On Feb. 1, two genetics companies came together in a merger that raised a few eyebrows. Acuity, a new genetics company started in August 2020 by The Maschhoffs, was acquired by Fast Genetics, a part of the Sexing Technologies family of businesses. This asset transaction includes all components of the Acuity business and will result in about 75 Acuity employees leaving The Maschhoffs, the family-owned pork production business that built the Acuity brand.
“When Acuity was initially launched, the growth and the business results of Acuity exceeded expectations in the business. There’s a realization that came along that we need to make sure the company is positioned the right way so it can really cut it loose in terms of its potential. So even though this has transpired in the timeline it has, I think there was a realization early on that we didn’t want to hinder progress in any way,” says Clint Schwab, president of Acuity.
As consolidation continues to take place at farms and in allied industry businesses across the swine industry, Bradley Wolter, CEO of The Maschhoffs, believes it’s more important than ever to focus on the animal itself.
“You’re only as good as the animal you’re working with,” Wolter says. “At the end of the day, there are going to be fewer options to access that profit potential and it’s going to come at the risk of a different value proposition under consolidation. There are two sides to the coin: synergistic, unique alignment of resources aspiring to do great things for the global industry and broader implications for resources available and the cost at which you access those resources.”
Farm Journal’s PORK sat down with Wolter and Schwab to discuss what this means for their companies and for the pork industry.
Q. Why did you decide to make this move?
Schwab: I link it to what Acuity’s tagline is: Your success is our benchmark. All of the moves we’ve made, including this one, are centered around making the customer win at the end of the day. If the customer wins, we win. As the leader of Acuity, I believe this creates opportunities for them. They get broader perspective and access to a new set of resources, and all those things help set them up for success.
Wolter: As we made the investment over the 15-year time period, building proprietary lines and ultimately rolling them out to the industry in the form of Acuity, we’ve always known that we would have to keep the program resourced to be on the cutting edge. As we see the area of genetic science in our business evolve, The Maschhoffs were compelled to get Dr. Schwab and his team resources that allow them to make genetic improvement at a faster rate.
Q. How will this impact industry progress?
Schwab: The premise behind this merger is to make faster progress at the genetic level. The faster that the engine can create value, the more opportunities come for everybody in the industry if we leverage the synergies right. A bigger nucleus population, access to the use of a commercial test herd across a broader set of lines, expanded supply chains, and all those things that do nothing but create extra value for the end user.
Wolter: There are synergies for both sides. It’s not simply about the Acuity genetic innovation platform, but there’s synergies from The Maschhoffs point of view as well. Not only do we maintain the relationship with Dr. Schwab and part of his sci-tech team that is going on to Acuity, but the balance of our science and technology team that remains at The Maschhoffs benefits from the relationship with them in the form of partnering in genetic improvement, leveraging the resources they have while continuing to run a balanced portfolio of bioeconomic research and development.
Q. How will this merger impact the U.S. pork industry?
Schwab: The genetic players in the industry – their impact on genetic progress and ultimately productivity in pork production – should go faster because two companies that were players in the market are both better. It should make the sum of all the parts better if you include all of the genetic suppliers in the industry.
Wolter: It offers the global pork industry, not only a science-based platform that can move quickly but do so with a great deal of certainty or less risk involved. I think the two organizations coming together allow the breeding objective to be formed by the whole supply chain, so our involvement in branded pork all the way back to continue to support Dr. Schwab and his colleagues on farms where these animals are still being developed. The data flow is going to have to continue to be built on high levels of trust between the two organizations, and I’m confident it will. I’m extremely bullish and optimistic about what this transaction can be.
Q. What’s one thing people may not know about this merger?
Schwab: Both companies – Acuity and Fast – were born from a commercial production system. That plays a unique role in how they think about partnerships and interacting with the end user. Acuity has grown up through The Maschhoffs. Fast was built through a Canadian production system.
Wolter: I didn’t start with this mentality 20 years ago. I assure you I came out of graduate school pretty convinced I had the very best ideas and solutions to all problems. And then 20 years of humility later, you realize you don’t know half of what you wish you knew. I fundamentally believe that as an industry, our consumer base is moving so quickly, our supply chains are evolving so rapidly, that if we spend a lot of time under this notion that we’ve got the best ideas and we’re going to invest heavily to protect those for ourselves. When we do, we’re missing the opportunity to share, leverage synergies and move at a faster rate. The competition is staying at pace with consumers’ expectations for protein, not protecting ideas and trying to have the best idea at the end of the day. Genetic improvement is a long-term game that requires significant resources and patience to get there.
Q. Any final thoughts?
Schwab: This is a win for the industry. It does nothing but improve the resources available out there. Pork producers should be looking for new resources that they didn’t have yesterday.
Wolter: The Maschhoffs remains under the philosophy that you get what you give. We remain very transparent and collaborative in our relationships. We think that’s what enables us to continue to be successful. Pork production is growing more complicated, taking increasing amounts of time, talents and capital. We fundamentally believe we’re better off as a company, as a supply chain, and the whole of an industry to be more transparent and more collaborative in our innovation efforts.
Read More from Farm Journal’s PORK:
The Maschhoffs Launch New Swine Genetics Company
Company News: Fast Genetics Acquires Acuity, Arm & Hammer Reorganizes
