Agribusiness Agribusiness Performance: Beyond Performance: Beyond the bottom linethe bottom line

Can we maximize returns for profit, Can we maximize returns for profit, people, and the planet?people, and the planet?

““Green Investing Is Paying Off: Eco-Green Investing Is Paying Off: Eco-friendly investments, from individual friendly investments, from individual stocks to mutual funds and ETFs, stocks to mutual funds and ETFs, have outperformed the Dow and S&P have outperformed the Dow and S&P 500 this year” (11/09)500 this year” (11/09)

WHY ARE FIRMS USING GREEN WHY ARE FIRMS USING GREEN MARKETING?MARKETING?

Organizations perceive Organizations perceive environmental marketingenvironmental marketing to be an to be an opportunity that can be used to achieve its objectivesopportunity that can be used to achieve its objectives

Organizations believe they have a Organizations believe they have a moral obligationmoral obligation to be more to be more socially responsible socially responsible

Governmental bodies are forcing firms through Governmental bodies are forcing firms through legislationlegislation to to become more responsible become more responsible

Competitors'Competitors' environmental activities pressure firms to change environmental activities pressure firms to change their environmental marketing activities their environmental marketing activities

Cost factorsCost factors associated with waste disposal, or reductions in associated with waste disposal, or reductions in material usage forces firms to modify their behaviormaterial usage forces firms to modify their behavior

AgribusinessAgribusiness

Corporate sustainability and responsibilityCorporate sustainability and responsibility Corporate sustainability http://www.winwinpartner.com/Who%20We%20Are/index.htmlhttp://www.winwinpartner.com/Who%20We%20Are/index.html

Dow Jones Sustainability IndexDow Jones Sustainability Index EnergyEnergy Pollution managementPollution management Environmental stewardshipEnvironmental stewardship Workforce developmentWorkforce development

An investable concept?An investable concept?

GreenGreenAgribusinessAgribusiness

Green marketing Winslow Green Growth Fund

seeks capital appreciation through environmentally responsible investing. The fund normally invests at least 80% of net assets in equity securities of domestic companies that create products or provide services that offer solutions to environmental problems and promote a healthier environmental future or integrate the principles of waste management, pollution prevention, or efficient use of natural resources into its business practices.

Winslow Management

Top Ten HoldingsTop Ten Holdings 09/30/2010  09/30/2010   First Solar, Inc. Bioexx Specialty Proteins First Solar, Inc. Bioexx Specialty Proteins

inc American Superconductor Corporation inc American Superconductor Corporation Waterfurnace Renewable Energy Inc Waterfurnace Renewable Energy Inc Horsehead Holding Corporation Schnitzer Horsehead Holding Corporation Schnitzer Steel Industries, Inc. A Rubicon Steel Industries, Inc. A Rubicon Technology, Inc. Nalco Holding Company Technology, Inc. Nalco Holding Company ProLogis Trust WabtecProLogis Trust Wabtec

Winslow Green Growth Fund 1994-2008

Winslow Fund – recession Winslow Fund – recession proof?proof?

Source: MSNBC.com financial charts, Nov 2011

Reorganized as Brown Advisory Sustainable Growth in 2012Struggles, like other green funds, to keep up with S&P 500

Some Agribusiness Some Agribusiness ExamplesExamples

P-R Farms (CA tree fruits & nuts)P-R Farms (CA tree fruits & nuts) Solar Energy ImplementationSolar Energy Implementation

Fair Oaks Dairy, Koetsier FarmFair Oaks Dairy, Koetsier Farm Anaerobic digestersAnaerobic digesters

WeyerhaeuserWeyerhaeuser Recycled packagingRecycled packaging Sustainable products from forestsSustainable products from forests

Weyerhaeuser | Growing Ideas

More interesting More interesting examplesexamples

Green mountain energy – branding “eco-Green mountain energy – branding “eco-friendly” electricityfriendly” electricity

Green Mountain Energy Company California Energy Company now servicing 7 California Energy Company now servicing 7

statesstates More expensive (5-6%)More expensive (5-6%) Purchase power on-linePurchase power on-line

What about investments in What about investments in alternative energy?alternative energy?

Is ethanol going to Is ethanol going to work?work?

Subsidies?Subsidies? Use mandates?Use mandates? See Terry Kasten’s See Terry Kasten’s

