A small Dunedin agri-tech company has received research and development funding from UK supermarket giant Sainsbury's, sparked by fears over the global lamb industry's future.
Sainsbury's concern about sustainable safe lamb supplies follows last year's European horsegate saga, when horse meat was sold in place of beef in some UK supermarkets.
Dunedin-based Techion Group has gained a grant from the British supermarket chain's £1 million agricultural research and development fund. It is understood around £200,000 has come the Kiwi firm's way. The funds will go towards further developing Techion's new cloud-based system for diagnosing parasites in sheep.
Released to market this month, the FecPakG2 technology counts the eggs in a faecal sample to help farmers know when to drench.
Greg Mirams, who founded Techion in 1993, says the horsegate crisis saw a rise in public distrust of UK supermarkets and prompted demand for more traceable farming practices.
Sainsbury's wanted to maintain its supply of New Zealand lamb, but also reassure its shoppers that the meat came from sustainable farms not dependent on chemicals, Mirams said.
As New Zealand's dairy industry expands, Sainsbury's aims to help farmers stay in the lamb industry by helping them save money on the farm. "They can't help New Zealand farmers by raising the price because consumers walk away, but you can get more money to farmers by making them more competitive," he said.
In addition, like super-bugs in humans, drench resistance is a global problem. "[It's] part of the rationale behind Sainsbury's investment. They are really worried about the sustainability of our lamb supply."
Designed so farmers can take samples themselves without the need of a vet, the FecPakG2 provides accurate data to help reduce the amount of drenching required. It has a micro digital eye that takes a photograph of the eggs which is then uploaded to a cloud system.
Techion's Dunedin-based technicians can email back the results to the farmer within 90 minutes. Being cloud-based, the technology has the potential to help farmers around the world.
Sainsbury's R&D grant will go towards distributing FekPakG2s to New Zealand lamb farmers who supply meat exporter the Alliance Group. It will fund half of the hardware costs for farmers and half of Techion's monthly diagnostic subscription service.
The product will also be given to British farmers, and Techion is planning to employ technicians in the UK to analyse samples without time zone delays.
Techion's connection with Sainsbury's stems from 2006 when the firm was involved in the EU's Parasol Project, a research scheme into the control of roundworm in cattle. The three-year trial used the company's original FecPak system designed in 1993.
That early system did not include a digital camera and required farmers to count parasite eggs in a microscope. Although difficult to use it received a positive reception, and the company exported it to Europe for 20 years. "We built up relationships during the Parasol Project. It's all about networks and credibility and trustworthiness," Mirams said.
As a result of those connections, he was introduced to a Sainsbury's executive at the International Sheep Vet Congress in Rotorua in February 2013. FecPakG2 was only a prototype, but Sainsbury's was sold.
The digital FecPak had been in the works since 2006, but it went on the back burner when Mirams sold the company to agricultural supplier PGG Wrightson.
The global financial crisis meant it couldn't fund the innovation, and in 2009 Mirams bought back the "ashes" of his business.
"The big experiment of being inside PGG Wrightson did not work for us. The ability to make things fast and to not be corporately-restrained has now become our edge," he said.
Mirams founded Techion's research subsidiary, Menixus, with Otago University biochemist Stephen Sowerby the same year and began working on the digital eye fine particle analysis technology. Menixus is a "reverse university spin-out", as the university's commercialisation wing, Otago Innovation, only invested in the project later on, he said.
Techion and Menixus simultaneously sought capital from Tauranga investment network Enterprise Angels and the New Zealand Venture Investment Fund to pay for the development.
The FecPakG2 system had multimillion-dollar potential and the Sainsbury's partnership would help the company's plans to launch into the UK, Germany, France and Scandinavia, where sustainable farming was a hot topic, Mirams said. "The Scandinavians tend to be very environmentally aware . . . They are driving very hard issues around the ethical production of food."
Techion plans to concentrate on European markets before it tries to conquer the US.
"One of the dangers of this business is that it's kind of like having a tiger by the tail - you're not sure where it's going to flick you off and so we are staunchly focused on our core market.
"The US market has some tricks to it that we have to be aware of and it's not our first port of call."