215 Christian Jochnick - Why Ibiza is the best place to start the regenerative renaissance

A conversation with Christian Jochnick, founder of Juntos Ibiza, a project designed around a circular, regenerative model of food, farming and community, about why Tesla is such a good model to follow for regenerative agriculture, why should we focus on the affluent market first and more.

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Transcript

SPEAKER_01 0:00

Why is Tesla such a good model to follow for regenerative agriculture? Why should we focus on the affluent market first? And should we focus on investing in quote-unquote boring infrastructure for processing, drying, fermentation, etc.? Listen today to an interview which covers a wide range of topics, from plant medicine to the European agriculture policy cap, and why we should subsidize farm workers instead of hackers under management. Enjoy!

UNKNOWN 0:25

Intro

Why are you doing what you are doing? Why Soil?

SPEAKER_01 0:31

This is the Investing in Regenerative Agriculture and Food podcast, investing as if the planet mattered, where we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, wear and consume. And it's Thank you. If our work created value for you, and if you have the means, and only if you have the means, consider joining us. Find out more on gumroad.com slash investinginregenag. That is gumroad.com slash investinginregenag. Or find the link below. Welcome to another episode, today with a category-defining brand and flagship destination in the heart of Ibiza, designing around circular, regenerative models for food, farming and community. Welcome, Christian. Thank you very much. And there's a lot to unpack, obviously, in that sentence alone. But I think we're going to do that and we have time for that. But I want to start with your personal story because you're not from there. You're not from Ibiza. You're not born on a farm, if I remember correctly. So how did you end up focusing on building Juntus, which is what you're building at the moment? What was your journey towards?

why and how was Juntos born?

SPEAKER_00 2:15

Oh my God, you know, that's a big answer. I mean, sometimes I feel like everything I've experienced in life has led me to this point so it's hard to pick a specific moment of inspiration but in essence I think the first time when it started was you know in the course of two months I got married I had went to a plant medicine retreat and I became a father at the same time and I think this just opened up a lot of reflections for me and I think becoming a father automatically you start thinking further out into the future but also during this retreat I had a moment sitting in the forest and growing up in Sweden I spent a lot of time in nature and sitting there in nature it was really a huge revelation of fully embodying the appreciation that we are all connected and that the forest is a community of sentient living beings that are working together in an organic system and it was just a mind-blowing experience to realize that every tree, every plant, every bush is connected and communicate and collaborate and cooperate in a system and we are part of this system and everything we have is thanks to this system. And if we want to have a future to believe in, we need to be in service of this system. And this is how the journey started in essence. And the next step of the question is how to arrive in Ibiza, I guess.

SPEAKER_01 4:13

Yeah, I mean, because you can, of course, then focus. I mean, you can take many paths after that revelation from forest conservation to NGO work, actually. and somehow you ended up founding a farm, restaurant, food brand and building way more. So I'm always interested in why that path. Of the other million options you could have done, having

SPEAKER_00 4:36

this revelation. Yeah, so I think Ibiza has always been very close to my heart. The first time I came here was 20 years ago. And for some people, when they arrive on this island, it's just like an instant connection. It is an island that has a very feminine energy. It's an island that has attracted rebels and seekers and dreamers and pirates for many, many, many hundreds of years. And it really has a very specific spirit. And I like to say that if you're in London or in Stockholm or in Amsterdam, maybe one in a hundred, if you're lucky, look you in the eyes, give you a smile, give you a hug. And here it's more like one in It's just the human connection here is really beautiful and the nature and environment is very beautiful as well. So I've always had in the back of my mind that one day I would like to try to live on this island because of this special energy and this special feeling. But after that experience, I came to the conclusion that I wanted to live closer to nature. I wanted to spend more time in nature and ideally I would like to be in service of nature. nature and more from a perspective of forest really to take responsibility of a forest wild natural zones and trying to support it I was very inspired by a project in Argentina which is replanting cloud forest at the top of the Andean mountain range so it was coming from that point of view of long term land custodianship so that was the first thing the second thing was to try to grow organic food more from a personal health point of view because after these experiences and starting to go deeper it just became so obvious we spray poison on plants designed to kill and then these plants absorb these poisons and then we eat these plants and then our bodies absorb this poison and then we wonder why diseases like ALS and cancer are skyrocketing in our societies it just became so obvious and we watched this documentary about seed and we realized wow you know how complex and beautiful and wonderful nature is and how we are interfering with this beautiful and perfect technology basically and the third thing was really about human the human dimension and growing up I've always been you know in my family as many families in Sweden we suffered I've suffered a lot from alcohol addiction, depression, anxiety, and so on. And I've always been interested in this. I worked five years for an NGO right out of high school. And really, I've always been curious about, you call it the human experience and human suffering and how we can become more happy. And I spent many, many years now playing an active role in the space of psychedelic and in particular psychedelics for healing of mental illness and psychedelic assisted psychotherapy. It's been a big part of my life the last 10 years. And people refer to the psychedelic renaissance and I really think that the psychedelic renaissance is paving the way for the regenerative renaissance in the sense that it really helps us get... well effectively ego this puts plants plants on the map as well I think psychedelics in general you know back in the days they talked about you know oneness and this I mean

