Feeding the Global Middle Class
Without Starving the Supply Chain
Brian Benjamin, HAVI Global Solutions
April 23, 2015
We’re the people who…
forecast demand for and move >1.5 billion premiums annually across
the globe; effectively predict and manage food, game and toy promotions,
driving efficient execution
Promotions
Management
produce 3.6 billion forecasts each day for 14,500+ locations, deliver endto-end supply chain visibility; design/optimize the most efficient networks
Analytics & Supply
Chain Services
design, source and deliver $3+ billion of global packaging annually
Packaging Technology
Integrated Solutions
recycle, convert to energy, or compost >3,000 tons of waste annually
Recycling & Waste
Solutions
Named by HfS as one of the top four service providers for
Supply Chain Management (SCM) Business Process Outsourcing (BPO)
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The extent of Global Middle Class Growth
Source: OECD Development Centre, THE EMERGING MIDDLE CLASS IN DEVELOPING COUNTRIES, Homi Kharas, 2010. Map submitted by Reddit user valeriepieris .
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The Impact…
Food price and volatility increase
Increasing
prices
2.2
2.0
Producer Price Index, Food & Feed
Increasing
fluctuation
Continuing
into the future
1.8
1.6
1.4
Consumer Price Index, All
1.2
1.0
2000
2005
2010
2015
Source: HAVI Global Solutions analysis, US Department of Labor: Bureau of Labor Statistics,
via Federal Reserve Bank of St. Louis. Nominal indexes reset to 2000 = 1.00.
─ CPI (consumer price index) data for All Urban Consumers All Items (CPIAUCSL)
─ PPI (producer price index) data for Crude Foodstuffs and Feedstuffs (PPICFFS)
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For the long term… why?
Yields: Improvements
approaching upper limits
Diversion of foods away from the
food chain
Impacts of the Growing Global Middle Class
• 
Demand Growth
−  Population
−  Demand Shifts
• 
Input resource costs and constraints (arable
land, water, energy) - susceptibility
Sources: (1) OECD Development Centre;
(2) GMO LLC, Welcome to Dystopia! Entering a long-term and politically
dangerous food crisis. Jeremy Grantham, GMO Quarterly Letter, July 2012.
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From the cereal aisle in Doha, Qatar
Nestle
Corn Flakes,
Turkey
Carrefour
Corn Flakes,
France
Bokomo
Corn Flakes,
South Africa
Poppins
Corn Flakes,
Lebanon
Kellogg’s
Corn Flakes,
Germany
Is the supply chain adapting to the trend?
Source: Leading Futurists LLC, December 2014
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Addressing the global
challenges
•  Need the complete picture: all the way
up and down the supply chain
–  Understanding demand
–  Supply base risks (supplier’s supplier…)
•  Contingency plans ready before they
are needed
•  Flexible, nimble:
–  Real-time visibility
–  Dynamic models: cost, hedging, and
inventory positions
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Moving production closer to consumption
Brewery example:
•  Demand: Closer to the consumer,
in-tune with local demand
•  Supply: Sustainable, efficient,
profitable, for the long-term
–  Grains – globally sourced
–  Water – locally sourced
•  Challenges to overcome:
–  Production planning with global/local inputs
–  More complex network / logistics challenges
–  Contingency planning to manage risk
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Responding effectively requires:
•  Addressing all of the supply chain goals
•  Global sourcing, meeting localized needs (often with localized production)
•  Partnering across the supply chain
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Partnering to success
Peruvian artichoke example:
•  A winning network of supply chain
partners:
–  Government
–  NGO
–  Private corporations
•  Partnering to create a complete system
–  Land / farmers
–  Social support
–  Supply chain / access to markets
Sources: (1) General Mills news release, “General Mills launches $1.1 million sustainable sourcing
program in Peru,” September 2013; (2) USAID website, August 2014. Photo courtesy USAID /
Chemonics
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Conclusion
A model to address the growing global
middle class:
–  Local / Global
–  Supply Chain improvements
–  Partnering to address global
demand challenges
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