reportreport

Scarce Energy ChronologyScarce Energy Chronology

1859:1859: Drake discovers oil in PennsylvaniaDrake discovers oil in Pennsylvania 1879:1879: USGS formed to deal with running out of oilUSGS formed to deal with running out of oil 1882:1882: 95M bbl remain (Institute of Mining Engineers)95M bbl remain (Institute of Mining Engineers) 1918:1918: 3 million cars on the road3 million cars on the road 1919:1919: auto industry shouldn’t ignore that only 20 years left (Scientific American)auto industry shouldn’t ignore that only 20 years left (Scientific American) 1926:1926: 4.5B bbl left in the U.S. (Federal Oil Conservation Board)4.5B bbl left in the U.S. (Federal Oil Conservation Board) 1930:1930: 18 million cars18 million cars 1932:1932: 10B bbl left in U.S. (Federal Oil Conservation Board)10B bbl left in U.S. (Federal Oil Conservation Board) 1944:1944: 20B bbl left in U.S. (Petroleum Administrator for War)20B bbl left in U.S. (Petroleum Administrator for War) 1950:1950: 100B bbl left in world (American Pet. Inst)100B bbl left in world (American Pet. Inst) 1980:1980: proven oil reserves 648B bblproven oil reserves 648B bbl 1993:1993: proven oil reserves 999B bblproven oil reserves 999B bbl 2000:2000: proven oil reserves 1016B bblproven oil reserves 1016B bbl 2007:2007: proven oil reserves 1317B bblproven oil reserves 1317B bbl

Source: Adapted from Terry Kasten, Kansas State Univ

Wind Farming?

Another example…Another example…

Forest Stewardship Council

Integrated Supply Integrated Supply Chain ControlsChain Controls

Branding targeted to Branding targeted to the green consumerthe green consumer

Values driven supply Values driven supply chain chain

poulet de Bressepoulet de Bresse Label RougeLabel Rouge Scottish salmon industryScottish salmon industry

Economic benefitsEconomic benefits

Tea & Coffee and child laborTea & Coffee and child labor http://www.teaandcoffee.net/0102/special2.htmhttp://www.teaandcoffee.net/0102/special2.htm

Social impacts of Social impacts of international marketinginternational marketing

Do food and agribusiness firms have an Do food and agribusiness firms have an obligation to developing communities to “get obligation to developing communities to “get the product right”?the product right”?

Nestle Infant FormulaNestle Infant Formula Misuse of formulaMisuse of formula Promotion impacts on feeding programs in poverty Promotion impacts on feeding programs in poverty

areas – samples, mediaareas – samples, media World Health Organization (response to protestors)World Health Organization (response to protestors) Nestlé & WHONestlé & WHO

The Cocoa Plan Ecuador In The Cocoa Plan Ecuador In ActionAction

Purchasing beans with Arriba taste

Winning consumerReferences on 60/40+

Supporting farmers through

“Farmer Connect”

Linking back to producer through claims towards health, origin, and purity

Managing the supply Chain and monitoring Critical control points

Nestlé Corporate AgricultureNestlé Corporate Agriculture

Nestlé “Farmer Connect” sourcing of agricultural raw materials around the world

Nestlé Corporate AgricultureNestlé Corporate Agriculture

Interacting with nearly 700,000 farmers in more than 50 countries

PEOPLE

LAND

WATER

ENERGY

CLIMATE

To ensure supply we have to smarter use natural resources by

• Not wasting

• Not polluting

• Not destroying

and a good start is eradicating the worst and promoting better

Sustainable Agricultural Practices.

Producing more food from the same area of land while reducing the environmental impacts requires what we call “Sustainable intensification of Agriculture”.

Our “Sustainable Agriculture Initiative Our “Sustainable Agriculture Initiative Nestlé” (SAIN) Nestlé” (SAIN)

NO FOOD WASTENestlé Corporate AgricultureNestlé Corporate Agriculture

Source: The Food Institute Report, Oct 18, 2010, The Packer, Oct 11, 2010

Agribusiness and sustainability:Agribusiness and sustainability:Profits, people, and planetProfits, people, and planet

Relating to an environmentally conscious Relating to an environmentally conscious generation – mixed results in the marketgeneration – mixed results in the market

Working with interest groups, technology Working with interest groups, technology and supply chains to deliver differentiated and supply chains to deliver differentiated products – new value netsproducts – new value nets

Adapting products and marketing Adapting products and marketing approaches to account for economic and approaches to account for economic and cultural differencescultural differences

Planning for the Planning for the McDonald’s CaseMcDonald’s Case

How does sustainability impact McDs?How does sustainability impact McDs? Is there sound business justification for McDs to pay attention to Is there sound business justification for McDs to pay attention to

sustainability for supply?sustainability for supply? Is McDs too big? Scale dis-economies and sustainabilityIs McDs too big? Scale dis-economies and sustainability What is your perception of them as a consumer? Are they What is your perception of them as a consumer? Are they

reaching the LOHAS folks?reaching the LOHAS folks? How does McD’s need to look at profits, people, and planet long How does McD’s need to look at profits, people, and planet long

term? What term? What conflictsconflicts might they expect to emerge? might they expect to emerge? Accounting jargon uses the term ‘viable going concern’ fairly Accounting jargon uses the term ‘viable going concern’ fairly

narrowly. Does the definition need to be broadened?narrowly. Does the definition need to be broadened?

McDonalds Brazil

FIRM MANAGEMENT

FIRM MANAGEMENT

CHANNEL MANAGEMENT

STRATEGY MANAGEMENT