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Eggheads is the go-to podcast for egg industry professionals who are interested in leadership and innovation in the egg world. Host Greg Schonefeld explores the evolving world of modern egg farming, from the latest in cage-free innovations and organic certifications to navigating the economics of large-scale production. Whether you're an egg producer, supplier, or involved in poultry genetics, this show provides the insights and expert discussions you need to thrive in the industry. Crack open the science, strategies, and stories behind the egg industry’s biggest challenges and opportunities.
Robert Yaman: I think the techno-optimist philosophy that I keep going back to, there's two parts of it, right. There's one part of it that says, "Hey, here are these technological solutions to big problems." But the other part of it is that technology allows us to preserve abundance. We say, "How can we solve the downsides while preserving the upsides?"
Greg Schonefeld: Hey, welcome back to Eggheads. I'm your host, Greg Schonefeld. Our guest this week is a tech industry veteran whose journey has taken him from Silicon Valley to the forefront of agricultural innovation.
Robert Yaman: I'm Robert Yaman. I'm the CEO of Innovate Animal Ag, and we're a think tank that publishes research on new technologies in animal agriculture that can have an impact on animal health and welfare.
Greg Schonefeld: Robert started his career at Google and YouTube, where he helped develop some of the front-end features on the iPhone app, but he gradually transitioned into biotech and food tech, exploring the intersection of tech technology and life sciences.
Robert is now the CEO of Innovate Animal Ag, and he's bringing that same innovative mindset to agriculture with a mission to merge the best of tech with the pressing challenges of modern farming. His team publishes research on emerging technologies, helping industry stakeholders stay informed about new trends and solutions. Innovate Animal Ag also champions innovation, working with and promoting leaders who are advancing sustainable practices and technological breakthroughs in agriculture.
Robert Yaman: There's an ethos here in Silicon Valley about, you could call it techno-optimism, where the idea is that there are many issues in our society that we could try to tackle, and oftentimes technology is our most powerful and most practical and most scalable way of solving those issues.
Greg Schonefeld: It seems we're at a turning point, at least the start of one. We're starting to see firsthand how these new technologies can impact the industry. What I'm curious about is how those in the trenches, farmers, producers, and industry professionals, are thinking about it.
Are innovations like in-ovo sexing seen as challenges to overcome or as opportunities to push the industry forward? And should more farms embrace these cutting-edge technologies, even if it means potentially higher costs, both for producers and consumers? I understand animal welfare is a big piece of where your heart is.
Robert Yaman: Exactly. I think when we started the organization, we noticed there was a big, maybe untapped opportunity where I think there's a lot of interest around animal welfare, animal health in society. But right now, there are a lack of practical solutions, in my opinion. And I think what we've seen around animal welfare is that because there isn't a clear sense of how we can solve some of these issues, the way that this is kind of surfaced in society has been kind of knee-jerk, antagonistic. It's fairly radical.
There's lots of folks out there who are calling for people to stop eating meat, stop eating animal products. Whereas I think if we had a portfolio of solutions that we could say, "Hey, look, these are things that could really help solve some of these problems in a way that preserves abundance, promotes innovation, is compatible with business interests, and broader economic growth." So the reason we started Innovate Animal Ag was that we wanted to move the conversation around animal health and welfare in a more innovation-friendly, more collaborative direction.
We try to take lessons from the climate space, where we've seen a massive revolution in the way that we produce energy and a number of other areas of society. And I think the reason that has been so successful and so powerful was because, fundamentally, there's lots of ways that you could push back against industrialization in the energy sector, or in the broader world, but ultimately, the most powerful tool to fight climate change has been technologies like electric vehicles, solar panels, carbon capture, nuclear energy, all these things that have really captured the attention of our broader society.
And I think the reason those have been successful is because they are something that preserves abundance, right. They allow us to keep what has been great about industrialization, it's left people out of poverty, it's made everything cheaper, and it's just allowed us to directly target those parts of industrialization, which are kind of the unintended downsides, the externalities, if you will.
