Oppenheimer’s Kristen Owen, CFA, is an Executive Director and Senior Analyst covering Agriculture and Agriculture Technology companies as part of the Sustainable Growth & Resource Optimization research platform. As a sell-side research analyst, Kristen is responsible for analyzing the operational and financial performance of publicly traded companies and assisting institutional investors in making investment decisions. 

John Shegerian: Get the latest Impact Podcast right into your inbox each week. Subscribe by entering your email address at impactpodcast.com to make sure you never miss an interview. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States, and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com. This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts and impact partners. Closed Loop’s platform spans the arc of capital, from venture capital to private equity, bridging gaps and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.

John: Welcome to another edition of the Impact Podcast. I’m John Shegerian, and I’m so honored to have with us today Kristen Owen. She’s the executive director and senior analyst at Oppenheimer and Company. Welcome Kristen to the Impact Podcast.

Kristen Owen: Thank you so much for having me, John. I’m excited for our conversation today.

John: We were talking a little bit offline. I’m sitting here in beautiful hot Fresno, California where, my wife and I moved here many, many years ago to raise our two great children. And you’re sitting in my hometown today of New York City, New York. Talk a little bit about how you even got to Oppenheimer and got on this fascinating journey and how you ended up in New York City.

Kristen: Well, John, I will tell you it would not be fair if I didn’t say I am living well above what I ever expected of myself. Originally from Ohio. I grew up outside of Cleveland. And to say that I would be working on Wall Street one day was not even within my ambitions at that point in time. So I went to a large state school, Kent State University. Studied business, so that basically qualifies me to go out and buy people drinks. And yet here I am now several years later. My background that brought me to Oppenheimer, and I’m actually really grateful for the ecosystem that we have at Oppenheimer because it makes it closed loop for me. I actually came up in the financial planning industry. So I started my career out of college in the middle of the financial crisis working for a local bank.

John: Wow.

Kristen: Yeah, Akron, Ohio in Goodyear Heights, so right outside of Goodyear Rubber & Tire Company headquarters.

John: Wow.

Kristen: And I was helping retirees at that point in time with their investment strategies. And here I am, some kid in the middle of the financial crisis trying to tell these folks how to invest for their retirement and how to make their retirement savings last. And one of the questions that I found myself always asking in that process was, why do we make the decisions that we make? Why do we make the investment choices that we do? Whether it’s me as an individual or capital funds or Fidelity. Why do they choose the investments that they choose? So my career has been taking those steps back to figure out why we invest the way that they do. Fast forward 15 years, and it turns out the thing that I was describing is exactly what I do on a day-to-day basis. I get to help institutional investors figure out what are the right stocks to be in, what’s the right entry point and what’s the investible thesis behind that company? And then they go and package that into a portfolio and sell that to individuals and our grandparents and help us sustain our livelihoods. So it’s a very circuitous route to get here. But Oppenheimer having both wealth management and capital markets, I get to see and experience both sides of that now.

John: That’s so interesting. Talk a little bit, when you were a young lady growing up outside of Cleveland, did you ever on TV tell mom and dad, “Hey, I want to go to New York, or I want to be there one day, or can you take me there?” Was that even part of your world as a kid?

Kristen: Oh my gosh, no.

John: Oh, cute.

Kristen: People that I grew up with, our aspiration was Chicago. If you were going to make it out of Cleveland, maybe you made it to Chicago.

John: Good point. Got it.

Kristen: New York was beyond my imagination. But now that I’m here, and we were talking a little bit about this beforehand, now that I’m here, I’m not sure I could leave.

John: Listen. It’s hard to leave. Of course, as I shared with you, I’m biased, very biased. But you’re in a great spot and probably one of the greatest, if not the greatest city on the planet. So it’s just hard. And you’re there with your husband and you’re young, and man, I don’t know. I think you’ve got it all going on. If I can relive my life, I don’t know. I think I made the wrong terms, but no. Everything worked out perfect. And the way I wanted it to work out. Talk a little bit about how long ago did you join Oppenheimer?

Kristen: So I’ve been at Oppenheimer almost 10 years now. Which coming back to, some things that are unique about my generation, it’s a long time to be at an organization.

John: Yeah.

Kristen: So I joined 10 years ago. One of my competitors, I was at a smaller bank beforehand, regional shop outside of Philadelphia. One of the competitors called me up and said, “Hey, we’ve got a spot. We’re interested, would you be willing to come to New York?” And it’s almost like the baseball analogy. You get called up to the major leagues. You can’t say no. So I joined Oppenheimer in 2015.

John: Wow.

