[SINGAPORE] In agribusiness where volatility stays, food giant Cargill is responding to its customers’ evolving needs with flexibility and innovation.
“We are fortunate as Cargill… to have the flexibility to work across different value chains,” John Fering, the company’s group president of food Asia-Pacific (Apac), told The Business Times.
One example is Cargill’s innovation in cocoa butter-equivalent products. They are palm oil based but maintain the same taste profiles, providing more affordable substitution options for food and beverage (F&B) brands tackling rising cocoa costs. Cocoa prices surged more than 170 per cent last year amid supply risks.
“It is sometimes very difficult to predict the future in (commodity) markets. What we do is making sure that we have got the asset network, the systems and teams, to have that agility to respond to customers, regardless of the environment,” said Fering.
He added that volatility in the cocoa market, specifically its supply tightness, is going to stay given the long crop cycle. “We are seeing a lot of shifts to cocoa butter-equivalent replacers using more palm based products… as a more effective price point.”
Besides innovation, the conglomerate also leverages its global footprint and extensive assets, from soy crushers to palm processing facilities, to provide supply chain resilience amid ingredients’ supply crunch. This includes its cacao farms in Indonesia as an alternative source to manage the bean shortage in Africa.
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“We talk about the ‘for Asia from Asia’ capability, which is in innovation, but also in supply chain resilience,” noted Fering.
Cargill, as America’s biggest private company, has longstanding partnerships with global brands such as Nestle and McDonald’s. It has also seen more regional players come onboard, including Indonesia’s F&B brand Garudafood, as well as Australian biscuit and snack food company Arnott’s.
“This is part of our strategy. We want to serve beyond our conventional core of international brands, to help our regional players grow and succeed as well,” added Fering, adding that Apac is the fastest-growing market for the company.
On Thursday (Apr 10), Cargill unveiled its transformed Innovation Centre in Singapore, which was launched in 2019, supported by the Singapore Economic Development Board (EDB) and Enterprise Singapore.
EDB’s vice-president and head of environmental sustainability and agri-food Michelle Tan highlighted that the initiatives reinforce Singapore’s position as a hub for food innovation.
She said: “We welcome more like-minded companies to tap Singapore’s research and development ecosystem and our understanding of the Asian market, to develop new solutions that meet the evolving consumer needs of the region.”
