June 18, 2020

By Lynda Kiernan, Global AgInvesting Media

Louis Dreyfus Company has officially launched LDC Innovations, a corporate venture capital unit tasked with investing in food and farming companies as part of its strategic plan to cement a position as a key player in global value chains. 

“This program is another positive step in our strategic growth plans, as part of which we are investing in innovations and technologies that can help meet increasing global demand for healthy, nutritious products that are responsibly sourced and produced,” said Ian McIntosh, CEO, Louis Dreyfus.

“Over the coming months, we will invest in early-stage companies with the potential to transform the food and agriculture industries,” continued McIntosh. “Most importantly, we will support businesses which share our vision for a safe and sustainable future through transparent supply chains, responsible sourcing and long-term value creation.”

The venture platform, which has not yet disclosed financial details, will be led by Max Clegg as head of LDC Innovations, which itself will be integrated into Louis Dreyfus’ Innovation and Downstream division.

Likewise, Thomas Couteaudier, the company’s current head of South & Southeast Asia Region, will also serve as the new head of  Louis Dreyfus’ Innovation and Downstream division. 

“Max brings significant experience to the program, and will play a key role in building long term, productive relationships with companies in the LDC Innovations portfolio,” said Couteaudier.

Years of global bumper harvests, increasingly competitive and volatile markets, investor pressure, an ongoing trade war with China, and now COVID-19 have made market conditions increasingly difficult for the ABCDs: Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus.

Each of the legacy ABCD global traders, as well as other major global companies, have undertaken reviews and re-examinations of their business models, reorganizations, and a shifting of their focus into more downstream or higher margin categories and activities as a means of staying relevant and afloat. 

Founded in 1851, Louis Dreyfus has grown to command an enormous presence in the global agricultural value chain, from farm to fork.

The company is structured as a matrix organization of six geographical regions and eight platforms including Grains & Oilseeds, Coffee, Cotton, Juice, Rice, Sugar, Freight and Global Markets. Active in more than 100 countries and employing 18,000 people, every year Louis Dreyfus transports approximately 80 tons of products to feed and clothe 500 million people.

However, although impressive, it is often the scale and scope of these global giants that inhibit their ability to react with agility in the face of rapidly changing global markets and consumer sentiments.

For Louis Dreyfus, one of the ways in which the company addressed these headwinds was to create the position of head of Innovation and Downstream Strategy effective January 1, 2019. 

Another was a push by the company’s leadership at the end of 2019, just prior to the spread of COVID-19, to endeavor to cut costs and reorganize, according to an internal memo.

The memo, which was signed by five of the company’s top executives including its COO and CFO, stated, “The aim is to become a stronger organization, with greater empowerment and accountability, structural simplification, the right levels of service and costs,” adding, “Our strategy does not change.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.