see who's going to
answer.
That's why we have video.
We don't record the video.
Speaker 1 (08:57):
We use video for this conversation so people can
point.
It's always useful.
Speaker 2 (09:01):
Great.
So the big idea is that thesolution to the challenges of
the food system that we've builtare not going to be found in
simply tweaking the system we'vegot.
The big idea is that the powerof the science of regeneration
(09:28):
that has developed over the last25 years through our
understanding of therelationship between things in
ecology is opening the door to acompletely new food system.
That's the big idea, and thatthat food system is built on two
principles.
It's built on the principlethat land can be highly
(09:50):
productive and highlyecologically productive highly
productive of the food andhighly ecologically sound, and
the consequence of that is thatyou end up with a requirement
then to transform the whole foodsystem between the field and
the person who eats the food atthe other end of the supply
(10:11):
chain, simply because what'shappened is you're now producing
lots of different things insmaller quantities in stacked
enterprises on the land, andthat enables you to then process
and sell locally and do thateverywhere, and that is the food
system that is coming in ourview.
We want to help make it happenfast, and it will shatter the
(10:37):
framework of the current globalcommodity industrial system,
because you're dealing with thewhole food pound in a way that
can create a highly profitablesystem, as opposed to the
current one, which doesn't makeany sense for the ecology or for
society, or for those peoplewho grow the food.
Speaker 1 (11:00):
So why haven't we seen that stacking?
Yet, if this is so obviousthrough the regeneration science
that we've seen, and alsoexamples of very productive
ecosystems, both on food and onbiodiversity, why haven't we
seen many, let's say, largerscale, highly profitable iPhone
(11:22):
moments?
Let's say that everybody's likeyeah, of course I looked at an
ecosystem before.
I looked at a farm before, andnow I realize we were only
scratching the surface in termsof potential.
What is unique here, or whatmakes this more than a nice
vision?
Why haven't we seen thismaterialized in many places?
Speaker 3 (11:43):
Let me zoom out for a moment in answering that
question and focus on adifferent sector just to
establish a few principles.
When the fossil fuel sectordelivers 100% of electricity to
all homes, it seems to somepeople to be nonsensical to try
(12:05):
out a different form ofrenewable energy production
through solar panels or windturbines.
Why would you want to do that?
It's risky, it's new.
Nobody's done it before.
We haven't connected it tofinance.
Then you have the emergence ofa new kind of knowledge and
connection with finance and itcreates disruption, market
(12:28):
disruption through disruptorenterprises.
That's what happened with theemergence of renewable energy at
scale.
We had that same disruption inthe communication sector when
landline telephony was actuallyquite fast replaced by mobile
(12:49):
telephony, when people in thelandline business didn't
understand how that might bepossible, to the extent that
some people now don't have alandline.
It's no longer the necessarilydefault communications option
100 years later after theinvention of the telephone.
But then within thecommunication sector there was
(13:13):
this next thing that you justreferred to call the iphone
moment, where in a way onebusiness decided that the game
wasn't about hardware, was alsoabout hardware, obviously, but
it was about the software andthe way that you use the piece
of the hand held device in orderto enable a lot more, then just
(13:33):
the communication, and now weuse the phone very little to
talk to each other and for allsorts of other things, including
measuring what we eat, how farwe walked.
I don't know what you listen to, your podcast, for example.
It's opened up whole new waysof thinking about things that
are possible when you, whenyou're looking at it through the
(13:57):
lens of an existing system.
Speaker 1 (13:59):
What is the lens with with the food and egg sector
where either at our iphonemoment or already had our iphone
moment, just to say that matterfor another is a perfect one.
But just to understand, just toget to that for investors
especially, why now, instead offive years ago or in five years
like, why is this Two thousandtwenty three the moment to put
(14:23):
resources in this?
Speaker 2 (14:26):
We think we're at the iphone moment, because there's
a technology that can transformeverything.
But, just like apple launchingthe iphone, what's happening to
most people is there, sittingthere and looking at it and
saying, well, why it doesn't dothat?
Speaker 1 (14:39):
it doesn't do that, it doesn't do it took quite a
bit of time.
Speaker 2 (14:43):
actually for many, including myself, you need a
keyboard, like of course you'renot gonna, and we all know how
that ended but the bakery andyeah, that's an interesting
point and so, if you draw theparallel, what's happening in
the in the food sector is thescaled response currently is not
(15:04):
an iphone response, it's alandline response where what's
happening is big food.
Big players in the foodindustry send me saying, okay,
is this new technology?
What it means is we can makemore ecologically friendly food
and shove it through the samesupply chain, and so where's all
the emphasis?
It's on Quality assurance downthe supply chain and things
(15:25):
called standards so that we canmeasure whether or not something
is ecologically sound.
But it's not doing what.
What what apple saw in theiphone.
This is gonna change everything.
Why?
Because it enables us to dothings we couldn't do before.
You couldn't deliver low cost,affordable, nutrient dense food
(15:49):
to everybody without a stockinggreat global supply chain.
We believe we now can.
That is the power of what theregenerative system enables, and
that is requires a level ofReorganization of the food
system that is way beyond simplymaking sure that what you buy
(16:13):
at all the little saints, breeze, whichever is your favorite
supermarket is more eco friendly.
It's a completely differentsupply chain.
Just imagine last point.
And then Is just imagine.
Somebody said to me the otherday it is, with all the
technological development we'vegot, we're still doing what we
(16:33):
did in the nineteen thirtieswe're going to the supermarket
to buy our food, notwithstanding the home delivery,
most of which is actually peoplein a truck walking into a
supermarket, picking off theshelves and delivering for us.
That's a incredibly ondeveloped, an unreformed food
(16:54):
system.
Compare with what's nowpossible.
We can have ninety percent ofthe nutrients that we will eat
delivered directly to our homesfresh from predominantly local
grown sources enable by thisregenerative system.
That's the iPhone moment,because people, we, what we
think is that very few peopleare seeing that opportunity and
putting in place the capacitiesand resources to do it.
(17:17):
So what the doing is typicallysaying okay, well, we need to do
things more regeneratively, buthang on, it's complicated,
because I've got to have twentyor thirty or forty or fifty
different Enterprise stacks onthe farm and I'm just one man
and a farmer and I can't do that, and it's usually one old man
as well.
I'm saying no, no, no, that youknow any other industry.
You would say hang on.
That means we need toreorganize everything.
(17:38):
We need a much moresophisticated organizations that
are capable of this verticalintegration.
So there's a whole lot behindthis is critical to the
transformation and is also thepotential of the opportunity
that can be now captured, rightnow.
We don't need to wait.
It can be done today.
Speaker 1 (17:58):
And yet you didn't manage to convince a landowner
to get on board with that, or atleast the not the final
decision makers or the committeemaybe we're enough people or a
few people that were interestedin this but that process did get
you to realize that you don'tneed a thousand acres to start,
(18:21):
which I think is a very valuablelesson.
So how, how did that process goand how did you realize you
need one?
Fourth, basically, which alsobrings down not saying it's
easier to raise five millioncompared to twenty.
It's actually it's a lot lessmoney, so it might, might, might
be easier.
So how did that process go, fromfrom one thousand to two
hundred and fifty, realizingthat that could be the MVP or
(18:42):
that could be enough to show alot of these things, because All
of this is on paper, all ofthis has been calculated, all of
this makes a lot of sense, butuntil people see it, feel it,
touch it and see what a reallyproductive stacked enterprise
farm could be, I think it'sgonna be very difficult for
people, for many people, to Tosee the potential to use all the
(19:04):
iPhone.
It was very difficult to seethe potential of touch screens
etc, even though we saw a fewsmall examples here and there,
which we also see Info the nag,with your few farms really
stacking a few things and doingrelatively well, and but you
don't see that scale, or atleast not not a lot.
So how did the process go fromOne thousand two fifty and?
Was that a moment?
Was that a calculation?
(19:25):
Was that a realization?
Like actually we need less.
Speaker 3 (19:29):
Let me let me zoom out one more time.
When we started, we wereabsolutely, we were absolutely
persuaded that regenerativeapproaches to agriculture were
the method, if you want, thatwas going to make it possible
for us to transform the way weProduce food for Form of
(19:53):
civilization and that that wouldtake it from an approach that
was the pletif or degenerativeof the underpinning ecological
assets to building it, but thatthe way farming is organized,
especially in the UK, you'veactually got a situation where
(20:16):
you have currently, just as astatistic, three percent of the
farmland in the UK or less isorganically certified.
There are twenty million acresof farmland or land on the man
agricultural management in theUK.
There are two hundred andtwenty thousand farms
approximately, as an average ofabout two hundred acres.
There are a lot of people doinglots of very inspired and good
(20:40):
work in small ways.
What we recognize is a lot ofsmall doesn't make big.
What we also recognize this,this disconnect between large
investors and small goodprojects, and it's not.
It's.
There's a clash of values, aclash of Perspective language,
(21:01):
but also a very good yeah, howdo you translate An organic
market garden into an investableasset class?
it's difficult.
There isn't the spreadsheetthat you can download, there
isn't the the masterclass thatyou can do.
And then, do you have the time?
(21:22):
Do you have the time assomebody engaged in this?
It's a real struggle gettingaccess to land.
So there are hurdles stackedagainst new entrance with new
ideas.
The market, the free market,isn't quite so free when it
comes to farming.
There are some very vestedinterests in Maintaining a
(21:43):
fragmented, disparate workforcein mostly men if it's arable or
whatever else in a tractor cabinand organizing in such a way
that they eat out I'm barely acat a livelihood and supply food
that I don't even know what ittastes like, and so forth.
(22:04):
And it's, it's a in systemsthinking.
You would call that a pathway.
It's entrenched.
This is people get out of bed,they think like this.
They don't have enough time tothink any other way or to
educate themselves to do itdifferently.
So you got this disconnectbetween small and big, both in
terms of the finances and interms of how people go about the
(22:25):
practice, and so it's verydifficult to find a lever point
in that to change it.
So the lever point that we'vebeen focusing on with new
foundation farms is how do youtake something like this and
develop an enterprise thatscalable both in operations and
impact?
And that's that's a paradox,and that which is that most
(22:46):
scaled large enterprises areactually centralized.
Where is in?
If you think through holisticapproaches and regenerative
approaches to land, one of themantras or the first principles
you come across is that it's allContext specific.
So ultimately you have to finda way of managing something, of
(23:07):
organizing something in such away that it's place based.
If something is place based inour in the world we're living in
at the moment, this is a totalparadigm shift.
Forget about all the otherdetails.
Business is not organized in aplace based way.
We're organized in a globalized, uniform, standardized way
where we do things in onecountry and the same way in
(23:30):
another country, because that'sallowed us to create thousands
of widgets in the same way andthen sell them in various ways
across the planet.
What we're proposing is thatthis possible to create a large
enterprise that's actuallysensitive to local context, grow
An abundant, hyper, diverse, arange of food fruits, vegetables
(23:55):
not seeds needs, etc.
And distribute that as locallyas possible to as many people as
possible.
We call that hyper diverse.
I put local everywhere, sothat's.
There's a lot of complexitythere, which is why I talk about
the, the, the, the, the.
