01 Mar 2013
by David E. Bell and Natalie Kindred
For Asian Agri and other Indonesian palm oil producers, the future promised rising demand from fast-growing Asian populations, but also intensifying criticism from environmental groups. With the highest yield and lowest production cost of any edible oil, palm oil constituted an abundant, inexpensive source of food for Asian and, to a lesser extent, international markets. Its production had soared from 1970 to 2010, sparking concern from environmentalists over the conversion of high-value conservation land in Malaysia and Indonesia (where nearly 90% of palm oil was produced) into palm oil plantations. Critics had intensified their campaigns in recent years, urging—at times successfully—packaged food makers and investors to boycott palm oil suppliers accused of environmental mismanagement. While noting that some accusations were unjustified, palm oil producers argued the industry was making strides towards greater sustainability and cited the unique advantages of palm oil: it was free of unhealthy trans fats, for example, and required less land to produce more oil than any known substitute. Asian Agri, an established Indonesian palm oil grower and exporter, had thus far avoided public scrutiny. The company was a key source of employment in many rural communities, had extensive experience negotiating the complex Indonesian regulatory environment, and was moving to certify its operations according to industry-set sustainability guidelines. In 2010, Asian Agri appeared well positioned to capitalize on the growing palm oil market, but the broad-strokes vilification of the palm oil industry was a source of serious concern. In the face of great uncertainty, the management team needed to devise a strategy for the future. Read more
07 Dec 2012
by Ray A. Goldberg and Lorin A. Fries
Corporate Head of Agriculture Hans Jöhr's mind raced in anticipation of the executive board meeting that afternoon. Jöhr recognized the meeting as a key opportunity to strategize far into the future, reexamining how his team's efforts in sustainable agricultural sourcing supported Nestlé's position as the world's leading nutrition, health and wellness company. The company had undertaken to impact three of the world's most urgent challenges—nutrition, water and rural development—and Jöhr's team was fundamental to each of these pillars. Yet the forces changing the global food system were formidable: unprecedented levels of hunger, obesity and chronic disease; land degradation, frequent natural disasters, and critical threats to water supply; population growth by the billions in the coming decades, along with increased urbanization; and a volatile and tentative world economy. In the face of such threats and complexity, how could Hans Jöhr ensure that Nestlé's agricultural raw materials were safe, high quality, of consistent supply, and sustainably and ethically and economically produced? How can the procurement process enable the small scale producer to become a viable partner in the milk production models that Nestlé has developed in the developing world? Further, how could his team excel beyond the company's day-to-day business and enable Nestlé's visions for the future? Read more
21 Nov 2012
by Rebecca M. Henderson and Frederik Nellemann
Unilever's Lipton Tea had been successful with the first phase of its certification partnership with Rainforest Alliance. Now the company faced challenges in how to push forward with the transformation of more difficult parts of the supply chain and how to market sustainable tea in developing markets like India. Read more
19 Jul 2012
by Arthur A. Daemmrich
Arcadia Biosciences is seeking to introduce genetically modified rice to China that will lower farmers' costs and generate environmental benefits through reduced greenhouse gas emissions. The case describes challenges facing this small agricultural biotechnology company, notably uneven enforcement of intellectual property in emerging market countries and uncertainty regarding the provision and market value of carbon credits under international climate change agreements. In September 2008, Eric Rey, Arcadia's CEO, faces an inflection point concerning his leading technology, genes for Nitrogen Use Efficiency (NUE) in rice. He can determine a price to charge for NUE seed based on savings to farmers from their reduced use of expensive nitrogen fertilizers. Or he can advance a plan to earn revenue from carbon credits allocated under the Kyoto Protocol to China for use of Arcadia's rice, since reduced nitrogen fertilizer use will lower greenhouse gas emissions. The case provides context on the company; describes advances in seed technologies focused to climate change and the associated resource issue of fertilizer use; and presents the strategic choices facing a start-up company operating at the intersection of business, agriculture, and climate change agreements. Read more
06 Oct 2011
by Deishin Lee and Stephanie van Sice
