described increases the chance that investors can capture attractive returns while addressing some of the most significant needs of the global population. Managing and capitalizing on the critical datapoints is likely to require strategic partnerships and acquisitions, and potentially a reshaping of the industry structure. Some investments may be more suited to investors with longer time horizons, such as better pension and sovereign-wealth funds. As a result, demand is rising for healthier functional foods (those that offer benefits beyond basic nutrition, such as lowering cholesterol) and for traceable and certified foods that are guaranteed to meet a certain level of safety and environmental or corporate social responsibility. By 2030, for example, the gap between expected water withdrawals and existing supply may reach 40 percent. For example, we have seen investors struggle to find opportunities in Brazil, where many family-owned companies have strong, relationship-based businesses. Investors must maintain a through-cycle mentality in recognition of the underlying volatility of food and agribusiness (and the impact of the volatility in other sectors, such as oil and gas). Meanwhile, other contributing factors to volatilityadverse weather, rising oil prices, export restrictions, civil strifewill most likely persist. Take a through-cycle approach. About the author(s) Lutz Goedde is a principal in McKinseys Denver office; Maya Horii is a principal in the Washington, DC, office; and Sunil Sanghvi is a director in the Chicago office. Instead, they should view these players as potential partners that can help execute investments, mitigate risks, and provide exit options. In particular, rapid expansion of mobile technologies in rural populations could allow farmers in these areas to greatly improve productivity based on access to better information. Since 2004, global investments in the food -and-agribusiness sector have grown threefold, to more than 100 billion in 2013, according to McKinsey analysis. Economics drive waste: margins and transport costs determine how much effort to put into waste reduction while consumer behavior is slow to change. Indeed, only a modest percentage of global agriculture production is traded across borders, but such exports can influence world market prices and regulation. In addition, there is increasing evidence of tighter linkages among commodity prices. Many of the capital-intensive segments of the value chain, such as production and processing, will require investors and owners to understand how to achieve best-in-class operations to capture their full value. Investors should not ignore the importance of building relationships with suppliers, major multinational companies, and strategic investors. Investors should be prepared to build the capabilities needed to operate successfully in the agribusiness sector. Recognize the importance of emerging markets. Breeding is one of the critical means to modernize the protein industry. Food -and-beverage companies can also profit from products with specific fortifications and nutrients to appeal to the health-conscious segment (for example, omega-3fortified milk). Increasingly, there are firms specializing in the food -and-agribusiness sector that are attractive to investors because of their strong understanding of the sector. Food -and-agribusiness investing requires a deep understanding of specific crops, geographies, and complex value chains that encompass seeds and other inputs, production, processing, and retailing. With the spike in food prices and the economic downturn in 2008, the number of undernourished people around the world increased to more than 1 billion, from 850 million in 2005. Small microbial-fertilizer companies are an example. With opportunity come risks.
Smaller, more than half of global GDP growth is expected to oxidation come from countries outside of the Organisation for Economic Cooperation and Development. Would you like to learn more about our Chemicals Practice. In part, especially pork in China, for example. Meanwhile, the Chinese continue to trail Western diets in protein consumption. Protein resume consumption there is expected to grow 3 to 4 percent a year. Animalhealth testing, as of the end of 2014. Within this space, over half the worlds urban population also will be in emerging economies.
The food-and-agribusiness value chain comprises a wide range of companies, from suppliers of agricultural machinery, seeds, chemicals, animal-health tests and vaccines, and packaged foods to data providers for precision agriculture.Global Cash Card offers a paycard solution to take your payroll 100 electronic.
And investment opportunities, but so is their distribution in emerging markets. And Louis Dreyfus have committed capital to relieving some important bottlenecks such as movement of product from Brazils interior. And 30 percent of greenhousegas emissions. For their contributions to this article The thesis authors would for also like to thank McKinseys Joshua Katz.
Food -and-agribusiness companies on average have demonstrated higher total returns to shareholders (TRS) than many other sectors: the TRS of more than 100 publicly traded food -and-agribusiness companies around the world increased an average of 17 percent annually between 20, compared with 13 percent for.Agriculture continues to play an important social and political role.In addition, the millions of smallholder farmers around the world are gradually integrating into commercial value chains; among them are coffee farmers in Ghana and cotton farmers in India.