Linking Commercial and Development Opportunities in the Global Marketplace

Linking Commercial and Development Opportunities in the Global Marketplace

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Description: To build a sustainable international business leveraging Land O’Lakes’ value-added products and proprietary knowledge through local investment and export. To generate economic growth, improve health and nutrition, and alleviate poverty by facilitating market-driven business solutions. Leverages our corporate and global technical expertise to assist farmers in emerging markets.

 
Author: Carol Kitchen   | Visits: 220 | Page Views: 358
Domain:  Business Category: Social Innovation 
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Contents:
Linking Commercial and
Development Opportunities in the
Global Marketplace
Carol Kitchen
SVP and General Manager,
Global Ingredients

Land O’Lakes
• #210 on the Fortune 500
• 2nd Largest U.S. Ag Cooperative
• 9,500 Employees at 300+ facilities
• 3,000 Producer-members & 1,00 member co-ops
• Serving 300,000 producers

VALUE ADDED BRANDED BUSINESSES

Leading market
positions in butter,
deli cheese, branded
dairy Foodservice,
Ingredients

Leader in
Livestock and
Lifestyle feed

Leading CPP and
Seed wholesaler

Challenge: Long Term, Global Food
Demand
Population growth
• From 7 billion people
today to 9.2 billion by
2050
• 70% increase in food
production needed
• 30%+ increase from
economic growth in low
income countries

~2 X
as much dairy
~2 X
as much meat
~1.5 X
more cereals

1 On a per-day basis, global food consumption is ~17 trillion Kcal in 2000,
~18 trillion Kcal in 2005, and ~28 trillion Kcal in 2050
2 From ~475 to ~892 million tons of dairy, ~1 to ~1.44 billion tons of
cereals, ~227 to ~464 million tons of meat, over the period of 2000 to 2050

Challenge: Limited Resources
• At most, only 12% more arable land is
available globally
• Only 5% more land is projected to be
cultivated by 2050
• Demand to outstrip water supply by 40% by
2030
We must produce more food, with fewer
resources and less environmental impact!
Source: OECD-FAO, global water supply/demand model; agricultural production based on IFPRI computed general equilibrium model
base case; A Daunting Task, Prof. Robert Thompson (2010)

Challenge: Efficiency and
Effectiveness
2.6 billion people currently live on less than $2.00 per
day
– 1 billion are unable to afford 1,800 calories per day
– As incomes rise from $2 to $10 per day, demand
increases for agricultural commodities: meat, dairy,
eggs, oils, fruits & vegetables

The number of people lifted out of poverty is the
most important uncertainty regarding future global
demand

Land O’Lakes
Positioned To Participate In Global
Growth Opportunity Of Agribusiness and
Food Production
Expertise In…






Increasing Productivity
Agricultural Insights
Research and Development
Innovation
Food Systems

Land O’Lakes’ International
Objectives
Commercial: To build a sustainable international business
leveraging Land O’Lakes’ value-added products and
proprietary knowledge through local investment and export

Increasing
Intersection
Development: To generate economic growth, improve
health and nutrition, and alleviate poverty by facilitating
market-driven business solutions.

Commercial China Initiatives:
Dairy Nutrition and Swine Feed
• JV with Great Wall Group, a
leading ag & food company
in Asia
• Relationship with Nestle on
Dairy Farming Institute
• Bringing total nutrition (feed
and forage) to dairy
producers
• Future:
– Expand feed footprint
– Increase sharing of expertise,
technology

Commercial China Initiatives:
Winfield Solutions
• Ag Chem active
ingredients
• Developing market
for alfalfa hay & seed
– 3 alfalfa demo plots

• Demonstrating
variety selection
• Future:
– Alfalfa seed exports
– Promote GMO
adoption

Land O’Lakes Legacy in China
Contaminated Milk
• 2008 Melamine Scare
• 2011 Aflatoxin
Disease
• Swine mortality: 25MM/year
• 2011 Foot & Mouth: Swine,
Cattle, Goats, Sheep

Quality Feed
– Enhanced testing
– Supply chain scrutiny
Animal Health
– Confinement hog
production expertise

Productivity
• 40% fewer pigs/sow than US
• China milk/cow = 1/3 of US

Agriculture Expertise
– Ruminant nutrition
– Forage production

International Development
Overview
• Established in 1981 as a not-for-profit division of Land O’Lakes,
Inc.
• Leverages our corporate and global technical expertise to assist
farmers in emerging markets
• Funded primarily by grants from USAID and USDA
• To date, IDD’s 260+ projects have improved the quality of life
for millions of people in 76 nations

International Development Impact
Areas
• Agricultural Productivity & Competitiveness:
– Adding value to staple products in the Republic of Congo

• Enterprise & Cooperative Development:
– Improved incomes & access to credit for 20,000+ farmers in Kenya

• Food Systems & Safety:
– Improved food quality standards and testing facilities in
Macedonia

• Nutrition & Health:
– Helped develop food products formulated to meet nutritional
needs for Ethiopians & Rwandans living with HIV

• Food Security & Livelihoods:
– Raised 2,700 farmers out of poverty & food insecurity in Zambia

Development Key Initiative:
Kenya JibuPlots™
• Based on Winfield Solutions AnswerPlots ™
• Winfield Solutions staff donated time to pilot 3 JibuPlots™,
now managed by field-based agronomists
• Inputs donated by partners Monsanto, Syngenta, Kenya
Seed Company, MEA Ltd. and Farmchem
• Traditional vs. modern farming practices demonstrated
• Local farmers attend Farmer
Field Days to learn how to
increase productivity

Land O’Lakes Legacy in Kenya
Increased Productivity
• Significant improvement in crop yields and cost effectiveness
Livelihood
• Training mostly female farmers; women bear primary
responsibility for farming & care of livestock
• Poorest households are headed by women, elderly or children
• Future
• Winfield funding with potential
from dollars from USAID
• Intend to scale to 30 locations
• Key factor: linking commercial
input suppliers to producers

Enterprise Wide
Leverage and Legacy
• Connecting smallholder
output to commercial-scale
food producers

Dairy Powder
Sales

Customer
Dairy
Imports

Feed
Sales/Jibu
Plots

Ag Productivity
Expertise

• Utilization of corporate
expertise in emerging
markets

Technology
Smallholder
Value Chain
Development

Customer
Local Mfg’ing

• IDD = market scout for
future opportunities

Foundational Themes:
Expertise, Productivity, Technology

Customer
Producer
Development

Integral Part of Growth Strategy
• Significant growth goals in place
– Earnings x 2
– Bottom Line x 2+

• International is a critical component
– Today only 2% of sales is from international business
– Target is 10 – 15% to achieve growth goals
– Domestic markets are mature so these markets are
key drivers to the future

Africa represents an unprecedented opportunity.
We are uniquely positioned.

Adding Lasting Member Value
• Leverage our R&D investment in
new markets; longer lifecycle for
older research

• Develop new markets for products
produced here
• Provide the infrastructure for
members to participate in global
growth opportunities
• IDD’s Washington DC exposure
increases our voice in domestic
and international farm policy

18

THANK YOU!!