The iphone moment was the switchfrom hardware to software, and
(24:17):
I'm sure that there were plentyof people who said people don't
want to Mobile computer, theydon't want to tick all those
boxes, they just want to talk tosomeone.
I'm those people, the so-calledlate adopters or laggards in
the adoption curve.
There are ways to time to talkto, because they're very good at
maintaining the status quo, butthey're not very good at
(24:37):
disrupting the status quo.
Where we're about disruptingthe status quo, and and this is
ultimately when you think thosethoughts through you end up with
this kind of place based logic.
And there's one final thing inthis, which is that as we got,
when deeper and deeper into thelogic, we arrived at the
(24:59):
recognition that this isn't justabout a different way of doing
business.
This is about a different wayof perceiving of ourselves as
human beings on planet earth.
This way of thinking isn'tpossible unless you recognize
the possibility of yourself asbeing a custodial species on
(25:20):
planet earth, which is anathemato the way many people think
about the role of human beingson planet earth.
We've come to see of ourselvesas a scourge, as the opposite of
the natural world, as theartificial species versus the
natural world, and we're sayinghang on, we are of nature, we
(25:41):
are capable of integratingourselves with nature, we are
capable of farming in such waysthat we can leave a landscape
better off than it was when weharvest, than it was when we
sowed the seeds.
So there's a whole lot of stuffthat we've been through, and
(26:01):
along the journey with us hasbeen a software model that's
gone through some seveniterations or seven major
version changes, called cow-how,and cow-how has accumulated all
of this thinking, and so, in away, this is the possibility
here of thinking about farmingdifferently through the software
(26:23):
, because it's enabled us totrack all of these individual
incremental thoughts thatactually add up to a major
perspective change.
And that perspective changemanifests itself, for example,
in our initial idea Well, we'regoing to have to have a thousand
acres in order to make thiswork.
And now we recognize with afurther fine tuning that much of
(26:45):
the magic in our thousand-acremodel was actually happening
within 250 acres.
But you have to spend time andgo through the details and have
people on the team Like we'vegot Dr Annie Rayner and Ali
Murrell on our team now who havedug deep into that data and
given me a very hard time andquestioned many things and made
(27:09):
it so that we didn't need abigger model.
We developed a model that wascapable of showing we can do
this on less land.
That's, in a nutshell, some ofthe aspects that have come up
for us as we dove deeper.
If you want, it's been ajourney of the soul, it's been a
journey of the spreadsheet andit's been a journey of thinking
(27:31):
through different ways of doingbusiness and what disruption can
mean.
Speaker 1 (27:36):
And so there's a lot to unpack there, but I want to
bring it to you to the now, andthe cow-how obviously is a piece
of that.
So what are you currentlylooking for proposing?
What is the current form thatnew foundation farms wants to?
Let's say, we talk in a yearfrom now, the summer of 2024.
(27:57):
What would you ideally betalking about, ideally, at that
time?
Speaker 2 (28:06):
So 12 months from now , we will have acquired a
250-acre farm, we will havestarted our operations, we will
be commencing the process ofengaging with local people who
will become customers, notconsumers we hate that word,
(28:27):
consumers.
I don't know about you, but I'ma human being.
I'm not a unit in somebodyelse's marketing department.
I am a customer of companies ororganizations and I am a
citizen.
So we will have a growing listof people excited about the
prospect that there's foodcoming their way.
(28:49):
We will have employed a bunchof people on the first site and
we will all be ready to berolling up our sleeves in terms
of phases two and three of thisthree-phase expansion of new
foundation farms into operation.
Just quickly to say what theyare, because it's quite
important in the understandingWe've got a team of 10 people.
(29:10):
Now why would you have a teamof 10 people in the core to run
a 250-acre farm?
Well, you don't.
You have that because we'rebuilding the capacity to create
a complete transformation in thefarming, the processing and the
food delivery or retail systems.
So we need all of thiscapability.
(29:30):
So, first phase 250 acres.
Second phase is to expand thatthrough leased land so that
first hub becomes bigger and todevelop partnerships with other
farmers.
And I would say that the secondphase is grow that 250 to pick
a number of 1,000.
(29:51):
And as we grow, partner withother local farmers who then go
on the journey with us and weprovide them with a guaranteed
offtake route to market at afair price and because we're
cutting out all the middlemen.
There's nothing new about that.
That's what Riverford do, forexample, who have the vegetable
box schemes here in the UK, butdeep, long-term partnerships
(30:13):
with other farmers willing to goon the journey.
So we've expanded to 1,000 acresand as we do that, we go into
the third phase.
And the third phase is thenwhere we go to much greater
scale With, if you like, thisvisible proof that this is
starting to happen on the groundin one hub and the vision there
is.
Over the next 10 years we go tosix hubs plus minus it's the
(30:37):
numbers not important, but eachof 10,000 acres of scale spread
around the UK.
And at that stage we'restarting to make a serious dent
in people's understanding ofwhat the food system can look
like.
And in order to do that, wethen have a series of different
financial solutions for each ofthe three phases, which we can,
(30:59):
I'm sure we'll talk about in aminute, but it's a combination
of operational planning andfinancial frameworks that will
allow us to build an enterprisefrom 250 acres to 60,000 acres
over 10 years in a three-stepprocess.
Speaker 1 (31:17):
And just for the customers that join in that
first hub, what should theyexpect in terms of food?
Like you were mentioning thestacking of different things,
I'm mentioning it's more, largerquantities of different things.
What is the full replacement ofthe supermarket or majority one
(31:42):
?
What's the food that thesediverse farms can deliver to my
doorstep, or do I have to pickit up?
I mean, that depends probablyon what I want.
But as a customer, what do Ilook forward to if I join, let's
say, a year from now orslightly?
Speaker 3 (31:58):
this so there's a whole range that we'll be
engaging with right at thebeginning.
So first let's start at thesimple end.
The model is based on homedelivery, and the home delivery
will happen in rechargeableelectric vehicles and they'll be
in the fourth year.
(32:19):
We will have built up to 300deliveries a day and they'll be
delivering the average shoppingbasket worth 55 pounds to
approximately 2000 homes or 2000families.
So some of the calculations arebased on the idea that there's
an average of a four personhousehold buying what we have to
(32:40):
offer.
And what we have to offer rangesfrom grains, including oats, to
various, in fact 42 lines ofvegetables, herbs and soft fruit
, there's honey, there's eggs,there's top fruit and nuts,
there's milk and then there'smeat in the form of beef,
(33:00):
poultry, pork and lamb or goat,and in fact we've got a bit of a
debate about the value of sheepand agriculture altogether.
That that's for a separateconversation.
Now there are obviously thingsthat you can't grow everything
that's already quite asignificant amount, but there
are things like cacao and coffeethat you can't grow here even
(33:25):
if you tried.
And we're not against trade.
We're against the facelesstrade in the form of commodities
, just like Mark doesn't likethe word consumer quite rightly.
I don't want to buy commodity.
I want to buy my things frompeople.
Have an understanding that theyactually come from people, if
(33:46):
you want, from another community.
So we will be trading withother communities and
encouraging regenerativeapproaches, whether it's in the
regional collaborations orwhether it's in international
collaborations, and we'll bevery mindful of the footprint.
Where we can deliver by cargoship, maybe we will deliver by
(34:07):
cargo ship.
There are businesses that arenow going that route rather than
fossil fuel for the deliverywhere that's possible.
So we will be curating thatkind of thing and delivering a
very wide range of things thatshould be on the immediate
appeal of it being muchhealthier.
Appeal also because of thevariety of things that basically
(34:29):
mean you can replace yourweekly shop at a grocery store
with the weekly home deliveryfrom new foundation farms.
Speaker 1 (34:39):
And was the home delivery always part of the plan
?
I remember we talked a lotabout the farm shop years ago.
Is that been a changedeliberate?
Or is there still both options?
What has happened there?
Or maybe nothing.
Speaker 2 (34:55):
I think we've.
This is where, if you like, theiterative process has led to
deeper insights.
And the deeper insight aroundfood retail is this idea that
it's largely an undevelopedsystem since the 1930s, since it
was founded in the 1930s, 20sdifferent ideas, but anyway
(35:19):
between the First and SecondWorld Wars and that the futures
we see.
It is fundamentally aboutdirect home delivery of the bulk
of nutrients that you need onan ongoing basis from local
sources.
And then retail has a differentpurpose.
When we did the originaldesigns, we saw retailers
(35:42):
replacing the supermarkets.
We now see physical sites asmuch more about education and
demonstration, communication.
Yeah, yeah, yeah, you know thesort of and the model is already
there.
Again, there's nothing that weneed to invent in this principle
, because it's a principle thata lot of brands have understood
(36:05):
for some time that the purposeof a store is not sales.
That happens online.
The purpose of a store is toexcite people, to engage people,
to allow people to experienceand learn, and that's how we see
it.
So it's a shift in terms of thepipeline, of how things
ultimately end up in the home,but it's a blend of different
(36:26):
solutions to enable people tolearn, engage and ultimately
make the decision to change theway that food is goes from the
field to the fork.
Speaker 1 (36:39):
And I'm going to ask a question that might sound
wrong but is the countrysideready for that home delivery?
In a sense, you would imaginethese kind of things to work
really well in London, in Milan,in Amsterdam, in New York,
where we're super used to we I'msaying the general we to clicks
and stuff arrives on mydoorstep and we're annoyed that
that doesn't happen and blah,blah, blah, blah, and you're
(37:03):
going to be in the countryside,obviously, because you're going
to buy a farm and do you selectas well, like good internet
penetration or like how do youselect for that?
Or has it shifted so much overthe last years, through COVID as
well, that were almosteverywhere in the UK?
People are ready to click thatbutton Because it has to happen
online and it has to getdelivered to their place, as the
(37:25):
shop is not the maininteraction point or the main
sales channel, at least.
Speaker 3 (37:32):
Well, unlike other geographies, that one of the
benefits of the UK is that it isa rather small island and even
when you're in the countrysideyou're actually apart from when
it's really remote not that farfrom significant conurbations.
So clearly that is a part ofour decision making process.
(37:53):
For the ideal sites, thereneeds to be something that is
say that the limitation is thereach of the electric vehicle,
so that we can have a reasonablyresponsible supply chain.
We are not holding ourselves tothis idea that local means
(38:14):
within 20 miles or 200 miles,because that's actually again a
matter of local context.
What we mean first and foremostby local is that it's the
opposite of the global supplychain.
So it means it's connecting youwith a region and an identity
that comes from the naturalenvironment that you inhabit.
Ethan Soloviev's idea of thelife shed that phrase that the
(38:38):
recognition that I am dependentand live in a reciprocal
relationship with a piece ofland and the water and the food
etc.
That grows on that land is verymuch at the heart of this.
So that's the idea of localthat matters here.
Even in the UK it's very muchpossible to identify hundreds,
(38:58):
thousands of locations like that.
So that's one.
The second thing is that therehas actually been a silent or
quiet revolution in the UK interms of shopping or farm retail
.
There are large numbers of farmshops.
People are used to this way ofshopping and COVID shifted
(39:20):
things in favour of that.
Where you had globalsupermarkets that were reliant
on global supplies, we allrealise how fragile they are and
more local opportunitiesblossomed.
