ADM – A Massive Bet on Nutrition – 31 August 2021
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Specialist:
Title:
Moderator: Nyree Hinton (NH), Third Bridge Sector Analyst
Ronaldo Gaguine (RG)
Former Head, M&A Integrations, EMEA Region at Archer Daniels Midland Co
Agenda:
1. Overview of ADM’s (NYSE: ADM) planned Sojaprotein acquisition
2. Alternative protein demand
3. Strategic update across legacy businesses – Ag Services & Oilseeds unit
4. H2 2021 pricing and costs outlook
Contents
Q: Could you give us an overview of the commodity and ingredient processing industry? How have things
changed across competitors or product focus?
Q: There is record demand and profit from these commodities and ingredient processors in the ag services,
but it seems as though the ag services side is also benefiting very well from the current environment. Could
you speak to how some of these ingredient processors are able to drive their profit, while other players such
as the CPGs are just trying to get by?
3
3
Q: In this tit-for-tat regulatory pressure between different administrations, almost every industry got hit,
from furniture to technology, but something that I don’t recall as vivid is food. It seems as though food or
food processing is under the radar. Could you speak to some of that regulatory risk that you were alluding to,
4
over the past three or four years?
Q: How have ADM’s business model and different categories fluctuated over the years, and what have you
noted from management regarding a shift in priorities from that classical commodity processing to more of
the speciality ingredients, to be more competitive?
5
Q: Could you expand more on how ADM could differentiate itself in human and animal nutrition? Could you
break down the nutrition segment as a whole within ADM, and some of the differences vs other speciality
ingredient providers?
5
Q: Which regions would you classify as the largest opportunity for ADM to really increase its footprint in? It
seems like it is one of the more global ones.
6
Q: You were describing some of the global footprint, but I think something you also mentioned was a lot of
the challenges ADM faces in nutrition. Who is leading in the nutrition front that ADM is trying to replicate or
7
compare to?
Q: Do you think ADM is late in trying to build out its nutrition, and in really seizing this wave of more value-
added ingredients? Do you think it still has time to really make a huge influence in this market?
7
Q: Where do you think the biggest opportunity is for ADM? Is it pet or human nutrition? Theoretically, it
should be humans, but where’s the opportunity in pet or animal nutrition?
7
Q: You talked about probiotics, pet and plant-based. Where do you think management has a hyper focus
within some of those key segments? Where do you think management is diverting most of the attention and
resources? When you’re spread a little thin, there are always going to be areas that don’t get the attention or
investment that they need. How do you think management is approaching this? It seems to be assessing the
plant-based sector as more of the main opportunity, and then it trickles down to probiotics and other animal
nutrition and health and wellness products. What are your thoughts on that?
8
Q: Could you discuss where some of the health issues are coming from? Is it coming from some of these
GMOs [genetically modified organisms] or modified commodities that start from the very beginning, that
ADM is producing in one business but trying to fix and cure that problem in the next business? How do
consumers assess where these products are coming from, and how does that play into ADM’s thinking? I’m
not familiar with it, but it doesn’t seem as if ADM possesses that capability to really root out some of those
non-organic products. Could you discuss that dynamic?
9
Q: How sustainable do you think ADM’s growth from the plant-based side is? How saturated do you think
the market is, given this rise in start-ups from different types of alternative proteins? Fungi, for example, and
you have a few lab-grown experiments that don’t need plant-based. Could you discuss the impact that might
have on future growth, if the industry suddenly shifts from a plant-based-centric focus to more of a lab-
grown fungi or other types of alternative protein?
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ADM – A Massive Bet on Nutrition
Transcription begins at 00:00:02 of the recorded material
NH: Welcome to Third Bridge Forum’s Interview on ADM - A Massive Bet on Nutrition. I’m Nyree Hinton
and I’ll be facilitating today’s interview with Mr Ronaldo Gaguine, former Head, M&A Integrations, EMEA
Region at ADM.
Ronaldo, before we start today’s Interview, please state I agree or I disagree to the following statement: You
understand the definition of material non-public information and agree not to disclose any such information,
or any other information which is confidential, during this Interview.
