Agricultural Product Differentiation

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Agricultural Product Differentiation Industry
Perspective November 15, 2004 CORNY
GALLAGHER AGRIBUSINESS EXECUTIVE
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Bank of America is one of the largest providers
of financial services to agribusiness and food
processing industries throughout the United
States.

• More than 14 billion in commitments to the
  industry sector.
• Clients value our industry knowledge and
  expertise as well as our ability to provide a
  complete range of financial products and
  services.

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FOOD FORESIGHTPRIORITY TRENDSFALL 2004

• GATHERS TRENDS AND ISSUES INFORMATION FROM AROUND
  THE GLOBE
• IDENTIFIES EMERGING ISSUES AND TRENDS

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2004 TREND 1

• PRODUCERS FIND THEMSELVES IN AN EVER-TIGHTENING
  VICE
• Increasing scrutiny
• Must trace and document practices
• Increasingly legislation and regulation leads to
  unequal playing field for U.S. agriculture

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2004 TREND 2

• VULNERABILITIES TO TERRORISM ADD A NEW WRINKLE OF
  INSECURITY AND ARE REDEFINING ROUTINE
  AGRICULTURAL PRACTICES
• Department of Homeland Security will play
  increasing leadership role
• GMO wars will continue and trickle-down

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2004 TREND 3

• BIG GLOBAL COMPETITORS AND MARKETS ARE
  ENGINEERING A WILD RIDE FOR THE AGRI-FOOD CHAIN
• Rising affluence and demand for high-value
  products with tastes of home

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2004 TREND 4

• OBESITY IS OVERWHELMING THE DIET/HEALTH LANDSCAPE
  
• -Is high fructose corn syrup the real
  villain?
• - Is it caused by the micronutrients?
• Perception shifted from food is healthful to food
  is bad for me

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2004 TREND 5

• NEW SCIENCES AND GENETIC INNOVATION ARE
  ACCELERATING THE ARRIVAL OF A NEW FRONTIER
• PERSONALIZED NUTRITION
• YOUR OWN RUBICS CUBE RATHER THAN THE FOOD PYRIMID

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2004 TREND 5
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2004 TREND 5CONCEPTS

• Genotyping - individuals' genetic make-up
• Metabolic profiling finger-stick tests
• Nanotechnology, in wrong hands used as bio
  terrorism?
• DARPA is driving radical nutrition research in
  biochemical pathways and processes like ketogenic
  diets
• micronutrients in certain foods lead to new
  opportunities

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2004 TREND 6

• WHAT CONSUMERS WANT, CONSUMERS WILL GET . . .
• Shift to a genuine "pull" marketing environment
• "if you don't like this, you might like this"
  suggestions tied to likes and needs

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2004 TREND 7

• FOOD SERVICE SECTOR IS SURGING
• Dominant share of consumer food spending
• Innovating through an explosion in ethnic flavors
  and cuisine

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2004 TREND 7CONCEPTS

• Confluence of mega trends the dramatic rise in
  ethnic foods, blurring between "formal" and
  "casual" eating
• Asian flavors are the top trend gainer in the top
  200 chains
• Food service providers must offer more choices

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FOOD SYSTEM OPPORTUNITIES

• Health benefits of ag products and parts.
• Changing demographics New products.
• Food Service Chefs looking for menu ideas.
• Health Consciousness driving product
• choices.
• Environmental improvement. Its not waste it is
  ..

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