Food and agribusiness story a wide open success

29 March 2021

Food and agribusiness poster child Wide Open Agriculture is proof that an enterprise built on a foundation of purpose and intent to make the world a better place can be highly profitable too. SIMON SHEPHERDSON reports.

The origin of ASX-listed food and agribusiness Wide Open Agriculture (ASX:WOA) is one of facing a deep tragedy with positivity and passion.

One of the drivers for launching Wide Open Agriculture was to honour the founding Chairman’s three children by creating a for-profit organisation that would make the world a better place.

The company does that by connecting more sustainable farming practices – known as regenerative farming – with consumers wanting to access healthy, nutritious food and understand its origins.

If the legacy had to be measured, and those goals were the key metrics, by all accounts it’s been a huge success.

But it doesn’t stop there. As each new chapter in the Wide Open Agriculture story unfolds, the successes keep building. In addition to launching its Dirty Clean Food retail brand, the company has created a highly popular oat milk, OatUP, and is in the early stages of commercialising a plant protein manufacturing capability using lupins.

Wide Open Agriculture is currently trading some 400 per cent higher than its share price at listing in mid-2018, and recently reported quarterly revenue nearing $1 million.

Profit with purpose

Co-founder and Managing Director Dr Ben Cole says the company was always intended to be a for-purpose, for-profit enterprise.

“The original vision was around recognising there were farmers farming differently, who were really focused on soil health, protecting biodiversity and nurturing their water and nutrient cycles,” Ben said.

“The term ‘regenerative’ covers a broad scope but our focus is to recognise farmers who really farm with and alongside nature rather than against it.

“We also saw very early on that there was no point of differentiation for consumers, yet all our conversations with consumers revealed that they wanted to know where their food was coming from, and that while they didn’t really understand how it was produced any more, they were pretty sure it didn’t align to their values.”

There is some significant pedigree behind Wide Open Agriculture. In addition to the considerable expertise of its founders, Non-Executive Director Stuart McAlpine came on board early in the company’s evolution. He is a well-known wheatbelt farmer and advocate for regenerative farming practices. In addition, Dutch-based organisation Commonland Foundation invested.

Commonland, which today is the company’s second biggest shareholder, helps incubate businesses that are focused on large-scale landscape restoration or regeneration.

Value-added food opportunities

While there have been numerous strings to the Wide Open Agriculture bow since those early days, such as a land portfolio and a pilot program that involved building a shade house and producing high quality vegetables in the WA Wheatbelt, Ben says the company has honed its focus over the past three years to develop its food brand and identify value-added streams for commodities, with a focus on oats and lupins.

It’s about allowing consumers to understand the entire provenance story of the end product – for example, the company’s OatUP milk uses oats sourced from WA Wheatbelt farmers utilising regenerative methods.

“It means people can buy OatUP knowing it uses ingredients that align to their environmental and social values,” Ben said.

“WA also produces about 60 per cent of the Australian sweet lupin crop but it is currently used almost exclusively for animal feed. There’s no point of difference from a pricing perspective between lupins and soy when they’re considered just in the context of animal feed.

“The intent of our program is to elevate Australian sweet lupins to be a human food and be able to communicate the story of its incredible protein structure, health benefits and the environmental credentials of how lupin crops are grown.

“We want people to understand that it is one of the best plant-based proteins you can get your hands on.”

The manufacturing process for creating the lupin-based protein was developed by Perth’s Curtin University and based on over 30 years of research around ways to cleanly extract plant proteins.

As well as having very high protein concentration, lupins are highly digestible, meaning humans can convert more of the contained amino acids into muscle development. Because of that, food technologists have been trying to encourage more human consumption of lupins for decades.

Wide Open Agriculture intends to now find strategic partners to commercialise the manufacturing process and hopes to grab the attention of major food and ingredient manufacturers. Ultimately, Ben says the company wants to be known as the go-to provider for lupin-based proteins in whatever formulation manufacturers require.

The technology has been patented by Curtin and Wide Open Agriculture holds an exclusive global licence for the near 20-year life of the patent.

While still at an early stage in the commercialisation phase, the numbers are compelling.

Other high-grade plant proteins already on the market sell for anywhere up to $10,000 a tonne, while the spot price for raw lupins peaks at about $400 a tonne.

Wide Open Agriculture has struck a deal to provide Curtin a royalty of $120 per tonne of end product, so that leaves considerable margin.

The key to recognising that margin will be to attract the necessary investment to successfully commercialise the process and enable production of the lupin protein at scale. But Ben says Wide Open Agriculture is progressing with confidence as it builds an attractive business case to move in that direction.

The other mainstay of the business, Dirty Clean Food, operates both as a food brand for a range of products developed by Wide Open Agriculture, and as an endorser for regenerative farmers who have established their own brands.

“We love to endorse brands that have been built by local regenerative and ethical farmers, so in that sense we act as the marketing, sales and distribution platform to give them a chance to communicate their stories,” Ben said.

“More importantly, by taking on those responsibilities, we enable farmers to focus on regenerative farming, which can be quite complex and labour intensive. We provide a really great opportunity for those farmers by helping bring more value into their brand and sales channels.”

Cracking open a tough investment market

While the food and agriculture sector has traditionally seen mixed fortunes on the ASX, it was always the intention for Wide Open Agriculture to list.

“We were focused on both the great opportunity in ethical, regenerative food production and the great threat of climate change and biodiversity loss,” Ben said.

“To attract capital to solve that problem in a profitable way needed the structure of a listed vehicle.

“We also wanted to create an impact investment that everyone could get involved with rather than a privately held model, which really accentuates the message that purpose and profit can successfully co-exist.”

Post listing in July 2018, the company performed admirably given the perceptions among local investment markets, however sentiments changed dramatically in mid-2020 as Australia dealt with the COVID pandemic. In August last year, on the back of the announcement it had invested in plant protein technology, Wide Open Agriculture’s share price soared nearly 1,000 per cent within days.

“Through COVID we saw a growing awareness of the importance of food security and supply, greater focus on health and a better understanding of the really exciting opportunities in plant proteins given the successes overseas of companies like Beyond Meats and Impossible Foods,” Ben said.

“They are more advanced than Wide Open Agriculture but in Australia, there are very few if any listed companies that are anywhere near as progressed in the plant protein space.

“COVID also totally jump-started our online business and while West Australians were once the lowest adopters of online food retail in Australia, that’s shifted dramatically.”

There are plans to expand into other geographic markets, both domestically and internationally, and to continue building the product portfolio.

A sum of all parts

Wide Open Agriculture represents many thing – a legacy to family, a vision and purpose to make a positive impact on the world and address climate change, and a commercially successful enterprise in a space that continues to grow and evolve rapidly. The company’s success is truly a combination of all its parts and that’s what keeps the founders and directors excited.

“I do believe in what we are trying to do here and how important it is,” Ben said.

“If we can get this right in Western Australia, building a world-class regenerative food and agricultural company, I believe farmers, consumers and investors all over the world will look at us and want to join us in our mission, which will be a great outcome.”