Post on 09-Mar-2021
transcript
NATIONAL DAIRYCONFERENCE 2017
November 28, 2017Seán Molloy,Director of Strategy & Supplier Relations
ROME
THE RUBICON
10 January 49 BC, the river Rubicon ……10 January 49 BC, the river Rubicon ……
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THE WORLD WE OPERATE IN IS CHANGING RAPIDLY…
Globalisation
GrowingMiddle Class
Urbanisation
Health andWellbeing
Natural andFree Form
Ethics, Sustainability& Traceability
Personalisation &Customisation
The Future of Retail
Digitalisation
Farm of the Future
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GLOBAL TRADE HAS LIBERALIZED SIGNIFICANTLY IN THE LAST 20YEARS BUT IS NOW UNDER THREAT IS SOME AREAS………
How competitive is Ireland on the global market place?
Global Tradequadrupled in thelast 20 years
Brexit - the singlelargest disrupter
Rise in food nationalism
Big foodrepresents safefood in emergingmarkets
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EMERGING MARKETS MIDDLE CLASS GROWTH CONTINUES…
How focused are we on the emerging market?
160 Mn enter middleclass annually
88% of the next 1 Bnwill be Asian98Mn Sub SaharanAfrica
Developedmiddle class demandpremium & convenience –willing to pay for it
Consumption growth+4% PA (developed0.5%, developing 6%)
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OUR WORLD… INCREASINGLY URBANISED…EMERGENCE OF MEGA CITIES
How do we respond to an increasingly urbanised mind set?
24 Mn residents inShanghai
Population density3,635 Shanghai Vs. 68nationally / Km2 inIreland
Populations crowdedintomega cities
Urban mindset drives consumption,preference andproduction models
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HEALTH AND WELLBEING IS FRONT OF MIND FOR CONSUMERS
Can we respond to the demand for healthy food?
Sugar, exercise,stress and immunityare key personalconcerns
54% of Asians areactively trying to looseweight
25% of US adults needfoods with highamounts of probioticsor prebiotics
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CUSTOMERS AND CONSUMERS ARE DEMANDING MORE……..
How can we verify/substantiate our claims?
ETHICS SUSTAINABILITY TRANSPARENCY Natural & ‘Free From’
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CONSUMERS ARE LIVING ONLINE AND INTERACTINGWITH THE WORLD DIGITALLY……
Are we to be the leaders or the followers in this revolution?
eCommerce could reach40% by 2026 driving$60 Bn in value
Potential to revolutioniseall aspects of agricultureand food
Facilitate integrationwithout ownership in thefood industry
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THE FARMER OF THE FUTURE WILL FACE MANY DIFFERENTCHALLENGES… AND OPPORTUNITIES
For success, a far greater integrated supplychain model will be required.
VolatilityFoodquality
Evolving farmingmodels
Knowledgerequirements& expectations
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ENVIRONMENTAL REGULATIONS …. FUTURE QUOTA
Research, science and evolved practices required toaddress these real challenges
Carbon
Nitrates Phosphates
Water
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And farm structures arechanging….
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FARMER
average age
SUCCESSORS
identified asuccessor
EMPLOYEES
Of those with no employees38% intend to employ
Employeenon-familymembers
GROUP / PARTNERSHIP
23% involved in farm partnership
Additional 20% interested infuture farm partnership
involved indiscussiongroup
LAND AREA
57 acres rented
acres
66% of suppliers rent land
RENTAL AGREEMENTS
43% Long-term, 20% Short-
term
Land area is rented(270k acres)
LAND UTILISATION
acresunsuitable fordairying
ZERO GRAZING
of suppliers will
practice zero grazing by2020
SOIL MANAGEMENT
Significant relianceon Nitrogen Derogation
83% soil test
WATERCOURSES
53% of those have a Nutrient
Management Plan
of suppliers have
watercourses on theirland
ANIMALS
37 heifers
cows
32 calves
58 beef
REPLACEMENT HEIFERS
of suppliersconsideringcontract rearingreplacements
FUTURE NON-DAIRY LIVESTOCK PLANS BY 2020
increase
63% maintain current level
GENETIC MERIT
40% Room for improvement
Excellent
BROADBAND
Poor-Very Poor
30% Satisfactory
ADDRESSING POLICY ISSUES
EMPLOYMENT LAND UTILISATION ENVIRONMENT
TECHNOLOGYSOILS
How will farmers need to evolveto ensure a sustainableproduction model…
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SUSTAINABLE MILK PROD. REQUIRES: MARKET & SOCIETY FOCUS
Farmer of the future:
- Market focused
- Consumer understanding
- Changing Societal Landscape
- Ability / agility to respond
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SUSTAINABLE MILK PROD. REQUIRES: CLINICAL SPECIALISATION
• Clinical specialisation
• Outsourcing all non core activities.