The UK is well connected.
There isn't a significant notspot environment.
(39:44):
We're all very connected.
Our first hub only requires2,000 households in the fourth
year.
We're talking about fairlymoderate numbers, as I used to
work at Riverford where we weredealing with hundreds of
thousands of deliveries per week.
Speaker 1 (40:06):
And so you're raising .
Now what are you exactlyraising for?
Is it the simple?
We need a quarter, so we need 5million, because we used to try
to raise for 1,000 and we'retargeting 20 million.
(40:26):
What has anything shifted?
There Is 5 million.
Does it feel more reachable?
Because sometimes it's actuallyeasier to raise a lot more than
it is to raise less.
That's an interesting piece.
You've probably talked to anyinvestor interested in
agriculture and food over thelast years.
So how does it feel to go tomarket now with this raise?
Speaker 3 (40:51):
It feels like the right thing to do because we
know that this is the way it cango.
The number also comes about inpart because, if you want the
alchemy of our journey in thatthat was just above that number
is what we soft circled in ourfirst attempt.
It wasn't enough to get us overthe minimum threshold to buy a
(41:14):
thousand acres.
But if you turn back the clockand we were only raising 5
million, you could go throughthe mind game of saying, oh yeah
, we achieved that then.
So there's the connection.
The two are connected in thatwe did actually get to that
number theoretically in thefirst and now we'll see how soft
(41:36):
the soft circle was and whathas happened over the years.
Speaker 1 (41:40):
But it's a good sign.
At least it seems feasible,although the world has changed
significantly.
Speaker 2 (41:46):
Well, it's interesting because when we Part
of your question was is 250acres, divide by four and divide
the amount by four?
Fascinatingly no, the answer isthe process was bottom up.
So, having gone on this journeyand concluded that we could do
(42:07):
this on a much smaller acreage,we then said, okay, well, based
on that smaller acreage, what isthe capital requirement?
Because a lot of other thingshad changed as well.
It was the level of detail inour analysis, and business
design was another quantumbeyond where we had been
(42:28):
previously, and therefore, ifyou were to dig into the
Carow-Howell model, what you'llsee is a much more sophisticated
understanding of the valuechain between the field and the
fork than perhaps we had at thebeginning, which in turn, allows
us to be much more preciseabout the quantum of capital we
(42:50):
require.
We should also say that theactual total capital requirement
is 7.5 million over four years,and so 5 million is the equity
side and over time, we see thebalance of the funding coming
from.
Essentially, we've modeled itas debt finance and explored the
(43:15):
modeling that we've done andsaid if we were to come to
market with a million pound debtinstrument raised in two years
time, we won't need it in thefirst year how does that look?
And it received a very warm andpositive response.
So there's a lot under thenumbers that are a lot more than
simply, oh, it's just theoriginal number divided by four.
(43:37):
It's actually bottom up andvery detailed in its planning.
The other thing that's changedis that we are Well.
Two other things have changed.
First thing is we're a muchbigger team.
We touched on that a little bitearlier, but there's 10 of us
now and with the funding itwould have been, let's put it.
(43:57):
Let me just say that again.
So two other things havechanged, if you like, within our
own landscape, in addition tothe refinement in the modeling
and the direction of travel.
The one is that the team is awhole lot bigger and stronger
(44:18):
and we've found ourselves beingable to attract really talented
people across the spectrum ofthe expertise that we need to
execute this field of approach.
And secondly, we have now beenthrough an external funding
round and that process of goingto market, which we did last
(44:40):
September, october, for aconvertible loan note, was, for
us, a wonderful expression ofconfidence and that, as you know
, of course, in any newenterprise there's a quantum
leap in the journey betweenbeing a bunch of people with a
(45:04):
nice idea, and a bunch of peoplewith a nice idea that has now
received funding.
Speaker 1 (45:09):
And the money in the back which we were very lucky
and happy to participate inpersonally, with a few thousand
and through a small syndicate wehave been running.
So we're part of this journeyand definitely biased in this
case.
And so that shift, the factthat you've raised some money
(45:30):
oversubscribed, I think, leaveit up to you to release how much
the conversation with otherinvestors, the fact that you
have raised some real cash inthe bank and not, like you said,
some people with a nice set ofspreadsheets.
Speaker 2 (45:46):
There's no question it changes the quality of the
conversations, especially whenand people can look at our
website.
We've asked a number of thefunders to if they'd be willing
to become visible and it's, fromour point of view, a very
impressive list of people whoare at the forefront of building
(46:09):
this new regenerative foodsystem.
And so, yes, it absolutely doeschange things, because we're
essentially saying we're now atthe stage where we're saying
we're inviting more people tocome on this journey with us and
for us, we see this isn't justabout putting some money to work
(46:30):
.
It's an invitation toco-student with us the future of
a new food system.
It's much more profound for us.
It dedicated our lives to thisand a growing number of people
are doing it, and it is apassion that we also look for in
the people that we are pleasedto see come to the table to fund
(46:51):
us as well, because this is ajourney of them, in a sense, a
journey of belief aboutsomething that's possible, that
could be completely differentfrom the world we live in today,
and that's really exciting tobe part of.
Speaker 1 (47:05):
Yeah, my reasoning to invest is as well.
We cannot afford not to try.
Am I convinced it's going towork?
I don't know, but do I want tosee this happen?
And I'm sure there are quite afew people who actually want to
see you fail, but I definitelywant to see you succeed and I
want to see if this is possible,the stacking, all the pieces
(47:29):
that require some money and thatrequire skin in the game.
So that's the reasoning behindthat and I want to double click
a bit on the journey piece aswell with you, mark, as we
talked a lot about in the firstinterview, the regenerative
business piece.
Has that thinking understandingchanged as well over the last
(47:50):
years and, if so, how has itbeen deepening?
On the deeper generation piece,we can definitely click on that
as well.
But also there's a role of theenterprise, the role of your
dimension, the role of humanbeings in as a keystone species
and a potential positive impactor net positive.
Has your thoughts and yourunderstanding of the potential
(48:14):
net positive role of enterprisesand companies also changed?
Speaker 3 (48:20):
It's gained in depth and detail a huge amount If you
want a really practical andalmost feels a bit superficial.
But if we go back to the modelCalhau Mark's just referred to
it, there was a.
We've had these seven versionsthat I've referred to and it's
(48:43):
now got what Mark referred to asa bottom-up approach.
What that means is that we canactually say, based on reliable
farm data and assuming a worstor normal case development, we
can tell you how much will growon that side and we use for each
(49:05):
individual thing.
So what?
In our first fundraise one ofthe questions was well, how many
pork chops are you going tosell?
And we weren't able to answerthat time because the approach
Worked on budgets rather than onthe bottom up detail.
So in that level of clarity andfine tuning, honing in on to
(49:26):
that Is very inspiring becauseit connects with other things
I've done in the past where I'veoften been confronted in my
career with people who wanted tosee things fail or who only
supported it because theysomehow had a A pre shard and
froid that they wanted.
This isn't possible and it's.
(49:47):
It is possible and one of thethings this is.
So this is where technology canbe really helpful in computers
can help us process.
In a way.
We can't think in the detailbut we can think in terms of the
vision and so the that's makingme really hopeful.
So what I think I talked a lotabout ESG and the cynicism
(50:07):
behind ESG in my in my in myprevious interview.
I think this idea of Basing aneconomy not just within the
planetary boundaries butactually building so that's
still old world thinking.
I'm trying to be within theplanet boundaries.
That's polluting less orpolluting.
Speaker 2 (50:28):
We don't actually have to yeah, it's, it's that.
Speaker 3 (50:31):
That's that sort of trying to have it both ways and
then you have it neither way.
It's possible.
And I'm absolutely confident,and in fact there is a large
organization in Brazil thatfarms 60,000 hectares and is
known to the outside world as asugar manufacturer, but inside
has a biodiversity that is morethan 50% of the nearby Sao Paulo
(50:56):
National Park.
This is the Balbo group, andthey they are organization
organizations like thatdemonstrate that you can do this
at scale, and they demonstratesomething else to.
They demonstrate this idea thatwe are in a competitive world
and that evolution is driven bycompetition is total bogus.
If it's driven by collaboration, if you, if it's based on
(51:21):
compete competition, you competeyourself out of the planet,
which is what we've just done.
It's the collaboration piecethat really makes a difference.
Does competition happen withinthe collaboration?
Totally.
Is competition for the bestideas important?
Absolutely.
But the ultimate piece is acollaborative piece and that's
(51:42):
where, also, joy is at home, andI've worked for so many people
who, who are just bitter becausetheir whole world view is
somehow based on.
Speaker 1 (51:54):
The market is one of them right yeah, yeah, yeah, I
mean no.
Oh, he's still on the courthere, sorry, sorry.
So the fun and joy piece I'mmaking a joke, but the fun and
joy piece is is fundamental,like it's like how I was this
going to be a marathon If thefirst meters are already
horrible?
Speaker 2 (52:16):
it's.
One of the amazing thingsactually about our journey is
that you know people would saythree years and three and a half
, four years into building newfoundation farms and you're
going to go you're only goingoperational now.
You know you must be exhausted,and actually we're not.
We're more excited because youhaven't been farming would be
that.
Well, don't forget that in theteam we've all done lots of
(52:39):
farming, so it's not that we'reunaware of the challenges.
Speaker 3 (52:46):
That old hat.
You know when people used tosay I mean, we're so glad that
Claire Hill has joined us asdirector of farming operations
and she's such, a, such a gem.
But you see them the above, theknowledge, the deep
understanding of farming andespecially regenerative farming.
Claire is also one of thosebeautiful people who's capable
(53:09):
of connecting to people andmotivating people and
recognizing the talent and skillthat they bring along, as
opposed to expecting a job sheetTo be ticked off by the end of
the day.
And another example of howregeneration is first and
foremost about collaboration.
The mindset shift Is aboutrecognizing the collaborative
(53:33):
opportunities and how, in a way,what we have to go through that
process of unknowing thecontrol and recognizing the
collaborative opportunity.
And so these are all things,but what it, what it amounts to,
is abundance, what all layers,it's the abundance below the
(53:55):
soil.
It's the abundance in my soul,the joy of recognizing how we
can collaborate with each other,other humans, but also step
back and have a little Humilityand see that we can collaborate
with water cycles and bees andthat we don't have to use
(54:17):
invasive foreign bees, but wecan work with our local bees
that live In our woodlands andwe can bring them onto our farms
and that a farm becomes, youknow, a wellspring of life
rather than Essentially a deathsentence for the natural world.
So I'm very, very positive thatbusiness is a is a suitable
(54:38):
organizational structure thatcan bring together capital,
organizational capacity,technology, equipment and land
in order to bring about the muchneeded rural regeneration that
we've all been waiting for.
Speaker 1 (54:56):
So it's safe to say we are.
We are in an iPhone moment.
Speaker 3 (55:01):
That is, yeah, the new foundation farms is simply
about just taking bits andpieces that have been proven all
around the world.
Nothing in what we do isfundamentally new.
It's the way we put it togetherinto a very sound business plan
with a very competent team, andwe're going to execute that
(55:21):
Then and then, as in.