SPEAKER_01 8:38

the other route of we the more people legally in many cases of course and safely can go through these experiences the more they can have that same realization as you and see sort of the in inevitability of regeneration and the connectedness and the enormous potential and the just complete sense making. No, that's not a sentence. But anyway, the potential of the number of people open to these concepts will just exponentially grow as more people go through these experiences and are exposed to it, let's say.

SPEAKER_00 9:13

Yeah, I mean, essentially, you know, Imperial College came out with a quite meaningful study where they looked at the brain under the influence of psilocybin and just seeing we have a part of the brain that is called the default mode network which is kind of the conductor of the brain so all our accumulated experiences create certain learnings so that we don't have to relearn everything from scratch and it's part of evolution it's how we evolve it's how we learn it's how we get better at things but sometimes we have a traumatic experience in life like for example you come back from a holiday and then you stand there in front of a class and you're going to talk about your summer experience and then someone cracks a joke and everyone laughs and then you go back and you say I never want to speak in front of people again and then you create this truth in your mind that says I'm not good at speaking in front of people it's not because you're not good at speaking in front of people because you had a traumatic experience an embarrassing moment and 20 years later you're still repeating this narrative no no no I'm not good at speaking in front of people and you have forgotten what this experience was It's buried deep down in your memories. But actually it's not about your capacity to speak in front of people. And what happens when you have a psychedelic experience is that the activity of the default mode network goes down and the connectivity in the brain goes up. So you're creating new neural pathways which helps you look at the world with a fresh pair of eyes. And many people describe something called like an out-of-body experience where you're effectively observing yourself from the outside in and you're observing your thoughts and you can identify where you get stuck in loops or where you are stuck in a perception that maybe not reflects reality a reflection of I'm not good at speaking in front of people or people don't appreciate me or I'm not good at this and I'm not

SPEAKER_01 11:15

or a farmer shouldn't be this way what would happen if all farmers go through or big groups of farmers go through those experiences or is that what's happening? Well, yes and no. Suddenly you might be open to new ways and you see the flowers very different and not longer essential or you see the connectedness with the plants you're growing or the animals, the trees, etc.

SPEAKER_00 11:38

For example, when you have a psychedelic experience, you might realize like, wow, why do I not pay more attention to my children when I'm at home? It really hurts them. Or why am I not more present and helpful with my partner and things like this. And of course, if you are a farmer, it's very likely that you will have this realization that saying, wow, the way I'm farming actually have a very negative impact on the ecosystem that I love. And I think, you know, I struggle to believe that there's many people that are work dedicating their lives to working in nature without having a deep, profound connection with nature. And I've been speaking to many people about this. I think it's not a lack of awareness. It's a lack of tool. and it's about offering a model that makes financial sense I think many farmers are ready to transition if they are provided with the tools and in this particular case I don't think that farmers need to take psychedelics I think it's about consumers need to take psychedelics to appreciate you know number one you realize you look at yourself not from your personal perspective you look at yourself and your life from a more collective perspective and in the beginning you become more aware of how your actions are affecting others and then you become aware how others actions affect yourself and then the next step is to become aware of how our collective actions both on an individual level and aggregated on a collective level what the impact it has on the natural world and this is where I think the psychedelic experience and especially plant medicines which is the next evolution if you compare what happened in the 60s where it was you know mainly LSD and psilocybin and what we are experiencing today which is you know plant medicine they're arriving from indigenous cultures and indigenous traditions and it's not necessarily what the plant medicines are bringing themselves but with the tools that they bring and I think there's many conversations around indigenous wisdom for example and what it is indigenous wisdom in its essence you know it can be many many things and it's a lot of knowledge and a lot of wisdom that is kept by communities all around the world but if you look at this smallest common denominator what is the red thread that is going through all of these cultures the appreciation for nature and I think this is what I've experienced as I've engaged with different cultures and traditions from around the world this deep and profound appreciation for the natural world and in every single moment of coming together whether it's for ceremony or for celebration there's always nature is always at the heart of this giving thanks to nature praying for nature celebrating nature and reminding ourselves that we are part of the natural world and if we want to have a future to believe in we need to be in service of this natural world and we need to invest into this natural world and we need to be very aware of how our actions, which consequences it has on the natural world. And this, I think, is the greatest gift of these times when we are becoming more aware of this. And this is, you know, at the end of the day, what moves politicians and what moves big companies is ultimately the power of voters and the power of consumers and the more people that become aware of the consequences of their decisions and the consequences of their votes, the greater change we're gonna see in both our public policies and in the value chains of our companies and the consequences of those.