• Investing only in essential assets.
• Cost understanding/focus.
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SUSTAINABLE MILK PRODUCTION REQUIRES: SUPPLY CHAININTEGRATION…
• Embrace/drive greater supplychain integration……from pre farmto post brand.
• Development and the adaption ofnew models / new ways of working
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SUSTAINABLE MILK PROD. REQUIRES: OWNERSHIP OF THE ENV.DEBATE
• Greater ownership of theenvironmental debate……..
• Take leadership and communicatecare for the environment……
• To enhance and protect theenvironment….. to do and be seen todo the right thing.
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SUSTAINABLE MILK PROD. REQUIRES: MAX UTILISATION OF LANDBASE…
• Utilisation to its sustainablemaximum the industry’s mostprecious asset……the land base.
• This may require questioning thecurrent model…examining thecurrent results.
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SUSTAINABLE MILK PROD. REQUIRES: EMBRACING SCIENCE &TECHNOLOGY
• Embrace advances in science andtechnology.
• Exploit the promise of digitaltechnology
• Technology investments – need to befit for purpose
• A need to discern the differencebetween noise and value.
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……AND SUSTAINBALE MILK PRODUCION REQUIRES FARMERSTO CHALLENGE…
• Challenge accepted thinking, toquestion convention.
• Engage beyond the farm
• Challenge short -term thinking.
• No stakeholder in the industryshould be immune from challenge.
Sustainable milk production will also require all of the relevant stateinstitutions to continue to work in concert to drive the success of thenations most important indigenous industry
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It will require all those who comment, analyse, lobby andrecommend to go beyond the apparent, to step out of thecomfortable, the traditional - perhaps even the popular…
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…and how is/will Glanbia Ireland drivesustainable milk production?
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40%OWNERSHIP
60%OWNERSHIPOWNERSHIP
28.5%
• CONSUMER
• AGRI
• GII
WE HAVE FUNDAMENTALLY CHANGED OUR STRUCTURE…OUR MODEL
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WE HAVE ESTABLISHED A BUSINESS OF RELEVANT SCALE
1800+ EMPLOYEES
2.4 BN LITRES OF MILK Irl6 BN LITRES GLOBALLY
11 PROCESSING FACILITIES
5000 MILK SUPPLIERS
TURNOVER €1.5 BILLION
EXPORTS TO 60+COUNTRIES
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WE ARE TARGETING GROWING MARKET SECTORS…….
INFANTNUTRITION
SPORTS &LIFESTYLE NUTRITION
CLINICALNUTRITION
AFFORDABLENUTRITION
BAKERYCONSUMER BRANDEDFRESH DAIRYPRODUCTS
B2B CHEESE
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INVESTMENT INANCIENT GRAINS
EXPANSION INGLUTEN FREE OATS
FIRST TO GROWQUINOA IN IRELAND
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WE ARE LEADING INTERNATIONALLY ON VOLATILITYMANAGEMENT……
IRELAND - THE PERFECT LOCATION FOR FOOD PRODUCTION
ABUNDANCEOF WATERWAYS
PASTORALLANDSCAPE
LOW STOCKINGRATES
RICH HISTORYNATURALHEDGEROWS
BIODIVERSITY
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WITH OUR PARTNERS, WE ARE DRIVINGTHE SUSTAINABILITY MESSAGE IN THE MARKET..…
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€270MN INVESTED SINCE 2013 IN MILK PROCESSING CAPACITY
PROCESSING INVESTMENTPROPOSED €250-300MN (2017-2020)
Belview, Co. Kilkenny
WE HAVE COMMITTED TO ACCOMMODATING OUR MILKSUPPLIERS’ EXPANSION BY INVESTING IN WORLD CLASS
PRODUCTION CAPABILITY
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We have heavilyresourced our innovationand quality capability
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We have invested in our route to market and marketingcapability……
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…...and we have reached out to understand and respondto the views of our members……
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and so we returnto the Rubicon…
THANK YOU!
November 28, 2017Seán Molloy,Director of Strategy & Supplier Relations