For us, the iPhone moment isalready happened, because we
know it and we're just gonnademonstrate you have shown
things, yeah go ahead?
Speaker 2 (55:30):
Yeah, couldn't it?
As I was listening to this partof our conversation, I was
picking up on on something thatsits very Profoundly in in a lot
of our really goodconversations with funders,
which is not, you know, couldthis work?
Does it work?
You know, show me the detail,because I mean anybody who looks
(55:53):
at the that you know the detailand looks at the quality of the
team it's hard not to reachconclusion.
We got the expertise to do this.
It's it's a different thing.
It's what if we're right?
What if we are right?
Because if we are right, thenwe are talking about A future
food system that is so muchbetter than the one we've got
and you know, we can haverewilding and regeneration
(56:17):
because we'll need a fraction ofthe lens for food that we
currently currently use.
We can have local food.
We can have resilience is somuch we can have that that comes
with this iPhone moment and andso for met many of the people
who we talk to her excited aboutthis.
It's that thought.
(56:38):
It's what if we're right?
What if we are right?
Because if we are, we're all ona different journey to the one
we've been on for the lastPossibly nine thousand years,
depends how far back you want togo since the day we first put a
plow into the ground andstarted Buggering up the ecology
and creating deserts.
We're at the moment of change.
Speaker 1 (57:01):
It's such a profound ending, but I wanted to ask a
question about accessibility andprices, but it just doesn't
feel really the right bridge,let's say but I'm going to do it
anyway.
For those 2,000 people, justwhat, if you're right, what does
it mean?
We talked about what they wouldget, apart from the fact that
we get a neighbor nearby that isfarming profoundly different
(57:21):
than anything else probably intheir vicinity.
But also, is this accessible?
Whatever you've modeled, you'vegone deep into the cost
structure.
You've gone deep into what isneeded to keep this company
alive, to keep it profitable, ofcourse, with the investors, etc
.
Etc.
But also, what does it mean for, apart from the quality, which
(57:42):
is probably way different thanwhat you can actually get now in
the supermarket.
But let's leave that at that.
Nutri-density research willcome, is coming and all that.
But if we just look at tomato,tomato, apple, apple, a piece of
beef, etc.
How do you make sure it isaccessible?
Or is it because you're cuttingout everything by definition,
or actually in a position thatit is accessible for almost
(58:06):
everyone?
What is the accessibility piece?
I'm just asking the devils.
I've got a question that somefunders might ask.
Speaker 2 (58:12):
There are so many layers to answer that question
about accessibility, but let'sdeal with the big picture first.
I was asked this by a bunch ofpeople from Nestle and Unilever
and they were saying, yeah, butisn't the farming going to be
more expensive?
And I said, well, actually, inour view, the total delivered
cost of food doesn't need to bemore expensive.
If any, we think it willprobably go down.
(58:33):
The total cost of deliveredfood and the total cost of
delivered food represents ahighly profitable supply chain,
just not currently for thepeople who produce it, but very
profitable if you're a bigsupermarket or a big wholesaler
or a supplier of industrialchemicals.
It's great, lovely business.
So, and guess, who's telling usthat these other systems are
(58:59):
not going to work?
It's the same story as we getin the energy system, where you
get engineers who spend theirlives with big power stations
telling us oh, we can't have anenergy system unless we have big
base load power stations.
Yes, we can, we can have adistributed system and every
house can be energy efficient.
We just have chosen not to doit yet, partly because of the
(59:22):
fob created by those who have avested interest.
In the current way the systemworks, and not with bad will,
just because you know, when allyou've got is a hammer,
everything looks like a nail,and that's the same in the food
system.
Our view is, in the long run,there is nothing in this
approach that suggests that foodneeds to be more expensive and
(59:45):
therefore, if it doesn't need tobe more expensive,
accessibility is not a problem.
Accessibility is not a problemand it is a combination of many
things that makes that astatement.
True in terms of relative costsand, yes, the benefit of the
whole value chain, but also lossof inefficiency, For example.
You know, we know that 40% ofthe food that's grown is wasted
(01:00:08):
in the supply chain, and justproduce that by half and you've
got a completely different setof numbers in the delivered cost
of food.
So there's so much in this, butthe thing to stick in the head
is that, fundamentally, we don'tneed some super premium at the
point where we, the citizens,buy the food in order to make
(01:00:30):
this kind of alternative foodsystem work.
Speaker 1 (01:00:34):
Mark, is there something to add?
Speaker 3 (01:00:36):
Yeah, it's definitely one of those multi-dimensional
questions.
There's lots of accessibility.
There's accessibility to land,for example.
There's access to health.
Access to health through foodis something that our current
healthcare system is notparticularly good at.
(01:00:58):
We spend millions on fertilizerand then farming subsidies, and
then we spend millions onobesity, and the two can be
married up.
We are essentially all eatingnutrient-poor diets.
We focus on the calorie andthen at the expense of the
(01:01:19):
nutrient and so forth.
But I think the question you'reasking ultimately is of the
social nature is this food moreexpensive?
Is it, like organic, moreexpensive?
I would say at this point intime it's a little bit difficult
to see what's ahead, becausenew opportunities, like the
(01:01:41):
software on your mobile phone,open a whole new possibility for
conversation.
But I think I'm going to hazarda macroeconomic guess, which is
that food can, on average, beproduced in these ways for the
same or less, or sold for thesame or less, while at the same
(01:02:05):
time removing vast externalities.
We talk about cheap food, butthat's obviously not a truth.
It's cheap at the point of saleand very costly in terms of the
environmental impact.
So I see a world in a fewyears' time when the immediate
(01:02:26):
pressure to demonstrate aprofitable business to the
current and future fundersrecedes a little where we can
talk about other social modelsof pricing where maybe people in
the immediate vicinity paydifferent amounts for their food
according to what they thinkit's worth and according to what
(01:02:48):
they can afford.
We have to develop the systems.
We have to engage in that kindof conversation.
But I think people take it backto something Mark said earlier.
Supermarkets only came about inthe way they are today between
the two world wars.
They were based on thecommodification and the
emergence of brands.
Until the 1920s you didn't paya uniform price in a supermarket
(01:03:15):
.
Even when there was a groceryou would pay based on a
negotiation on price Before agrocer became a store, in the
sense that you would go there,food was home delivered.
In a certain way we are talkingabout things that have.
We've had a brief blip wherefood was concentrated to the
(01:03:40):
benefit of brands and thelogistics provided by
supermarkets, and by taking thatout of it, food becomes more
affordable for more people.
Speaker 1 (01:03:54):
It's fascinating the price piece, the delivery piece,
and we see it in many cases.
Of course we were so used tothe supermarkets that we sort of
take it for granted.
They've always been there sincethe invention of the plow and
of course that's not the case,but that holds any innovation.
We've been used to landlines,centralized power, the great
(01:04:17):
landscapes, and we cannotimagine in many cases what it
could look like, which I thinkis a good way to bring this
conversation to a hold, or atemporary one, Because for sure
you'll be back.
I will be following thisjourney as it unfolds further.
I wish you all the best withthe fundraise and hopefully
(01:04:40):
we'll be following the farmingpiece and you'll be in the
market soon for a farm, whichmeans this spreadsheet is going
to land somewhere with roots,somewhere with deep roots and
probably not with the plowpassing by every now and then.
So I'm looking forward to thatmoment and let's see if the
(01:05:01):
naysayers are wrong and we'llsee how abundant these systems
can be.
Speaker 3 (01:05:09):
Thank you, kuhn.
Thank you, kuhn.
Thank you for being part of asubspecies of humankind,
beneficial, keystone species inthe making.
Speaker 1 (01:05:22):
Thank you so much.
Thank you so much for listeningall the way to the end.
For the show notes and links wediscussed in this episode,
check out our website investingin RegenderEcologycom.
Forward slash posts.
If you liked this episode, whynot share it with a friend or
give us a rating on ApplePodcasts?
(01:05:43):
That really helps.
Thanks again and see you nexttime.
A check-in interview with the founders of new
foundation farms about how theywent from trying to raise 20
million to buy 1000 acres in theUK to deciding to focus on
building their stackedenterprise on Leesland and
ending up going almost fullcircle back to the beginning.
Now, having learned a lot inthe past 3 years, they realized
that in order to build a highlyprofitable and ecological sound
(00:21):
business, they don't need 1000acres, but only 250.
So they are back in fundraisingmode to raise 5 million to show
the world that we have passedthe iPhone moment of
regenerative agriculture, whichmakes me wonder what if they are
right?
What if we can build profitable, abundant regenerative
companies, if that's the case,that we put the food and ag
world upside down?
(00:42):
And those are enough reasonsfor us to follow the story very
closely.
This is the investing inregenerative agriculture and
food podcast investing as if theplanet mattered, where we talk
(01:02):
to the pioneers in regenerativefood and agriculture space to
learn more on how to put ourmoney to work to regenerate soil
, people, local communities andecosystems, while making an
appropriate and fair return.
Why my focus on soil andregeneration?
Because so many of the pressingissues we face today have their
roots in how we treat our land,nrz, grower food, what we eat,
(01:25):
where and consume, and it's timethat we as investors big and
small and consumers, startpaying much more attention to
the dirt slash soil underneathour feet.
To make it easy for fans tosupport our work, we launched
our membership community and somany of you have joined us as a
member.
Thank you.
If you have our work createdvalue for you and if you have
the means and only if you havethe means consider joining us.
(01:46):
Find out more on comroadcomslash investing in regener ag,
that is, comroadcom slashinvesting in regener ag or find
the link below Welcome toanother episode of the podcast,
(02:10):
a very special one, as we areback with Marcus and Mark of New
Foundation Farms and we haverecorded quite a few interviews
with them before, so specialseries.
I will definitely put the linkbelow in the description or the
show notes, and we also recordedan update interview in November
2021, but we never released itbecause there were so many
(02:31):
things happening in NewFoundation Farms over that time
that it just didn't feel rightbecause it wasn't up to date
anymore.
Things were changing and thingshave been pivoting, merging,
changing, coming full circle.
Let's say it's safe to say, alot has happened at New
Foundation Farms and I'm verymuch looking forward to release
this interview first of all, butfirst of all to actually record
(02:52):
it and checking in with Markand Marcus, who I don't think we
ever had together on thepodcast at the same time in an
interview that we actuallyreleased.
So it was great to see atGroundswell and to meet actually
Marcus for the first time inperson and Mark we've had met a
few times and to check in andnow we're recording this the end
(03:12):
of summer 2023 and I'm so muchlooking forward to unpack what
has happened, what is movingforward, your insights and
what's going to happen on theground and so much more.
So welcome, welcome back bothof you.
Speaker 2 (03:25):
Thank you very much.
It's great to be here.
Speaker 3 (03:28):
Wonderful to be here.
Thank you, Kuhn.
Speaker 1 (03:32):
And let's say somebody is listening to this
relatively soon, so somewhere inautumn of 2023.
What would you say as asnapshot of where New Foundation
Farms is now?
I remember I think I put theheadline a long time ago you're
raising 20 million and buying athousand acres and, like large
(03:55):
numbers, always do really wellin title.
So we, of course, put it thereas well, but it was your goal.
Where would you say you're now,as we are recording this, at
the end of August 2023?
