Exploring Incumbent Innovation in Agriculture
Comparisons, what's missing and what innovation leaders will do.
Recently, I read a post from Bob Reiter, Head of Research and Development at Bayer Crop Science, talking about Bayer’s continued investment into R&D:
For us, we continue to take the results of the Farmer Voice survey deeply to heart. Our biggest challenge and greatest opportunity is to meet global need with unprecedented ingenuity, continuing to invest in an R&D pipeline that will keep delivering on farmers' biggest needs.
It made me want to look closer at not only Bayer’s R&D spend, along with some of their competitors but also the approach to innovation within input incumbents.
In 2022, Bayer invested €2.876 billion plus has >7,000 employees working in R&D.
The general trend, on a percentage of revenue basis, has been declining— moving from 13% of revenue in 2018 to 10.1% in 2022, according to their annual report:
Even though their R&D expense as a percent of revenue was down in 2022, it was up in absolute dollars over 2021 thanks to the increased revenue (because of increased input prices).
This brings them in at almost exactly 10% of revenue— ahead of all major competitors on a percent of revenue basis and absolute spend basis, as we can see from the Innovation Comparison Chart below: