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70 meatingplace.com October 2016

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At the

Richard Kottmeyer stands at the intersection of data and anecdote. The stories the numbers tell him about the meat industry often run counter to conventional wisdom.

by Lisa M. Keefe, editor

CROSS

71meatingplace.com October 2016

THOUGHT leader

To hear Richard Kottmeyer tell it, there are only three ways to meet the skyrocket-ing demand for food by the

year 2050: grow more, waste less, and/or get more out of the resources already being used. Two of the three, he says, rely increasingly on complex software platforms and lots and lots of data.

Some of that’s a personal sales pitch, seeing as how he’s spent decades ana-lyzing data and how to use it to improve agriculture, food security, food and beverage marketing and distribution, and general understanding of consumer behavior in more than 100 countries.

But he also has a point. With criticism mounting of Western-style concentrat-ed ag systems, but demand growing, particularly in developing countries and particularly for meat, the pressure is on to improve the U.S. sector’s “sustainabil-ity” and environmental footprint. Data analysis and technology can improve these ratios across the supply chain.

Now vice president of agriculture and food for the Swiss software consult-ing firm Luxoft, Kottmeyer’s resume includes Accenture and IBM, Strategic (a unit of Lehman Brothers) and KPMG, as well as other investment banks and

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work for the State Department. But he stays true to his Midwestern roots, maintaining a residence in St. Louis even as his work has required him to live for extended periods elsewhere.

“I’ve been everywhere agriculture and Uncle Sam took me, save home,” Kottmeyer jokes.

He spoke with Meatingplace about the stories the data tells about the meat industry’s past, present and future.

Meatingplace: Your company’s expertise is in technology. What is your interest in the ag sector?

KOTTMEYER: We’re market-domi-nant in software and the … human-ma-chine interface. We’re dominant in the automotive industry, which means that we’re valuable to agricultural equip-ment. A lot of the data work that we’ve done for retail becomes the basis for competitive intelligence … for an agri-cultural industry.

Meatingplace: What would be some examples of such technology as applied specifically to food and ag?

KOTTMEYER: We have to define what is ‘food.’ Food and ag is a huge lifecycle which includes things like finance. [Something] that is a little more tangible … would be the work that we do in agricul-

meatingplace.com October 201672

tural equipment: ‘How do you get infor-mation off of a tractor’ to ‘how do you set up the user experience within the tractor’ to ‘how do you do the analytic work?’

There’s a lot of good intellectual prop-erty in ag equipment. There are more lines of code in agricultural equipment than in any automobile and almost as many as in an airplane. So, when you really think about the differentiating factor for agricultural equipment … it’s now really the software.

Meatingplace: In the plant, the issues tend to be where and how to cut and it seems basic and analog. You’re saying there’s a whole world of technology behind that.

KOTTMEYER: Let me give you some examples. We have traceability issues all the time, right? Traceability is a function of being able to measure, monitor and sense. There are issues of quality control in meat, right? How do I cut something and ensure that it’s exactly the same product when it gets on a retail shelf? You have all of the steps in place in terms of the logistics and warehousing, but how do you know that they’re being run at peak efficiency to result in peak quality? You really don’t, except when you find a problem, because the supply chain is disaggregated with a number of people touching that product.

But what if you could see, in real time, exactly what’s happening? What if every time there was a problem — even that a door on a trailer was open for too long — you can calculate based on humidity and temperature exactly what’s happening to your chicken, pallet by pallet. You can get to levels of specificity with censors and technology.