Speaker 2 (04:06):
We're going to have that funny moment where whenever
both of us are on anyconversation, we look at each
other to try and sense who'sgoing to respond.
So let me dive in and say wherewe are is we're about to launch
a 5 million pound fundraiseafter an extraordinary 20 months
(04:27):
or so since we last were liveon the podcast, and with that
we're going to acquire our first250 acre site and lots to tell
about that and build the firstvertically integrated field to
(04:49):
home hub in the UK for deepregeneration and the basis for
the transformation of the foodsystem.
Nothing modest about that.
Speaker 1 (05:02):
And what's the biggest surprise?
I would say we get to lessonslearned over the last 20 months
as you have been trying tofundraise, came to the
conclusion that probably in thatmarket and now the market is
changing more 20 million andbuying so much land was a
thousand.
Now you're back to 250 and Iknow you were on a path for a
(05:23):
while to lease land of others.
Like, how has the journey beenover the last 20 months and what
was the biggest surprise?
Speaker 3 (05:31):
There's been a number of different pivots in the
process, and the pivots haveboth been brought about through
our own developing thoughts.
People who've joined the teamthere are now 10 of us.
At the same time, theconversations we've had with,
especially organisations thatare interested in bringing
(05:54):
finance to this emerging market,as you want, have obviously
hugely influenced us, and one ofthe pivots was this change that
we pursued for nearly two yearsof leasing land instead of
buying land.
(06:14):
That was inspired by a largefunder who saw great potential
in the lease opportunity, and sowe worked that through in great
detail and we explored thatopportunity with major
landowners in the UK.
In fact, we've worked through aholistic planning process with
(06:35):
six landowners of differentsizes, but the ultimate outcome
of that journey was thatactually the organisational
constraints of large landowners,or, in fact, the established
world of institutions, has areal hard time as an institution
(06:56):
not as the change agents in theorganisation, but as the
institution itself, with itsembedded policies and decision
making frameworks and so forththat those organisations really
struggled to engage with thenecessary change that we're
facing.
People get it, they love it,they engage with it, they want
(07:16):
to see it, and then it comes tothe crunch point where you have
to make a decision making.
Committees have not been up tothat task.
That's been one of the majorlessons and the reason for
several of our pivots, since thefirst 1000 acre fundraise, and
(07:36):
then the pivot to leased options, and now our final approach to
buy 250 acres, which is so muchsmaller than the original 1000
acres and another big pivot forus.
Speaker 2 (07:54):
Kuhn, can we jump in?
Because, as I was thinking, thegreat thing about being two of
us on this is one can talk andthe other one can come up with
an even cleverer answer.
But the big surprise for me,actually as Marcus was talking,
was that the big plan hasn'tchanged at all.
So here we are four years afterwe started Newfoundation Farms,
(08:18):
and our clarity of vision to be, within a decade, operating on
60,000 acres of land and havinga supply chain ecology of
600,000 acres in the UK hasn'tchanged.
It's all been tactical.
It's all been how do we getthere?
We have not had a scenario inwhich we've said, oh, hang on,
we've got the wrong big ideahere.
(08:40):
This doesn't make sense.
It's been all about tacticalsolutions to move forward.
Speaker 1 (08:45):
So forever didn't listen to our original series.
What's the big idea?
Speaker 2 (08:52):
We're looking at each other and to see who's going to
answer.
That's why we have video.
We don't record the video.
Speaker 1 (08:57):
We use video for this conversation so people can
point.
It's always useful.
Speaker 2 (09:01):
Great.
So the big idea is that thesolution to the challenges of
the food system that we've builtare not going to be found in
simply tweaking the system we'vegot.
The big idea is that the powerof the science of regeneration
(09:28):
that has developed over the last25 years through our
understanding of therelationship between things in
ecology is opening the door to acompletely new food system.
That's the big idea, and thatthat food system is built on two
principles.
It's built on the principlethat land can be highly
(09:50):
productive and highlyecologically productive highly
productive of the food andhighly ecologically sound, and
the consequence of that is thatyou end up with a requirement
then to transform the whole foodsystem between the field and
the person who eats the food atthe other end of the supply
(10:11):
chain, simply because what'shappened is you're now producing
lots of different things insmaller quantities in stacked
enterprises on the land, andthat enables you to then process
and sell locally and do thateverywhere, and that is the food
system that is coming in ourview.
We want to help make it happenfast, and it will shatter the
(10:37):
framework of the current globalcommodity industrial system,
because you're dealing with thewhole food pound in a way that
can create a highly profitablesystem, as opposed to the
current one, which doesn't makeany sense for the ecology or for
society, or for those peoplewho grow the food.
Speaker 1 (11:00):
So why haven't we seen that stacking?
Yet, if this is so obviousthrough the regeneration science
that we've seen, and alsoexamples of very productive
ecosystems, both on food and onbiodiversity, why haven't we
seen many, let's say, largerscale, highly profitable iPhone
(11:22):
moments?
Let's say that everybody's likeyeah, of course I looked at an
ecosystem before.
I looked at a farm before, andnow I realize we were only
scratching the surface in termsof potential.
What is unique here, or whatmakes this more than a nice
vision?
Why haven't we seen thismaterialized in many places?
Speaker 3 (11:43):
Let me zoom out for a moment in answering that
question and focus on adifferent sector just to
establish a few principles.
When the fossil fuel sectordelivers 100% of electricity to
all homes, it seems to somepeople to be nonsensical to try
(12:05):
out a different form ofrenewable energy production
through solar panels or windturbines.
Why would you want to do that?
It's risky, it's new.
Nobody's done it before.
We haven't connected it tofinance.
Then you have the emergence ofa new kind of knowledge and
connection with finance and itcreates disruption, market
(12:28):
disruption through disruptorenterprises.
That's what happened with theemergence of renewable energy at
scale.
We had that same disruption inthe communication sector when
landline telephony was actuallyquite fast replaced by mobile
(12:49):
telephony, when people in thelandline business didn't
understand how that might bepossible, to the extent that
some people now don't have alandline.
It's no longer the necessarilydefault communications option
100 years later after theinvention of the telephone.
But then within thecommunication sector there was
(13:13):
this next thing that you justreferred to call the iphone
moment, where in a way onebusiness decided that the game
wasn't about hardware, was alsoabout hardware, obviously, but
it was about the software andthe way that you use the piece
of the hand held device in orderto enable a lot more, then just
(13:33):
the communication, and now weuse the phone very little to
talk to each other and for allsorts of other things, including
measuring what we eat, how farwe walked.
I don't know what you listen to, your podcast, for example.
It's opened up whole new waysof thinking about things that
are possible when you, whenyou're looking at it through the
(13:57):
lens of an existing system.
Speaker 1 (13:59):
What is the lens with with the food and egg sector
where either at our iphonemoment or already had our iphone
moment, just to say that matterfor another is a perfect one.
But just to understand, just toget to that for investors
especially, why now, instead offive years ago or in five years
like, why is this Two thousandtwenty three the moment to put
(14:23):
resources in this?
Speaker 2 (14:26):
We think we're at the iphone moment, because there's
a technology that can transformeverything.
But, just like apple launchingthe iphone, what's happening to
most people is there, sittingthere and looking at it and
saying, well, why it doesn't dothat?
Speaker 1 (14:39):
it doesn't do that, it doesn't do it took quite a
bit of time.
Speaker 2 (14:43):
actually for many, including myself, you need a
keyboard, like of course you'renot gonna, and we all know how
that ended but the bakery andyeah, that's an interesting
point and so, if you draw theparallel, what's happening in
the in the food sector is thescaled response currently is not
(15:04):
an iphone response, it's alandline response where what's
happening is big food.
Big players in the foodindustry send me saying, okay,
is this new technology?
What it means is we can makemore ecologically friendly food
and shove it through the samesupply chain, and so where's all
the emphasis?
It's on Quality assurance downthe supply chain and things
(15:25):
called standards so that we canmeasure whether or not something
is ecologically sound.
But it's not doing what.
What what apple saw in theiphone.
This is gonna change everything.
Why?
Because it enables us to dothings we couldn't do before.
You couldn't deliver low cost,affordable, nutrient dense food
(15:49):
to everybody without a stockinggreat global supply chain.
We believe we now can.
That is the power of what theregenerative system enables, and
that is requires a level ofReorganization of the food
system that is way beyond simplymaking sure that what you buy
(16:13):
at all the little saints, breeze, whichever is your favorite
supermarket is more eco friendly.
It's a completely differentsupply chain.
Just imagine last point.
And then Is just imagine.
Somebody said to me the otherday it is, with all the
technological development we'vegot, we're still doing what we
(16:33):
did in the nineteen thirtieswe're going to the supermarket
to buy our food, notwithstanding the home delivery,
most of which is actually peoplein a truck walking into a
supermarket, picking off theshelves and delivering for us.
That's a incredibly ondeveloped, an unreformed food
(16:54):
system.
Compare with what's nowpossible.
We can have ninety percent ofthe nutrients that we will eat
delivered directly to our homesfresh from predominantly local
grown sources enable by thisregenerative system.
That's the iPhone moment,because people, we, what we
think is that very few peopleare seeing that opportunity and
putting in place the capacitiesand resources to do it.
(17:17):
So what the doing is typicallysaying okay, well, we need to do
things more regeneratively, buthang on, it's complicated,
because I've got to have twentyor thirty or forty or fifty
different Enterprise stacks onthe farm and I'm just one man
and a farmer and I can't do that, and it's usually one old man
as well.
I'm saying no, no, no, that youknow any other industry.
You would say hang on.
That means we need toreorganize everything.
(17:38):
We need a much moresophisticated organizations that
are capable of this verticalintegration.
So there's a whole lot behindthis is critical to the
transformation and is also thepotential of the opportunity
that can be now captured, rightnow.
We don't need to wait.
It can be done today.
Speaker 1 (17:58):
And yet you didn't manage to convince a landowner
to get on board with that, or atleast the not the final
decision makers or the committeemaybe we're enough people or a
few people that were interestedin this but that process did get
you to realize that you don'tneed a thousand acres to start,
(18:21):
which I think is a very valuablelesson.
So how, how did that process goand how did you realize you
need one?
Fourth, basically, which alsobrings down not saying it's
easier to raise five millioncompared to twenty.
It's actually it's a lot lessmoney, so it might, might, might
be easier.
So how did that process go, fromfrom one thousand to two
hundred and fifty, realizingthat that could be the MVP or
(18:42):
that could be enough to show alot of these things, because All
of this is on paper, all ofthis has been calculated, all of
this makes a lot of sense, butuntil people see it, feel it,
touch it and see what a reallyproductive stacked enterprise
farm could be, I think it'sgonna be very difficult for
people, for many people, to Tosee the potential to use all the
(19:04):
iPhone.
It was very difficult to seethe potential of touch screens
etc, even though we saw a fewsmall examples here and there,
which we also see Info the nag,with your few farms really
stacking a few things and doingrelatively well, and but you
don't see that scale, or atleast not not a lot.
So how did the process go fromOne thousand two fifty and?
Was that a moment?
Was that a calculation?
(19:25):
Was that a realization?
Like actually we need less.
