MFS Conference, New Delhi - India 6 June, 2011

Agenda: Agenda:

Introduction to GMV and MFSIntroduction to GMV and MFS

Performances in processing technology and products Performances in processing technology and products

Ambitions with market led approachAmbitions with market led approach

Innovations in cooperation, research and educationInnovations in cooperation, research and education

ConclusionConclusion

The Netherlands as ‘Food Valley’The Netherlands as ‘Food Valley’Turnover 2010: EUR 68 billion in agri-food products

Home country of world leading food companiesHome country of world leading food companies

The Netherlands as ‘Food Valley’The Netherlands as ‘Food Valley’

Turn-over 2010: EUR 3,3 billion in processing equipment and research(80% poultry, 70% cheese and > 50% potato processing systems)

Home country of world leading companies in food technologyHome country of world leading companies in food technology

World-Class Performance (WCP)World-Class Performance (WCP)

Positioning: Positioning:

Center of excellence “Food & Flower”Center of excellence “Food & Flower”

Food & Nutrition Delta - Food Valley – EUKP7 – Genomics – 9 Dutch TopicsFood & Nutrition Delta - Food Valley – EUKP7 – Genomics – 9 Dutch Topics

Research:Research:

Food & Nutrition DeltaFood & Nutrition Delta

Safety - Nutrition & Health - Sensory Science and Structure – BehaviorSafety - Nutrition & Health - Sensory Science and Structure – Behavior

Education:Education:

Platform AcedeMI - IO / SVML Platform AcedeMI - IO / SVML

(Social) Innovation - ICT – Know-how sharing(Social) Innovation - ICT – Know-how sharing

World-class performance initiatives:World-class performance initiatives:

Road to Success:Road to Success:

AmbitionAmbition

InnovationInnovation

PerformancePerformance

Human CapitalHuman Capital

Quantity and QualityQuantity and Quality

Nutrition value and medicinal functionsNutrition value and medicinal functions

Poverty elimination and crop rotationPoverty elimination and crop rotation

Energy security and sustainabilityEnergy security and sustainability

Natural disaster reliefNatural disaster relief

Legalization & controlLegalization & control

Food Safety and SecurityFood Safety and Security

Huge area, low yieldsHuge area, low yields

Breeding and extension of new varietiesBreeding and extension of new varieties

Seeds supply systems and certificationSeeds supply systems and certification

Chain quality control and managementChain quality control and management

Logistics Logistics

Supply chain managementSupply chain management

Added value creationAdded value creation

Constrains in India (and other BRICS – countries)Constrains in India (and other BRICS – countries)

> 40%> 40%

40% to 20%40% to 20%

20% to 10%20% to 10%

< 10%< 10%

19951995 20252025

((Source: WMO, 1996; GEO, 2000; UNEP, 1999)Source: WMO, 1996; GEO, 2000; UNEP, 1999)

The (fresh) water stressThe (fresh) water stressWithdrawal as a % of total

The world is UrbanisingThe world is Urbanising

Urban people have more purchasing power:Urban people have more purchasing power:shift in consumption basket

Diet/Functional/Organic FoodsDiet/Functional/Organic Foods

Convenience foodsConvenience foods

Snacks/Prepared MealsSnacks/Prepared Meals

Dairy, meat, fish, fresh fruit Dairy, meat, fish, fresh fruit

juices, beveragesjuices, beverages

Carbohydrate staplesCarbohydrate staples

Increasing consumption of Increasing consumption of

processed foodprocessed food

Increasing consumer discern Increasing consumer discern

towards safe, healthy and towards safe, healthy and

quality foodquality food

Transparency in food chain Transparency in food chain

“from farm gate to food plate”“from farm gate to food plate”

Diversification of demand in Metropoles:Diversification of demand in Metropoles:from food to fashion to pharmaceuticals

Energy and buildingEnergy and buildingFuel, fibersFuel, fibers

FoodFoodFodder, food crops, Fodder, food crops,

vegetables, fruitsvegetables, fruits

FashionFashionFlowers, flavors, Flowers, flavors,

fragrancesfragrances

PharmaceuticalsPharmaceuticalsFunctional foods, Functional foods, pharmaceuticalspharmaceuticals

World spending on luxury goods World spending on luxury goods in 2005: US% 165 blnin 2005: US% 165 bln

