Woolf Farming and Processing

David E. Bell; Laura  Winig; Mary Louise Shelman

Case | HBS Case Collection | December 2009 (Revised March 2013)

Woolf Farming and Processing

by David E. Bell, Laura Winig and Mary Louise Shelman

Abstract

Woolf Farming Company, a privately owned family farming business in California's Central Valley, found its business threatened by a lack of water, brought on by a combination of drought, poor quality well water and unavailability of surface water due to federally imposed pumping restrictions. Woolf had been farming crops for more than 30 years, but this was the first time they suffered a water shortage so severe that crops had to be abandoned in the field. Even if there was short-term relief in the form of an increased allocation of water from the government, Woolf was concerned about water reliability and the need for additional infrastructure to provide long term water security to the region. If convinced that the water problem would be resolved, then Woolf should move quickly to purchase more land which was currently available at distressed prices. Yet some board members questioned the logic of additional investment in the region whose resources were so uncertain and wondered whether it was more prudent to pursue growth elsewhere. At the same time, some of Woolf's owners began to believe that more of the company's resources should be prioritized for dividends and other distributions as opposed to purely growth. What, if anything, could Woolf and other farmers do to influence the outcome?

Keywords: Family Business; Resource Allocation; Quality; Business and Government Relations; Decision Choices and Conditions; Infrastructure; Investment; Growth and Development Strategy; Weather and Climate Change; Agriculture and Agribusiness Industry; California;

Language: English

Format: Print

31 pages

Educators Purchase

Citation:

Bell, David E., Laura Winig, and Mary Louise Shelman. "Woolf Farming and Processing." Harvard Business School Case 510-033, December 2009. (Revised March 2013.)

Led by CEO Randall Stuewe, Texas-based Darling Ingredients International was a rendering firm with $3.7 billion in 2017 revenues. Since 2003, Darling had transformed from U.S. focused into a global player in the processing of biological waste from meat and foodservice firms into oils, fats, and proteins that were sold for use in feed, food, fuel, and other products. It had also entered a 50-50 joint venture, called Diamond Green Diesel (DGD), with oil refiner Valero to produce renewable green diesel. Darling supplied the oils and fats that DGD converted into renewable diesel products sold to oil companies. In the U.S., regulatory mandates and incentives supported the market for renewable diesel, which cost more to produce than conventional fuels. For Darling, the renewable diesel JV was proving to be a lucrative outlet for the company’s oils and fats and as a valuable hedge for its traditional business. In 2018, Stuewe and his Valero partners were considering a substantial expansion of DGD. This case invites students to consider the long-term competitive advantages of DGD’s renewable diesel product, the strategic questions for a business (at least in 2018) dependent on favorable regulations, and the tradeoffs involved in moving too aggressively, or not aggressively enough, to claim a place in the carbon-friendly fuel market.

Case | HBS Case Collection | November 2018 (Revised April 2019)

Zespri Grows

David E. Bell and Natalie Kindred

Controlling about a third of global kiwifruit exports by volume and nearly half by value in 2018, Zespri was a grower-owned “corporatized cooperative” with the exclusive right to export New Zealand-grown kiwifruit (except to Australia). Zespri did not grow fruit but rather managed an integrated marketing system across the value chain. This coordinated structure enabled Zespri to control quality, build a brand, and command premium prices in export markets. In 2018, Zespri had a strategic goal of marketing the world’s leading portfolio of kiwifruit year round, with a target of nearly doubling sales, to NZ$4.5 billion, by 2025. This would require Zespri to vastly increase its kiwifruit supply in New Zealand, as well as from overseas suppliers, who currently accounted for a relatively small portion of its volume. Rapid growth presented several challenges, including the need to preserve product quality and consistency while working with new growers, prioritizing customers and markets as demand outpaced supply, considering Zespri’s position vis-à-vis the crucial China market, and developing new capabilities as Zespri transformed from New Zealand-centric into a global organization. At the same time, the Zespri team aspired to launch new products that met consumer demand for sweeter taste and convenience—an increasingly urgent priority as global competition in kiwifruit intensified. Zespri had been the first to introduce a high-quality proprietary gold kiwifruit to the global market, and it continued to dominate the gold segment. Could it do the same in the emerging red-flesh category? As with many questions facing Zespri in 2018, there are risks of moving too fast as well as too slow.

Keywords: Agribusiness; kiwi; kiwifruit; Agriculture; Global Supply Chain; branding; produce; coordinated industry structure; industry coordination; countercyclical supply; New Product Development; Product Strategy; differentiation; Food; Quality; Trade; Brands and Branding; Marketing; Strategy; Global Strategy; Change Management; Organizational Change and Adaptation; Globalization; Globalized Firms and Management; Competitive Strategy; Resource Allocation; Product Development; Agriculture and Agribusiness Industry; Consumer Products Industry; Food and Beverage Industry; New Zealand;