Speaker 3 (19:29):
Let me let me zoom out one more time.
When we started, we wereabsolutely, we were absolutely
persuaded that regenerativeapproaches to agriculture were
the method, if you want, thatwas going to make it possible
for us to transform the way weProduce food for Form of
(19:53):
civilization and that that wouldtake it from an approach that
was the pletif or degenerativeof the underpinning ecological
assets to building it, but thatthe way farming is organized,
especially in the UK, you'veactually got a situation where
(20:16):
you have currently, just as astatistic, three percent of the
farmland in the UK or less isorganically certified.
There are twenty million acresof farmland or land on the man
agricultural management in theUK.
There are two hundred andtwenty thousand farms
approximately, as an average ofabout two hundred acres.
There are a lot of people doinglots of very inspired and good
(20:40):
work in small ways.
What we recognize is a lot ofsmall doesn't make big.
What we also recognize this,this disconnect between large
investors and small goodprojects, and it's not.
It's.
There's a clash of values, aclash of Perspective language,
(21:01):
but also a very good yeah, howdo you translate An organic
market garden into an investableasset class?
it's difficult.
There isn't the spreadsheetthat you can download, there
isn't the the masterclass thatyou can do.
And then, do you have the time?
(21:22):
Do you have the time assomebody engaged in this?
It's a real struggle gettingaccess to land.
So there are hurdles stackedagainst new entrance with new
ideas.
The market, the free market,isn't quite so free when it
comes to farming.
There are some very vestedinterests in Maintaining a
(21:43):
fragmented, disparate workforcein mostly men if it's arable or
whatever else in a tractor cabinand organizing in such a way
that they eat out I'm barely acat a livelihood and supply food
that I don't even know what ittastes like, and so forth.
(22:04):
And it's, it's a in systemsthinking.
You would call that a pathway.
It's entrenched.
This is people get out of bed,they think like this.
They don't have enough time tothink any other way or to
educate themselves to do itdifferently.
So you got this disconnectbetween small and big, both in
terms of the finances and interms of how people go about the
(22:25):
practice, and so it's verydifficult to find a lever point
in that to change it.
So the lever point that we'vebeen focusing on with new
foundation farms is how do youtake something like this and
develop an enterprise thatscalable both in operations and
impact?
And that's that's a paradox,and that which is that most
(22:46):
scaled large enterprises areactually centralized.
Where is in?
If you think through holisticapproaches and regenerative
approaches to land, one of themantras or the first principles
you come across is that it's allContext specific.
So ultimately you have to finda way of managing something, of
(23:07):
organizing something in such away that it's place based.
If something is place based inour in the world we're living in
at the moment, this is a totalparadigm shift.
Forget about all the otherdetails.
Business is not organized in aplace based way.
We're organized in a globalized, uniform, standardized way
where we do things in onecountry and the same way in
(23:30):
another country, because that'sallowed us to create thousands
of widgets in the same way andthen sell them in various ways
across the planet.
What we're proposing is thatthis possible to create a large
enterprise that's actuallysensitive to local context, grow
An abundant, hyper, diverse, arange of food fruits, vegetables
(23:55):
not seeds needs, etc.
And distribute that as locallyas possible to as many people as
possible.
We call that hyper diverse.
I put local everywhere, sothat's.
There's a lot of complexitythere, which is why I talk about
the, the, the, the, the.
The iphone moment was the switchfrom hardware to software, and
(24:17):
I'm sure that there were plentyof people who said people don't
want to Mobile computer, theydon't want to tick all those
boxes, they just want to talk tosomeone.
I'm those people, the so-calledlate adopters or laggards in
the adoption curve.
There are ways to time to talkto, because they're very good at
maintaining the status quo, butthey're not very good at
(24:37):
disrupting the status quo.
Where we're about disruptingthe status quo, and and this is
ultimately when you think thosethoughts through you end up with
this kind of place based logic.
And there's one final thing inthis, which is that as we got,
when deeper and deeper into thelogic, we arrived at the
(24:59):
recognition that this isn't justabout a different way of doing
business.
This is about a different wayof perceiving of ourselves as
human beings on planet earth.
This way of thinking isn'tpossible unless you recognize
the possibility of yourself asbeing a custodial species on
(25:20):
planet earth, which is anathemato the way many people think
about the role of human beingson planet earth.
We've come to see of ourselvesas a scourge, as the opposite of
the natural world, as theartificial species versus the
natural world, and we're sayinghang on, we are of nature, we
(25:41):
are capable of integratingourselves with nature, we are
capable of farming in such waysthat we can leave a landscape
better off than it was when weharvest, than it was when we
sowed the seeds.
So there's a whole lot of stuffthat we've been through, and
(26:01):
along the journey with us hasbeen a software model that's
gone through some seveniterations or seven major
version changes, called cow-how,and cow-how has accumulated all
of this thinking, and so, in away, this is the possibility
here of thinking about farmingdifferently through the software
(26:23):
, because it's enabled us totrack all of these individual
incremental thoughts thatactually add up to a major
perspective change.
And that perspective changemanifests itself, for example,
in our initial idea Well, we'regoing to have to have a thousand
acres in order to make thiswork.
And now we recognize with afurther fine tuning that much of
(26:45):
the magic in our thousand-acremodel was actually happening
within 250 acres.
But you have to spend time andgo through the details and have
people on the team Like we'vegot Dr Annie Rayner and Ali
Murrell on our team now who havedug deep into that data and
given me a very hard time andquestioned many things and made
(27:09):
it so that we didn't need abigger model.
We developed a model that wascapable of showing we can do
this on less land.
That's, in a nutshell, some ofthe aspects that have come up
for us as we dove deeper.
If you want, it's been ajourney of the soul, it's been a
journey of the spreadsheet andit's been a journey of thinking
(27:31):
through different ways of doingbusiness and what disruption can
mean.
Speaker 1 (27:36):
And so there's a lot to unpack there, but I want to
bring it to you to the now, andthe cow-how obviously is a piece
of that.
So what are you currentlylooking for proposing?
What is the current form thatnew foundation farms wants to?
Let's say, we talk in a yearfrom now, the summer of 2024.
(27:57):
What would you ideally betalking about, ideally, at that
time?
Speaker 2 (28:06):
So 12 months from now , we will have acquired a
250-acre farm, we will havestarted our operations, we will
be commencing the process ofengaging with local people who
will become customers, notconsumers we hate that word,
(28:27):
consumers.
I don't know about you, but I'ma human being.
I'm not a unit in somebodyelse's marketing department.
I am a customer of companies ororganizations and I am a
citizen.
So we will have a growing listof people excited about the
prospect that there's foodcoming their way.
(28:49):
We will have employed a bunchof people on the first site and
we will all be ready to berolling up our sleeves in terms
of phases two and three of thisthree-phase expansion of new
foundation farms into operation.
Just quickly to say what theyare, because it's quite
important in the understandingWe've got a team of 10 people.
(29:10):
Now why would you have a teamof 10 people in the core to run
a 250-acre farm?
Well, you don't.
You have that because we'rebuilding the capacity to create
a complete transformation in thefarming, the processing and the
food delivery or retail systems.
So we need all of thiscapability.
(29:30):
So, first phase 250 acres.
Second phase is to expand thatthrough leased land so that
first hub becomes bigger and todevelop partnerships with other
farmers.
And I would say that the secondphase is grow that 250 to pick
a number of 1,000.
(29:51):
And as we grow, partner withother local farmers who then go
on the journey with us and weprovide them with a guaranteed
offtake route to market at afair price and because we're
cutting out all the middlemen.
There's nothing new about that.
That's what Riverford do, forexample, who have the vegetable
box schemes here in the UK, butdeep, long-term partnerships
(30:13):
with other farmers willing to goon the journey.
So we've expanded to 1,000 acresand as we do that, we go into
the third phase.
And the third phase is thenwhere we go to much greater
scale With, if you like, thisvisible proof that this is
starting to happen on the groundin one hub and the vision there
is.
Over the next 10 years we go tosix hubs plus minus it's the
(30:37):
numbers not important, but eachof 10,000 acres of scale spread
around the UK.
And at that stage we'restarting to make a serious dent
in people's understanding ofwhat the food system can look
like.
And in order to do that, wethen have a series of different
financial solutions for each ofthe three phases, which we can,
(30:59):
I'm sure we'll talk about in aminute, but it's a combination
of operational planning andfinancial frameworks that will
allow us to build an enterprisefrom 250 acres to 60,000 acres
over 10 years in a three-stepprocess.
Speaker 1 (31:17):
And just for the customers that join in that
first hub, what should theyexpect in terms of food?
Like you were mentioning thestacking of different things,
I'm mentioning it's more, largerquantities of different things.
What is the full replacement ofthe supermarket or majority one
(31:42):
?
What's the food that thesediverse farms can deliver to my
doorstep, or do I have to pickit up?
I mean, that depends probablyon what I want.
But as a customer, what do Ilook forward to if I join, let's
say, a year from now orslightly?
Speaker 3 (31:58):
this so there's a whole range that we'll be
engaging with right at thebeginning.
So first let's start at thesimple end.
The model is based on homedelivery, and the home delivery
will happen in rechargeableelectric vehicles and they'll be
in the fourth year.
(32:19):
We will have built up to 300deliveries a day and they'll be
delivering the average shoppingbasket worth 55 pounds to
approximately 2000 homes or 2000families.
So some of the calculations arebased on the idea that there's
an average of a four personhousehold buying what we have to
(32:40):
offer.
And what we have to offer rangesfrom grains, including oats, to
various, in fact 42 lines ofvegetables, herbs and soft fruit
, there's honey, there's eggs,there's top fruit and nuts,
there's milk and then there'smeat in the form of beef,
(33:00):
poultry, pork and lamb or goat,and in fact we've got a bit of a
debate about the value of sheepand agriculture altogether.
That that's for a separateconversation.
Now there are obviously thingsthat you can't grow everything
that's already quite asignificant amount, but there
are things like cacao and coffeethat you can't grow here even
(33:25):
if you tried.
And we're not against trade.
We're against the facelesstrade in the form of commodities
, just like Mark doesn't likethe word consumer quite rightly.
I don't want to buy commodity.
I want to buy my things frompeople.
Have an understanding that theyactually come from people, if
(33:46):
you want, from another community.
So we will be trading withother communities and
encouraging regenerativeapproaches, whether it's in the
regional collaborations orwhether it's in international
collaborations, and we'll bevery mindful of the footprint.
Where we can deliver by cargoship, maybe we will deliver by
(34:07):
cargo ship.
There are businesses that arenow going that route rather than
fossil fuel for the deliverywhere that's possible.
So we will be curating thatkind of thing and delivering a
very wide range of things thatshould be on the immediate
appeal of it being muchhealthier.
Appeal also because of thevariety of things that basically
(34:29):
mean you can replace yourweekly shop at a grocery store
with the weekly home deliveryfrom new foundation farms.
Speaker 1 (34:39):
And was the home delivery always part of the plan
?
I remember we talked a lotabout the farm shop years ago.
Is that been a changedeliberate?
Or is there still both options?
What has happened there?
Or maybe nothing.
Speaker 2 (34:55):
I think we've.
This is where, if you like, theiterative process has led to
deeper insights.