Which is a 100-fold increase Which is a 100-fold increase between 1977 and 2005between 1977 and 2005

Strategic outlookStrategic outlook

WorldWorld

Growing population, increasing urbanisation, Growing population, increasing urbanisation, water and food shortagewater and food shortage

SocietySociety

Ageing populationAgeing populationGrowing high(er) income populationGrowing high(er) income population

Wealth of choiceWealth of choiceIncreasing incidence of chronic non-communicable diseases like:Increasing incidence of chronic non-communicable diseases like:

Obesity, Cardiovascular diseases, Hypertension, Diabetes mellitus and various cancersObesity, Cardiovascular diseases, Hypertension, Diabetes mellitus and various cancers

Strategic outlookStrategic outlook

WHAT WHAT Calories Calories "experience" "experience" nutrition & health, nutrition & health, varietyvariety

WHENWHEN Regular Regular grazing and snacking grazing and snacking WHEREWHERE In-home In-home out-of-home out-of-home WITH WHOMWITH WHOM Social Social individual individual HOW PREPAREDHOW PREPARED From scratch From scratch ready-to-eat, heat and eat ready-to-eat, heat and eat

Function of foodFunction of food

Market led approachMarket led approach

Needing social cohesion (and safety)Needing social cohesion (and safety)

Especially older generationEspecially older generation In more individualistic worldIn more individualistic world

Increasing suspicion (decreasing authority)Increasing suspicion (decreasing authority)

Especially young generationEspecially young generation Towards: institutions, banks, large corporationsTowards: institutions, banks, large corporations

In society, according to Wim Lageweg (MVO -2011)

MegatrendsMegatrends

Needing “Roots and Wings” (and origin)Needing “Roots and Wings” (and origin) Especially cultural ‘’creatives’’, self determinationEspecially cultural ‘’creatives’’, self determination Regional identify, interest in origin and processRegional identify, interest in origin and process

Stressing sustainabilityStressing sustainability Especially awareness of scarcityEspecially awareness of scarcity

Increasing transparencyIncreasing transparency Especially sharing knowledgeEspecially sharing knowledge Pressure on media, social mediaPressure on media, social media

MegatrendsMegatrendsIn society, according to Wim Lageweg (MVO -2011)

FunctionFunction

StructureStructure

FormForm

Integration ofIntegration of LIFE CYCLESLIFE CYCLES

Integrated scopeIntegrated scope

TechniquesTechniques

ICTICT

ProductioProductionnDesignDesign UseUse

Traditional scopeTraditional scope

IntegrationIntegration of of DISCIPLINESDISCIPLINES

Integration of Integration of ABSTRACTIONSABSTRACTIONS

RecycleRecycle

EconomicsEconomics

Integrated approach to product and process developmentIntegrated approach to product and process development

Innovation projectsInnovation projects Innovation projectInnovation project

Generic Innovation InputGeneric Innovation Input

Generic ImprovementsGeneric Improvements

Stimulating Trial & ErrorStimulating Trial & Error(competition games etc.)(competition games etc.)

1000 Flowers bloom1000 Flowers bloom

FromFromLaissez-faireLaissez-faire

FromFromLaissez-faireLaissez-faire

To Innovative To Innovative Goal RegulationGoal RegulationTo Innovative To Innovative

Goal RegulationGoal Regulation INNOVATIONINNOVATIONINNOVATIONINNOVATION

Strategic levelStrategic level

Definition levelDefinition level

Tailor levelTailor level

Innovation KnowledgeInnovation Knowledge

Effec

tiven

ess

(%)

Effec

tiven

ess

(%)

Efficiency (%)Efficiency (%)

100100

Trial-and-error / Individualism

Trial-and-error / Individualism

+ Integral (whole)

+ Integral (whole)

Expl

icit (

shar

ing)

Expl

icit (

shar

ing)

Risk reduction + Competence growthRisk reduction + Competence growth

+ Creative

(pro

-active

)

+ Creative

(pro

-active

)