SPEAKER_01 15:38

Yeah, and I think it's a strong point to make in a sense that it's not that you can unsee it. Like just as farmers, when they start a transition, they go through it and they see the complexity, but also the potential. I mean, after you've seen or felt or somewhere in the middle of those two and the true size or the true importance and your place within nature, it's not that you a day later think, okay, I'll just continue my normal life. Like that's not something that happens. like it's a switch that is switched and then you're in sort of in another in another realm so every time that happens we have another another soul and on another side which is great meaning somebody's going to create impact either through through eating through building companies like yourself through other things so and then so Ibiza is that seems to be a hotspot for that at the same time it's known of course as as a party island and it has a massive industry around that and And so when you sort of combined your vision of I want to live at some point on the island and I want to combine it with this deep belonging and deep need or deep interest of working in and within and with nature, how did you end up on Juntus? And how did that manifest itself as it's manifesting now?

UNKNOWN 17:02

Yeah.

SPEAKER_00 17:37

Yeah, so basically me and my wife, we moved here with our two kids. We found a beautiful piece of land with a really special forest and these stone-walled terraces that went down and just incredible, you know, this technology of the terraces that have been built over hundreds of years and, you know, We can have a torrential rain and half an hour later, it's just completely absorbed by the land. So it's basically an erosion control system. And our intention was first to be in service of the forest, to manage the forest and maintain the forest. And in Ibiza, it means to clear the pine trees because it creates a big fire hazard, but also the dominance of the pine species suffocates a lot of the other... species in the forest so it's really about managing and nurturing the forest to maximize biodiversity and the second was to cultivate the lands to feed ourselves and friends and the community that we're part of and the third was to bring people together for you know celebrations and ceremonies to connect help people connect with themselves with each other and to nature and this were the starting point and to begin with I didn't have any commercial intentions with it. It was really about a journey, an exploratory journey grounded in the willingness to be in service of nature. So that's where it started. And slowly along this journey, always I had in the back of my mind that this needs to be financially viable. So I cannot keep covering the cost forever but and I always had an idea that you know we need to find other ways to activate farms and this idea that a farm does not have to be only a place of production it can be a place where people come together where people celebrate together so really essentially activating event and hospitality revenues and there was always an idea that you know We need to walk up the value chain to go from raw materials to value-added products and to increase the margins. But also on the distribution side, make sure that especially small establishing brands, it's extremely difficult to build a company in a traditional retail model because it's a very inefficient distribution channel. You are you know first of all it costs a lot to distribute through retailers they take a big chunk of your margins from the sales price and then you're also stuck with inventory that don't move in certain shops and you run out of inventory in other shops where it do move so it's extremely inefficient so the idea was always you know somewhere to think about events hospitality value added product and direct direct to consumer. And this was linked to my experience as I've spent the last 10 years in venture, early stage investment world and had my own startups and invested in many different startups and some of them were consumer products companies building a direct to consumer market. So I think somewhere this was always in the back of my mind but I was not investing into it proactively at that point. I just had a clear revelation walking on the land one day, which was our existing food system is fundamentally destructive. It depletes the soils, it depletes our watersheds, and it reduces the insect population in the ecosystem. And if you extrapolate this, it's a very predictable outcome And in that moment, I realized, wow, regenerative agriculture, it really works, number one. And number two, you can measure it. And number three, you can verify it. Which means that, you know, this is going to be the future. There is just no other option than regenerative agriculture being a huge part of the solution to our existential challenges, to our religious problems. relationship to nature and at that point I decided we need to go for this and it's not a problem of agriculture system it's a value chain problem and it's a problem of infrastructure basically infrastructure across the value chain and making sure that we can build a model that makes financial sense for the participants and that's when I decided to really go all in so to say

SPEAKER_01 23:14

and There are many different moving parts in Juntus. Let's unpack it a bit. Of course, there's a farming piece which wants to supply or is supplying Ibiza, which imports like many islands, especially the tourism ones, 90 plus percent of stuff from overseas or in this case, mainland Spain and the rest of Europe. 96

SPEAKER_00 23:38

on

SPEAKER_01 23:38

Ibiza. 96. Okay. So there's a lot to do there, but you didn't stop there. So there's a processing, which is not the right word here, but like infrastructure as you mentioned before to transform a lot of these things but also make it visitable like you said the community piece and make it not a closed factory where one end ingredients go in and the other end products come out so that's another layer which is open to other producers as well not just your farm and so let's unpack those a bit and then let's unpack the piece that should leave Ibiza which is very interesting because you could have stopped there and say, okay, we need production, we need processing, we need fermentation, which we need ourselves, but also others. So let's focus on that and let's supply as much of Ibiza as possible. What is the vision there and what is the current status? And then we'll unpack the piece that's beyond the island.

