I had the chance to chat Nov. 9 with Jeff Simmons, president of Greenfield, Ind.-based Elanco. Read the entire chat online.
12:30 p.m. Tom Karst: You are giving a speech today titled “Making Safe, Affordable, and Abundant Food a Global Reality” at the National Association of Farm Broadcasters here in Kansas City. What’s the premise of the talk?
12:31 p.m. Jeff Simmons: Last week was a pretty good milestone to wake us up to the fact the seventh billion child was born. That really reiterates three numbers I continue to emphasize, which are 50, 100 and 70. By 2050 we need 100% more food; you can’t really debate that. Those are United Nations numbers. The third number is what people don’t talk about, and that’s an important one. If there is doubling of food, more than 70% is going to come from technology because we really have to freeze the carbon footprint. We only have 1% more land, that’s a fact. There is less water and more regulation. It is going to come down to doing more with less. We have done it before and we need to do it again. The real key to this big issue is the 70%, which is technology. (Technology) is defined in three categories. The first is practices, doing it better from on the farm, having perishable products in the supply chain having less waste. The second is better products and the third is genetics in plants and genetics in animals. All three of those are actually vital.
12:33 p.m. Karst: As you point out those issues, the one that gets a lot of attention is genetic modification of food. In your travels and listening to the pulse of the policy makers and consumers, where do you think we are in terms of consumer acceptance of genetically modified foods?
12:35 p.m. Simmons: We travel the 75 countries we do business in and you look at this issue and this is serious. People want affordable food, the world needs more food and if technology is the answer, do consumers really want technology? What this paper did was look at, with independent economists, with consumer experts helping us and I’ve always open to say, debate it, look at the references. What it did was look at a decade’s work of research with really two of the most objective criteria. Unaided question; you can test this in your own home. An unaided question is something like “What is important to you when you buy vegetables? The second criteria is give me your Safeway card and let’s where do you spend your money. then, with unaided questions, a decade’s worth of research, with 28 countries and 26 studies, what came back? A 100,000 consumers; the vast majority 95% were food buyers. We couldn’t name them anything else. They want taste, affordability and nutrition. And there was a luxury segment. The luxury segment gets a lot of noise and they say money is less of an issue. They are not mutually exclusive, these food buyers and the luxury segment; they go back and forth depending on categories. A new mom may look differently on milk. I myself look differently on coffee; money means less on coffee for me. That luxury segment, the gourmet movement, the organic movement; it is still a very small percent. What you do when you step back and ask your question, guess what 99% of the world wants? From Singapore, sub Sahara Africa to Des Moines Iowa - they want taste, cost, nutrition and depending on the category, some choice. And we have a tendency to get a lot of noise and a lot of news from a fringe that represents a maximum of 1% or less of the group trying to turn their choice to everybody else’s choice and that’s where I believe that 7 billion people are at risk. And that’s where I think we need to be very careful and not allow that to be stated as what everybody wants. This is independent research, it is as clear as possible; many studies done different ways and different geographies came back with 95-4, 99 percent people want those things.
12:38 p.m. Karst: You talk about the interest in organic, local food, as being a small slice of the total. Do you feel like percentage of “lifestyle” consumers is growing and if it is growing, what implications does it have for agriculture?
12:39 p.m. Simmons: Globally, organic is 1.3% of global food purchases. Here in the United States, more affluent it may be closer to 3%. They are predicting in 2014 that (globally) it will grow from 1.3% to 1.4%. In the U.S., it was forecast to grow from 3% to 4%. It may be a category leader, it may be something that draws people in the stores, but as a whole we need to be extremely careful that we don’t react in building global food chains, or more importantly, food policy around a very niche, gourmet, luxury sector. That is very important, given the dynamics of what is happening in the world. Let’s bring the environmental piece in. I talk about technology enables three rights; it enables more affordable food, more food overall. Two, technology enables choice to the consumer and I think we really need to do a better job saying “Allow more choices.” That was a conversation at the Grocery Manufacturing Association meeting this year, because choice is critical. The third right is sustainability. We cannot leave that out. The World Wildlife Fund says we must freeze our carbon footprint. We can no longer use any more resources, and we need more food The only way to do that is do it differently, continue to do it with technology and that allows us to continue to do what U.S. agriculture has done the last 60 years, is more food on the same resources.