Cost LevelCost Level

Result LevelResult LevelCost ReductionCost Reduction

MarketMarket OrganizationOrganization ProductProduct InformationInformation

decisivedecisive flexibleflexible added valueadded value fastfast

cost reductioncost reductiontime to markettime to market

product flexibilityproduct flexibility

head-tailhead-tailco-developmentco-development

self regulatingself regulating

product supportproduct supportmaintenancemaintenance

controlcontrol

design toolsdesign tools3d models3d models

configuration configuration managementmanagement

t r e n d st r e n d s

n e e d sn e e d s

enterprisingenterprisingmarket-orientedmarket-oriented

methodicmethodiccommunicativecommunicative

project engineeringproject engineeringmarketing / innovationmarketing / innovation

cost engineeringcost engineeringit knowledgeit knowledge

life cyclelife cycleanalysis and designanalysis and design

design optimalizationdesign optimalization

problem solvingproblem solving multi-disciplinarymulti-disciplinary integralistintegralist

AttitudeAttitude KnowledgeKnowledge ProfileProfile

Trends and NeedsTrends and Needs

Transitions in marketing approaches over the next 10 yearsTransitions in marketing approaches over the next 10 years

FromFrom

•Store Store and land locations as greatest assetsocations as greatest assets•““One to Many” mass marketingOne to Many” mass marketing•Transactions and traffic flowsTransactions and traffic flows•SKU’s and product profitabilitySKU’s and product profitability•Offering a product rangeOffering a product range•Single channel accessSingle channel access•Right product, placeRight product, place and and timetime•A monolithic customer offerA monolithic customer offer•Data on what is boughtData on what is bought•Marketing as an “add-on” departmentMarketing as an “add-on” department•No one in the organization (except CEO) No one in the organization (except CEO) •BenchmarkingBenchmarking•Customer loyalty schemesCustomer loyalty schemes

To / As well

•Customers as greatest assets•“One to One” mass customization•Customer lifetime value•Customer and market basket profitability•Offering solutions and an experience•Multi-channel access•Anything, Anytime, Anywhere•(Multiple relationship options)•Knowledge on what is bought by •whom and why•Marketing as a core competence•Customer-centric forms of organization•Path breaking•Customer loyalty as the creed of business

RequirementsRequirements

Purchasing power of Purchasing power of retailersretailers

Very short lead timesVery short lead times

High service levelsHigh service levels

7 day supply7 day supply

Quality / food Quality / food standardsstandards

CompetitionCompetition

PressurePressure

Increased use of EDIIncreased use of EDI

Support wide range Support wide range of productsof products

Shorter shelf life Shorter shelf life productsproducts

Reduction in use Reduction in use of stabilizers / of stabilizers /

additivesadditives

Product traceabilityProduct traceability

Market

RequirementsRequirements

Integrated systems Integrated systems structurestructure

Variable batch sizesVariable batch sizes

Effluent / Effluent / waste reductionwaste reduction

Lowest cost productionLowest cost production

Just in time operationJust in time operation

PressurePressure

Forecasts of Forecasts of requirementsrequirements

Reduced dependency Reduced dependency on people on people

Plant flexibilityPlant flexibility

High speed High speed changeoverschangeovers

Scheduling of Scheduling of

production/ production/ maintenancemaintenance

Product recovery Product recovery

systemssystems

Detailed records of Detailed records of productionproduction

ManufacturingManufacturing

Innovations in the Potato – ChainInnovations in the Potato – Chain

HarvestingHarvestingLow damage lifting and handlingLow damage lifting and handling

HarvestingHarvestingLow damage lifting and handlingLow damage lifting and handling

Seed Potatoes, genomicsSeed Potatoes, genomicsClean room technology , gen manipulationClean room technology , gen manipulation

Seed Potatoes, genomicsSeed Potatoes, genomicsClean room technology , gen manipulationClean room technology , gen manipulation

CultivatingCultivatingDrip irrigation, crop rotation in (semi) arid areasDrip irrigation, crop rotation in (semi) arid areas

CultivatingCultivatingDrip irrigation, crop rotation in (semi) arid areasDrip irrigation, crop rotation in (semi) arid areas

Innovations in the Potato – ChainInnovations in the Potato – Chain

Storage Storage Optimal storage, conditioningOptimal storage, conditioning

Storage Storage Optimal storage, conditioningOptimal storage, conditioning

Processing, packagingProcessing, packagingStarch, flakes, french fries, etc. Starch, flakes, french fries, etc.

Processing, packagingProcessing, packagingStarch, flakes, french fries, etc. Starch, flakes, french fries, etc.

