John Graettinger - Advancing Technologies to Feed 9 Billion
Post on 13-Aug-2015
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Technology in Agriculture
Role of technology in a safe and abundant food supply Consumer perceptions of technology in food production
Current Industry Issues & Opportunities
Increasing Beef Prices
Generational Shifts
Changing Eating Preferences/Habits
Continued Activist Threats
Increased Global Opportunities
Freedom to Operate Challenges
Forrest Roberts, NCBA 2
Will our Customers Accept New Ag Technologies?
“The new source of power is not money in the hands of a few but information in the hands of many.” John Naisbitt Megatrends 1982
Moms have questions and are seeking information about their food is grown
and how animals are raised.
But whom can they turn to for the knowledge they crave if the Ag Industry adopts a new technology
Social Networking Fills Knowledge
Voids
“Who can Consumers trust?”Trend: Consumers don’t know who to trust.
– Mass media and advertising have consumers feeling “over-marketed,” overwhelmed and confused
REALITY for agriculture:– Consumers’ desire for
authenticity and transparency is increasing – they want the real facts from real people
NBC News: “GMOs are here to stay – should you be worried?”
Dr. Oz: “No to GMOs”
GfK Public Affairs, Illinois Farm Families®
Eroding consumer trust• Trend: Consumers are skeptical.
– They’ve lost faith in businesses, government, and religious institutions
– Distrust extends to other industries including agriculture
• REALITY for agriculture:– Consumers trust people– They need to feel they know you,
the people growing and raising their food to trust the system
GfK Public Affairs, Illinois Farm Families®
Consumer perception: big is badTrend: Big is bad1.
– Consumers trust the small family farmer or the “traditional” image of farming
– Corporate factory farms are untrustworthy, driven by $$$
– Size of farm linked to perception of shared values
REALITY for agriculture:
– Transparency is no longer an option2
What they envision farms are like
What they fear most farms are like
1. Illinois Farm Families® 2. The Center for Food Integrity 2013 Consumer Trust in the Food System Research
65%
66%
67% of consumers think it’s important to understand how their food is produced
of consumers would like to see the food industry take more action in educating people on how food is produced
of consumers want to know more about where their food comes from
“Emerging Faith in Food Production,” Sullivan Higdon & Sink FoodThink, 2014.
The Educated consumers’ hunger for more food knowledge
Consumers are concerned …
“Emerging Faith in Food Production,” Sullivan Higdon & Sink FoodThink, 2014.
Retailers Top of Mind:Meat
beef pricesmanaging meat mix case margins
Crisis managementkeeping out of activists line of sight
Product mix and supplynatural, organic, traditional
Other Concernsantibiotics usefood safetyanimal well-beingmeat quality
Retailers: Don’t add technology that I have to
defend
On meat labels they’d like to know…
“Building Trust in What We Eat,” Sullivan Higdon & Sink FoodThink, 2012.
Value of Technologies
Bill Gates: I also believe that innovation will improve our ability to produce meat.gates notes: the blog of Bill Gates April 21,2015
Technologies: Producing more with less
In 2012, the U.S. produced 4.4 billion pounds more beef with 20 million fewer total cattle than in 1980
Cattle Numbers
Beef production
Why not Maintain the Status Quo?Protein demand is increasing:• Population growth:
• 9 billion people by 2050.• Incomes rising to 4.8 billion middle class.• Increased urbanization: 2014 54% est. in 2050 66% Hunger continues:• One in eight people suffer from chronic hunger, 3.1
million children starve to death each year• Not one recorded death from GMO’s, rbST,
hormones, ßAA, etc.
UN and Brookings Institution
History and Heritage
Paulinemene T" Grand Champion Angus Female, Fort Worth Livestock Show 1955.
A 1950s Championship hog
Millennials want brands to care and to do something…
Cause change Stand for something
Food Democracy not a Food Aristocracy.
What Do Brands
Do?
What do Retail Brands do when confronted?
Millennials
Social Media Activists
NGO’s
What Do Brands
Do?
Unless informed, it’s easiest to acquiesce!
Millennials
Social Media Activists
NGO’s
Are brands taking positions to…
seize a marketing opportunity?
avoid getting slammed in the media? ?
as looking out for their customer?
Supplies of certain foods
aren’t growing as fast as Demand
• The merger of Kraft Foods and Heinz aims to save $1.5 billion annually by the end of 2017 by making the combined Kraft Heinz Company more efficient.
• Heinz and Kraft may try to lower costs for retailers, but their ability to do so will depend on the prices of food ingredients and oil.
• “As China and other developing countries have grown their middle class, that has grown the demand for protein products like dairy and meat.” “Supply has been unable to grow as swiftly as demand.”
• Virginia Lee, food market analyst Euromonitor Int.
The largest growing market doesn’t accept current technologies
• Cattle Implants yield 90 lbs. of additional red meat• Feeds 41.7 million people per capita beef
• Beta agonist use in pork adds 10 lbs. of additional lean pork• Feeds 24 million U.S people their per capita pork needs
• All antibiotic use in livestock is under scrutiny
“Food Elitist” efforts are preventing
proven technologies from providing safe abundant affordable food
Global Technologies Acceptance Crossroads
Need to increase Agricultural Productivity
Distractors
Global Governmental Regulators
Need for Affordable Food
Will our Customers Accept New Technologies
So What do We do?
Adapt to our changing world.• Technologies must be accepted by the food chain
• Be careful how you position the product • Embrace full transparency
• Help fill the knowledge void• Frame the customer needs to the value message • Be part of the conversation
• Suggest a better way• Frame your conversation carefully
• Support the companies that support help feed the world
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