And the deeper insight aroundfood retail is this idea that
it's largely an undevelopedsystem since the 1930s, since it
was founded in the 1930s, 20sdifferent ideas, but anyway
(35:19):
between the First and SecondWorld Wars and that the futures
we see.
It is fundamentally aboutdirect home delivery of the bulk
of nutrients that you need onan ongoing basis from local
sources.
And then retail has a differentpurpose.
When we did the originaldesigns, we saw retailers
(35:42):
replacing the supermarkets.
We now see physical sites asmuch more about education and
demonstration, communication.
Yeah, yeah, yeah, you know thesort of and the model is already
there.
Again, there's nothing that weneed to invent in this principle
, because it's a principle thata lot of brands have understood
(36:05):
for some time that the purposeof a store is not sales.
That happens online.
The purpose of a store is toexcite people, to engage people,
to allow people to experienceand learn, and that's how we see
it.
So it's a shift in terms of thepipeline, of how things
ultimately end up in the home,but it's a blend of different
(36:26):
solutions to enable people tolearn, engage and ultimately
make the decision to change theway that food is goes from the
field to the fork.
Speaker 1 (36:39):
And I'm going to ask a question that might sound
wrong but is the countrysideready for that home delivery?
In a sense, you would imaginethese kind of things to work
really well in London, in Milan,in Amsterdam, in New York,
where we're super used to we I'msaying the general we to clicks
and stuff arrives on mydoorstep and we're annoyed that
that doesn't happen and blah,blah, blah, blah, and you're
(37:03):
going to be in the countryside,obviously, because you're going
to buy a farm and do you selectas well, like good internet
penetration or like how do youselect for that?
Or has it shifted so much overthe last years, through COVID as
well, that were almosteverywhere in the UK?
People are ready to click thatbutton Because it has to happen
online and it has to getdelivered to their place, as the
(37:25):
shop is not the maininteraction point or the main
sales channel, at least.
Speaker 3 (37:32):
Well, unlike other geographies, that one of the
benefits of the UK is that it isa rather small island and even
when you're in the countrysideyou're actually apart from when
it's really remote not that farfrom significant conurbations.
So clearly that is a part ofour decision making process.
(37:53):
For the ideal sites, thereneeds to be something that is
say that the limitation is thereach of the electric vehicle,
so that we can have a reasonablyresponsible supply chain.
We are not holding ourselves tothis idea that local means
(38:14):
within 20 miles or 200 miles,because that's actually again a
matter of local context.
What we mean first and foremostby local is that it's the
opposite of the global supplychain.
So it means it's connecting youwith a region and an identity
that comes from the naturalenvironment that you inhabit.
Ethan Soloviev's idea of thelife shed that phrase that the
(38:38):
recognition that I am dependentand live in a reciprocal
relationship with a piece ofland and the water and the food
etc.
That grows on that land is verymuch at the heart of this.
So that's the idea of localthat matters here.
Even in the UK it's very muchpossible to identify hundreds,
(38:58):
thousands of locations like that.
So that's one.
The second thing is that therehas actually been a silent or
quiet revolution in the UK interms of shopping or farm retail
.
There are large numbers of farmshops.
People are used to this way ofshopping and COVID shifted
(39:20):
things in favour of that.
Where you had globalsupermarkets that were reliant
on global supplies, we allrealise how fragile they are and
more local opportunitiesblossomed.
The UK is well connected.
There isn't a significant notspot environment.
(39:44):
We're all very connected.
Our first hub only requires2,000 households in the fourth
year.
We're talking about fairlymoderate numbers, as I used to
work at Riverford where we weredealing with hundreds of
thousands of deliveries per week.
Speaker 1 (40:06):
And so you're raising .
Now what are you exactlyraising for?
Is it the simple?
We need a quarter, so we need 5million, because we used to try
to raise for 1,000 and we'retargeting 20 million.
(40:26):
What has anything shifted?
There Is 5 million.
Does it feel more reachable?
Because sometimes it's actuallyeasier to raise a lot more than
it is to raise less.
That's an interesting piece.
You've probably talked to anyinvestor interested in
agriculture and food over thelast years.
So how does it feel to go tomarket now with this raise?
Speaker 3 (40:51):
It feels like the right thing to do because we
know that this is the way it cango.
The number also comes about inpart because, if you want the
alchemy of our journey in thatthat was just above that number
is what we soft circled in ourfirst attempt.
It wasn't enough to get us overthe minimum threshold to buy a
(41:14):
thousand acres.
But if you turn back the clockand we were only raising 5
million, you could go throughthe mind game of saying, oh yeah
, we achieved that then.
So there's the connection.
The two are connected in thatwe did actually get to that
number theoretically in thefirst and now we'll see how soft
(41:36):
the soft circle was and whathas happened over the years.
Speaker 1 (41:40):
But it's a good sign.
At least it seems feasible,although the world has changed
significantly.
Speaker 2 (41:46):
Well, it's interesting because when we Part
of your question was is 250acres, divide by four and divide
the amount by four?
Fascinatingly no, the answer isthe process was bottom up.
So, having gone on this journeyand concluded that we could do
(42:07):
this on a much smaller acreage,we then said, okay, well, based
on that smaller acreage, what isthe capital requirement?
Because a lot of other thingshad changed as well.
It was the level of detail inour analysis, and business
design was another quantumbeyond where we had been
(42:28):
previously, and therefore, ifyou were to dig into the
Carow-Howell model, what you'llsee is a much more sophisticated
understanding of the valuechain between the field and the
fork than perhaps we had at thebeginning, which in turn, allows
us to be much more preciseabout the quantum of capital we
(42:50):
require.
We should also say that theactual total capital requirement
is 7.5 million over four years,and so 5 million is the equity
side and over time, we see thebalance of the funding coming
from.
Essentially, we've modeled itas debt finance and explored the
(43:15):
modeling that we've done andsaid if we were to come to
market with a million pound debtinstrument raised in two years
time, we won't need it in thefirst year how does that look?
And it received a very warm andpositive response.
So there's a lot under thenumbers that are a lot more than
simply, oh, it's just theoriginal number divided by four.
(43:37):
It's actually bottom up andvery detailed in its planning.
The other thing that's changedis that we are Well.
Two other things have changed.
First thing is we're a muchbigger team.
We touched on that a little bitearlier, but there's 10 of us
now and with the funding itwould have been, let's put it.
(43:57):
Let me just say that again.
So two other things havechanged, if you like, within our
own landscape, in addition tothe refinement in the modeling
and the direction of travel.
The one is that the team is awhole lot bigger and stronger
(44:18):
and we've found ourselves beingable to attract really talented
people across the spectrum ofthe expertise that we need to
execute this field of approach.
And secondly, we have now beenthrough an external funding
round and that process of goingto market, which we did last
(44:40):
September, october, for aconvertible loan note, was, for
us, a wonderful expression ofconfidence and that, as you know
, of course, in any newenterprise there's a quantum
leap in the journey betweenbeing a bunch of people with a
(45:04):
nice idea, and a bunch of peoplewith a nice idea that has now
received funding.
Speaker 1 (45:09):
And the money in the back which we were very lucky
and happy to participate inpersonally, with a few thousand
and through a small syndicate wehave been running.
So we're part of this journeyand definitely biased in this
case.
And so that shift, the factthat you've raised some money
(45:30):
oversubscribed, I think, leaveit up to you to release how much
the conversation with otherinvestors, the fact that you
have raised some real cash inthe bank and not, like you said,
some people with a nice set ofspreadsheets.
Speaker 2 (45:46):
There's no question it changes the quality of the
conversations, especially whenand people can look at our
website.
We've asked a number of thefunders to if they'd be willing
to become visible and it's, fromour point of view, a very
impressive list of people whoare at the forefront of building
(46:09):
this new regenerative foodsystem.
And so, yes, it absolutely doeschange things, because we're
essentially saying we're now atthe stage where we're saying
we're inviting more people tocome on this journey with us and
for us, we see this isn't justabout putting some money to work
(46:30):
.
It's an invitation toco-student with us the future of
a new food system.
It's much more profound for us.
It dedicated our lives to thisand a growing number of people
are doing it, and it is apassion that we also look for in
the people that we are pleasedto see come to the table to fund
(46:51):
us as well, because this is ajourney of them, in a sense, a
journey of belief aboutsomething that's possible, that
could be completely differentfrom the world we live in today,
and that's really exciting tobe part of.
Speaker 1 (47:05):
Yeah, my reasoning to invest is as well.
We cannot afford not to try.
Am I convinced it's going towork?
I don't know, but do I want tosee this happen?
And I'm sure there are quite afew people who actually want to
see you fail, but I definitelywant to see you succeed and I
want to see if this is possible,the stacking, all the pieces
(47:29):
that require some money and thatrequire skin in the game.
So that's the reasoning behindthat and I want to double click
a bit on the journey piece aswell with you, mark, as we
talked a lot about in the firstinterview, the regenerative
business piece.
Has that thinking understandingchanged as well over the last
(47:50):
years and, if so, how has itbeen deepening?
On the deeper generation piece,we can definitely click on that
as well.
But also there's a role of theenterprise, the role of your
dimension, the role of humanbeings in as a keystone species
and a potential positive impactor net positive.
Has your thoughts and yourunderstanding of the potential
(48:14):
net positive role of enterprisesand companies also changed?
Speaker 3 (48:20):
It's gained in depth and detail a huge amount If you
want a really practical andalmost feels a bit superficial.
But if we go back to the modelCalhau Mark's just referred to
it, there was a.
We've had these seven versionsthat I've referred to and it's
(48:43):
now got what Mark referred to asa bottom-up approach.
What that means is that we canactually say, based on reliable
farm data and assuming a worstor normal case development, we
can tell you how much will growon that side and we use for each
(49:05):
individual thing.
So what?
In our first fundraise one ofthe questions was well, how many
pork chops are you going tosell?
And we weren't able to answerthat time because the approach
Worked on budgets rather than onthe bottom up detail.
So in that level of clarity andfine tuning, honing in on to
(49:26):
that Is very inspiring becauseit connects with other things
I've done in the past where I'veoften been confronted in my
career with people who wanted tosee things fail or who only
supported it because theysomehow had a A pre shard and
froid that they wanted.
This isn't possible and it's.
(49:47):
It is possible and one of thethings this is.
So this is where technology canbe really helpful in computers
can help us process.
In a way.
We can't think in the detailbut we can think in terms of the
vision and so the that's makingme really hopeful.
So what I think I talked a lotabout ESG and the cynicism
(50:07):
behind ESG in my in my in myprevious interview.
I think this idea of Basing aneconomy not just within the
planetary boundaries butactually building so that's
still old world thinking.
I'm trying to be within theplanet boundaries.
That's polluting less orpolluting.
Speaker 2 (50:28):
We don't actually have to yeah, it's, it's that.
Speaker 3 (50:31):
That's that sort of trying to have it both ways and
then you have it neither way.
It's possible.
And I'm absolutely confident,and in fact there is a large
organization in Brazil thatfarms 60,000 hectares and is
known to the outside world as asugar manufacturer, but inside
has a biodiversity that is morethan 50% of the nearby Sao Paulo
(50:56):
National Park.