Greg Schonefeld: So what does bringing that techno-optimist mindset to animal agriculture look like? That's where in-ovo sexing comes in.
Robert Yaman: One of the main reasons right now why chicken, meat, and eggs are so affordable is that there's been a bifurcation in the breeds of chickens that we use for those two different purposes. The breeds of chickens that we use for eggs versus meat have been highly optimized for their particular use case. So for the chickens that we use for meat, they've been optimized to put on muscle as quickly and as efficiently as possible and basically turn feed into meat as quickly and efficiently as possible. And on the other side, the breeds of chickens that we use for eggs also optimized to produce as many eggs as efficiently as possible.
And this has been a huge reason why, again, this food has been now so accessible to everybody, and I think that's been a great thing for society. But going back to the unintended downsides, one of the side effects of this bifurcation is that the males of the layer breeds, the males that are born in the egg industry, serve no economic purpose, right. They are not optimized to grow very quickly, so they tend to be pretty scrawny. The meat that you get from them doesn't taste very good, frankly. And so there really just isn't a way to use them that's economically viable. So what happens right now is that chick sexers are employed to look at every single chick that's hatched in the egg industry.
Greg Schonefeld: Yes, that's a real job and a highly skilled one at that. Chick sexers are workers who determine the sex of newly hatched chicks, typically poultry hatcheries. They assess whether each chick is male or female shortly after hatching.
This is a critical process in egg production because male chicks, which do not lay eggs and are not ideal for meat production, are typically cold. The process of chick sexing requires a high level of precision and speed. Chick sexers often train for years and can examine thousands of chicks per day, making split-second decisions based on subtle physical characteristics.
Robert Yaman: So this has kind of just been one of the realities of the egg industry up until recently where there hasn't really been a great alternative to this. But I think that when a normal kind of person learns about this practice, I think there is a sense that it kind of goes against... you could say it goes against common sense morality, where something is a little wrong when we are hatching all these animals only to have them immediately be killed, be cold.
Greg Schonefeld: So the solution?
Robert Yaman: There are various ways of doing it, but essentially, the goal is to identify before the eggs even hatch which eggs will hatch male and which eggs will hatch female so that the male eggs can be removed before they are morally relevant, you could say, and only females are hatched. This removes the need for male chick culling and solves one of these big problems we've seen in the egg industry.
Greg Schonefeld: Just to clarify, this issue isn't limited to commercial laying hens. It applies across the board whether we're talking about free-range, pasture-raised, or even backyard chickens. In most cases, backyard hen owners wouldn't have much use for a rooster either, and their neighbors probably would thank them for not having them around.
As Robert explained, this is a challenge for the entire industry since even hens raised in more specialized environments, like pasture-raised or cage-free, come from the same hatcheries that face the issue of male chick culling. So what are the actual solutions? How does the in-ovo sexing technology work and why is it gaining traction in places like Europe? Robert breaks down the two main approaches being used today, and what might be on the horizon for this groundbreaking technology.
Robert Yaman: There are multiple ways to do it. In-ovo sexing is the term for this technology, and in-ovo means in the egg, and sexing is clear. As far as how the technology actually works, there are multiple different ways of doing it. So one of the things we haven't touched on yet is that if you look at the European market, this practice, this technology is actually quite widespread at this point. It's around 20% of the layer flock at this point has already used this technology. 20% of the hens have been in-ovo sexed.
And the technologies that are most common in Europe, there are kind of two broad classes that I would say. One is... are imaging approaches which use technologies like hyperspectral imaging or MRI technology to essentially scan the egg and look for some sex identifying characteristics. So that's one way of doing it. The other way of doing it, I would call the liquid-based analysis, where a small fluid sample is taken from inside the egg from the allantois, and then some chemical or biological test is run on that sample to determine whether the egg is male or female.