RG: I agree.
NH: Thank you, Ronaldo. Could you start by giving the audience an overview of your background and various
roles you’ve held in the industry?
RG: I have 20-plus years of experience within finance and business development within the FMCG food
industry and ingredients industry, starting at Coca Cola, with 20 years approximately, and then moved into
Revlon, short time. Then, ADM, going through the trading desk, then a transformation initiative all over the
segments, and last, doing the M&As to build the health and wellness segment of the company, starting in
Europe. Thank you.
[00:01:36]
Q: Could you give us an overview of the commodity and ingredient processing industry? How have things
changed across competitors or product focus?
RG: As you know, within the large categories of commodities, those being energy, metal, etc, we go to
agriculture, and within the agricultural sector, historically, there were four big commodity tradings, big
players, the A, B, C and D. A is for ADM, Archer-Daniels-Midland, B for Bunge, C for Cargill and D for
Dreyfus. These, days we can add to that list players like Cofco, Viterra, Glencore, Fonterra, as well, in different
commodities. These big players are controlling over 80% of the global grain trade, being those major products,
wheat, corn, soybeans, and then you have secondary products like coffee, sugars, water and juice, etc. As we
move along the supply chain, 10 companies started to move from just being a commodity trader to starting
processing those ingredients, and producing ingredients for food and beverage producers and some other
segments where we have other players, like Givaudan, Ingredion, DSM, Kerry Foods, McCormick, Arla Foods.
Also, ADM, Bunge, DuPont and a few more that are going closer to the consumer but stopping in the B2B
segment, producing these, let’s say, value-added products and ingredients.
[00:03:48]
Q: There is record demand and profit from these commodities and ingredient processors in the ag services,
but it seems as though the ag services side is also benefiting very well from the current environment. Could
you speak to how some of these ingredient processors are able to drive their profit, while other players such as
the CPGs are just trying to get by?
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RG: I think there are some trends playing in favour of this industry now. One of them, it’s that the agriculture
businesses or these AG services are understanding more and more the customer they have. Actually, they have
big initiatives to focus on the customer, understand the customer, and start to produce ingredients that are
tailor-made or customised towards the end consumer. I think the other point that is facilitating this growth is
technology. The farming industry is getting into something called smart agriculture trend. Farmers are able to
use technology better, to have better yields in their harvests, in the way they produce (audio cuts out 05.26)
small players that are appearing in the market with a good tailor-made offer, so you will see a trend of these
big players and the AG services starting to acquire them.
If you think that they go from origination to distribution in the end markets and ending this B2B, producing
ingredients for those big food producers that are selling to consumers, they are all starting their incubators,
trying to find the best new technologies, food technologies, food production technologies, innovative start-ups,
and they are trying to acquire them, as well as smaller players in the market that are growing very fast. There’s
a lot of inorganic growth, not to mention that there’s a huge demand these months or last years coming from
China and biofuels. Plant-based fuels are in much demand, and this will increase the commodity prices for the
next years. There’s a growing population, wealth, so people are consuming more. This is helping the segment,
as well, and weather, of course. It’s important to highlight some of the big players, when they refer to China,
what they say is, “We have to be careful.” It’s very hard to predict what China will do, but definitely, it is well-
seen that there is a huge demand from China, and increasing.
NH: Could you elaborate a little bit further on that aspect with China? What are the concerns here regarding
demand from China?
RG: For example, there’s a growing wealthier population in China. The consumer that can afford to buy better
foods, and also the consumer that is moving from the rural centres into urban centres, is more and more able
to buy better products, hence the full industry of foods is growing faster than other times in China, or keeps
growing at a very fast pace. At the same time, if you take a look at the regulation around China and some of the
obstacles that China can place, that’s where it needs to be looked at in detail when you think long-term.
Basically, the US responds to some China obstacles, then China responds to some other obstacles, being those
regulations about the typed of commodities that can be traded, the types of qualifications of quality or
qualifications about the types of commodities that can be accepted in China. Interestingly, some of the players
are always looking for a good partner within China. For example, ADM has Wilmar. Wilmar is a good partner
of ADM. On the other hand, you have players like Cofco which are trying to get aggressively bigger in the
origination markets. Cofco is playing very big in Brazil, Argentina, and even trying to get into the Black Sea
region, aggressively. That, of course, plays a big role here, where China gets more and more power to decide on
prices or to, I wouldn’t say manipulate, it’s not the word to say, but influencing prices.