12:42 p.m. Karst: You mentioned the GMA and supermarkets. How important are they and other buyers to the effort of communicating with consumers the benefits of food technology? What can they do to help the communication piece of that?
12:43 p.m. Simmons: I believe they are vital. We are in a very concentrated food chain today. A lot of leaders, like myself and leaders of retailers and policymakers on food, we need to engage, we need to be well-read, we need to look at the facts. We need to let the regulators do what the regulators are supposed to do, let the retailers do what the retailers are supposed to do and right across to the farmers to do what the farmers are supposed to do. We need to be well-read, and that’s the purpose of this paper. It is the purpose of this independent blog that I would highlight http://plentytothinkabout.org/. There plenty to think about, there is plenty to debate and discuss and blog about it and I think we need all opinions at the table. But we need to be careful and don’t make an absolute decision that represents maybe a minority voice, fringe voice. A fringe changes what sku you carry or whether or not you keep a product, or a state proposition that comes up like eggs in California that I highlight in the paper and a choice goes away for the wrong reason. That to me that is something we can no longer afford, considering the macroeconomics of our situation. You’ve got a major soup company that takes salt out and market share drops and they find to say they maybe should have let a small new choice in brand be established but don’t take salt out across the board. We need to be careful that we don’t things out immediately versus maybe offering, if it makes economic sense, a second choice.
12:46 p.m. Karst: Agriculture is kind of a generic terms. You’ve got a lot of different elements to it. You’ve got livestock, grains, specialty crops. Is everybody in the same play book in terms of what you are talking about? Do you think agriculture is pretty united in this perspective on food and technology? What more needs to be done in that regard?
12:47 p.m. Simmons: As a whole it is. I think that we may have different approaches and opinions, but as a whole I believe the global food chain is a lot further (ahead) than we were two years ago in understanding these facts. I believe the global recession has put a little bit more logic into the system to allow us to say we better be careful we don’t take immediate action on a minority luxury group. We need to make sure we stay competitive in cost and affordability. Look at the facts. I make this point. I spent four days of my vacation in one of the largest slums in Nairobi Kenya and one of my observations is that 25% of the world lives on a dollar per day. You add that to the total of 43%, 25% included, that lives on $2 per day. Then add that to the U.S. and western European statistics, with 16% of Americans at the poverty level and 24% are struggling to put food on the table. More people live with food as an issue - affordability, buying it, abundance of it, than those that don’t. It is absolutely vital we understand that.
12:49 p.m. Karst: You talk about this issue with a lot of passion. Yet I think sometimes modern agriculture, agribusiness and so on, doesn’t convey the same passion as maybe folks that embrace issues such as organics or sustainability, or so called fringe issues. When the consumer see the passion of those people, that’s pretty powerful. How can the industry convey the passion of some of these consumer groups have shown?
12:50 p.m. Simmons: I totally agree with you Tom, and I believe strongly that is why we are out here and flying to the East Coast at the end of this week and next week to major campuses talking to students. Our company is going to be at a couple dozen campuses across the globe talking to student to say it is very important we get more passionate. The facts from a consumer, environmental, economic and social and a science - all five corners of the debate - the facts line up to say this is real, this is significant. Technology is the answer, it does open these three rights I talk about. We need to deal with this. We need to be as passionate as the other fringe groups. We do need to make it personal. When we do that, given the facts and how significant this issue is - it is the biggest issue I believe of the century is this issue - then I believe we will start to see a balancing. We are starting to see that, we are seeing a lot more people speak up, but I think you hit something. We can learn from activists and need to become activists ourselves. We are representing the 99%.
12: 52 p.m. Karst: One other question. On the subject of free trade, the WTO process has been on the backburner, but as you look forward, how important is the expansion of free trade to help the world feed the hungry?
12:53 p.m. Simmons: I look for three avenues as far as access to technology. One of course is government, the FDA, EPA. Second is the retailer - let’s make sure we have the right policies in place on products to keep animals healthy to genetics, etc. The third is trade. Calories need to move to solve this problem, especially in the next 30 years. For calories to move, we need the WTO and Codex and import/export standards. All countries need this. We need clarity, we need science to drive it and then we can let the local country decide. We believe global trade standards are essential,and then let the local country decide. We believe global standards are essential. It takes the politics out of the science. so its essential.