So those are the two technologies that are in commercial use in Europe right now. And then there a wide range of other technologies that are at the kind of lab scale are being developed that could in theory work in the future but have not yet shown commercial applications. So just to list some of these off. There are some technologies that look at the volatiles that are... come from the egg, and the volatiles mean just the biological compounds or whatever gases are excreted from the shell of the egg. So you could think of this as smelling the egg for sex-identifying characteristics. That's one of the ones that's in development.
Another one that's in development uses various gene editing approaches to modify the breeders so that the male eggs either can be identified or it can just stop developing. These are interesting because the companies developing them are very aware of the regulatory and consumer perception issues around gene-editing. So what they do is that they have these clever breeding strategies essentially that make it so that only the male eggs have the gene edit, and then the female eggs and the resulting hands and the resulting eggs that we would eat are not themselves gene edited at all.
So there are a bunch of different approaches, and it remains to be seen, which will be the favorite one in the long term. But right now, the two I mentioned earlier, the kind of ones that are being used in Europe and which will be used in the US soon.
Greg Schonefeld: And do you think those have taken the lead because they've come up with a fully viable solution faster I guess is one reason they've become more popular so far? The other two, it sounded like, are a little bit more in testing at this time.
Robert Yaman: That's right. In order for this technology to be used in commercial production, it has to meet certain characteristics, right. It has to be possible to do at a large enough scale that it can be done in commercial hatchery, which might be hatching millions or tens of millions of birds per year. It also has to be accurate enough so that there aren't a large number of misidentified males that end up on the farm.
Lastly, it has to be done at a cheap enough cost so that it doesn't unduly increase the price of eggs that consumers have to buy. I would say that the technologies that have made it onto the market in Europe so far have shown that they can hit these characteristics fairly well. And then the ones that are in development are still working on how exactly they're going to do that.
Greg Schonefeld: And of the two in the market, what are some of the pros and cons of the two? Is there one more popular than the other so far?
Robert Yaman: I would say it remains to be seen. I think that, ultimately, the hatcheries themselves are the ones that are evaluating all the different options that are available to them and evaluating how they integrate into their unique process into the unique supply chain.
Over the last year or two, we've seen more uptake in the kind of imaging-based approaches because they are what's referred to as non-invasive. So there is one worry with the sampling-based approaches that because you have to puncture the egg, take a fluid sample, there would be issues with biosecurity or with hatchability. But I should caveat all this by saying we're still in early days of technology, right.
Greg Schonefeld: Mm-hmm.
Robert Yaman: It's only been on the market for, I think, six years now. And I think, over time, I anticipate that there will be substantial technological and improvement such that I wouldn't necessarily want to make a strong bet on which one will be the norm in the industry over the longterm. But these are the ones that have been successful in the recent history.
Greg Schonefeld: It's hard to even imagine. I mean, if you're saying hundreds of thousands may be done at a time or millions or, I don't know what the numbers are, but just to imagine how fast that's going through even, can you paint a little picture of what that looks like?
Robert Yaman: Yeah, so I actually just got back from France, where I visited a hatchery there that was using a technology called Cheggy, which is one of the imaging approaches developed by a company called Agri Advanced Technology. And this was a technology that used hyperspatial imaging to essentially look at the feather colors of brown layers because the males and females have different color patterns in their feathers. And it was a really impressive, really fascinating technology. It's highly automated.
Essentially, to give you a visual picture, in the hatchery, the eggs in the setter trays, or and I guess if you don't know what a setter tray is there's big racks of fertilized eggs that have these developing embryos. They are moved onto a conveyor belt, which goes through a machine which essentially moves the eggs to a scanning area where the hyperspatial imaging is done. The analysis of the images happens within a few seconds so that the males and females can be identified.
Then the female eggs are moved back onto the conveyor belt and recondensed into their trays and moved back into the setter while the male eggs then go into a macerator to be turned into some by-product. And the technology was very impressive. It happened very quickly. It was highly automated, and one could definitely envision how it might be scalable to hit a bunch of the scale needed to supply a hatchery.