Kristen: And a lot of market volatility at that time. So I ended up joining my current team in early 2016. And we’ve been on this just incredible journey since then of just doing things a little bit differently. And Oppenheimer is really one of those places that has afforded the opportunity to be a little bit different in how we think about the world. So I don’t want to presage this too much, but that I’ll lay that foundation there.

John: Okay. So as a CFA, and also your title is executive director and senior analyst. It’s a longer title though technically. When I read your title and I’ve done my work on what you really do, it’s executive director and senior analyst covering agricultural and agricultural technology companies as part of sustainable growth and resource optimization. Break that down for our listeners and viewers because that’s fascinating, but there’s a lot to it. And it can be read broadly or narrowly. How is it read with regards to your day-to-day, quarter-to-quarter, year-to-year duties at Oppenheimer.

Kristen: John, it is a full mouth, isn’t it? So let’s break it down a little bit.

John: Okay.

Kristen: Executive director, that’s just where I am in the hierarchy. Senior research analyst. So I provide research on stocks, and I publish that research. It’s my name attached to it. So that describes what I do. The sustainable growth and resource optimization. Now this is where it gets really, really interesting.

John: Yeah.

Kristen: It’s a very full mouth way of saying that we look at enabling technologies for the zero emissions economy. And as you think about what that means, it’s really how do we do more with less? How do we find growth opportunities in a resource scarce or resource-efficient way? And that really guides us to how we conduct research, how we think about the companies that we cover, even what companies we cover. So you threw out Ag and Ag-Tech. Well, as happy as I am to be here in Manhattan, we’re actually going to take it back to the Midwest. Because our coverage universe, as I came up through this team, was really heavily focused on power, infrastructure, energy, clean tech. And we’ve migrated that over time to follow both the electrons in the economy, but also these big trends around automation. How do we make things more resource-efficient? We could talk a little bit about AI today because that’s a big focus for us. How do we solve for a warming world? So cooling. And HVAC systems is an important part of that, the circular economy. And for me, I saw a lot of these similar trends around automation and resource efficiency. And when we look at the circle of greenhouse gas emissions, we covered 70, 80% of that in our existing coverage universe. But we were really missing this piece around agriculture, which is somewhere between 15 to 20% of greenhouse gas emissions. It’s big methane emitter, but it’s also a, what I would call a, what’s the word I want to use? It is both an enabler or emitter of greenhouse gas emissions, but it also suffers from global warming. So this is an area where we saw an opportunity to leverage these existing technologies and really understand how is that going to make our food production, our agriculture production, our fiber and clothing production more sustainable.

John: Kristen, Just as an aside, I’m not a Wall Street person. I’ve never run a publicly traded company. But as an analyst, aren’t analysts like what publicly traded CFOs and CEOs live in most fear of, you guys are, you don’t look scary, Kristen. Let me just say that. I don’t know what everyone’s been talking about all these years. And the analysts always got the, all my friends that are involved with publicly traded companies are so afraid of analysts and you just don’t come across that scary. What’s going on here?

Kristen: Well, let’s be clear. We’re having a very friendly conversation here.

John: Okay.

Kristen: Certainly, and I think some of the CFOs and CEOs that I’ve talked to over time would tell you, be mindful. There’s a nice face, but we can also cut to the quick and…

John: Okay. I always stay on the private side then. Okay.

Kristen: That’s right, that’s right.

John: I’m going to cross you. I’m not crossing you. But it is ironic, as you just said. Now that I think about some, the funniness of this is, and the irony of it is you’re sitting in Manhattan, and I’m sitting here in Fresno, and Fresno is one of the greatest Ag belts still that remain and is producing some of the most important agriculture in the world right here in my now hometown for the last 30 years. So sustainability in agriculture and sustainable growth and resource optimization. You’ve been now doing this, like you said 10 years and you joined the team that you’re on now back in ’16. That was still, you were very early in the curve with regards to the explosion of the major trends of ESG, the shift from the linear to circular economy, regenerative agriculture. These are trends that are not going away. They’re only growing, but have only passed a tipping point, I’d pause it to say in the last three to five years. Being that you started back in ’16, you have some fascinating thoughts and visibility on this journey. Share a little bit about starting off back in ’16 and how this has all evolved and where are we on this journey with regards to now the world’s goals, common goals of getting to net zero and trying to decarbonize this planet as fast as we can.

Kristen: There are so many ways that I want to get after that question because we work in hype cycles in our industry. We think about ourselves first as technologists.

John: Sure.

Kristen: And then move into, okay, now how does this work? How does adoption work? And there are these hype cycles of when technologies are in that really, really early stage, but they’re getting a lot of media attention.

John: Sure.