SPEAKER_00 24:37

So basically the way I see it is we have a value chain challenge and you can split up the challenge a value chain in two parts it's the supply and the demand and what we just talked about was the demand side how can we you know create additional sources of revenue and how can we increase the margins on the commercial side on the revenue side on the demand side but there's also the supply side and what I learned through building out a regenerative farm myself is that you know essentially we need to build go from large scale focused monoculture farming to small scale diversified farming and you know there's a challenge in that it's not an unsurmountable challenge but there is a challenge there in that instead of doing one thing in a large scale you need to do many things in a small scale and when you do things in a small scale of course the investments are less than if you do it in a big scale but you still need to obtain the knowledge you need to invest into tools you need to invest into infrastructure and you need to invest into operations. And you need to do this for multiple activities. And for each activity, it takes time before you start to earning revenues on the activity. For example, if you plant almond trees, it takes three to five years before you have your first harvest. So you have a pretty meaningful upfront investment. And then you have several years before you start to benefit from that investment. Other activities in a farming system can can be quicker but all of them there is a certain level of delay and when you start to add up these complementary activities you start to add up capex and opex and you know for me i was fortunate i could afford to do this but even then you know you start there in the beginning it's super exciting oh yeah let's plant almond trees yeah let's do that okay so how are we going to gain the knowledge oh we need to find the find someone that knows okay and now we know okay which variety should we choose and where should we source them and how do we need to prepare the soil and how can we and and and what do we need in order to plant them and then what do we need to prune them and then what do we need to harvest them and then what do we need to store them and then you come to the bees and then you need to go through the same journey with the bees and then you come to the saffron and then you come to the grains and then you come to the sheep and you come to the chicken and it's it adds up and it becomes very heavy to carry and you know I have a lot of appreciation and sympathy for conventional farmers that are being proposed this challenge of transitioning and effectively you need to take something that may work financially or may not work financially but what's proposed to you is to go through a significant effort in time, energy and money and then arrive at a place on the other side where there's a huge amount of uncertainty about what you will be able to generate in terms of revenue and unfortunately many of the farms that have transitions don't generate enough money so you have farmers that are looking at this and saying okay I get it we need to change our ways but what you are proposing for me is a significant investment that will take me to a point of loss making so you know it's very difficult to convince someone to do that and the it's our job and me saying though from the capital markets and from the business community to create this certainty for the farmers we are the ones that can understand how to create value in the market we are the ones that understands how to raise capital and invest into infrastructure and we have the tools to manage risk and the risk and the risk needs to be put on a market not on farmers and this is where in Juntos as I was going through these investments for myself to invest into this infrastructure for our various farming activities it just dawned on me that we should do this collectively and it makes so much more sense if we spread this investment on a community of farmers rather than on one single farmer because if I have 15 hectares of almonds it's very difficult to justice any meaning investment into infrastructure for almonds. But if we are 10 farmers with 15 hectares of almonds, all of a sudden we're talking about 150 hectares. And if we are 100, then we're talking about 1,500 hectares of almonds. And then it starts to make sense. And this is where we need to look at. And from Juntos, our assumption is that if you're going to manage 5 to 10 complementary farmers, You also don't want to go to five to 10 different locations that might be 45 minutes to have one and a half hours away for each of these activities. You want to have one hub that you connect into. And this is the place where you can gain access to soil, where you can get access to seed, to seedlings, to harvesting tools, to processing facilities, to transformation kitchens, to distribution centers, to farmers markets, to events. through support you know administrative support you know how to gain access to grants how do you optimize grant applications how do you prepare grant applications who do you send it to how do you follow up how do you make sure that it's being processed how do you gain access to marketing how do you gain access to capital and there's a lot of benefits we can extract by thinking of this as echoes systems rather than thinking of this as individual projects.

SPEAKER_01 31:08

And so you bought a hub. That's basically, I mean, many of these things, that makes a lot of sense. Yeah, of course we should do that. In this case, you made it actionable, let's say. So last year, we are recording this beginning of 2023, but you bought an old dairy farm and processing facility in the heart of Ibiza.

