AGIC 3 August 2017

KFC Case StudyLinking Consumers to the Farm

Charlie Aldersey

CanolaOilValueProposition

PRICE

FUNCTIONALITY

HEALTH

SUSTAINABILITY

TheEvolutionofSustainability

• Beingagoodcorporatecitizen

• Accountingandreportingframeworkthatreportsonanorganisationsprogressalong3lines:

• Economicprosperity• Environmentalprosperity• Socialjustice

*TriplebottomlinePeople,Profit,Planet

TheEvolutionofSustainability

• UmbrellaConcept

• Economicprosperity• Environmentalquality• Socialjustice• Businessethics• Governance• Employeehealth&safety• Diversity• Philanthropy• Traceability&Provenance

BenefittedbydirectfarmmodelBenefittedbydirectfarmmodel

Benefittedbydirectfarmmodel

Benefittedbydirectfarmmodel

Benefittedbydirectfarmmodel

LinkingtheFarmertotheConsumerContractingProcess– HighOleicCanolaOil

Orderandpurchaseseedfromlocalstore

CompleteMonola®Grower

Agreement

Growcropandentertonnagecontract(s)with

MSM

Harvestanddeliver.Storein

systemoronfarm

Payment14daysweekendweek

LinkingtheFarmertotheConsumerPricingMechanismExample– HighOleicCanolaOil

Deliver Manildra

Track Price (eg) $540.00 per mt

Minus GTA freight -$35.50 per mt

Plus premium $85.00 per mt

Delivered Manildra Segregation $589.50 per mt

UniqueFunctionalPropertiesHighOleicCanolaOil

UniqueFunctionalProperties

FARMER

LinkingtheFarmertotheConsumer

STORAGE

DC

PADDOCK

SEEDPROCESSINGPACKINGCUSTOMER

LinkingtheFarmertotheConsumer

KFC– PromotingSustainableSourcing

• Website:• “Westrivetosourcelocalproduce,wherepossible.Around85%ofallouringredientsaresourcedfromwithinAustralia”

• Packaging/Labelling:

KFC– Promotingsustainablesourcing

SharedBenefitsAlongSupplyChain

• FARMERS• Reliable,ongoingdemandbase• Premiumpaidoverpurecommodityprices• Greaterabilitytocontractforward• Leveragesofffarmerssustainabilityand‘goodpractice’credentials• Visibilityofendusermarket

• PROCESSOR• Providesnicheservicebybeinglinkbetweenfarmerandenduser• Workseffectivelyforspecialtyproductswhichareless‘commoditized’• Leveragesoffprocessorssustainability,qualityandtraceabilitycredentials

SharedBenefitsAlongSupplyChain

• ENDUSER• Ensuresatraceablesupplybackthefarm• Enhancessustainabilitycredentials• Leveragesoff:

• Australiangrown,madeandsourced• Clean&greenimage• Ensuresanefficientandthereforesustainablesupplychain• Onecontactwithtotalcontroloversupplychain

• Providesbrandandmarketingvalue

Thankyou