Kristen: And I think when we look back to 2015, 2016, and I would be remiss if I had said I got to step in some very important footsteps. There are some really great leaders who paved this path ahead of me. They’re still my teammates, so I’m really lucky to have adopted a lot of their thesis. But we entered into this world of sustainability through what we would think of as the initial clean technology. So solar, wind, energy storage, geothermal, your classic renewable energy. And started to understand some more of the themes around that. And I’d say we’ve actually followed a number of these hype cycles first as it relates to the companies and technologies themselves, but then how investors viewed them. So if we go back to say 2020, during the COVID pandemic, there was this massive wave of capital that was flowing into sustainability. And all of these companies that we had, there was a ton of capital that was flowing into how do we decarbonize, how do we hit sustainability and net zero goals?

And I would say if we tie back to that hype cycle, we were in the very early stages of that hype cycle, things got pretty inflated during that time. We all had to get really smart on ESG and what that meant. And now we’ve come through a bit of that peak in terms of that hype cycle. And I think the combination of where we are in in the economic cycle, high interest rates, high cost of capital, that means we’ve had to sharpen our pencils, all of us and think about what really moves the needle, whether it’s from a sustainability standpoint, from a return on capital standpoint. And now we’re reaching this phase of, I won’t quite call it like enlightenment, but steady state on ESG, and really what’s going to move the needle in terms of performance and in terms of making a difference for the planet. And what is it that we as consumers, because we are all consumers, actually want. So I think we’re still in the early stages of figuring that out.

John: Yes. Yeah, I agree with you. And for our listeners and views who have just joined us. We’ve got Kristen Owen with us today. She’s the executive director and senior analyst at Oppenheimer and Company. To find Kristen and all of her colleagues and all the important work they’re doing in sustainability and way beyond, please go to www.oppenheimer.com. Well wait a second. So talk to me a little bit about driving forces. Now, I go back in my memory since I’ve been now in the recycling industry, “the sustainability industry” 21 years or so, I’ve got to see the arc. Talk a little bit about your arc and what you’ve seen. Now, one of my memories in that time period you just laid out, it was probably 2020, was Larry Fink’s letter at Blackstone basically saying, “Hey, all my portfolio companies now here are going to have to get on board, and they’re going to have to actually be transparent and report on what they’re actually doing to decarbonize and meet their ESG goals and all the other goals that we’ve laid out for them. So is this, are these trends, Kristen, being driven by your generation, which seems tremendously concerned with decarbonizing the planet and healing the planet from all the harms of generations prior and are voting with your pocketbook to do so? Or is it driven by institutional capital vis-a-vis the BlackRocks of the world and the Oppenheimers of the world, and other great organizations that have a lot to do and will have a lot to say about where capital’s allocated and how the market should be moving?

Kristen: I would say you can’t have one without the other. It’s not really an or, it’s an and.

John: Okay.

Kristen: And on the one hand, us as consumers, I’m a millennial, so you’re maybe giving my generation a little bit more credit than even what Gen-Z deserves in terms of really pushing the envelope and in terms of accountability for companies, for brand owners. So I do think that there is that generational shift. But when I think about it from the institutional side, we’ve got the carrots and the sticks, right? You’ve got the regulatory environment. A lot of that’s coming out of Europe. And around that same time, as the BlackRock letter, the EU was also putting in place some pretty stringent reporting requirements. But when I think about institutional investors and how that trickles down through the economy, and really what’s driving the needle at this stage, it’s about risk. We have to find ways to mitigate the risks of some major event disrupting our lives. COVID, for example, we could spend a lot of time talking about what happened in that circumstance, but animal-to-human transmission of a disease, we’ll go with it. But that is something that only if we were to look now, bird flu is passing from birds to cattle, potentially to humans. There are two or three situations where that’s happened. Now I’m not raising the red flag here.

John: Correct.

Kristen: But this is something that gets more challenging in a changing environment.

John: Right.

Kristen: And so you have to think about this in terms of risk mitigation and where are the opportunities to dampen risk factors. And that speaks to institutional investors, whether it’s ESG, DEI, whatever it is, it’s about risk.

John: And so that’s what you’re looking for. You’re looking for the breaks in the system that need to be de-risked, and you’re looking for those inherent risks, but also as oral, let’s just say it this way, the overt risks, but also the covert risks that exist in the ecosystems.

Kristen: That’s exactly right. If it doesn’t rain in the Midwest, we don’t have corn. You don’t have ethanol put in your gas tank, and you don’t have Oreos to eat. So there’s a pretty simple line to draw that gets back to risk. And if I am Mondelez and I make Oreos, I care about my supply chain.