This case explores a method of value creation through exploiting synergies that exist in an environment where there is diversity. The context of the case is a farm where biodiversity is leveraged to create value. This is contrasted to industrial farming, which operates on the principles of economies of scale. The case also provides an opportunity for students to discuss the environmental impact of different types of operating systems. Read more
21 Jun 2011
by Forest L. Reinhardt and James Weber
Clearwater was trying to market value-added products in a traditionally commodities based industry while facing supply uncertainties and regulatory, environmental, and foreign exchange challenges. Clearwater harvested shellfish from the Canadian Atlantic fishery and sold this in markets around the world. They prided themselves on their sustainable fishing practices, which were not the norm for the industry. Seafood buyers traditionally bought on price. Clearwater's innovations and technology investments enabled it to produce a higher quality, value-added product, but it faced the challenge of convincing buyers to pay a premium price. Their products originated from a wild resource under government regulations which limited the size of the catch by both the industry and Clearwater. In recent years, Clearwater operated in an environment with a rising Canadian currency. This reduced profitability because Clearwater's costs were in Canadian currency while its sales where largely in other currencies. The case also discusses the challenges of maintaining a sustainable fishery and uses the collapse of the cod fishing industry as an example. Clearwater was founded in 1976, it went public in 2002, and was still managed by its two founding partners in 2006. Read more
03 Jan 2011
by Arthur A. Daemmrich, Forest L. Reinhardt and Mary Louise Shelman
Arcadia Biosciences is an entrepreneurial California agricultural biotech company seeking to earn carbon credits by modifying commodity crops for use in China and India. Eric Rey, Arcadia's CEO, faced a strategic inflection point in early September 2008. The company had a plan to share carbon credits allocated by the United Nations Clean Development Mechanism Executive Board to China, for use of Arcadia's rice varieties, since they enabled farmers to reduce nitrogen fertilizer use, in turn lowering greenhouse gas emissions. But the company's proprietary traits for nitrogen use efficiency, salt tolerance, and water use efficiency also had more conventional paths to market based on licensing deals to large seed companies. Alternatively, Arcadia could acquire a seed company and develop and market its seed directly. A different near-term growth area involved commercializing enriched safflower oil, which had undergone several proof-of-concept tests and for which Rey foresaw a clear market in nutritional supplements and functional foods. The case provides context on the company; describes advances in crops genetics focused to climate change and associated resource issues of fertilizer use, water use, and soil salinity; and poses strategic choices for a start-up company operating at the intersection of business, agriculture, and climate change. Read more
06 Dec 2007
by David E. Bell, Brian Milder and Mary L. Shelman
Vegpro, a horticulture company, is Kenya's largest exporter of fresh vegetables and flowers to top supermarkets in the U.K. and Europe. In 2007, Vegpro's business is threatened by growing consumer concern about the environmental impact of food production and transport, including "food miles". The case describes the company's growth, which includes the use of owned land and outgrowers for production, the addition of value-added processing to obtain premium prices, and the introduction of global certification to ensure food safety and meet retailer and consumer requirements. The case also discusses the potential impact of increased consumer awareness of ethical sourcing and introduces the potential trade off between local production and economic development. Read more
29 Oct 2007
by David E. Bell and Mary L. Shelman
Brazil's national agricultural research corporation, Embrapa, has developed an integrated crop and livestock production system that will allow farmers and ranchers to intensify production and improve profitability. Broad adoption of the technology would provide the country with greater agricultural production, a major source of exports, without the need to convert additional areas of the Cerrado or Amazon to farmland. However, producers have been slow to adopt it due to the initial costs of the system and the fact that many of the benefits are beyond the farmgate. Embrapa's director of technology transfer must develop a plan to encourage adoption. Read more
06 Mar 2006
by Ray A. Goldberg and Carin-Isabel Knoop
Biodiversity is being lost due to the delegation of the ability to store and maintain various types of plants to governments and foundations with no or little financial base. How does one develop the resources to maintain plant diversity for the future benefit of society? Read more
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