Building an Innovation Hub: The Salinas AgTech Story
How A Historic Agriculture Region Transformed Its Trajectory Through Technology
by Amy Wu
The road to the seat of California’s burgeoning “AgTech” sector starts on the drive down Highway 101 from Silicon Valley to Salinas, where modern office landscape morphs into a panorama of lettuce heads, strawberries and broccoli.
The Salinas Valley, which includes Salinas and four neighboring municipalities, is known for its agriculture industry, a $9 billion industry where 80% of the country’s leafy greens are grown. More recently though, the Salinas Valley has become a base for AgTech (agriculture and food focused technology), a fast-growing sector that attracted $1.5 billion across 160 deals in investment last year alone.
The Salinas AgTechEcosystem emerged from a major economic blow in 2012 when the city lost Capital One as major employer which resulted in the loss of 900 jobs.
The city responded quickly, with then Mayor Dennis Donahue reaching out to John Hartnett of SVG Partners for his expertise to help drive economic development and recovery for the region. Donohue was aware of the work that Hartnett had done to build innovation in Ireland; in 2009 then U.S. Secretary of State Hillary Clinton tapped Hartnett to be a part of a subcommittee to build an economic development ecosystem in Belfast and linking it to the U.S.
“He has a clear record of understanding innovation ecosystems and was off the shelf in terms of experience and background,” Donohue said.
Soon after, Hartnett visited Salinas and met with city leaders and the heads of some of the largest agriculture companies including Bruce Taylor of Taylor Farms, LorriKosterthen CEO and Chair of Mann Packing, and Victor Smith from JV Smith. He also met with key leaders at local academic institutions including Cal State Monterey Bay andHartnellCollege.
The AgTech strategy made sense for this region, Hartnett said. The Salinas Valley was already the base for the country’s leading agriculture companies including Taylor Farms, Driscoll’s, Tanimura & Antle, Earthbound Farm, JV Smith and Dole, companies with extensive histories, many still family owned. The region is famous for specialty crops including strawberries and raspberries.
“It was almost a hidden secret,” Hartnett said of Salinas. “You had phenomenal strength with agriculture and proximity to Silicon Valley.”
In 2013 the city hired SVG Partners to develop the city’s AgTech sector and create a roadmap for AgTech growth. This set forth a collaboration and partnership that lay the foundation for the sector, and one that SVG worked to create by connecting government and big businesses.
The blueprint included 4 pillars; Innovation, Acceleration, Investment and Corporate Engagement.
Hartnett and his team created the Steinbeck Innovation Foundation, now renamed THRIVE Foundation which initiated education programs such as Kauffman FastTrac, one of the original training programs and workshops for entrepreneurs; the Young Innovators Program, a problem solving challenge for high schoolers, CoderDojo, a coding for kids program developed in Ireland, now run by Hartnell College.
In 2014 The THRIVE Accelerator was launched to attract companies from all over the world to come to Salinas and leverage the world class agriculture and technology corporate network as well as supportive growers to trial new technologies. This highly competitive program selects the best AgTechstartups from a vast pool of applicants from all over the world. This year marks the program’s fourth cohort with nine startups chosen from 172 applicants across 37 countries.
Members of the accelerator connect with industry players including growers, and have access to the Western Growers Center for Innovation & Technology an incubator launched in 2015 that houses AgTechstartups including THRIVE Accelerator winners.
Bruce Taylor, CEO and Chairman of Taylor Farms, then the chairman of The Western Growers Association, one of the largest trade associations in the industry, was a supporter from the start. In 2015 Taylor launched the company’s new headquarters on Main Street, which has steadily revitalized the city’s downtown with trendy restaurants and shops.
Taylor was instrumental in engaging the Western Growers in the THRIVE initiative and ultimately the Western Growers Association decided that it would like to operate the incubator space in Salinas, now called the WG Center for Innovation & Technology.
Innovation and funding are almost synonymous with each other, and an investment fund was a fundamental part of the innovation strategy from the beginning. SVG Partners launched the THRIVE Fund whose investors include some of THRIVE’s corporate partners and other strategic LPs from the world of agriculture. These companies understand the problems in ag and that they are not going to be solved overnight. Patient capital is essential for AgTech, which has longer development cycles than typical tech startups since they are often limited by growing cycles for validation.