John: It’s funny. Recently we was having a conversation on this show on sustainability in coffee. And what we learned from the guest is that coffee consumption’s going to continue to rise in the next 30 years, but the ability to grow the right coffee beans to support this growth is going to be shrinking because of the climate change. So as you’ve pointed out 10 minutes ago or so, when it comes to agricultural companies and sustainability, Ag is both a contributor and inheritor of the impacts of climate change. Talk a little bit about how do you balance those interests when you are covering technologies, industries emerging, or as you say, better said than I’ve ever heard, hype cycles. How do you then balance all those interests of being both contributor inheritor and inheritor of climate change when it comes to the Ag industry specifically?

Kristen: Well, thank you for finding the word that I lost, an inheritor and a contributor. And this is every industry that we’re in. No industry is without trade-offs. And here, what drives my interest in this end market is that this is one of the few industries that touches absolutely everyone on the planet. Everybody is impacted by this. And every new person that comes will be impacted. Every person who has ever been here is impacted by food, where it comes from and how it is produced. Some really basic facts. We only have as much land as we’re ever going to have. And how you make the best use of that land requires being more and more precise with how you use it. And if the population is growing, it’s not growing as fast as it was historically, but it is still growing. And as we move up the wealth spectrum, what you choose to eat, often means more proteins. It means higher quality. It means that we have to continue to innovate if we’re going to continue to feed, clothe, and fuel the population growth here. So you have to think about that in the context of, well, we’ve got a fixed amount of resources, they’re getting more variable. How do we get smarter? Whether it’s through the use of technology, like labor automation or see and spray technology, which means you don’t have to spray all these chemicals across your whole field. But what if I could just spray a weed?

John: Wow.

Kristen: And it would be really effective, and that would save that chemical from getting into the water stream. The knock on effects here are really, really profound. And technology is the nexus of all of this.

John: Wow. So you go from democratized pest control to precision pest control, but you’re using the wonder now of robotics, AI, and other types. So talk a little bit about that. Since AI is one of the hotter topics, I I want to go back to EVs and other technologies that have been covered for a while. But first let’s hit what’s hot right now. And of course, we can’t wake up any morning without turning on CNBC or Bloomberg or the Wall Street Journal or New York Times. And Nvidia and AI are just always the topic, which again, like you say is a hype cycle, but also just how things work. Where does AI and robotics and automation fall into sustainability in the Ag industry? And is that a lot of what you’re covering right now with your colleagues?

Kristen: Yeah. I’ll use a really acute example and then we’ll get a little bit bigger.

John: Yeah, sure.

Kristen: So you’re sitting in Fresno, right? The two biggest challenges in California to our agriculture system are labor and water.

John: Right.

Kristen: Water, I can’t really, there are some really interesting things being done there, but that’s a really hard problem to solve. Labor is something where technology, automation, AI, that is a perfect use case. So you said you wanted to wait on EVs. Well, let’s talk a little bit about autonomous vehicles.

John: Yeah, go ahead. Yeah. No.

Kristen: Because if you can drive a tractor to do a simple task, repeatable doesn’t require a skilled driver, then your ability to make the returns that you need on your lettuce farm or on your almond orchard, you can actually hit those returns because you have less labor and you can stay in business, and you can continue to grow almonds and supply us all with almond milk. But it also sustains the California economy.

John: Right.

Kristen: So technology as an enabler of labor efficiency is a huge opportunity. But in order for a tractor to be able to drive itself, and I will say tractors have been able to drive themselves for quite a long time. But to really be without somebody operating in the cab, it’s not just about driving. It’s about everything that’s happening behind your tractor. That requires a significant amount of compute. It requires intuition that often sits within the grower today. Can we train computers to do this job that is repeatable? It’s not taking a job away from anybody, but making a job more simplistic or using robotics to swarm and do the task of many with just one operator. So those are the ways that I think about technology, AI being a driver behind what gets that person out of the tractor of the cab. Or cab of the tractor.

John: Kristen, I want to understand this because I’m so fascinated by your profession honestly. I don’t have a lot of, I really rarely ever get to talk to analysts. So this is a treat for me. But I want to demystify a little bit. Are you covering, so for instance, we had a company on the show four or five months ago called Monarch Tractor, Evie Tractors, okay. Started by one of the members of the Mondavi family.

Kristen: That’s right.

John: So are you covering that technology or are you covering the farms that Monarch is selling to saying they’re going to be more sustainable because they’re adopting this great new technology early or are you covering both?

