Helping agriculture players, investors, and policy makers navigate the opportunities and challenges created by growing global demand, and build the capabilities they need to win.
After three decades of declining relevance, agriculture is once more at the center of the global agenda. To meet the demands of a growing global population, in the next 40 years alone the agriculture industry will need to generate outputs that are equivalent to its total production over the last 10,000. But increasing regulation and resource constraints are accelerating the level of uncertainty and volatility in the sector.
Despite these challenges, opportunities for agriculture players and investors are substantial; there is a renewed interest in the sector, and an appetite both to scale up existing solutions that show promise and to experiment with new "disruptive" technologies. Our Agriculture group has more than 75 practitioners who work closely with our partners in the Consumer Packaged Goods, Sustainability & Resource Productivity, and Social Sector practices to support clients on a broad range of topics.
Much of our work focuses on delivering McKinsey's functional know-how to leading players along the agriculture value chain. We carefully select applicable concepts and best practices from other sectors, and then adapt them to best serve the unique characteristics of our clients. Tailoring these concepts to agriculture is critical: the sector is diverse, locally differentiated, seasonal, geographically dispersed, and subject to a high degree of operational uncertainty.
We have used this customized approach to support clients on projects related to strategy, organization, marketing and sales, operations, and R&D. Some of our unique capabilities include:
We have created a unique perspective on value creation pools and investment opportunities in food and agriculture. We bring this perspective to our work with private equity groups and financial investors—and to our work supporting industry players as they plan for strategic growth.
Raw materials management
We help consumer packaged goods and processing companies improve performance within their raw agricultural materials procurement and risk-management functions.
Increasingly, we are developing approaches that help farm operators and land-holding management companies drive operational improvements.
Fresh food supply chains
We use an end-to-end perspective on supply chain management to help our clients reduce shrinkage and optimize the quality and cost of their fresh fruits, vegetables, and meats.
We help national governments and development partners in emerging economies develop their agriculture sectors, and work with donor agencies and foundations that support rural agriculture.
Examples of our work
In the last five years alone, we have served organizations across the agriculture value chain, including: major agricultural input players; farmer co-operatives; fertilizer companies; businesses that specialize in crop protection; primary processors; traders; major consumer packaged goods companies; and top food retailers. Some recent examples of our work include:
- We helped a global fertilizer producer develop a new corporate strategy. We identified the strengths, weaknesses, opportunities, and threats for each business unit and then used that information to develop a cohesive, integrated strategy. The strategy's financial model created projections that helped the company target a 30% profit growth in the next five to ten years.
- We worked with a major global seed company to improve visibility, cross-functional trust, and communication across its supply chain. Our three pronged approach—focusing on bottom-up planning, a new inventory management architecture and segmented production—helped create a transformation that is expected to yield $100 million in bottom-line impact through sales uplift, cost reduction, and market-share gain.
- We helped a country in North Africa define a transformation program for its agriculture sector—and in doing so created a strategy that encourages private investment in high-value crops while also increasing revenues and living conditions for the rural poor. Within five years of the program's launch, investment from both public and private sources had increased tremendously; in fact the private sector had invested $15 billion across hundreds of agriculture projects.
Tools, resources, and partnerships
We use supply and demand data about key commodities and an extensive understanding of market dynamics to help our clients make fact-based decisions about their strategies and operations.
We take an active role in the agriculture work of many of the world's leading institutions, including the Business 20, the G8, the World Economic Forum's New Vision for Agriculture, the IFC's private sector food security initiative, and Grow Africa.