ADM looks to set competitive standard in industry

by Eric Schroeder
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ADM silo
ADM will continue to look for ways to probe the business so that it can continue to evolve.
 

NEW YORK — Different companies have different strategies when it comes to building capabilities. At Archer Daniels Midland Co., the goal is to push the company’s businesses “to set the competitive standard in the industry,” said Juan Luciano, chairman, chief executive officer and president of the Chicago-based company.

Juan Luciano, ADM
Juan Luciano, chairman, c.e.o. and president of ADM

“I want to have the best grain business in the world,” Mr. Luciano told participants at the BMO Capital Markets Farm to Market Conference held May 17 in New York. “I want the processing guys to have the best processing business. And I want to be the best ingredient business in the world. So we continue to drive that, and we feel very comfortable that we know those. We have the capabilities to manage those. I think the capability that we’re trying to get into the company is, ‘How do we continue to align people to key activities, all the activities that have the most impact?’”

Mr. Luciano explained that while it’s easy to keep people busy, it’s difficult to get people to work toward the top three things that make the most impact for a company. He said ADM has tried to address this challenge by establishing a feeling of a small organization, one in which all employees feel comfortable talking to top level executives while fully understanding the company’s strategy.

He also indicated that ADM will continue to look for ways to probe the business so that it can continue to evolve. As examples, he mentioned the success ADM has had integrating Wild Flavors as well as the recent acquisition of Biopolis.

ADM WILD Flavors
ADM has had success integrating Wild Flavors.
 

“Biopolis is a tiny thing, but it’s a gem,” he said. “We bought Biopolis in Valencia. This is for the trend of personalized nutrition. We both drink Coke. You’re going to react different to the Coke than I would react because of your biome. And we want to be able to tailor some of those ingredients that we have to help people to deal with some of their metabolic issues, and this is a very important element. So for me, flavor is a platform, and it allows us to do many things. Microbial capabilities are another platform. They’re going to take the company into other places.”

Mr. Luciano stressed that ADM is going to remain a grain company and is still going to run an integrated value chain, but it will do so with an eye toward the next 50 years.

“In the (next) 50 years, there are a lot of things that our customers shift to, our consumers shift to, and we need to protect that relevancy, and we need to be there with our customers,” he said. “And as customers change, our customer base is probably the thing that has changed the most. There are people … that are important customers of our core ingredients that the only thing they have is a blog and followers from that blog. But all those people fanatically believe in those trends and buy those products, and we produce some of those products. And today, we have the capabilities. If you come to me and you say, we will like to … launch a beverage drink that is a breakfast, that has 20% caffeine, 20% or 15% protein, that is white and with flavor like vanilla, we can provide 100% of that, including the label. And that’s an aspect that … it’s important for some of our customers that we will continue to be a grain company.” 
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