Kristen: Yes, yes. Yes. And Monarch is a great example of this that’s bringing AV and autonomous vehicles together. So perfect, perfect example of this type of application. Now most of the farms themselves are not publicly traded. But if you look at, say Monarch, they’re also not publicly traded, so I don’t cover them. But they’re big large peers. John Deere is going to be among them. Case New Holland, AGCO, these are big companies that I do cover. And then I also look at companies like Corteva that offer the seed technology and the crop protection technology. And I will piggyback on something that you said here. I have the coolest job in the whole wide world. Let’s be very, very clear about that.

John: It sounds like it right now. Again, not only you are the coolest city, you’re actually doing some really neat stuff.

Kristen: Well, I get to talk to farmers, I get to get out and get my boots dirty and really understand what are the challenges that they face. I get to talk to really, really smart people and have them tell me what matters in the world. And I’m lucky that I work for an organization that lets me be driven by that intellectual curiosity because that’s ultimately what’s going to drive returns for our clients, is just understanding the ecosystem better. And my job doesn’t really exist at any other bank. So I’m really lucky that I have the support of my organization to say go out and be interesting. Be right, but be interesting.

John: Right. Let’s talk a little bit about, when you say other banks, other banks aren’t covering the Ag sector and sustainability like you are or, and is there a thesis as why they’re not? But obviously you’re doing that and I think it’s brilliant because as you say, the Ag industry touches all of us. We all have to eat and drink and everything else. And why have others overlooked that a sector?

Kristen: Yeah. So there are a couple of concentric circles within that question. One is that agriculture is complicated. It’s part consumer, part chemical, part industrial. So the way that a large bank typically covers this space is you’ve got somebody who covers machinery, and they might cover the Ag equipment manufacturers, but they also probably cover Caterpillar. Well, I also cover Caterpillar. They also might cover some trucking companies. They cover large heavy equipment. I’m really focused on agriculture. You have folks that’ll cover just the chemicals. And they’ll cover every chemical that goes into our economy. I really just focus on agriculture. Or they want to look at the consumer products, and we’ve got a great consumer team. I often tell ’em, I don’t really understand the consumer as much as I’m a millennial. I’m terrible on TikTok. So I help them understand the supply chain, they help me understand what end user demand looks like. And that doesn’t happen at other banks because you often have somebody doing those discreet things at other banks. At Oppenheimer, we’re a little bit more nimble in that we look across sectors, and we’re unique in this practice, the sustainable growth and resource optimization practice, in that we look for those names that are on the fringe. That are a little bit of this and a little bit of that because they’re hard to understand. And when things are hard to understand, that’s where we in the information business can make a difference.

John: That’s so interesting. Let’s go back to water. Now years ago when I used to cover water more on this show, 10, 12 years ago, I learned from some real top water specialists who were in the technology side of water. That water issue that you, as you point out, Central Valley that’s really in California itself is very water tight and always been a problem. They made the movie Chinatown about water rights and things of that such. But here we are in the Central Valley, which is really probably suffering the most and has the most at stake. When I was talking to this water specialist without giving away names or brands or anything, but he was truly one of the top specialists in the world. He had sold the technology into the UAE to help them solve their water problems. Israel and also Singapore, all who were very water challenged 15, 16 years ago. And basically his technology was taking black water and turning it into drinkable water.

Kristen: Yeah.

John: And he said, “John, what I feel,” this was his own opinion. “We don’t have a water problem, nor do we have a water technology solution problem. What people call water problems are only political problems. Getting people aligned politically speaking to make the right decisions because the right decisions are going to help us be more sustainable in the future. Whether it impacts them selfishly or not is really getting their own politics out of the way, is more important than choosing the right technology. Because the right technology does exist.” To help catch me up now, those were comments made to me 11 or 12 years ago. Do they still ring true? Or is it truly a water problem? And the technology doesn’t truly exist to help reclaim black water and make it drinkable and also usable in the Ag, Ag industry and other industries that desperately need water to be sustainable and be resilient?

Kristen: Yeah. My area of expertise would not be necessarily on the technology side, but what I can say to the framework that you’ve outlined is we need to be smart about how we use what water is available to us.

John: Sure.

Kristen: There are always carrots and sticks associated with access to water and one of the tremendous unlocks that that type of technology has for the countries that you named, UAE, Israel, Singapore, these are now countries that are in a position to be able to be self-sustaining when it comes to their own agricultural production. So the value of water cannot be under said.

John: Underestimated.

Kristen: Underestimated. Yes, that’s the word. So a really, really important piece of this, and the way that I think about water in that context is we have to protect what’s available to us. So if we treat our land better, it will in turn drive improvements in our water system. It’s not the only thing that’s available out there to help improve the water system. But if you treat the agricultural land better, more porous, more loomy, there are some great words that I could tell you about soil health. That actually has a significant benefit to the water tables as well, and the ability of the land to absorb that and protect that.