Since 2016, SVG Partners has invested $100k in each accelerator company.
Reinvention involves branding, marketing and media outreach, and from the very start the city and SVG Partners invested significantly in what some say is the rebranding of Salinas. The challenge was to transform the less than favorable outside perception of the city and its sole moniker of “salad bowl of the world” into a mecca where agriculture and technology converge.
The city took a proactive approach and as early as 2012 tapped the Development Counsellors International (DCI), a New York City based marketing firm, to promote Salinas and AgTechto national press. Five years since pitching the AgTech story to press, the story has headlined the front pages of international media including The Financial Times and subsequent stories in The Los Angeles Times, San Francisco Chronicle and NPR. The Salinas AgTechstory has generated well over 100 news stories.
The genesis of what is today the annual Forbes AgTech Summit started back in 2014 when Hartnett posed the idea of holding a summit to bring together the worlds of agriculture and technology as nothing of the kind existed at the time. In the summer of 2014 the first AgTechsummit was held in nearby Monterey.
Soon after Hartnett, city manager Ray Corpuz Jr., and other city leaders traveled to New York City to propose the idea of a summit to Forbes, launching a relationship that continues to this day.
The Forbes AgTechSummit has grown every year in scale and number of participants, namely CEOs and leaders at Fortune 500 companies along with investors and entrepreneurs. Since 2015 it has been held downtown in a marquee tent bookended between the Taylor Building and the National Steinbeck Center. This year’s Summit drew in an estimated 750 executives, investors and entrepreneurs in the AgTechspace. The Summit also spotlights the THRIVE Accelerator cohort who showcase their technologies on demo day. City leadership, including current Mayor Joe Gunter, continue to support the Summit and the growth of the sector.
The growth of THRIVE
Since launching its first cohort in 2014, THRIVE’s programs have grown tremendously. The programs, events, investments and services have reached more than 5,000 growers and 1,200 startups representing over 60 countries.
In 2016 THRIVE launched its corporate open innovation program to provide technology scouting, trend reporting, innovation advice, investment opportunities and brand exposure to its Corporate Partners.
In 2017 THRIVE convened a Growers Roundtable where growers shared the challenges they are currently experiencing in the field and challenges relating to working with startups. Additionally, technologists shared challenges in robotics and automation and explained how new business models for innovation may be the way forward in driving innovation.
THRIVE’s most recent program is THRIVE-X, a university challenge that strives to tap fresh talent and attract college teams to solve the biggest problems in agriculture. Students are tasked with developing a solution to reduce the number of unharvested acres of specialty crops resulting from a lack of available labor.
Participating universities in this year’s launch include Santa Clara University in San Jose and Cal Poly, San Luis Obispo). The program will expand to several other universities in the coming year.
This is a new season in Salinas. Main Street is again abuzz with what is now the fourth annual Forbes AgTechSummit.
Inside the Center for Innovation and Technology, Donohue – himself a seasoned veteran in the ag industry – makes a point that developing the agtechsector is a necessity for economic vitality.
“The future economy and future high skilled jobs are going to include a lot more tech,” Donohue said. “I think human capital will be a value proposition.”
The pipeline of talent that Salinas aims to cultivate continues to move forward. Salinas launched a new workforce program for agtechjob training in partnership with Hartnell College in Salinas and neighboring cities.
City leaders assert that they hope that agtech will be the city’s leading sector and anticipate that the potential is being played out through initiatives and most certainly THRIVE.
“Developing and supporting the development of the AgTechEcosystem in Salinas is our number one economic strategy. We are committed for the long term. We believe the benefits will be more investments and jobs for Salinas,” Corpuz said.
In looking ahead, Hartnett considered creating a fund for growth stage companies and attracting large technology companies as investors, and taking deeper dives into areas like data and artificial intelligence.
“We need a few unicorns, and I am betting on Trace Genomics and a few of these to be the unicorns in agtech,” said Hartnett, smiling.