[00:09:37]
Q: In this tit-for-tat regulatory pressure between different administrations, almost every industry got hit, from
furniture to technology, but something that I don’t recall as vivid is food. It seems as though food or food
processing is under the radar. Could you speak to some of that regulatory risk that you were alluding to, over
the past three or four years?
RG: I think that the regulatory, it’s a challenge that we all have to face. You are totally right. There’s still
growth in the food industry and AG services industries. I believe that what happened is that people stopped
spending in certain other categories, being those outdoors expenditures, tourism, hospitality and other
industries that got a big hit due to COVID, but then food became a must-spend category. People started to also
look into some ideas that probably will take us to some other subjects, the function and nutrition, the much
better quality of food’s nutrition, so there is a growth in the market. The prices are growing, also. You will see
that the industry will grow proportional to those prices. Some of this growth can also be reflected, you will see,
in the stock price of some of these companies, that they have, in less than a year, recovered what they have lost
due to the crisis in March, April last year. They even surpassed by 20-25% those original prices of pre-COVID
in their stock price.
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[00:11:58]
Q: How have ADM’s business model and different categories fluctuated over the years, and what have you
noted from management regarding a shift in priorities from that classical commodity processing to more of
the speciality ingredients, to be more competitive?
RG: As you will know, ADM, for more than 100 years, have been doing this commodity trading, which has
grown a lot. The biggest segment still in ADM would be those AG services that include from origination to
transportation, and now have merged with oilseeds, as well. On the other hand, carbohydrates also have been
growing a lot, and it’s that second tier, let’s say, of the business. It’s important to mention that these two
segments, they are huge in volume but they are very low in margins. We are talking really, really large
volumes, very small money coming in at the bottom line of the P&L. Then, they started to go into the nutrition
segment, accelerated mostly, I would say, 2014, when the company acquired Wild Flavors and Specialty
Ingredients. It’s a company based in Germany or out of Germany, and that another USD 3-4bn of revenues to
the company.
They brought that expertise of using the processed ingredients that the company was already producing and
blending those with other ingredients, sophisticated recipes, to finally have their end products that they can
sell to Nestle, Danone, Pepsi, Coca-Cola, General Mills and many other players in the market. If I do a deep
dive into nutrition, this is where the large profits are in terms of percentage. The margins come from nutrition,
and the company, the senior management, is envisioning that they need to play within this segment of
nutrition to be able to have, I would say, competitive margins, to be able to get more money to buy other
companies and keep growing. In this nutrition segment, you will also have animal nutrition, and there you can
see a large M&A that happened in 2018, completed in early 2019, which is called Neovia. Neovia was, is, a
French original company that had about 60-plus manufacturing plants, and brought about 6,000-plus
employees to the company.
Then, you have also speciality ingredients, where you have essences, where you have vitamins, where you have
proteins and beyond, even going into a health and wellness division, which is the diva of this nutrition
segment where the company is putting a lot of eyes, a lot of talent, as well, so that this could be the future. If
you think of where the company would be going, senior management is trying to understand, how would it be
to have personalised nutrition in the future? What would that be? Imagine if you have the analysis of humans
and animals in terms of the DNA, genome sequencing analysis, and then you could detect strengths and
weaknesses and produce foods and ingredients according to their needs. That is where the company is moving
into, and that’s where the big margins are. We are talking at least 30% of margins in a large variety of
products. Another large variety of products would be 50%, even 70% or 80% of margins, very different from
the AG services, the classic ones as we know them.
[00:16:49]
Q: Could you expand more on how ADM could differentiate itself in human and animal nutrition? Could
you break down the nutrition segment as a whole within ADM, and some of the differences vs other
speciality ingredient providers?
RG: If you think of nutrition as the services that you can provide within ADM, one of those services, the
sophisticated one, would be the laboratory analysis of the ingredients, the genome sequencing of potential
patients or potential customers, consumers, being those animals or humans, and the company is already there.