Innovations in the Bakery - ChainInnovations in the Bakery - Chain

StorageStorageOptimalisation storage, conditioningOptimalisation storage, conditioning

StorageStorageOptimalisation storage, conditioningOptimalisation storage, conditioning

Grain, genomicsGrain, genomicsClean room technology , gen manipulationClean room technology , gen manipulation

Grain, genomicsGrain, genomicsClean room technology , gen manipulationClean room technology , gen manipulation

MillingMillingMillingMilling

Innovations in the Bakery - ChainInnovations in the Bakery - Chain

ProcessingProcessingHard and short dough, wafers, pastry, biscuits, Hard and short dough, wafers, pastry, biscuits,

bread and croissantsbread and croissants

ProcessingProcessingHard and short dough, wafers, pastry, biscuits, Hard and short dough, wafers, pastry, biscuits,

bread and croissantsbread and croissants

PackagingPackagingFlow packFlow pack

PackagingPackagingFlow packFlow pack

Innovations in the Fruit and Vegetable – ChainInnovations in the Fruit and Vegetable – Chain

CultivatingCultivatingDrip irrigation, crop rotation in (semi) arid areasDrip irrigation, crop rotation in (semi) arid areas

CultivatingCultivatingDrip irrigation, crop rotation in (semi) arid areasDrip irrigation, crop rotation in (semi) arid areas

Fruit and vegetables, genomicsFruit and vegetables, genomicsNew variaties, gen manipulationNew variaties, gen manipulation

Fruit and vegetables, genomicsFruit and vegetables, genomicsNew variaties, gen manipulationNew variaties, gen manipulation

Storage Storage Optimal storage, conditioning, ULOOptimal storage, conditioning, ULO

Innovations in the Fruit and Vegetable – ChainInnovations in the Fruit and Vegetable – Chain

Processing Processing Fresh handling, freezing, heat preservation, dehydration,Fresh handling, freezing, heat preservation, dehydration,infusion, pressure preservation, etc. infusion, pressure preservation, etc.

Processing Processing Fresh handling, freezing, heat preservation, dehydration,Fresh handling, freezing, heat preservation, dehydration,infusion, pressure preservation, etc. infusion, pressure preservation, etc.

Packaging and LogisticsPackaging and LogisticsControlled atmosphere, handling automation, ICTControlled atmosphere, handling automation, ICTPackaging and LogisticsPackaging and LogisticsControlled atmosphere, handling automation, ICTControlled atmosphere, handling automation, ICT

Shift of power to retailers and food service sectors:Shift of power to retailers and food service sectors:

Closest to the consumer, Multi-channel strategy, Vital marketing Closest to the consumer, Multi-channel strategy, Vital marketing information, 70 - 80% Buying decisions at P.O.P., Co-marketinginformation, 70 - 80% Buying decisions at P.O.P., Co-marketing

Improving supplyImproving supply

Supply managementSupply management

Continuous replenishment / flow through, Changing logistics systems, Cross docking, Continuous replenishment / flow through, Changing logistics systems, Cross docking, Bar coding, Consumer focused P.R., Business to Business, Biggest opportunity , Bar coding, Consumer focused P.R., Business to Business, Biggest opportunity ,

Cutting out middle-man, Market led approaches, Food supply chain, Intelligent automationCutting out middle-man, Market led approaches, Food supply chain, Intelligent automation

Improving supplyImproving supply

Consumer

3rd partyalliances, partners

distributors

METROPOLITAN METROPOLITAN FOOD SECURITYFOOD SECURITYcorporate command

center

data warehouse

strategic hub

?!

regional, global plants, bulk, semi-finished, filling,

finishing, packaging

retailers

manufacturing network

= information

Future food supply chainFuture food supply chain

• World class showcases in sustainable development World class showcases in sustainable development (efficiency of asset utilization (people, land-water-energy, know-how)(efficiency of asset utilization (people, land-water-energy, know-how)

• Driver for economic development through innovative food productionDriver for economic development through innovative food production• Maximize synergies between rural and urban development Maximize synergies between rural and urban development • Leading the way for India’s long term food securityLeading the way for India’s long term food security

Vision on Metropolitan Food SecurityVision on Metropolitan Food Security

MFS

‘‘Creating MFS’: Creating MFS’: Strategy for SuccessStrategy for Success