technical developments for a sustainable meat industry the

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Technical Developments for a Sustainable Meat Industry The New Economic RealityScott J. Eilert, Ph.D.Cargill10/27/09

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New economic reality requires new thoughts..Commercialization

Collaboration

Food Safety

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Opening Thought

“If you build it,he will come”

Quote taken from the American Movie, “A Field of Dreams”

Some things work well in the movies……not so much for us today

We are going to focus on having the strategy for success (why and how people will come) before we “build it”

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Commercialization

• Technology>>>Innovation>>>$$$$– Speed and success rate have never been more critical– Previous downturns: change in priority

• New Economic Reality: Risk Management– Cannot afford to be risk averse: MUST STILL ENABLE GROWTH– Cannot afford to be risk naïve: MUST UNDERSTAND ALL RISK AND

MITIGATE APPROPRIATELY

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Type of Commercialization Risk

Interdependence

Initiative

Integration

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Michelin Develops Greatest Tire Innovation in Last 50 Years!!!!

Technology Sparsely ImplementedTaken from Review by Adner, 2006; Originally from Martin, 1984.

EMI Wins Nobel Prize!!!!!

Fails to Profit from CommercializationTaken from Review by Teece, 2009; Originally from Martin, 1984.

IBM Invents No New Technology

Commercialization Success Sets Standard for Computing Industry

Taken from Review by Teece, 2009; Originally from Gens and Christiansen, 1983

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Collaboration: Requirements

Two requirements for successful collaboration:

--One party willing to prevent someone else from failing

--One party willing to accept assistance without ego

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Innovation Is A Pillar of Our Strategic IntentStrategic Intent 2015 identified Innovation as an important areaof attention for Cargill’s continued success

2015 Strategy Statement

By 2015, Cargill will be the partner of choice, recognized as having

great people with imagination committed to delivering the best

ideas to the worlds we serve: Agriculture, food and risk

management

Innovation is converting knowledge and insight into new products and servicesthat create distinctive value and profitable growth for our customers

Cargill Innovation Definition:

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Churning vs. Rowing

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Innovation Partnerships

Old Economy• Moving project through

team• Expensive Candor• Internal Sourcing, closed

innovation• IP discussion at end of

project

New Economy• Moving team through

project• Lowered price of candor• External Sourcing, open

innovation• IP discussion at beginning

of project

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The successful innovation partnership with a is one where it is difficult to see the line between Cargill and its partner.

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Transformational Innovation is often linked to strong collaboration

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Partnership in the new economy

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Move from:

“The lab is my world”

to

“The world is my lab”

Peter Erickson, Sr. VP, Innovation, Technology, QualityGeneral Mills

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Partnerships yielding transformation….

• Precept Joint Venture– Hormel and Cargill

• Driven by key customer needs

– Branded case ready beef

• Enabled transformational change

– Approval of low oxygen packaging

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Partnerships yielding transformation….

• September 1, 2009: Augmented USDA Grading

– Required collaboration:• Competitors• Trade associations• Government• Technology providers• Academia

• Impossible to make this change without effective partnership

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Opportunities for Improvement• Academia and Industry

– Alignment of instruction– Focus on talent development– Industry/Academic collaboration on research priorities

• Government and Industry– Should not be adversarial– Example: Cargill Training of Thailand Government officials for H5N1

detection• Trade Associations

– Limited funding focused on common goals– Need to move to more coordinated approach to shared opportunities

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Cargill PowerPoint Presentation Title Cargill Confidential. Do not distribute without permission from Corporate affairs. Sept. 28, 2009

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Food Safety: New Reality

Old Reality• Illnesses largely unlinked

to source• Test to comply• Regulatory environment

limited to establishment• One size fits all approach

• Consumer has ultimate role—”cook it properly”

New Reality• Majority of illnesses will be

traced to source• Test to find• Inclusive consideration of

risks, beyond the Est. #• Product risk determines

inspection rigor• Consumer has a role, but

not as a CCP

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Food Safety: New Reality

• Elimination is impossible: zero risk is not achieveable– Ubiquitous– Soil borne– Raw commodities

• Mentality MUST CHANGE: We must pursue zero risk as IF IT IS ACHIEVEABLE

• Transformational reduction of risk is possible– High Pressure Pasteurization– Carcass Irradiation– Product Irradiation

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Closing Thought…

"Why didn't we develop this product 10 years earlier? Because we knew it was impossible. We knew it from experience and from looking at competitor products.

What changed in the 10 years for us to develop it? We changed our mindset. The people who worked on the project didn't know it couldn't be done. They just knew we had to find a way to make this product work. Failure was not an option.”

When you believe something is impossible you focus on the barriers. When you believe it's possible you focus on finding solutions."

– Scott Woodward, Ph.D. September 30, 2009

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Questions and Comments!!!!!!!!!

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THANK YOU

OBRIGADO

MERCI

DANKE

GRACIAS

ARIGATO