John: Let’s talk about that, though. It’s become a very, very big trend in the recent years, especially in the last four or five years, regenerative agriculture. How are you covering that sector and how exciting is that sector to what you do and the analysis that you put forth?

Kristen: Yeah. There are some really, really interesting things happening in the regenerative agriculture space. First and foremost, getting a framework or a definition, it’s almost like ESG.

John: Yes.

Kristen: Getting a definition for regenerative agriculture, really, really challenging. But the premise of the right products, the right place, the right time, and being resource-efficient, there’s so much happening there. And now we’re starting to get the economics to align. So one of the things that we tend to think about or as part of our thesis is any technology, we want it to be resource-efficient, enable a resilient food and agriculture supply chain. But we also have to have the grower participate in the unit economics. It’s really table stakes for us. If the grower doesn’t benefit from the practice change, they’re not going to adopt. And we’re finally getting to a point where some of those economics are coming into play. Even just last week, the Biden administration outlined carbon offset commentary. Now we’re still very early days in that, but that could be a mechanism. I’m more personally a fan of insets versus offsets, meaning how do we do it better from the start rather than relying on a credit to offset something? And how do we do better from the start? That’s where the, there’s really interesting stuff here.

John: Yeah.

Kristen: And some of the legislation through the IRA tax credits really move the needle in terms of land conservation and how do you do things in a more resource-efficient way. We’re at only the tip of the spear in terms of aligning those economics, but we have to start somewhere. And there are a lot of, whether it’s on the biological crop protection side, whether it’s seed technology, there’s a lot happening in the regenerative Ag space that I think is good for the consumer and good for the grower.

John: I didn’t ask you, but I should have asked you. Are you covering publicly traded companies or emerging technologies in companies that are just specifically constrained to the geography of the United States? Or do you look beyond?

Kristen: Most of the companies that we have, all of the companies that we have are listed in the United States.

John: Yes.

Kristen: But they do business globally. And one area that we think is really, really interesting right now is Latin America, Brazil in particular. It’s one of the largest agricultural producers. So this is going to be a region that’s really, really important over the coming decades. They have the land capacity, they have now technology. There’s this really interesting case of Deere linking up with Starlink, with SpaceX to provide connectivity in Brazil so that farmers can take advantage of the technology that we have in the United States that relies on broadband.

John: Wow.

Kristen: So there’s an awful lot of opportunity there to both move up the technology cycle, but also to produce a lot more for the growing population.

John: Besides you being, you are obviously an expert of what you do, and as you said, one of the only experts in this space. Whereas in a world where there’s a lot of analysts that are much more generalists speaking. What are you seeing on the poll side? The investors today are young people obviously, like you say, Gen-Z, and your generation, the millennials, which is my children’s generation and then older. Is there bigger, is there more appetite now than ever before for sustainability or impact investing or whatever you and I want to call it, but for let’s just say, is there more appetite for your type of analysis? Because people are very interested in voting and betting with their pocketbooks on the future of this planet and companies that are focused on resilience and sustainability as opposed to others that are wonderful companies and are great brands, but they’re really not moving the needle when it comes to sustainability or impact.

Kristen: Think about some of the big trends in the grocery store aisle.

John: Yeah.

Kristen: A clean label, healthier, move to protein. So I think there’s this food is health that is emerging and you’re seeing it accelerated by GLP-1 craze, another hike cycle that we’re connected to. If everybody’s eating healthier, what does that mean for the CPG companies? What does it mean for restaurants? Can we produce the raw materials that go into that supply chain in a more sustainable way that provides traceability but also better health outcomes? This is the next horizon. I think this food is health investment strategy because it takes what is historically been a commodity. Corn is corn is corn, right? It takes that commodity and it differentiates it based on something other than how much corn did you produce? And it pays the farmer for something more than just how much did you produce? Did you produce it with higher protein content, higher oil content? Can we see those stars aligning? I think that’s what’s being driven by the consumer whole. And investors are going to follow the dollars, right? So they’re going to look and see, who is best aligned to provide that traceability or that stamp of approval on quality. So I really look at food as health as being that thing that pulls us more in this differentiated de-commoditized direction. You mentioned, say Monarch Tractor. One of the things that they are aligned with is a less than zero carbon emissions for wine. I think they talked about this on your episode.

John: Yes.

Kristen: So if you have an electric tractor that’s producing and you’re not using any inputs, I do like a good glass of Pinot grigio. Am I going to be willing to pay another $3 for something that’s clean and that has that front of label claim? Absolutely. So that’s the sort of pull that I see that’s really coming from the consumer and the investors will follow those dollars.

