Copyright © President & Fellows of Harvard College

Local and Global Opportunities for

the American Farmer

Executive Women in Agriculture

December 3, 2015

Copyright 2015 Mary Shelman

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

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

7

Fundamental shift in Supply-Demand balance

INCREASED VOLATILITY

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

BIFURCATION

VALUE PREMIUM

?

Local Markets

23

24

Traceability - There’s an App for That!

From automation and Big Data to

purchasing portals and differentiated

products

27

Transformational

Technologies

29

Digitization of Agriculture

Where’s the beef?

Integrating to

• Manage volatility

• Capture margins

• Secure current and future supply

• Ensure food safety

• Protect brand reputation

• Deliver differentiated products

33

Supply Chains: From Farm to Fork

Domino’s buying chicken feed

HARD RED

SPRING WHEAT

CORN

35

Mission’s farm in Trujillo, Peru -

August 2011

36

Mission’s farm in Trujillo, Peru

– December 2013

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

mshelman@hbs.edu

Thank You!