Ag Growth Beyond the Core
The Business of Food
by Jennifer Barney
Ag Growth Beyond the Core 3-min read
Your organization has bold plans. You’ll introduce new ingredients and develop new distribution channels to meet the needs of emerging products.
Many ag producers want to move into higher-value processing and are willing to make the capital investment if given strong end-market customers—big players willing to enter long-term contracts. But as middlemen and end-users vertically integrate downstream, these opportunities are harder to come by. Take multinational ingredient supplier Olam’s acquisition of Hughson Nut last year. The acquisition was said to enable the company to provide an integrated offering across the almond value chain, and direct participation in the primary and ingredient processing space. How does ag compete?
Ag producers should position themselves as the conduit between the brands that market novel products and the farmers that grow it.
When Puris, a producer of peas launched pea protein for the first time in 2014 there wasn’t much of a market. Today it supplies Beyond Meat and is expanding innovation into things like syrup (to compete with corn syrup) with a $75M investment from Cargill. In the crowded space of plant proteins, how do they do it?
The company, founded in 1984, focuses on breeding and creating ingredients.
"We're participating really as a linchpin between all the plant-based food companies you see on the market, and the farmers that grow it, and really being the engine behind that," said Tyler Lorenzen, CEO of Puris.
This is manifested by:
Understanding how the product works in application
Connecting why it matters in global terms
Being able to prove it out - not just talk about it
Communicating back to the grower base
Ag producers that have access to food science technical knowledge and are willing to act like in-house developer partners will win these opportunities.
Pro tip: The procurement buyer that buys from you now is probably not the point of contact for your new innovation. Typically supply chain is the last to know what innovation wants. The relationships need to be formed at the R&D or marketing level where new concepts are being tested.
All my best,
Jennifer
News
Chickpea protein concentrate set to be hot hot hot
40% of leading food firms, including Kroger, Tesco, Nestle and Unilever, now have dedicated teams for plant-based products
I'd love to hear from you - get it touch at jennifer@3rdandbroadway.com