Greg Schonefeld: While in-ovo sexing has gained traction in Europe, adoption in the US faces its own set of challenges and opportunities. So what's the key difference?
Robert Yaman: As I mentioned, the European flock at this point is around 20% in-ovo sexed. And this has, in some part, been driven by bans in Germany, France, and Italy on the practice of male chick culling that the government's imposed. And what that did was, I think, create the commercial incentives to get the technology across the finish line. In-ovo sexing is something that the industry has thought about and talked about for a long time, for basically as long as this bifurcation in the breeds has happened, but only recently has the technology become good enough to see commercial use.
And so the governments of Germany and France, in particular, basically said that any hatchery operating in this country has to use or can't do male chick culling. And so we saw in the beginning was that the producers in those countries were actually trying to raise the males for meat, which, as we discussed before, commercially is very difficult. But what we've seen over time is that because that is a difficult and costly proposal, we've seen the market shift towards this in-ovo sexing technology and has created the commercial incentives to really improve this technology such that countries around the world now I think have access and have the ability to start using this if they want. So we've seen a few countries in Europe that don't have bans on culling start to adopt this practice.
Norway being a leader in this, where their biggest hatcheries have elected to start doing this. Switzerland being one where the hatcheries in Switzerland have all come together and said, "We're going to start using this technology of our own accord." And then US also being a recent one where three egg companies so far have said that they will start using in-ovo sexing this year, which will... which means that the eggs from those hands will hit the market mid-next year. I think, in the US, we have kind of a unique situation here where we have a very robust and very notable specialty market for eggs, even more so than pretty much any other country in the world. I listened to your episode with a guy from Vital Farms. I think they're a great example of this-
Greg Schonefeld: Oh, yeah.
Robert Yaman: ... where there are a substantial market of consumers that are very excited, very happy to pay a pretty meaningful premium for eggs that they feel are more in line with their values. I think what that allows producers to do is have a more differentiated portfolio of products, right.
There are still going to be the kind of commodity-level eggs for folks who are very price-sensitive, but there are companies like Vital Farms, companies like NestFresh, Egg Innovations, Kipster, those are the ones that have announced they're going to use in-ovo sexing. So I think that's how it'll work in the US. You'll see kind of a different category perhaps of eggs that use this practice that'd be slightly more expensive.
Greg Schonefeld: Are there other hurdles to adopting this, I mean, besides cost?
Robert Yaman: We're talking about industrial machinery here. So you have to manufacture the machines, you have to ship them to the hatchery, you have to install them, commission them. Things are moving further quickly, actually relative to how quickly they could be moving when it comes to these big manufacturing processes.
Greg Schonefeld: What stops the US from adopting this, say, overnight?
Robert Yaman: So the US is adopting it, and I think that, if I were a betting man, I would say I anticipate there to be a substantial amount of adoption in the US in the specialty markets. I think that, again, in terms of like ROI of animal welfare improvement for cost, this is kind of a slam dunk compared to things that companies are already doing.
So I anticipate that in the parts of the market where consumers are already looking for higher quality differentiated products, we'll see this technology be used in a very widespread way. We will likely not see it, for example, on the cheapest eggs because, again, it is a small price increase, and obviously, consumers are often very price-sensitive.
But I think over time, as the technology improves, as new approaches are developed, we'll see kind of modest decreases in cost as all technologies do, which will open up new markets. But I think the kind of long-term potential of the technology still remains to be seen.
Greg Schonefeld: What role is Innovate Animal Ag playing in this or looking to play in all this?
Robert Yaman: We essentially serve as a source of information. I think when we started publishing on the technology around the beginning of last year, I think it was pretty hard for folks to find information about what options are out there, how the technology worked, what was happening in Europe, how American consumers were thinking about this practice. And so what we try to do is demystify that for any of the stakeholders in the supply chain that are interested in this.
And we work closely with a number of producers, different types of stakeholders to help them understand what's going on and help them understand how it might affect their business. And then, like I said before, we try to be cheerleaders for this technology, right. We try to help the companies that are out in front of this new innovation help get them the type of attention that they want, help elevate them as kind of leaders in American innovation, and just try to be as helpful as possible.