What happens [now] is, you get a report at the end of the day, or maybe it’s two days. Headquarters doesn’t exactly know what all the plants are doing in time to be able to make corrections between those operations. What if you

RICHARD KOTTMEYER

TITLEVICE PRESIDENT —

AGRICULTURE AND FOOD, LUXOFT

EDUCATION B.A., EARLY CHRISTIANITY,

HISTORY, PHILOSOPHY, WASHINGTON UNIVERSITY

IN ST. LOUIS; J.D. LAW, SAINT LOUIS UNIVERSITY SCHOOL

OF LAW

PREVIOUS EMPLOYMENT

CHEETAH DEVELOPMENT; STRATEGIC

(LEHMAN BROTHERS); ACCENTURE; IBM;

CET (A MILITARY RESEARCH COMPANY FOCUSED ON

MICROBIOLOGY, BIOLOGICAL AND CHEMICAL THREATS,

PANDEMICS, EMERGING DISEASE, FOOD SAFETY AND OUTBREAK PREVENTION); FAB ADVISORS; KPMG CORPORATE FINANCE;

TRUMAN GROUP

INTERNATIONAL EXPERIENCE BEEN TO MORE THAN

100 COUNTRIES (BUT NEVER HAWAII) ON SIX CONTINENTS.

IS THERE AN AG PROJECT TO BE DONE

IN ANTARCTICA?

tl

THOUGHT leader

74 meatingplace.com October 2016

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wanted to run those operations a littlemore centrally? You would do that viatechnology, and this is being done inother industries and can be happeninghere. There was a point in time whereagriculture was about selling moreproduct and it wouldn’t have beenworthwhile to do this. Now, we’re look-ing at going from only a dozen cuts toover 100 cuts in a plant.

Meatingplace: Are there somecompanies that do well in the ag-foodspace that you would point to as lead-ers in the field?

KOTTMEYER: Unfortunately, agri-culture has been the left-out industry.

Meatingplace: Why?KOTTMEYER: Because the industry

didn’t have the incentive years ago toinvest in that kind of technology. Agri-culture in general was in a commodityphase. Now it is about precision ... in themanufacturing. [H]ow do you cut an an-imal? How do you keep quality control?How do you deal with traceability? Howdo you deal with an increasingly complexsupply chain? And customers demand

more visibility into what they eat. Whenyou transfer from kind of commodityto digital, all of a sudden technologybecomes the key priority. In fact, yousee agricultural companies going fromspending as low as half a percent of reve-nue on technology to 5 percent.

You’ll find that every wise meat pro-cessor is [asking themselves], how do wedigitize and become more precise? If youwant precision manufacturing, it’s thesame kind of technology solution basedon sensors and software.

Meatingplace: From a revenue ora throughput point of view, is there apoint where a company is big enoughto make use of that technology? A lot ofthe meat industry is still so disparateand fragmented.

KOTTMEYER: That’s when you needit the most.

You have a computer, right? What’son your computer may change betweenCoca Cola, for example, and a craft brew-er, but … you’re going to have a technologyneed no matter what size meatpackeryou are. The question is, what software

at what cost, and what need do you have?[Regardless of size or product,] you’regoing to [invest] in the same categories:Traceability. Operational excellence —making sure that you use less energy,less resources — because that’s profit.Technology that calculates price. Foodsafety technology. I would argue that asthe meat industry is disaggregated orfractured, to be able to [meet] increas-ingly difficult downstream customerrequirements, [companies are] going tohave to multiply their presence and bebigger than they are through technology.That will [determine] market access.

Meatingplace: Can this be used forwhat’s been called the ‘social license’to operate?

KOTTMEYER: I’ve modeled, forexample, how Monsanto could turnits brand reputation around in 12 to 18months. It’s not difficult. It’s just thatwe tend to use old-fashioned publicrelations and marketing techniques ina digital world. The key is being able toget early insight in terms of activists:What are their issues? How are thoseissues traveling? And exactly where doyou insert yourself?

Monsanto [has] a data infusioncenter that allows them to take all thesignals of the market, see … potentialissues and respond quickly. Essential-ly you’re looking at intelligence andcounter-terrorism techniques.

The amount of data that’s out there isso high that about 66 percent of the timeyou … can figure out what your compet-itors are working on, even though theydon’t have to report it until they launch.

Now, in the meat-packing industry— let’s take antibiotic-free. If you goantibiotic-free, you’re doing that because… one of your customers [is] saying,‘I’ve surveyed consumers, and they’reworried.’ That’s looking in the rearviewmirror. They’re worried because the onlyside to really voice anything has been the

Let’s not focus on the pile of data, but let’s

focus on those specific questions that if we

had answers, we would create value.

