{"id":1387,"date":"2019-05-13T08:41:22","date_gmt":"2019-05-13T08:41:22","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=1387"},"modified":"2019-05-11T15:44:19","modified_gmt":"2019-05-11T15:44:19","slug":"a-conversation-with-kristen-eshak-weldon-2","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2019\/05\/13\/a-conversation-with-kristen-eshak-weldon-2\/","title":{"rendered":"A conversation with Kristen Eshak Weldon"},"content":{"rendered":"

Part Two: The future of food<\/strong><\/p>\n

\u201cJoining Dreyfus is a tremendous opportunity for me in terms of innovation and disruption,\u201d Kristen told me, \u201cand my initial focus is on the future of food.\u201d<\/p>\n

\u201cSo where do you start?\u201d I asked her. \u201cYou arrive at LDC, you are given a long business title and then what?\u201d<\/p>\n

\u201cThe first thing I had to do was to understand what makes LDC successful as a company. I initially spent very little time in London and instead tried to go to the places where LDC has a major presence. I visited the industrial assets and wanted to understand the industrial processes, but more importantly I wanted to meet the people and understand the culture of the company.<\/p>\n

\u201cDuring this initiation period I realized that people were often working on the same challenges in different regions, but without necessarily sharing their experiences. It is essential that we leverage best practices across regions, so my first task was to try and link the dots.<\/p>\n

\u201cThe second thing I had to do was to define our investment thesis. The future of food topic is so vast, there are so many things we can be doing. Upstream is logical in terms of looking at helping farmers to be more efficient and more effective, but it is a really crowded space, and more the domain of the seed and technology companies. The downstream part has more opportunities and is adjacent to what we already do, but we have to decide what is relevant to us, and where we can be impactful.<\/p>\n

\u201cCould you tell me a little about your company\u2019s investment in MOTIF<\/a>?\u201d<\/p>\n

\u201cI joined LDC when the due diligence was nearly done. This investment is really exciting, cutting edge and I would place it on the far right hand side of our range of opportunities as it relates to adjacency. MOTIF leverages biotechnology to create innovative ingredients that replicate animal proteins in terms of texture or taste. The company is based in Boston and was the second start-up to launch from Ginkgo Bioworks<\/a>. Investing in MOTIF was a way for us to help us understand more about the future of food.\u201d<\/p>\n

\u201cThe other agricultural commodity traders have already been serial acquirers in the sector, moving into specialty areas. What will you do differently?\u201d I asked.<\/p>\n

\u201cOur intention is not to provide all of the F&B companies with a blanket solution for all their specialty ingredients, but we will do it in specific areas and regions. And we will do it differently. We are looking to work in partnership with other companies in the form of joint ventures, or by bringing in external co-investment capital on the innovation side. This will allow us to move quickly.\u201d<\/p>\n

\u201cDon\u2019t you think LDC is starting the process a little late in the game compared to your competitors?\u201d<\/p>\n

 <\/p>\n

\u201cMaybe, but one thing that gets drummed into your brain at business school is that there is no such thing as a first mover advantage. That and \u201cfail fast.\u201d I would have liked to have had some lessons learned from previous acquisitions, but we are certainly not too late. The timing is still right, and we can add value in the areas and regions that are less trafficked.\u201d<\/p>\n

\u201cIn the late 90s Continental Grain decided that the risks in commodity trading weren\u2019t worth the rewards, and they sold their commodity trading operations to Cargill. They then became a major investor in the faster growing parts of the food chain, almost as a venture capital fund. Is that something that LDC might consider doing, selling off their bulk handling operations?\u201d<\/p>\n

\u201cAbsolutely not. The trading part of our business is the DNA of our company. That won\u2019t go away. When we look at new areas we have to ask what we bring to the table and how, are they adjacent to what we know and do best. We can bring industrial scale to a business, as well as our risk management skills. Our geographical footprint helps massively. We already operate in countries where a start-up may not be able to go by themselves\u2014countries where we already understand the regulatory landscape, the political issues etc.\u201d<\/p>\n

\u201cWhat about brands?\u201d I asked. \u201cLDC has a crushing plant in China, and if I understand correctly your plan is to take beans all the way from Argentina through to branded bottled oil in China. That\u2019s a new venture for you: a branded consumer product.\u201d<\/p>\n

\u201cBranded consumer products are not new to LDC per se. Over the years, we have created a number of branded consumer products, including edible oil brands \u201cVibhor\u201d in India and \u201cVila Velha\u201d in Brazil, or \u201cZephyr” coffee in the US, together with rice and sugar brands. Today, we plan to go downstream in a more structured approach where we leverage our matrix structure and take experts from our platforms that know these products, and then use our regional resources that understand local consumer demands.\u201d<\/p>\n

\u201cAnd that leads me on to my most important question: what does the consumer want? Is it sustainability, health, human rights, a fair income for farmers, or what?\u201d<\/p>\n

\u201cYou are asking the wrong question. Different consumers want different things. That\u2019s what makes this job so interesting, and provides so many opportunities.<\/p>\n

\u201cFirst, it depends on where you are in the world. If you look at Europe and the US, then health is probably the number one issue, followed by environmental sustainability and human rights. Farmer welfare probably comes last but that does not mean that it is not important. In China and other Asian countries, consumers are looking closely at quality and safety, for example. In the poorer parts of the world, the first question usually is, \u201cHow can I meet the daily needs of my family?\u201d<\/p>\n

\u201cSecond, regardless of where they are, different people have different priorities. They may be vegetarian, vegan, flexitarian, or whatever. There are opportunities in providing different consumers with different solutions.<\/p>\n

\u201cAs a company, our downstream approach has to be crafted differently for each region and for each market segment. At the same time we have to keep a focus on the macro picture of feeding the world safely and sustainably. We have to be aware of what our global goals are. We have to look at the entire value chain and where it is impactful.<\/p>\n

\u201cEveryday when you leave the office you should ask yourself, \u201cAm I doing the right thing? Is what I am doing beneficial, and do I feel good about it?\u201d<\/p>\n

\u201cThat is what is really important about what I am doing at LDC, especially on the innovation side. We want to know that we are delivering a food product in a safe and environmentally sustainable way, that we know exactly where it comes from, and that the labour that produced it is being paid market wages.<\/p>\n

\u201cI want to be someone that does positive things, and I want to work with aligned parties that share our values, whether it is the companies that we invest in, or fellow investors in these companies.\u201d<\/p>\n

\u201cThank you Kristen for your time.\u201d<\/p>\n

\u00a9 Commodity Conversations \u00ae<\/p>\n","protected":false},"excerpt":{"rendered":"

Part Two: The future of food \u201cJoining Dreyfus is a tremendous opportunity for me in terms of innovation and disruption,\u201d Kristen told me, \u201cand my initial focus is on the future of food.\u201d \u201cSo where do you start?\u201d I asked her. \u201cYou arrive at LDC, you are given a long business title and then what?\u201d … <\/p>\n

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