Greg Schonefeld: I guess one question I have is why nonprofit? Why was that the right model to do what you think could be done here?
Robert Yaman: That's a good question. When we first started publishing on this technology, at that point, again, like I said, it was pretty hard to find information, pretty hard to understand what was going on. We created a kind of toy model like back of the envelope calculation of how prominent this practice was in Europe. And the initial number we came up with was like 10 to 15% of the hens in Europe were in-ovo sexed as of the beginning of last year. This was extremely counter-narrative.
This was a very surprising realization. And it was so surprising that, in fact, when we told people about it, oftentimes they didn't believe us. They say, "No, you must be mistaken. You must be talking about Germany." But we kind of published more information about why we were confident in that number. And now I think that number is more widely accepted. And so I think what was really helpful there is that we were able to go to our partners and say, "Look, we have no financial stake in this.
We aren't asking you for money. We aren't advocating on behalf of particular technology or particular practice. We're trying to make it easier for you to understand what's going on so that this technology has an easier path to market." And so we are able to be an impartial third-party source of information on this technology, which I think helps us give more... gives, what we say, more trustworthiness, I suppose.
Greg Schonefeld: Do you feel like you get that trust?
Robert Yaman: Yeah. Honestly, we are, in a sense, outsiders coming into this world. I think we have a unique perspective in that we're coming from Silicon Valley. We thought a lot about how new technologies come to market. We thought a lot about how innovation works and the promise of innovation, but we have, over the last maybe two years, spent a lot of time developing our brand as someone that producers can trust. We're interested in practical solutions and things that can be a win-win for every stakeholder in the supply chain. And I think the partners that we work with now do see that.
I think one of the things that we really try to emphasize is that the techno-optimist philosophy that I keep coming back to there's two parts of it, right. There's one part of it that says, "Hey, here are these technological solutions to big problems." But the other part of it is that technology allows us to preserve abundance, right. One of the... The reasons why we have this bifurcation in the egg industry or in the poultry industry between chicken and eggs is because that has allowed us to keep food affordable, nutritious, and safe in a way that is able to feed the whole population.
And that is something that has been great, and I think doesn't get enough credit and doesn't get enough attention. And so I think we try to stay focused on both sides of that, right. Instead, the Technopolis philosophy says that when you have this kind of tradeoff between abundance and these downsides, instead of pushing back on everything and saying, "Hey, we shouldn't participate in this whole system." We say, "How can we solve the downsides while preserving the upsides?" So that's maybe a way to phrase our philosophy.
Greg Schonefeld: I mean, I think that's a great approach. I think to get people to move at all you've got to meet them halfway or meet them where they are. And it sounds like you're kind of able to work alongside people and really truly help down a path towards technology and some other, I guess, practice improvements wherever you can. So it seems like this in-ovo sexing is something you've really kind of focused on. Is there a what's next idea or some other things that you really want to tackle?
Robert Yaman: So we have been very focused on in-ovo sexing technology over the last maybe two years. And the reason is because I think it's such a clear example of this philosophy we're talking about of how the power of technology to solve these problems. But our overall goal and our broader ambition is to bring more of this kind of thinking to the field of animal health and animal welfare.
And I think we're still pretty early on in those days. We're still building the foundation of this kind of philosophy as applied to animal agriculture. So I think there's a lot of work to be done, and one of the things we're going to try to do, trying to flesh out what else is there, what other technologies are coming onto the market that could really solve big problems in a way that's positive for business and producers as well?
And how can we think about stuff that's coming onto the cutting edge in Silicon Valley, like new types of biotechnologies? AIs obviously a huge topic. How are those going to affect agriculture, and how can we use those in a way that's going to be positive? We're very interested in building this field and building this philosophy out from the nascent state that it currently is in.
Greg Schonefeld: The potential for technology to reshape agriculture is vast. While AI is a hot topic globally, and for once, I don't mean avian influenza but artificial intelligence, it's still uncertain how it will impact animal agriculture, though the possibilities are brewing. Robert and the Innovate Animal Ag team are keeping a close eye on emerging trends in Silicon Valley and beyond.
For example, on-farm hatching is made possible by in-ovo sexing. If you can identify the females in the egg, then you can move them to the farm and hatch them in their environment rather than moving them as baby chicks. This idea has the potential to further improve welfare and efficiency by reducing stress on the birds. Innovations like these can continue to reshape the future of animal agriculture.
Robert Yaman: I think when you really dig into how people think about technology, it's about do they understand what problem the technology is solving and do they resonate with that? I think the issue with some of the technologies I talked about before is that people just don't really understand why it's good for them, why it's good for the world, why it's good for animals.
And I think that if stakeholders across the supply chain, including agricultural producers, can be really good about just talking about what they're doing to solve problems that people understand, I think they can be very powerful. And we've seen that folks are very happy to support companies doing these types of things.
They're very happy to pay more for products that are produced with technologies like in-ovo sexing. They're very happy to support policy initiatives that would provide incentives for producers to adopt more technologies like this. So I think there is a lot of openness to technology in general, but the key is that people have to understand why we're doing these things and why it's important.
Greg Schonefeld: I think that's a good insight. If it's technology just for the sake of reducing cost, maybe people don't resonate with that as much, but when you're talking solving problems, hopefully, people have a good understanding of today or even the opportunity to hatch on-site and promote some animal welfare. Any kind of technology supporting that, once people understand that kind of problem, they're in favor of it.
Robert Yaman: Exactly. And I think there's a lot of nuance here, and obviously, because people are very complex and think about things in a lot of different ways in different contexts. Obviously, if there's a practice that significantly lowers the cost of the food that people are buying, there is a sense in which they're going to be happy about that.
Greg Schonefeld: Mm-hmm.
Robert Yaman: Maybe they'll be blissfully unaware of all the stuff that happens behind the scenes to make their food so affordable. But I think when it comes to public messaging and talking to institutions and to the media and to the government about what's happening in our agricultural system, there are lots of ways in which we can talk about technologies and new ways of doing things that bring people in that are accessible, that are exciting to people, and I think that's what we're trying to get across.
Greg Schonefeld: When people think of agriculture, they don't usually picture someone like Robert, former Google, former YouTube, Silicon Valley. Yet here he is, making a meaningful impact in the egg industry using technology to tackle its challenges while also addressing the side effects of technological advances. He has identified in-ovo sexing as an early opportunity with high-impact returns.
In addressing this opportunity, he's not only brought his technological expertise. He's worked to understand the reasoning behind current practices. The role chick sexing plays in the supply chain, and the cost impacts of in-ovo sexing. With this foundation, he's worked with farms to understand opportunity and even offered solutions from a messaging standpoint. Robert's passion for animals is what led him down this path, and I admire his dedication to making a difference.
He's a great example of someone who doesn't fit the mold of what most people imagine in agriculture, and I want to thank him for sharing his unique perspective. Check back in for more episodes of Eggheads, and if you're the show, please follow Eggheads on Spotify or Apple Podcast, Instagram, and LinkedIn. I won't drop an egg on my head for every episode release, but you'll have to be on Instagram or LinkedIn to see it when I do. We appreciate all your support. Until next time, I'm Greg Schonefeld. See you soon. Last question I have for you, Robert, how do you prefer your eggs?
Robert Yaman: I'm partial to hard-boiled. I think there's just something about it. Great for breakfast, very hardy, very easy to eat.
Greg Schonefeld: Any salt or cut it in half, or what do you do?
Robert Yaman: Put it on a sandwich, add some salt to it, eat it with other breakfast foods. I think it's just very versatile and a great thing to get your day started with.
Greg Schonefeld: Yeah, man. Amazing versatility in eggs. Well, thank you.
Robert Yaman: Absolutely.