Carol Kitchen SVP and General Manager, Global Ingredients Linking Commercial and Development Opportunities in the Global Marketplace
Carol Kitchen SVP and General Manager,
Global Ingredients
Linking Commercial and Development Opportunities in the
Global Marketplace
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
Leader in Livestock and Lifestyle feed
Leading CPP and Seed wholesaler Leading market
positions in butter, deli cheese, branded dairy Foodservice, Ingredients
VALUE ADDED BRANDED BUSINESSES
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
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
~1.5 X more cereals
~2 X as much meat
~2 X as much dairy
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
Development: To generate economic growth, improve
health and nutrition, and alleviate poverty by facilitating
market-driven business solutions.
Increasing Intersection
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
Productivity
• 40% fewer pigs/sow than US
• China milk/cow = 1/3 of US
Quality Feed
– Enhanced testing
– Supply chain scrutiny
Animal Health
– Confinement hog production expertise
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
Ag Productivity
Expertise
Technology
Dairy Powder Sales
Feed Sales/Jibu
Plots
Smallholder Value Chain
Development
Customer Producer
Development
Customer Local Mfg’ing
Customer Dairy
Imports • Connecting smallholder
output to commercial-scale
food producers
• Utilization of corporate
expertise in emerging
markets
• IDD = market scout for
future opportunities
Foundational Themes:
Expertise, Productivity, Technology
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