Then we find thedata around it.

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side of panic and concern. I could easily argue that with a limited amount of mon-ey, you could make the consumer hate any company that went antibiotic-free.

Consumers can relate to a question like this: ‘If you give your baby antibi-otics, are they in your baby’s system a year later?’ That’s the way in which you talk about the fact that we use antibiot-ics but [not] anywhere near the time of

slaughter and processing. You relate it back to their personal story.

The other thing is that the consumer looks at their furry pet and expects when they take it the vet-erinarian, the pet is cared for. Well, take that a little bit further. What do you

think the consumers are going to want to happen when Bessie the cow is sick?

That’s what’s occurring with antibi-otic-free. One side’s bringing about the issue and the other side has not [coun-tered], ‘Do you really want us not to take care of sick animals?’

Meatingplace: Do you personally have a side on that issue?

KOTTMEYER: I never have a side. I’m a data dork. My goal is to present the data and what future scenarios could look like. Too often, we do have a side and that blinds us to the opportunity for an alternative future.

Meatingplace: You sit at the junc-ture of the numbers and the story; most people are one or the other. Where did you start from and how did you move to this intersection?

KOTTMEYER: I started as a theolo-gy major, right? Yeah, I was going to be a priest. It was one of those situations where you had to be able to tell a story … and you have to relate to people.

People say that it’s difficult to be nu-meric and storytelling and yet there are whole industries that do this. The retail industry is about numbers and stories. The entire consumer packaged goods [industry] — numbers and stories. It’s only industries that really haven’t digi-tized where we have the separation.

There’s no chief marketing officer today that isn’t going digital and that means [merging] data analytics and storytelling. That’s fundamentally what agriculture has to do if it wants to reshape its brand.

There are loads of stories of rebrand-

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ing and re-messaging. The ag industrytends to fail in large measure because[it] tends to be so insular. When I go toexecutive boards and suites and even atthe director level, I see almost every-one came from agriculture. We’re notcross-pollinating. You’re not going to getthe best practices of how to deal with amillennial by only hiring millennialswho happened to grow up on a farm.That’s one of the biggest mistakes thatagriculture has made. Heck, we don’teven cross-pollinate between meat andgrain very well, much less meat and astartup technology company or meatand the travel and transportation in-dustry. That’s how you get good ideas.

Meatingplace: After your presenta-tion (to the National Chicken Council),some folks said, ‘I’ve heard his presen-tation before. … He likes to … surprisepeople but that doesn’t mean that it’srelated to real life.’ With that kind ofresponse from] a key audience … howdo you bridge that gap?

KOTTMEYER: Oh, I love it! Pleasedear God, be skeptical of everything I’vesaid, because everything I say is based ondata, which means that if you invite meto your office ... I’ll make you a believer.In a short speech that’s not going to besomething that I can do very well. A

couple of years ago ... when I was on asimilar panel, [poultry industry exec-utives] were saying, ‘Oh, you know, themarkets going to be 5, maybe 10 percentantibiotic-free.’ And I said, ‘No, becausethe doctors have weighed in. The [QSRs]are going to go first. [Then] groceries and… you’re going to wind up with at leasthalf of chicken becoming antibiotic-freequickly.’ Well, that happened.

Meatingplace: One of the technol-ogy challenges in meat productionis that you have a lot of best-in-classequipment that is made from differ-ent producers.

KOTTMEYER: I can name 20 or 30industries where that’s the case. Theissue is, can we create or work withbridging software and standards sothat they can all talk to each other? Themore important issue is when you have20 or 30 owners of those pieces of equip-ment … are they going to share databetween one another? Sometimes the

answer is ‘No’ and we’re going to have tocollect data without them giving it to us,which is not hard. If your product is goingon a truck, and the trucking companydoesn’t want to send data, put a sensor onthe pallet. Get your own data. It’s increas-ingly easy because sensors have becomesmaller, cheaper, easier to work with, andthe software with them is so much better.