The company acquired, as an example, ADM Protexin in the UK. That’s a probiotics company, and it comes
with an interesting laboratory of R&D. This also comes along with a large amount of medical talent, medical
doctors, engineers that are dedicated to biotechnology, also food industry experts, flavourists, and people who
really understand the sub-segments in animal nutrition. When I talk probiotics here, I would say half of the
business would be human probiotics, and the other part would be divided into equine, livestock, pets and even
aquaculture.
Private and confidential 5
Pets, it’s really growing fast. There’s a large population of pets growing as people tend to make them part of
the family. I wouldn’t say they’re replacing children, but they play a big role within their families. They are
really focused on providing the high quality or, as long as they can afford it, the highest quality of foods to
them. When we talk about the animal nutrition segment within ADM, you can also see that ADM is mostly
playing a role here of producing large white label or private brands for other companies, and slowly, gradually
trying to see where they can play a role to have their own brands. As such, as a brand, Protexin is owned by
ADM, while they also produce other probiotics for other companies. Likewise, in Spain, there’s a large
laboratory producing these genome sequencing services, and providing information, for example
metagenomic sequences, to other parts of the company that will use these to understand the trend of what’s
needed in animals and humans to have better nutrition. You will see plant-based solutions, as well.
Within this segment, if you take Brazil, for example, the company acquired and developed, it’s still in progress,
in Campo Grande a large factory of plant-based hamburgers. It’s not the only player. Cargill is already there,
DSM is already there, and there are even other companies. You may have heard of NotCo. It’s a start-up that
has just recently raised USD 230m to produce plant-based meats. ADM knows that there is a large number of
big players, or smaller, that are accelerating their growth. Even in the other piece which is really important,
the health and wellness, ADM is trying to see what the trend is, trying to understand that, and trying to bring
solutions to the table for the people to buy these products, for consumers and for the customers, as well.
There is a challenge in-house for ADM, probably a few, but one of the large ones that I see within the nutrition
and ingredients is that the company noticed that there are not a lot of experts in-house. Slowly, this expertise
is growing through the newly acquired businesses, so through inorganic growth of M&As. Talents are coming
to the table, are coming to the game. The other challenge is that there is still a US-centric approach to
business, so ADM put in place, about three years ago, an initiative called Readiness. Readiness, it’s an
initiative to detect where are the weaknesses, where the company needs to grow strengths. One of those is
talent, how to prepare talent to make that growth happen within the company, and also how to bring more
talent that could get up-to-speed the lack of expertise that the company has and open their mentalities
towards selecting centres of excellence for proteins, centres of excellence for plant-based ingredients, centres
of excellence for a diversity of ingredients. Instead of keeping everything centralised in the US, the company is
starting already to play an accelerated approach towards being global, not only in papers but in the practices,
as well.
[00:24:02]
Q: Which regions would you classify as the largest opportunity for ADM to really increase its footprint in? It
seems like it is one of the more global ones.
RG: Very true. I would say, for ADM as origination, you have South America, where they are trying to grow
the engine to obtain the ingredients, or to obtain the commodities to then process those to become
ingredients, likewise in Asia, and bring those to the large markets where there is a lot of demand and where
there is a higher wealth among consumers. From origination, you have Asia and Latin America and some areas
of east Europe, coming into central Europe, west Europe, North America and Canada, as well as, within Asia,
China, Korea, Japan, Singapore. Those are the big markets where the company is trying to grow. Australia,
New Zealand, as usual, big market with big pockets where money can be spent, so that they can accelerate the
growth there.
Nevertheless, if you take a look at Cargill, Cargill is also moving very fast. They are associated with the biggest
universities to try to do R&D at state-of-the-art R&D laboratories, like Unilever has in the east of the
Netherlands with Hive. It’s a big initiative of Unilever. Danone has another global R&D centre within the same
location. In the case of ADM, Heidelberg in Germany is one of those big centres, which is actually where Wild
Specialty Ingredients was established first. A colour note there. That’s where there is a juice brand called
Capri-Sun. The owner of Capri-Sun used to own Wild Ingredients, and sold it to ADM but he kept the brand.