SPEAKER_00 31:31

Yeah, you know, this was one of those synchronistic moments. I realized that my farm was in a beautiful protected zone. And just to invest in infrastructure there just didn't make sense. A production kitchen in a beautiful valley that is on top of it protected, even if I could get the licenses, I wouldn't want to build something there. You want to protect this. So I was looking for a land with a more industrial character. And then I stumbled on this dairy farm that had been abandoned for seven or eight years. But it had 600 square meters of buildings and 6,000 square meters of industrial shade covers for the cattle. And that's where the vision of building this hub came into existence, where I thought, wow, if we can transform these cow sheds into climate-controlled indoor space and where we, through a modular system, can slowly slowly start building out the infrastructure that we need, the shared infrastructure that we need, then we can really create something very very special and meaningful.

SPEAKER_01 32:51

And as I mentioned before, you decided not to just keep that closed. Like this is meant to be, I think you said Disneyland for foodies, or that might be my words, but this is meant to be open. And so describe a day in the future, obviously this is all future talking, but describe a day in a year or so, a year and a half, let's say for a visitor, not necessarily a farmer producer, but for a visitor, what could he or she or they do? So,

SPEAKER_00 33:20

you know, I see this as a hub for the entire value chain. So if we start with soil, you know, a real soil lab, a real composting soil lab, the next step would be seed banks, the next step would be seedlings, the next step would be tree nursery. And then on the other side of the cultivation, and obviously education facilities. So as a farmer, you can arrive there, you can get classes, you can get education, you can get get plugged into a community where you can ask questions and get answers and you can get access to all the basic input materials that you need. And then on the other side of the cultivation, you can get support with harvesting, you can get support with processing, you can get support with transformation. So I see transformation processing facilities for grain, grain mill, bakery and a deli where you can enjoy the bread. So building out the value chain and over time, slowly building out the value chain for all the key components of a regenerative system here. So here on Ibiza, for example, we're in a Mediterranean climate. Almonds work super well. Saffron, carob, grain, all kinds of grains and legumes and obviously fresh produce. So I see all of these lines there and then also arts and crafts using local materials you know it's really important if we want to have a healthy managed forest we also need to create some form of utility for the biomass that we bring out and what better way to do that than a you know carpentry and wood workshop so I can see you arrived there as a family you can participate in a clay pottery workshop or a natural dye workshop or a carpentry workshop you can participate in a seedling production workshop how do you make your own seedlings how do you prepare your beds how do you store produce how do you transform produce how do you pickle how do you ferment how do you create kombucha how do you make wine really about educating and bringing people into educational activities on one hand and then on the other hand you know coming together in celebration there's something really beautiful that happens when people engage with nature and then come together with a little bit of music a little bit of food a little bit of wine and you know I really see a place for the whole family to enjoy the children the grandparents the dogs and a space where you arrive 10 in the morning and you stay till 10 in the night and education entertainment food and nature

SPEAKER_01 36:46

And you could have stopped there in a sense, like this is already probably, let's say for producers and for the general public and of course for Ibiza. Actually, let's start with the question there. Like why? And because you mentioned in the pre-call we had that this is the perfect island to do it or the perfect place to do it. If it can happen, it like, if it can happen here, not that if it can happen here, it can happen everywhere, but this is a perfect place to start something like this and then to spread out. Like why is it? is that why is Ibiza which has a let's say a party name for many and I understand the northern part of the island is different but has a let's say different tone to it or has a tone to it and why is it such a perfect place for a regenerative renaissance to start

SPEAKER_00 37:31

so I think we need to rebuild the culture and the energy and the spirit of the countryside and I think a lot of people when they are thinking about wow I'm living in the city I would love to move out of the city but where should I move and what type of community would I plug into and what would we do and how would we live and I think it's about the farm can be one of these points where a community gather and where people where you can start to build this social fabric that draws people back into the natural cycle and into the agricultural cycle and reconnect with food production and And in order to do that, the idea is the farm does not just have to be a place of production. It can also be a place where people gather, where the community gathers. And in order to do that, you need to bring energy and you need to bring vibe and you need to bring spirit. And it's very difficult sometimes. Most of the artists, most of the creative people are in the big cities. But what's wonderful with Ibiza is that you have this room And many people, many things are very difficult to do on Ibiza from a business point of view. But what's very easy to do is to create a wonderful atmosphere. We have so many creative people. We have so many artists. We have so many musicians. We have so many people that love what they're doing from chefs to bartenders to people who are making small batch artisan products. And this is what I think we can really do is create a wonderful atmosphere. this idea of putting culture back into agriculture and create this idea of what can a farm be and how can it be to gather in a rural area and come together and create culture together. So this is one of the things that we can do on Ibiza that is really interesting. I think another thing that is quite interesting with Ibiza is that you have, it's a very small island and it's a closed ecosystem and today we are extremely dependent on external input. If the ferry stop arriving it's only a matter of days before we are running out of seedlings we are running out of grain we are running out of food in the supermarket so it's a very good food security case study and we are very fortunate to have a very long season and a very strong tourist population and at the top of this pyramid we have a very affluent tourist population that are trying to make better choices and what you see on Ibiza is that people are willing to pay for quality and so we can fund these activities we can fund these infrastructure investments through the tourist demand from the tourist population but this infrastructure can also benefit greatly the local community especially in the winter season so I see you know transformed products really being the bulk of the revenues and the bulk of the margins but they are effectively subsidizing affordable food for the local population so this is how I'm thinking and what's left behind if we ever need to transition to self-sufficiency we have that infrastructure so really leveraging the tourist economy to build the infrastructure that can then be repurposed for self-sufficiency. And if we can build a model here that we can show can sustain the life of a community of 150,000 people then this is something that can potentially be replicated in many rural areas and communities all around Europe and America.

