Key note speaker Anco Sneep in Mexico
Anco Sneep was invited as key note speaker on the annual conference of AMHPAC, the Mexican association of horticulurists. His speech focused on the case of Mexican horticulture from a strategic managerial perspective. Anco represented Berenschot Group, the company he is professionally associated with.
From Charles Darwin we know that it is not the strongest that survives, but the fittest, that is the one that adapts best to his environment. This knowledge became fashionable in social sciences some decades ago, starting off strategic managerial thinking. Strategy in this respect comprises all policies, plans and/or tactics according to which you work to survive.
Applying this to the agrofood industry world wide we can distinguish the following trends:
- Food demand exceeding food supply
- Water demand exceeding water supply
- Higher demands form retail or consumers
- More emphasis on food safety, & tracking and tracing
- More focus on food & health or obesity
- Biological production
- Increasing technological applications
- Social media
More and more, today’s consumers want to know what kind of footprint is being left behind by the producers from whom they buy their products. So, as a producers you have to be open and fair about this to build trust towards the consumers that buy your products.
From these worldwide trends in agrofood we can derive the following opportunities:
- With 9 billion people in 2050, the market will grow worldwide
- Market segments will provide lots of unmet demand for probably all segments
- There will be room for quality & innovation
- Biological production will be one of the segments
- Sustainability will be a necessity
Taking these opportunities, business value can be created, basically, either by cutting costs through large scale production or value adding activities, such as unique quality, extra services (packaging, etc.). By partnershipping in the production chain or further integration (horizontal or vertical), this business value even can be boosted (larger scale, co-creation, etc.).
Following these basic notions on business value, three fundamental managerial strategies can be distinguished:
1. Operational Excellence: going for maximal efficiency, relatively high quality and low prices
2. Product leadership: priority on adding value, highest product quality, innovation and new products
3. Customer intimiacy: filling in customer demands in the best way, going for total solutions, being the most reliable supplier for the long term.
Specifically for the Mexican horticulture producers these managerial strategies highly apply, taking into account the counrty’s Strengths, Weaknesses, Opportunities & Threats ( SWOT) on horticulture.
- Growing demand domestic market & export market (retail)
- Increasing market for quality domestic & export (U.S.)
- Technology applications (producers & consumers)
- Social & environmental awareness consumers
- Water availability
- Crop diseases
- Food safety incidents (.e.g. salmonella / papaya’s)
- Geographical position
- Natural resources: soil, climate
- Comparative advantage transportation costs (US)
- Economic growth
- Need for more specialized & general labor
- Need for more technology
It is essential to choose a strategy and stick to it, trying to become the best in your strategy, working together, in associations for example, where possible. More technology can be used, developing towards a more protected horticulture production. Diversification of crops would be wise, for example vegetables, cut flowers (export) or pot plants (retail). Also a lot of unmet demand can be filled both in the domestic market as in export.. Doing so, will make the Mexican horticulture less dependant on existing crops. It will open the gate to a bright and prosperous future!