Interestingly, when you go to Heidelberg, you see the plant of ingredients on one side of the road and this
massive plant, global one, on the other side producing the juice of Capri-Sun. If you think of another player,
DSM, they are in the south of the Netherlands.
Private and confidential 6
[00:29:09]
Q: You were describing some of the global footprint, but I think something you also mentioned was a lot of the
challenges ADM faces in nutrition. Who is leading in the nutrition front that ADM is trying to replicate or
compare to?
RG: I would say one of them would be Cargill, and actually, ADM, in the past five years, have captured some
of the talent and management of Cargill and brought it in-house into ADM. Another player that ADM looks
closely at, it’s DSM. DSM, it’s this Dutch player based in the south of the Netherlands, and it’s really having
ultimate technology. Some of those people have been captured also and brought in-house, good talent, I would
say experts in the field but with a very global, innovative mindset. Likewise, ADM started to bring people from
the FMCG companies, for example General Mills, Nestle, Danone. They started to bring management who
understand the need of the customer, and this demonstrates that the company is trying to put a lot of effort in
understanding the customer and having a very close relation to the customer. Now ADM has people in-house
that speak the same language and understand the needs of the ultimate consumer, and the trends, as well. It’s
not only in the sales function. They’re bringing experts across the engineering function, across the R&D
functions, across scientific and regulatory affairs, and any other area that could potentially be a challenge and
that can, at the same time, create a competitive advantage vs the other players.
[00:31:33]
Q: Do you think ADM is late in trying to build out its nutrition, and in really seizing this wave of more value-
added ingredients? Do you think it still has time to really make a huge influence in this market?
RG: I think they are trying to catch up, because there are so many players in the market nowadays growing so
fast. An additional condiment, I think, is that there are lots of venture capitals out there investing zillions and
zillions of dollars into, as you may see, technology, biotechnology, those connected to food, as an example.
SOSV is a big venture capital based out of Silicon Valley, and they have about, I think, USD 3bn in investments
behind companies that are producing biotech types of ingredients. Those are already having partnerships with
Mondelez, Kraft, Heinz, PepsiCo and other players in the market.
There’s a lot of money flowing into this segment, and ADM, it’s of course trying to catch up, trying to preserve
the category of being a top five player in the market in this segment. I think it’s doing a very good job in trying
to control the food supply chain end-to-end, from origination, going through ingredient processing, and finally
selling to the producer of the food. In the latest months, you may have seen the acquisition of Sojaprotein from
ADM. It’s a provider of non-GMO soy ingredients. This shows a little bit more, again, how ADM is trying to
move really fast to complete a good portfolio of ingredients, to be able to satisfy the demands of very high-
quality, high-end customers that want functional foods, that want really, really natural ingredients in their
foods, and a partner that can help develop foods for the consumers for the long term globally.
[00:34:16]
Q: Where do you think the biggest opportunity is for ADM? Is it pet or human nutrition? Theoretically, it
should be humans, but where’s the opportunity in pet or animal nutrition?
RG: I would choose health and wellness as one of the key segments, and health and wellness, again, for
animals and for humans, for several reasons. There’s a large increase of people that are moving into
understanding more of what they eat, how they eat, frequency, quality of foods. They don’t only look at the
packaging now, they try to understand who is providing those ingredients. Where are those ingredients
coming from? There are even NGOs now producing a service of, I would say, verifying those ingredients.
Private and confidential 7
Where are they coming from? Even if they come from Africa, they want to make sure that there is a great way
of taking care of those African supply chains, that they take care of the farmers.
These are initiatives that are already very trendy among the big brands like Danone, FrieslandCampina in the
Netherlands, Coca-Cola itself, Pepsi or Fonterra, the big dairy producer. Again, health and wellness is one of
those big segments. The probiotics being brought into foods, it’s a huge, huge new thing. It started by being
only probiotics. Now companies are producing prebiotics, probiotics, even post-biotics, and they have
different characteristics. For example, some of those can even work for the dairy industry, and these are not
just the probiotics that we may see in a pack of milk. These are probiotics that have a functional piece, for
example reducing migraines, helping the digestive system. There are also others that are working on the
sharpness of the mind. These are really, really the trends, and we are talking very high-margin products.
