Transcript Agribusiness Performance: Beyond the bottom line

Agribusiness
Performance: Beyond
the bottom line
Can we maximize returns for profit,
people, and the planet?
 “Green Investing Is Paying Off: Ecofriendly investments, from individual
stocks to mutual funds and ETFs,
have outperformed the Dow and S&P
500 this year” (11/09)
WHY ARE FIRMS USING GREEN
MARKETING?
 Organizations perceive environmental marketing to be an
opportunity that can be used to achieve its objectives
 Organizations believe they have a moral obligation to be more
socially responsible
 Governmental bodies are forcing firms through legislation to
become more responsible
 Competitors' environmental activities pressure firms to change
their environmental marketing activities
 Cost factors associated with waste disposal, or reductions in
material usage forces firms to modify their behavior
Agribusiness
 Corporate sustainability and responsibility
 Corporate sustainability
 http://www.winwinpartner.com/Who%20We%20Are/index.html
 Dow Jones Sustainability Index
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Energy
Pollution management
Environmental stewardship
Workforce development
 An investable concept?
Green
Agribusiness
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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
Winslow Green Growth Fund 1994-2008
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Top Ten Holdings
09/30/2010
First Solar, Inc. Bioexx Specialty Proteins
inc American Superconductor Corporation
Waterfurnace Renewable Energy Inc
Horsehead Holding Corporation Schnitzer
Steel Industries, Inc. A Rubicon
Technology, Inc. Nalco Holding Company
ProLogis Trust Wabtec
Winslow Fund – recession
proof?
Reorganized as Brown Advisory Sustainable Growth in 2012
Struggles, like other green funds, to keep up with S&P 500
Source: MSNBC.com financial charts, Nov 2011
Some Agribusiness
Examples
 P-R Farms (CA tree fruits & nuts)
 Solar Energy Implementation
 Fair Oaks Dairy, Koetsier Farm
 Anaerobic digesters
 Weyerhaeuser
 Recycled packaging
 Sustainable products from forests
 Weyerhaeuser | Growing Ideas
More interesting examples
 Green mountain energy – branding “ecofriendly” electricity
 Green Mountain Energy Company
 California Energy Company now servicing 7
states
 More expensive (5-6%)
 Purchase power on-line
What about investments in
alternative energy?
 Is ethanol going to
work?
 Subsidies?
 Use mandates?
 See Terry Kasten’s
report
Scarce Energy Chronology
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1859:
Drake discovers oil in Pennsylvania
1879:
USGS formed to deal with running out of oil
1882:
95M bbl remain (Institute of Mining Engineers)
1918:
3 million cars on the road
1919:
auto industry shouldn’t ignore that only 20 years left
(Scientific American)
1926:
4.5B bbl left in the U.S. (Federal Oil Conservation Board)
1930:
18 million cars
1932:
10B bbl left in U.S. (Federal Oil Conservation Board)
1944:
20B bbl left in U.S. (Petroleum Administrator for War)
1950:
100B bbl left in world (American Pet. Inst)
1980:
proven oil reserves 648B bbl
1993:
proven oil reserves 999B bbl
2000:
proven oil reserves 1016B bbl
2007:
proven oil reserves 1317B bbl
Source: Adapted from Terry Kasten, Kansas State Univ
Wind Farming?
Another example…
 Forest Stewardship
Council
 Integrated Supply
Chain Controls
 Branding targeted to
the green consumer
Values driven supply chain
 poulet de Bresse
 Label Rouge
 Scottish salmon industry
 Economic benefits
 Tea & Coffee and child labor
 http://www.teaandcoffee.net/0102/special2.htm
Social impacts of
international marketing
 Do food and agribusiness firms have an
obligation to developing communities to “get
the product right”?
 Nestle Infant Formula
 Misuse of formula
 Promotion impacts on feeding programs in poverty
areas – samples, media
 World Health Organization (response to protestors)
 Nestlé & WHO
The Cocoa Plan Ecuador In
Action
Winning consumer
References on 60/40+
Managing the supply
Chain and monitoring
Critical control points
Purchasing beans
with Arriba taste
Supporting farmers
through
“Farmer Connect”
Linking back to producer through claims
towards health, origin, and purity
Nestlé Corporate Agriculture
Nestlé “Farmer Connect” sourcing of
agricultural raw materials around the
world
Interacting with nearly 700,000 farmers in more than 50 countries
Nestlé Corporate Agriculture
Our “Sustainable Agriculture Initiative Nestlé”
(SAIN)
LAND
To ensure supply we have to smarter use natural
resources by
• Not wasting
• Not polluting
WATER
• Not destroying
and a good start is eradicating the worst and
promoting better
ENERGY
Sustainable Agricultural Practices.
CLIMATE
Producing more food from the same area of land
while reducing the environmental impacts requires
what we call “Sustainable intensification of
Agriculture”.
PEOPLE
NO FOOD WASTE
Nestlé Corporate Agriculture
Source: The Food Institute Report, Oct 18, 2010, The Packer, Oct 11, 2010
Agribusiness and sustainability:
Profits, people, and planet
 Relating to an environmentally conscious
generation – mixed results in the market
 Working with interest groups, technology
and supply chains to deliver differentiated
products – new value nets
 Adapting products and marketing
approaches to account for economic and
cultural differences
Planning for the
McDonald’s Case
 How does sustainability impact McDs?
 Is there sound business justification for McDs to pay attention to
sustainability for supply?
 Is McDs too big? Scale dis-economies and sustainability
 What is your perception of them as a consumer? Are they
reaching the LOHAS folks?
 How does McD’s need to look at profits, people, and planet long
term? What conflicts might they expect to emerge?
 Accounting jargon uses the term ‘viable going concern’ fairly
narrowly. Does the definition need to be broadened?
McDonalds Brazil
FIRM
MANAGEMENT
CHANNEL
MANAGEMENT
STRATEGY MANAGEMENT