What I’d love to do is to take a team of 10or 15 key meat executives and walk themthrough plants of other industries and say,‘This is what you’re supposed to be doing.’We look myopically at meat plants andthink there’s something different aboutthem from other manufacturing, andthere’s not.

Meatingplace: What are the ‘bigdata’ data points that a companyshould collect and pay attention to?

KOTTMEYER: [Instead of ‘big data,’]let’s talk about this: What are the knowl-edge issues that you’re failing at? And,then ask the question, how does technol-

When I go in the executive boards and suites and even at the director level, almost

everyone came from agriculture.We’re not cross-pollinating.

meatingplace.com October 201678

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ogy [and data help]? If it’s an inventoryproblem, that’s easy. If it’s a traceability problem, that’s a little more difficult but doable. If it’s determining profitability in real time, that’s been done in multiple industries. If the issue is brand reputa-tion, and more importantly ... how do we deal with activists who are against cer-tain meat production practices or just the concept of meat, that’s incredibly doable. I love to say that agriculture has the benefit, being the laggard, of being able to apply the best practices from oth-er industries. There’s not a whole lot of cutting edge that needs to occur to really be transformative in the meat industry.

Meatingplace: Are there data points that would be specific to the protein production industry?

KOTTMEYER: You don’t say, ‘What are the data points that are important to the industry?’ You say, ‘What are the questions that the industry has to an-swer that are unique to that industry,’ and then, ‘Can they be answered with data?’ Let’s not focus on the pile of data, but let’s focus on those specific questions that if we had answers, we would create value. Then we find the data around it.

Meatingplace: Food safety?KOTTMEYER: Absolutely, so … let’s

talk about questions of traceability.

There are more lines of code in agricultural

equipment than in any automobile

and almost as many as in an

airplane.

With technology, you could be watchingproduct from end to end. You have to decide, how much does your customer want to know? [Do they] want to get it from a single source, versus a collection of reports that say, ‘Yeah, I did my job and by the way, I made sure the guy below me did his job, too.’

Another issue is just … human error. A guy goes from the dirty side to the clean side accidentally. Someone takes off a

piece of safety equipment and exposes a product to potential bacteria. Someone doesn’t go through a foot wash properly.

Oftentimes just the clever use of technology will [solve the problem]. And sometimes it’s just the clever redesign of a physical facility or a workflow or whatever. It’s not that technology has some kind of magic over human capital. It just tends to be faster and able to ingest a whole lot more.

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Meatingplace: Does looking atthings through the lens of data andtechnology take that emotionalcomponent out of it for people in thebusiness or who are observing thebusiness, such as animal rights activ-ists or the consumer?

KOTTMEYER: If you’re within theindustry, it should make you more pas-sionate. It’s going to emphasize whoeveryou are. So, let’s say you’re a veterinar-ian. You’re able to get a quick alert thatthere’s something wrong with a certainflock [or] with a particular animal. Nowyou can catch it and focus on health andwellness as opposed to correcting a prob-lem too late. That’s going to bring out thecompassion.

Let’s talk about it from outside of theindustry … looking at how consumers

actually behave. I’m not sure you want totake it away from being an emotional is-sue. Because here’s the problem: Scienceis tough. Consumers get confused andwhen consumers get confused, the easi-est thing is to say, ‘I don’t want to have toworry about it. I don’t have time to do it.Just leave it out.’

On the other hand, you could deal withit as an emotional issue and talk abouthow would you feel about being a vetwhose job it is to protect the health ofanimals and be told you can’t do that.

We’re afraid in agriculture to useemotion. We’re trained as scientists orengineers, but that’s not who our audi-ence is. I love to say that what doesn’twork is just vomiting science all over theshoes of the consumer. No one wants tobe vomited on.

People say that it’s incredibly difficult to be numeric and

storytelling and yet there are

whole industriesthat do this.

meatingplace.com October 201682