SPEAKER_01 41:44

And let's talk a bit about the impact You want to have that final piece of the puzzle, which is beyond the island. And so what are you planning there with a few, I think, top products or key products, like things that travel well? Because, of course, these affluent tourists, they go back home at some point. In many cases, some cases they stay. But let's say a majority goes back at some point and you would like to keep engaging them, but also to keep using some of their affluence to fund transition and regeneration elsewhere. So what are you planning there?

SPEAKER_00 42:16

Well, I think we need to take it step by step. In Ibiza, things work. When you do something that the local community likes, then the tourist comes. So you need to start where you are and start to service the community that is around you. So that is where we start, to invest into the local farming community here and offer amazing experiences and amazing products and amazing services for the local community. the local community of the north of Ibiza and the whole island but really we are based in the north of the island which is a little bit more alternative and through that we will attract the attention of the tourists and we intend to send them home with an amazing experience and an amazing feeling and something that will travel far and wide way beyond the boundaries of our island and help build demand at the top of the market and this is is what we have on Ibiza we have an outside outsized demand but what we have in the mainland Spain especially in the southern part of Spain Andalusia, Murcia, Almeria this is the largest agricultural region in Europe but it's also the oldest population in Europe and the poorest population in Spain so they have an incredible amount of farmland in desperate need of transition but they have a very weak local economy and very, very far from the end consumers. And it's very difficult for these rural communities to create brands and distribution that reaches the type of customers that are willing to pay a premium for the right type of products with the right type of value chains that are aligned with our ecosystem needs. So I see that what we can do is to capture the demand of Ibiza and then connect that with the supply of southern Spain. And by doing so, help create demand at an attractive price to start creating incentives for farms to transition in the mainland, which is really where the big work needs to happen.

SPEAKER_01 44:35

And do you see that, I mean, you say step by step, like how soon is that? How soon are you touching, let's say, or indirectly influencing also the mainland in Spain? So

SPEAKER_00 44:48

I think, you know, we are working in parallel. We've been investing already five years into our local farm operations here in Ibiza. We are already servicing 13 restaurants. We already sell in the supermarkets. We already have direct consumers. our veggie boxes we also distribute the few transformed products that we actually have here primarily honey but also saffron and now this winter we are building our community transformation kitchen so we will start to create a larger activity of small batch artisan products for local distribution but in parallel with this we are working with farmers that we know on the mainland that are doing an incredible incredible job transitioning their farms and we are already developing our first range of products from partner farms in the mainland and what we're focusing on primarily is essential oils and nuts and I think essential oils and nuts are two great places to start you know essential oils aromatics they thrive in arid soils and they can help deal with very tough conditions and actually the tougher the conditions the stronger the potency of the aromatics so I think aromatics and essential oils and any derivatives from that is a great way to start the engine somehow and then I think almonds is a great crop that over the last 5 to 10 years there's been an incredible amount of plantation of regenerative almonds in this region. So we are working with almond producers, pistachio, walnuts, and they were looking at very simple ways to transform those. What we see here on the retail side is that you get more or less a 10x uplift in retail value if you activate and dehydrate your almonds. So a pack of activated dehydrated almonds you can sell for 10 times more than just a retail pack of normal almonds. So starting with very simple...

SPEAKER_01 47:12

Just a stupid question. What are activated almonds?