John: Well, let’s step one step back. I had a gentleman on this show, 2011. And no one was covering him then. And he wasn’t publicly traded then. It was a startup. His name was Ethan Brown. And he had started a little company called Beyond Meat. And one of our common friends who had been on the show asked to get him on and we got him on. And of course the rest is history. Where Ethan has gone with Beyond Meat and other plant-based products that are replacing eggs and other meat products. And now comparatively speaking, when you walk in Whole Foods today compared to 10, 12 years ago, there’s a massive array of options when it comes to plant-based cheeses, meats, and other great products. How does that affect the great and important work that you do also? Because it’s a subset of clean eating, clean living as you point out. And it’s a predecessor, but still running concurrently with the whole GLP-1 hype cycle as well. Where does that fall with regards to your important work?

Kristen: Unity economics still matter in this space. So pull from the consumer, absolutely you don’t have innovation without understanding what the consumer pull is. I look at what are the picks and shovels that’ll enable that product to exist, and can those picks and shovels, whatever it is, can the technology, maybe it’s fermentation or microbial. We could really get deep in the weeds here.

John: Wow.

Kristen: What are the technologies that enable that product to exist in a way that allows them to hit their unity economics? Because sustainability, it is about all of these things that we’ve talked about. It’s about water, greenhouse gas emissions, but it’s also financial sustainability. If you don’t have the ability to continue, then all that work that you’ve done, it’s not that it goes for naught, but financial sustainability is really important to continuing that work forward. So it’s how do you find the technologies to align those two things, and that’s where the magic happens.

John: It’s so funny you say that because I’ve said that so many times. So many young entrepreneurs come to me for guidance or advice on their project and I always say, “Hey, listen. To make an impact is important. And there’s no shame to say you’re a capitalist. And we live in a capitalist country, and I understand that you want to not only make a paycheck, but you want to make a difference.” But your company as you just said, Kristen, your company has to be sustainable. You can’t go save the world if your company’s losing money. So focusing on profit and focusing on resilience and focusing on its own sustainability is something that some folks forget along the way and is really, really important stuff. Talk a little bit about, pull the curtain back a little bit on the process. Now if I had a publicly traded company that was going to impact the Ag industry, obviously I want you to cover it. But if it’s privately held today, when do I start trying to get on your radar? And I’m sure so many people are begging for your attention to cover their company. How does it work with privately held companies that think they have a big future in the publicly traded markets. When do they cross over and when do you start studying their efficacy, their brand, what they’ve got going, their ability to go public and be a viable public company? That’s a journey. Where are you in that ecosystem?

Kristen: It is absolutely a journey. And we’ve seen a lot of companies go through that. Oppenheimer sits across that journey. I sit in one specific aspect of that. So where I like to be engaged is teach me about your product. Help me understand what’s valuable about it, how it fits within the ecosystem, and then when you’re ready to go do something, that’s the job of our investment bankers and they really do all that business development. But where we are interested in is how is this going to impact an industry that we understand or try to understand as well as the end user can. So I’m always anxious to learn more about young companies, startups. Maybe you’ve been private for 35 years, and the technology is finally at a scale where it’s ready. We want to understand all of that because that’s going to help us make better decisions and better analyze the companies that are in the public space because a lot of those companies end up getting bought by the large publicly traded companies. And then, hey, we know something about them and we can vet that for investors. Or they may be the disruptors. And gee, wouldn’t it be nice to be able to help investors of those companies understand what might be coming down the pike? So that’s where I sit. I let my bankers do the other, the other side of it. But I’m always interested in learning about young companies in this space.

John: Help me up. I want to understand this delicate dance here. So the bankers are like, “Hey, more companies to take public, more money for us.” And that’s their job.

Kristen: Absolutely.

John: But before they make final decisions on who to take out on the public markets. If the public markets are, the equity markets are good at that time, and the social and economic conditions and political conditions align, they come back to you first and say, “Hey, if we take this company public and our name’s on the book, is this going to be viable? Is this something you’re excited about that you’re going to be able to cover and give good coverage to?” How does that delicate dance work? And is that a constant ebb and flow of information and advice and consent as well?

Kristen: I would say it is a very delicate dance.

John: Okay.

Kristen: There is ebb, there is not necessarily flow.

John: Got it. Understood.