When it comes to pets, definitely there’s a large, large growth in health and wellness and also in pet foods.
(Audio distorts 37.15) private label foods, there are a lot of players in the market, especially Europe, that are
growing very fast, even backed by big venture capital groups. I’ll take an example. There’s one called Cinven.
Cinven Group, it’s buying in this area, and it’s helping companies, investing behind companies. For example, a
company that today has a turnover of EUR 300m, it’s taking them in four years to become a company with a
turnover of EUR 1bn. There’s a large infusion of money in the market behind pet foods, and again, trying to
make these super premium pet foods where the large margins are. When it comes to ingredients, speciality
ingredients, that’s the other piece, with really high-quality plant-based foods and democratising where the
foods are coming from. Being totally open and transparent, that’s the trend, to show that these foods are non-
GMO, that they are plant-based, that they have vitamins, minerals, etc, etc. I think those are the key areas
where ADM will have to focus to grow fast, solidly and long-term, not to lose market share to other players
that are starting to accelerate things with a lot of money being placed, especially from outsiders like venture
capital firms.
[00:39:08]
Q: You talked about probiotics, pet and plant-based. Where do you think management has a hyper focus
within some of those key segments? Where do you think management is diverting most of the attention and
resources? When you’re spread a little thin, there are always going to be areas that don’t get the attention or
investment that they need. How do you think management is approaching this? It seems to be assessing the
plant-based sector as more of the main opportunity, and then it trickles down to probiotics and other animal
nutrition and health and wellness products. What are your thoughts on that?
RG: I would maybe consider it as building a web or a network of combined trends. Take pet foods, the
probiotics piece, the ingredients piece, including flavours. For example, the company is trying to produce
particular pet foods. They bring ingredients from the probiotics factory into the pet food factory, and likewise,
they bring their flavours and tastes from those R&D centres into the pet food factory and they are blending the
best, so I think every part of it is playing a big role, especially for those animal nutrition foods. Maybe we can
think of a supply chain or a value chain that starts from blending all these ingredients, ultimately going into
the pet food business. I think that’s a large focus of the company. I dare to put at the same level the plant-
based foods. There are some initiatives being held with FMCG producers to make sure that there are plant-
based… For example, there is a plant-based immunology project. Imagine if you could have foods that could
strengthen your immune system as a human. That’s a big focus, as well, of the company, to focus with
companies that are thinking beyond what we see in the market and going into these types of initiatives, like
immunology foods or immune-boost foods. A clear example is Danone, a real example, that are developing
this in the Netherlands, and the company is providing speciality ingredients for those products.
I forgot to mention one, cosmetics. Imagine if you could also get the cosmetics into your body and your
system, not only through foods but through creams. The large players of cosmetics and body care, like L’Oreal,
Beiersdorf, one in France, the other one in Germany, and if you take Coty, as well, Coty is doing a large,
massive transformation, partnering for some of those initiatives with players like ADM and asking them to
produce particular R&D-produced, functional-based ingredients. You see there, in my mind, I would go for pet
foods, I would go for the cosmetic industry, which has actually been growing during the pandemic,
Private and confidential 8
unbelievably, and the health and wellness sector. I would put them as three big priorities, where there are,
again, large margins, not to mention that the company is always keeping the big flagship like commodity
trading as a key factor of success. It’s not that they are decreasing any initiative there, or they are having less
interest in the AG services group. That’s the flagship, and that will always be a very strong segment of the
company.
[00:44:11]
Q: Could you discuss where some of the health issues are coming from? Is it coming from some of these GMOs
[genetically modified organisms] or modified commodities that start from the very beginning, that ADM is
producing in one business but trying to fix and cure that problem in the next business? How do consumers
assess where these products are coming from, and how does that play into ADM’s thinking? I’m not familiar
with it, but it doesn’t seem as if ADM possesses that capability to really root out some of those non-organic
products. Could you discuss that dynamic?