This is the Balbo group, andthey they are organization
organizations like thatdemonstrate that you can do this
at scale, and they demonstratesomething else to.
They demonstrate this idea thatwe are in a competitive world
and that evolution is driven bycompetition is total bogus.
If it's driven by collaboration, if you, if it's based on
(51:21):
compete competition, you competeyourself out of the planet,
which is what we've just done.
It's the collaboration piecethat really makes a difference.
Does competition happen withinthe collaboration?
Totally.
Is competition for the bestideas important?
Absolutely.
But the ultimate piece is acollaborative piece and that's
(51:42):
where, also, joy is at home, andI've worked for so many people
who, who are just bitter becausetheir whole world view is
somehow based on.
Speaker 1 (51:54):
The market is one of them right yeah, yeah, yeah, I
mean no.
Oh, he's still on the courthere, sorry, sorry.
So the fun and joy piece I'mmaking a joke, but the fun and
joy piece is is fundamental,like it's like how I was this
going to be a marathon If thefirst meters are already
horrible?
Speaker 2 (52:16):
it's.
One of the amazing thingsactually about our journey is
that you know people would saythree years and three and a half
, four years into building newfoundation farms and you're
going to go you're only goingoperational now.
You know you must be exhausted,and actually we're not.
We're more excited because youhaven't been farming would be
that.
Well, don't forget that in theteam we've all done lots of
(52:39):
farming, so it's not that we'reunaware of the challenges.
Speaker 3 (52:46):
That old hat.
You know when people used tosay I mean, we're so glad that
Claire Hill has joined us asdirector of farming operations
and she's such, a, such a gem.
But you see them the above, theknowledge, the deep
understanding of farming andespecially regenerative farming.
Claire is also one of thosebeautiful people who's capable
(53:09):
of connecting to people andmotivating people and
recognizing the talent and skillthat they bring along, as
opposed to expecting a job sheetTo be ticked off by the end of
the day.
And another example of howregeneration is first and
foremost about collaboration.
The mindset shift Is aboutrecognizing the collaborative
(53:33):
opportunities and how, in a way,what we have to go through that
process of unknowing thecontrol and recognizing the
collaborative opportunity.
And so these are all things,but what it, what it amounts to,
is abundance, what all layers,it's the abundance below the
(53:55):
soil.
It's the abundance in my soul,the joy of recognizing how we
can collaborate with each other,other humans, but also step
back and have a little Humilityand see that we can collaborate
with water cycles and bees andthat we don't have to use
(54:17):
invasive foreign bees, but wecan work with our local bees
that live In our woodlands andwe can bring them onto our farms
and that a farm becomes, youknow, a wellspring of life
rather than Essentially a deathsentence for the natural world.
So I'm very, very positive thatbusiness is a is a suitable
(54:38):
organizational structure thatcan bring together capital,
organizational capacity,technology, equipment and land
in order to bring about the muchneeded rural regeneration that
we've all been waiting for.
Speaker 1 (54:56):
So it's safe to say we are.
We are in an iPhone moment.
Speaker 3 (55:01):
That is, yeah, the new foundation farms is simply
about just taking bits andpieces that have been proven all
around the world.
Nothing in what we do isfundamentally new.
It's the way we put it togetherinto a very sound business plan
with a very competent team, andwe're going to execute that
(55:21):
Then and then, as in.
For us, the iPhone moment isalready happened, because we
know it and we're just gonnademonstrate you have shown
things, yeah go ahead?
Speaker 2 (55:30):
Yeah, couldn't it?
As I was listening to this partof our conversation, I was
picking up on on something thatsits very Profoundly in in a lot
of our really goodconversations with funders,
which is not, you know, couldthis work?
Does it work?
You know, show me the detail,because I mean anybody who looks
(55:53):
at the that you know the detailand looks at the quality of the
team it's hard not to reachconclusion.
We got the expertise to do this.
It's it's a different thing.
It's what if we're right?
What if we are right?
Because if we are right, thenwe are talking about A future
food system that is so muchbetter than the one we've got
and you know, we can haverewilding and regeneration
(56:17):
because we'll need a fraction ofthe lens for food that we
currently currently use.
We can have local food.
We can have resilience is somuch we can have that that comes
with this iPhone moment and andso for met many of the people
who we talk to her excited aboutthis.
It's that thought.
(56:38):
It's what if we're right?
What if we are right?
Because if we are, we're all ona different journey to the one
we've been on for the lastPossibly nine thousand years,
depends how far back you want togo since the day we first put a
plow into the ground andstarted Buggering up the ecology
and creating deserts.
We're at the moment of change.
Speaker 1 (57:01):
It's such a profound ending, but I wanted to ask a
question about accessibility andprices, but it just doesn't
feel really the right bridge,let's say but I'm going to do it
anyway.
For those 2,000 people, justwhat, if you're right, what does
it mean?
We talked about what they wouldget, apart from the fact that
we get a neighbor nearby that isfarming profoundly different
(57:21):
than anything else probably intheir vicinity.
But also, is this accessible?
Whatever you've modeled, you'vegone deep into the cost
structure.
You've gone deep into what isneeded to keep this company
alive, to keep it profitable, ofcourse, with the investors, etc
.
Etc.
But also, what does it mean for, apart from the quality, which
(57:42):
is probably way different thanwhat you can actually get now in
the supermarket.
But let's leave that at that.
Nutri-density research willcome, is coming and all that.
But if we just look at tomato,tomato, apple, apple, a piece of
beef, etc.
How do you make sure it isaccessible?
Or is it because you're cuttingout everything by definition,
or actually in a position thatit is accessible for almost
(58:06):
everyone?
What is the accessibility piece?
I'm just asking the devils.
I've got a question that somefunders might ask.
Speaker 2 (58:12):
There are so many layers to answer that question
about accessibility, but let'sdeal with the big picture first.
I was asked this by a bunch ofpeople from Nestle and Unilever
and they were saying, yeah, butisn't the farming going to be
more expensive?
And I said, well, actually, inour view, the total delivered
cost of food doesn't need to bemore expensive.
If any, we think it willprobably go down.
(58:33):
The total cost of deliveredfood and the total cost of
delivered food represents ahighly profitable supply chain,
just not currently for thepeople who produce it, but very
profitable if you're a bigsupermarket or a big wholesaler
or a supplier of industrialchemicals.
It's great, lovely business.
So, and guess, who's telling usthat these other systems are
(58:59):
not going to work?
It's the same story as we getin the energy system, where you
get engineers who spend theirlives with big power stations
telling us oh, we can't have anenergy system unless we have big
base load power stations.
Yes, we can, we can have adistributed system and every
house can be energy efficient.
We just have chosen not to doit yet, partly because of the
(59:22):
fob created by those who have avested interest.
In the current way the systemworks, and not with bad will,
just because you know, when allyou've got is a hammer,
everything looks like a nail,and that's the same in the food
system.
Our view is, in the long run,there is nothing in this
approach that suggests that foodneeds to be more expensive and
(59:45):
therefore, if it doesn't need tobe more expensive,
accessibility is not a problem.
Accessibility is not a problemand it is a combination of many
things that makes that astatement.
True in terms of relative costsand, yes, the benefit of the
whole value chain, but also lossof inefficiency, For example.
You know, we know that 40% ofthe food that's grown is wasted
(01:00:08):
in the supply chain, and justproduce that by half and you've
got a completely different setof numbers in the delivered cost
of food.
So there's so much in this, butthe thing to stick in the head
is that, fundamentally, we don'tneed some super premium at the
point where we, the citizens,buy the food in order to make
(01:00:30):
this kind of alternative foodsystem work.
Speaker 1 (01:00:34):
Mark, is there something to add?
Speaker 3 (01:00:36):
Yeah, it's definitely one of those multi-dimensional
questions.
There's lots of accessibility.
There's accessibility to land,for example.
There's access to health.
Access to health through foodis something that our current
healthcare system is notparticularly good at.
(01:00:58):
We spend millions on fertilizerand then farming subsidies, and
then we spend millions onobesity, and the two can be
married up.
We are essentially all eatingnutrient-poor diets.
We focus on the calorie andthen at the expense of the
(01:01:19):
nutrient and so forth.
But I think the question you'reasking ultimately is of the
social nature is this food moreexpensive?
Is it, like organic, moreexpensive?
I would say at this point intime it's a little bit difficult
to see what's ahead, becausenew opportunities, like the
(01:01:41):
software on your mobile phone,open a whole new possibility for
conversation.
But I think I'm going to hazarda macroeconomic guess, which is
that food can, on average, beproduced in these ways for the
same or less, or sold for thesame or less, while at the same
(01:02:05):
time removing vast externalities.
We talk about cheap food, butthat's obviously not a truth.
It's cheap at the point of saleand very costly in terms of the
environmental impact.
So I see a world in a fewyears' time when the immediate
(01:02:26):
pressure to demonstrate aprofitable business to the
current and future fundersrecedes a little where we can
talk about other social modelsof pricing where maybe people in
the immediate vicinity paydifferent amounts for their food
according to what they thinkit's worth and according to what
(01:02:48):
they can afford.
We have to develop the systems.
We have to engage in that kindof conversation.
But I think people take it backto something Mark said earlier.
Supermarkets only came about inthe way they are today between
the two world wars.
They were based on thecommodification and the
emergence of brands.
Until the 1920s you didn't paya uniform price in a supermarket
(01:03:15):
.
Even when there was a groceryou would pay based on a
negotiation on price Before agrocer became a store, in the
sense that you would go there,food was home delivered.
In a certain way we are talkingabout things that have.
We've had a brief blip wherefood was concentrated to the
(01:03:40):
benefit of brands and thelogistics provided by
supermarkets, and by taking thatout of it, food becomes more
affordable for more people.
Speaker 1 (01:03:54):
It's fascinating the price piece, the delivery piece,
and we see it in many cases.
Of course we were so used tothe supermarkets that we sort of
take it for granted.
They've always been there sincethe invention of the plow and
of course that's not the case,but that holds any innovation.
We've been used to landlines,centralized power, the great
(01:04:17):
landscapes, and we cannotimagine in many cases what it
could look like, which I thinkis a good way to bring this
conversation to a hold, or atemporary one, Because for sure
you'll be back.
I will be following thisjourney as it unfolds further.
I wish you all the best withthe fundraise and hopefully
(01:04:40):
we'll be following the farmingpiece and you'll be in the
market soon for a farm, whichmeans this spreadsheet is going
to land somewhere with roots,somewhere with deep roots and
probably not with the plowpassing by every now and then.
So I'm looking forward to thatmoment and let's see if the
(01:05:01):
naysayers are wrong and we'llsee how abundant these systems
can be.
Speaker 3 (01:05:09):
Thank you, kuhn.
Thank you, kuhn.
Thank you for being part of asubspecies of humankind,
beneficial, keystone species inthe making.
Speaker 1 (01:05:22):
Thank you so much.
Thank you so much for listeningall the way to the end.
For the show notes and links wediscussed in this episode,
check out our website investingin RegenderEcologycom.
Forward slash posts.
If you liked this episode, whynot share it with a friend or
give us a rating on ApplePodcasts?
(01:05:43):
That really helps.
Thanks again and see you nexttime.
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