Kristen: Yeah. We keep that separate because my job is to be as independent as possible. We talk about this on our team. We have our time and our reputations. So we want to spend our time with those companies that are going to be really interesting, but we also have to protect our reputation and say, when it comes time to to be mean, to rip the bandaids off or to really get to the meat of something and say, this is or this is not a viable path today, then we have to be able to do that. So we separate and all of the investment banking industry has developed this way where bankers sit on one side, the research analysts sit on the other so that we can really protect our ability to be…

John: Non-biased.

Kristen: Thank you. Please don’t let anybody know that I couldn’t come up with that word.

John: No, I know what you meant all along and you were very good about that.

Kristen: Yes.

John: You’ve been around for even as a very young person, Kristen, you’ve seen a lot in 10 years, eight years specifically since you’re on this team. Are you seeing an acceleration? What gets you most excited right now? Is there an acceleration? Moore’s law was great 20 years ago, but obviously Moore’s law doesn’t hold anymore. There just seems to be, things are moving at such a fast speed now in terms of innovation and invention and everything else. Are you seeing more interesting technologies at a higher velocity than ever before? And what gets you the most excited right now in middle of 2024?

Kristen: Absolutely is the short answer. There are three technologies that I think are really paramount to what we’re seeing in the next generation. It is connectivity. We have more devices connected than ever before. That is enabling more data, more data collection, more data analysis that requires AI. How can we use, whether it’s big data or actual artificial intelligence, turn that sensor information into language because most of the AI that we talk about today is that LLM, those large language modules that are based on language. So how do we take the information that we’re getting from those sensors, turn that into language to turn it into insights. And then the third technology that I think is really, really interesting is actually, I’m going to throw a curve ball in here, is CRISPR or gene editing technologies. So we’ve seen a lot of the development happen on the hardware side. Tractors have gotten bigger, they’ve gotten more powerful, they’ve gotten smarter, more precise. Seed technology, the productivity in the seed and how you protect the seed, how you grow the seed. That has averaged about a percent productivity gain every year, which is actually really good. But there’s an inflection to come. And it’s when AI and CRISPR come together, how can we use genetic tools like we’ve done in therapeutics and in the pharma industry to really create, whether it’s healthier seeds or more drought tolerant seeds to bring back our conversation about water. There are so many possibilities within the genetic system of a plant that are yet undiscovered. And I get really, really excited about what that potential looks like when it comes to this food is health evolution that we’re watching.

John: What is that merger going to be called? That’s fascinating. I never heard of anyone talk about the AI and CRISPR merger.

Kristen: Yeah.

John: What will that hype cycle be called? Do we know yet?

Kristen: It’s a little bit Ag biotech.

John: Okay.

Kristen: That’s how I think about it. There are a lot of ways that we could look at it like molecular biology, but the big picture way that we think about this is taking chemistry and turning that into biology. And we’ve seen that in the hydrocarbon space, whether it’s renewable fuels, seen it in plastics, we’ve seen it in so many other ways that’s really coming to agriculture and to our food systems. And there’s just so much out there that we don’t know that can be unlocked by these technologies.

John: How many years away are we from that?

Kristen: Ooh, these are long cycle times.

John: Of course, of course. But if you were to guess today.

Kristen: I would say there are some very interesting companies that are doing work in this space. Some of them are public, some of them are not. We’ll see the first introductions before the end of this decade at scale. When you talk about some of the other seed technologies that have come out there, you can hit scale within 20 years and be penetrated in the market. So there’s going to be some evolution around that.

John: Sure.

Kristen: We’re going to have to see how consumers feel about that.

John: Right.

Kristen: Because it is, we are talking about a food system and or some plant-based supply chain. So there’s going to be some pieces that have to fall into place, but the technology is ready today to do something like that. And I think we see products before the end of the decade.

John: That’s exciting. Kristen, you’re just so delightful. And I don’t care what anyone say about analysts. They’re just not telling the truth. That’s what I say.

Kristen: Not everybody has as much fun as I do.

John: Oh, I don’t think so. But for our listeners and viewers that want to find Kristen and her colleagues, all the important work they’re doing in Ag and sustainability and everything else with regards to their important work and impact work, please go to www.oppenheimer.com. Kristen Owen, you’re just a delight to have on. It’s been just wonderful. I could talk to you for hours. What you’re doing is fascinating and also very impactful, important, and thank you and your colleagues at Oppenheimer for making the world a better and more sustainable place.

Kristen: Thank you, John.

John: This edition of the Impact Podcast is brought to you by Engage. Engage is a digital booking platform revolutionizing the talent booking industry with thousands of athletes, celebrities, entrepreneurs, and business leaders. Engage is the go-to spot for booking talent, for speeches, custom experiences, live streams, and much more. For more information on Engage or to book talent today, visit letsengage.com. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet and your privacy, and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States, and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.