Local and Global Opportunities for the American Farmer Executive Women in Agriculture December 3, 2015 Copyright 2015 Mary Shelman Copyright President & Fellows of Harvard College
60+ Years of Agribusiness at Harvard Business School A Concept of Agribusiness, Davis and Goldberg (1957) Agribusiness Seminar (Executive Education) since 1960 Hundreds of cases, thousands of program alumni
Harvard Agribusiness Cases, A to Z AGRA (Kenya) Alltech (USA) Arcadia Biosciences (USA) Asian Agri (Indonesia) Associated British Foods (UK) Barilla (Italy) Brasil Foods (Brazil) Bunge (USA) CHS (USA) CME Group (USA) Codevasf (Brazil) COFCO (China) Cosan (Brazil) Cresud (Argentina) DaChan (China) Diageo (Africa) Diamond Foods (USA) Disney (USA) Domino s (USA) Ebro Puleva (Spain) Exima (Russia) Fonterra (New Zealand) FreshTec (USA) Friona (USA) GlobalGAP (Germany) Greencore (UK) Heineken (Netherlands) HN Naturals (India) Hungerit (Hungary) Identigen (Ireland) Jain Irrigation (India) JBS (Brazil) Kepak (Ireland) K&N s Poultry (Pakistan) Los Grobo (Argentina) Louis Dreyfus (Switzerland) Lufa Farms (Canada) Marine Harvest (Norway) Marks & Spencer (UK) Mission Produce (USA) Monsanto (USA) Munoz Group (Spain) Mutti (Italy) Nestlé (Switzerland) Ocean Mist (USA) Olam (Singapore) OSI (China) PureCircle (Malaysia) Queensland Sugar (Australia) Rabobank (Netherlands) Red Lobster (USA) Red Tomato (USA) Ripe N Ready (USA) Simplot (USA) Syngenta (Switzerland) Taylor Farms (USA) Tesco (UK) Tissue Culture Beef (NL) Unilever Tea (UK) Vegpro (Africa) ViniBrasil (Brazil) Woolf Farming (USA) Xinjiang Tunhe (China) Yum! China Zespri (New Zealand)
HBS Agribusiness Cases
Major Trends Globalization Consolidation Risk Management Technology Food and health Food security Scarcity of land, water and talent Consumer engagement/activism
2006+: A New Era for Agriculture & Food Source: FAO, August 10, 2015 Long-term fundamentals remain strong
Fundamental shift in Supply-Demand balance DEMAND Population, Income Increasing China and others eating more meat, dairy Biofuel use continues Demand +70% by 2050 SUPPLY Land and Water constraints Climate change Government policies Price, stocks, insurance Environment Trade INCREASED VOLATILITY 7
Harvard Agribusiness Seminar Cases
Strongest growth in emerging markets
People (and appetites) moving to MEGACITIES
Supply history: Producing more with less
Where s the land?
Future limited by water?
Brazil s opportunity: Land and water
China s Challenge: Feeding 1.3 billion Improving diets Pork consumption doubled since 1990 + Chicken, beef, dairy, fresh produce. Relentless urbanization 160 cities > 1m (35 in Europe) More demanding consumers - Digitally connected (1.2B mobile phones, 618M internet users) - Global outlook (200m Chinese tourists a year by 2020) A new KFC opens every 13 hours!
Securing China s future Food policy - Critical! Produce? Import? 60% of global soybean exports go to China Investing globally to stimulate production, improve logistics FDI $12B in Brazil in 2011 Also Australia, New Zealand, Argentina, Africa. Buying land and companies
Consumers: Engaged and Empowered Food is Trending Internet = (Im)Perfect Information Trust friends more than ads Product and Purpose Rejection of BIG ag/food companies VALUE PREMIUM BIFURCATION
?
Local Markets
23
24
Traceability - There s an App for That!
Transformational Technologies From automation and Big Data to purchasing portals and differentiated products 27
Digitization of Agriculture 29
Where s the beef?
Supply Chains: From Farm to Fork Integrating to Manage volatility Capture margins Secure current and future supply Ensure food safety Protect brand reputation Deliver differentiated products 33
Domino s buying chicken feed HARD RED SPRING WHEAT CORN
Mission s farm in Trujillo, Peru - August 2011 35
Mission s farm in Trujillo, Peru December 2013 36
Our goal: by 2016 all food & drink exports from farms and food businesses certified as on the road to sustainability http://www.bordbia.ie/origingreen/whyorig ingreen/pages/default.aspx Saoirse Ronan for Origin Green
The Take-Aways Volatility - the new normal! Growing mismatch where food produced and where consumed Local, national, AND global supply chains More specialties, fewer commodities Substantial change in investment flows Talent the biggest constraint
Thank You! mshelman@hbs.edu