56
JAN 2017
FOOD FOCUSTHAILAND
SCOOP
Professor Dr.Ralph D. Christy mentioned the new arising trends in
Asia’s Agribusiness during his presence in the “Advanced Agribusiness
Management”seminar. According tohim,Meta-Analysis,which isastatistical
analysis that combines the resultsofmultiple studieson the same subject,
pointed to 10newAgribusiness trends inAsia, which are:
GlobalTrends
and
theKeyDrivers
in
AgribusinessDevelopment
1
Globalization
Theborderlessworldof today,with itsvarious
alternatives for speedy transportations and communications,
hasmade it virtually effortless for sellers andbuyers todobusiness
swiftly and efficiently.
2
Supermarket
Supermarket is the most effective marketing
channel thathighly influencesconsumers’behaviors.Controlling
factors towards the fast expansion of supermarkets are:
• Demand factor
- More and more people are migrating into cities from outer
parts of towns (Urbanization), and with them come the needs for
convenience and variety of taste, all of which has led to higher
demands in various ways. Doing business with countries in other
continents requires thorough studies on their backgrounds and
cultures.
- The growing per-capita income has resulted in demands for
higher qualities goods such as organic products.
• Supply factor
- Foreign Direct Investment or FDI that yielded more profits
outsidewasagood incentive for investors toexpand theirbusinesses
acrossborders.Carrefour inArgentina, for instance,hasmade3 times
higher profit than its France counterparts.
Trends in businessmergers pointed towards
•Global supermarketmerger
Retailmarketshave shifted from local businesses to centralized
wholesales, where themergersmostly happened in form of foreign
takeoversof localbusinessesaswellas thebiggernetworksof traders
that gobbled up the smaller ones. Examples of such international
retailers are Carrefour, Walmart and Dairy Farm International from
HongKong.
•Mergersareoccurring indifferent rates in the food industry
Mergers in food retail businesses in developing countries are
rapidlygrowingespecially insectorsof processed foods, dried foods
and packaged foods, such as noodles, dairy products, and grains
products. Product groups that tend tobemergedare chicken, beef,
pork and fish.
•Systemtrendsonpurchasingandprocurement insupermarkets
Purchasingsystemwillgraduallychange towardscentralwarehouse
system in order to be able to support various stores that spread
over counties or regions. Central warehouse system requires less
purchasing management and fewer staffs. One good example is the
central warehouse co-investedbyChinaResourcesEnterprises (CRE)
of HongKong andVanguardGroup in southernChina. CRE isChina’s
10
th
biggest retailerwith17megastoresacrossShenzhenprovinceand
GuangdongCounty. Its USD 680million investment inChina aimed at
transforming the traditional store purchasing system into a centralized
one for each province.
• Development in logistics to go with purchasing and
procurement
Purchasing systems for processed products and semi-processed
products as well as main rawmaterials is rapidly modernized inAsia,
enabling supermarket chains to better their systems with the most
effective logistical strategies.
3
Climate Change
99% of all scientists agree that climate
change is really happening. The change of only 1 degree inwater
temperature can force marine life to migrate and subsequently affect
thewhole food chain.
• Effect of the climate changeonagriculture and food security
Climate change indirectly affects plants’ production. It is forecasted
that within 2050, rice production from irrigated areas will decrease 14-
20%. Wheat yield will drop 32-44%, whereas corn will drop 2-5% and
soybean9-18%. Figuresofmalnutrition inchildren,whichdirectly linked
to levelsorcalories intake,will consequently increasedue to thisclimate
change. It is forcasted thatwithin2050,numbersofmalnutrition inchildren
will shootupby9-11million,added to thepreviouslyestimated65million.
4
Water and itsMultipleUses
Supply for cleanwater is now
becoming critically low, not just drinking water, but also irrigated
water for agriculture.Watermanagement and planning, hence, is such
an important topic to be carefully consideredby every operator.
5
Rising Incomes
Inequalityof incomeaffectspopulation’s ratio,
purchasingpowers, educationopportunity, and informationaccess.
Thiswill lead toability toacquire food, nutritionandenergy.Consumers
with higher incomewill shift in consumers’ behavior towards foods and
productswith higher quality.