RG: Good point. I think consumers are more and more aware that the GMO products are not good for the
body, are not good for all of us, so the company is putting more emphasis, as you well said, in plant-based
products, also ingredients that are not including GMO ingredients. The company is investing, for example, in
initiatives or food technologies that can help. As an example, in Argentina and Brazil, to use pesticides in the
farms, pesticides that are 100% organic, that are created out of very natural products, I dare to say, and I
apologise if it’s not a technical term, but out of some bacteria, they are generating the ultimate ways of
producing pesticides that are 100% natural, organic. They are testing already these, and if the test is going
well, they are acquiring these companies. These are 100%, I would say, Argentinian or Brazilian companies,
start-ups, very small, but the start-ups are being brought up or scaled up by start-ups that are dealing only
with agricultural services since years. The company knows that the consumer wants that, hence the food
producer wants to use these types of ingredients, the non-GMO.
The European Union is also very reluctant to allow products that are GMO, hence the company is already
working on how to look for those, how to make, ideally, in a dream world maybe, all the products non-GMO,
and they are finding the ways, definitely. The expertise is in-house. The R&D centres of the company are also
growing, and they are not only focusing on the quality of the ingredients, the quality of the soy that is being
bought, etc. They are also very connected to the farmer, trying to understand their needs and trying to
understand how to help, again, (audio distorts 47.51) those GMO products and getting these, let’s say, non-
GMO products or pesticides or other products that they put into the land to produce the best ingredients.
Definitely, now, the company is more open to listening to the consumer, to understand what the consumer
wants. As you said, a consumer wants 100% natural ingredients, low-fat, non-GMO, vitamins, minerals, and
less chemicals. If we go one step farther, it’s companies that are producing those ingredients with renewable
energy in the plants, but it will take a long time to have that. Hopefully, everything will tend to be
environmentally friendly, human-friendly, wellness-friendly, etc. It’s a bit of the vision that I have.
[00:49:00]
Q: How sustainable do you think ADM’s growth from the plant-based side is? How saturated do you think the
market is, given this rise in start-ups from different types of alternative proteins? Fungi, for example, and you
have a few lab-grown experiments that don’t need plant-based. Could you discuss the impact that might have
on future growth, if the industry suddenly shifts from a plant-based-centric focus to more of a lab-grown fungi
or other types of alternative protein?
RG: I think definitely the growth will be there for the plant-based. If we stand today, 2021, I am 100% sure
that, 2022 or 2023, there will be these fungi-based, I take another example. In aquaculture, now there are
companies in Norway that are expanding towards the US that are producing in-vitro fertilisation with certain
fish. An example of that is the Yellowtail fish. It’s an example of a huge investment behind it, of a company
that is already producing bacteria-free, virus-free, 100% naturally grown in-house. It’s not a plant-based
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product but it’s healthy, it’s there in the market, people love it, the taste is amazing. I think the plant-based is
just another pillar of, I would say, the human nutrition, but the aquaculture is accelerating very fast, and there
will be more. Like you said, the fungi-based ingredients.
I’ve been talking and advising a start-up that is producing out of soybeans. They are producing a technology to
convert the soybeans, process them, and that becomes milk out of soybeans. While that is kind of plant-based,
I think there are more and more and more technologies taking living things and producing ingredients or
finished goods with those. I think we will get surprises every year of the trends and how the trends are
changing, so I don’t know whether 100% plant-based nutrition will be the best. At least now there is a big
consultation with medical doctors. There are even medical doctors working in the companies, like in ADM, to
understand what’s the best nutrition for humans. Likewise, veterinarians are being brought in to house to
understand the best nutrition for the pets, and for the rest of the animals, as well.
[00:52:44]
NH: Thank you, Ronaldo. We’re just about out of time, but let me just close by saying thank you for your time
today. We were able to get really in-depth about the nutrition, and I think it’s a very interesting area. Thank
you, clients, for joining Third Bridge Forum’s Interview today. If you wish to speak with our specialist in a
private call or meeting then please let your relationship manager know. Have a good one.
RG: Thank you so much.
Transcription ends at 00:53:00 of the recorded material.
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