SPEAKER_00 47:16

So activated, basically, you put the almonds into water and then you start basically the sprouting process. So you activate, you know, in more esoteric terms, the kind of life force of the almond, the reproductive process, and that releases a lot of healthy and beneficial enzymes and then you take them and then you put them in 50 degrees temperature and you dehydrate them and then they become deliciously crunchy and it feels like toasted almonds but actually they're just dehydrated and they preserve extremely well so these are very simple and basic techniques but they create an extremely delicious product and And increasingly more and more people see a value in this and are willing to pay a premium for it. And I think we need to look at how can we target the premium market. It's not because I want to be elitistic, but I think Tesla showed this better than any other company on how do you... How do you launch a new concept in a capex-heavy, low-margin industry? that to invest into your infrastructure to increase your production capacity to bring down your unit cost and then you can come out with the Model S for 90,000 and then you keep investing into your value chain keep investing into your infrastructure bring your unit cost down even further and then you can come out with Model X for 70,000 and then you keep investing and then eventually you have a mass market product for 40,000 and I think this is where we need to go right now the fundamental problem is that we have a subsidy regime that is not aligned with the financial needs of regenerative agriculture or small-scale diversified farming. What we need is OPEC subsidies. We don't need scale incentives. We need OPEC subsidies and we need subsidies that reward and incentivize intercropping and diversity. And before we have these subsidies, we are competing in an rigged market basically we are competing against a subsidized alternative and before the government subsidies fall into place which they will eventually how can we subsidize it we can subsidize it by private consumers that can afford to pay a premium for what they perceive to be quality and that's where we need to start and and then over time we will be able to start to show regulators that look this is how the value chain looks like and if you put these types of subsidies over here then you're going to have this type of impact on the margin profile in the other side of the value chain and this is our vision for Juntos is to really try to offer high quality products with a regenerative supply chain where we capture, validate and translate transparently present our regenerative impact data and make sure that we give access to high quality products to people that are willing to pay a premium to show regulators and show the markets that this is what we want.

SPEAKER_01 51:21

So many pieces to unpack there, but fascinating. No, no, it's a fascinating vision and step plan that I think is a first here on the podcast. For sure, I'm going to get emails. And then how do you combine that with accessibility for specifically the local non-affluent population in Ibiza? How do you, let's say, how do you dance with that tension?

What should smart investors, who want to invest in reg ag and food look out for?

SPEAKER_00 51:47

Well, you know, basically we think about it in terms of end stacking so you know we're going to stack a number of commercial activities on top of each other and you know everything from our event schedule we're going to try to do events where we can which we can monetize we're going to try to offer well we already do we have a restaurant in San Mateo that we opened this summer and that is doing really well and restaurants if you if you get it right you can make really good money on this island and then I think we're gonna be able to have very healthy financial performance of value-added transformed products and that will hopefully enable us to be able to offer fresh produce to a local market at reasonable prices so you know every single activity in your business does not have to maximize profit necessarily as long as there is a sufficient amount of business activities that generate a surplus, then we can have other activities that can be run on lower margins and be made more accessible.

SPEAKER_01 53:07

And so what would you, I mean, shifting gears a bit, and I want to be conscious of your time as well. There's so much still back here, but I will keep that for future episodes as well. What would you tell, obviously without giving investment advice, but as you have been and still are, both on the investor side and investee side, what would be your main message to investors? Like look for boring, quote unquote, infrastructure, or let's say I usually like to ask this question. Imagine we're in a theater and we're doing this in person and they're a few hundred people or a few thousand people in the audience and mainly from let's say in london from the investment world what would you like to give um to them as the main message or where to look where to dig a bit deeper where to learn and if they want to start putting money to work

What would you do if you were in charge of a 1B investment portfolio tomorrow morning?

SPEAKER_00 53:52

look at the end of the day we are at the cusp of one of the biggest economic opportunities we've seen in our lifetime basically every single product in every single shelf of every single supermarket in every single town in all of Europe and all of America and the rest of the world need to be replaced with a product with a regenerative value chain so I mean Lombard Audier released this campaign they call it the superhero it's focused on soil and they state that there's a 1.5 trillion investment opportunity in the transition of our food system So I think that's the first thing we need to appreciate. This is not a small thing. This is a huge thing. And it's going to be big and it's going to be profitable eventually. And we need to be bold and we need to be long term. And we need to invest across the entire value chain. And basically, we need to look at what they did in Silicon Valley. You know, the investors into Google, I don't know the exact number, Thank you very much. very very low and if we invest in the demand side but we don't have the supply then we're not going to be able to to recover those investments as well so we need we need big bold investments on across the value chain from you know demand generating activities from festivals to restaurants through products and brands and you know really create a cultural movement in invest into a cultural movement and then we need to invest in retail, we need to invest in distribution, we need to invest into online marketplaces, we need to invest into the infrastructure that is powering this industry and we need to invest into the farming that is ultimately the heart of this movement. And, you know, across this value chain, there's a hundred different strategies and a hundred different types of investors and And I think, you know, people just need to decide that, hey, I'm going to take 10 to 20% of my net worth, and I'm going to dedicate this into exploratory research, exploratory investments now, and don't be too focused on return on investment in the short term. You know, why do we have the internet and the whole internet industry is because the US government put 800 billion into DARPA and just said to scientists, like, go for it, see what's out there. And so many amazing innovations and technologies came out of it that has created multiple industries. And we need to be that bold now. And I think we need to figure out where can I make a difference? Where is my core knowledge? If your core knowledge is infrastructure, figure out how do you invest into infrastructure to support this transition. If your skill is culture and entertainment figure out how you can create awareness for this movement if your skills and your core competency is marketing and distribution then put your money there and be bold and be brave and be patient

