Big data is not a major money spinner for Bayer CropScience
German agchem giant Bayer CropScience is investing heavily in big data, although it has not joined seeds and plant protection as a significant source of income.
Instead, Bayer CropScience believes that data enables it to offer better products and advice, and to stand out against rivals such as DuPont and BASF.
Tobias Menne, head of Bayer’s worldwide data programme, said one of the reasons the company bid for American firm Monsanto was because it owns the Climate Corporation, which uses soil, field and weather data to provide practical, up-to-date advice. Monsanto paid $1.1bn for the company in 2013.
Mr Menne pointed out at the recent F&A Next startup conference at Wageningen University, Netherlands, that big data has significant financial potential for the agchem giants.
Worldwide, excluding grassland and forestry, the total area of land involved is equivalent to some 300m hectares. Half of this is cultivated commercially and the use of digital solutions is achievable in half of that.
Bayer is not in it for the fees
“If you have a 30% market share, with no one else coming close to you, you can make €5-€10/ha [£4.40-8.80], giving you annual sales of €112.5m-€250m [£99.6m-£221m]. That’s a lot of money, but Bayer CropScience’s sales were €9.9bn [£8.7bn] last year. We’re not in it for the fees.”
He also said the company is not planning to sell data it obtains from farmers. “Data for us is primarily a way of staying relevant, because the technology exists and someone will use it. But it’s simply unethical to use data for any purpose other than giving better advice, and this also makes good business sense.”