SPEAKER_01 57:56

And so what would you do if you had, I mean, not 800 billion, but 1 billion to, let's say, euros to invest? What would be your prioritization? What would be your priority areas?

If you could wave a magic wand and change one thing overnight

SPEAKER_00 58:08

Well, you know, first of all, I would put 30 million euros into Juntos and finalize our vision for our project here. And then I would try to replicate it. But, you know, I would put, you know, maybe 100 million into... exploratory investments right now and keep 700 million to double down where it works and I really think that you know at the core it's you know we need to create demand and we need to create supply so I would invest you know go into the rural areas and try to understand where are the bottlenecks the way that we are thinking about it here is looking at what are the bottlenecks for the local local farming community and how can we start investing into shared infrastructure that can reduce risk and reduce time to transition for the farmers. That's the first place. And then on the other side, I would support platforms like Producers Market that try to create supply chain transparency, but not just supply chain transparency from an ESG point of view. We need to go one step further. It's not just about having the data and making it available. We need to tell the stories and tell the stories in a way that makes people feel something and creates something that attracts and brings people in and makes people curious and creates excitement. So I would invest on those two sides. I would look for infrastructure for farmers and I would invest into marketplaces and demand generation on the other side.

SPEAKER_01 1:00:00

And what would you do if you had the magic power to change one thing overnight? So I call this the magic wand question. What would you do? So no longer with the fund, unfortunately, but you do have one wish or one magical change you can imply which gets into effect tomorrow morning.

SPEAKER_00 1:00:24

Well, I would shift the significant amount of the subsidies towards related subsidies you know it's ultimately the big bottleneck here is that small scale diversified farming needs labor labor costs money and this is what is needed we need to today you get 300 euros per hectare per land that you cultivate in Europe and you get no added benefits if I plant almonds I get 300 euros but if I then do intercropping with grains or cereals or legumes I don't get another 300 and if I add bees to that I don't get another 300. And if I add saffron, I don't get another 300. But I do get another 300 if I plant another hectare of almonds and then another hectare of almonds and then another hectare of almonds. So, you know, if I have a thousand hectare of almonds, that's 300,000 euros. That's a really nice OPEX subsidy there that covers my fixed costs. And this is how the system looks today. So, you know, what I would really do is to say that anyone that has hires a worker on a farm, gets 50% of the salary covered, and there is no added social security costs on top of that. This is really what we need to do. We need to make it possible to involve more people into the food production. And I think this is going to happen naturally anyway. With the speed and pace of AI and robotics, human beings are going to be made redundant very very fast and what are people going to do people talk about citizen salaries instead of giving people citizen salaries subsidize farm workers draw people in if we can make it possible to run a farm with seven people instead of three people for the same cost then people don't need to break their backs people don't need to work seven days a week you can have it as a part time job even and on the side you can engage in creative industries crafts and arts and music and food and creative industries where we don't want the AI to write our songs or define our recipes or design our clothes so really that's the magic wand you know reallocate a huge amounts of the 50 billion euros that go to subsidizing the industrial agriculture today and make sure that they go to subsidizing farm workers so we get more hands into the soil and more people into nature and that's going to have tremendous impact on the scalability of our food system and the wellness of our population.

SPEAKER_01 1:03:15

I think it's a perfect way to, to end this episode. I want to thank you so much for, for your time. It was definitely not the magic wand answer I was expecting, but that's, that's even better. And so thank you so much for sharing. Thank you for the work you do and for the path you've taken. And of course, good luck with raising, with finishing an old dairy plant into a Disneyland for foodies and so much more of all what you do.

SPEAKER_00 1:03:40

Thank you so much, Cone. I really appreciate it. Thank you for inviting me and, uh, keep doing the amazing work that

SPEAKER_01 1:03:56

you're doing as well. Thanks again and see you next time.