March 21, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

As one of the world’s largest agri-commodities merchants, Louis Dreyfus Company (LDC) has stood the test of time throughout its nearly 170-year history. The global trader’s activities span the entire value chain across a range of platforms including Grain & Oilseeds, Coffee, Cotton, Juice, Rice, Sugar, Freight, Carbon Solutions, and Global Markets. Employing approximately 17,000 people around the globe, and active in over 100 countries, LDC feeds and clothes some 500 million people every year by processing and transporting approximately 80 million tons of products.

The ongoing pandemic has put an enormous spotlight on food, agriculture, and critical challenges in the global supply chain. Together with shifts in consumer priorities and concerns, LDC began to pivot away from its traditional role as an agricultural commodities merchant toward greater vertical integration and focus on the trends and shifts occurring within the full value chain.

Growing concerns regarding health, the environment, animal welfare, and the spread of zoonotic diseases have been drivers behind strong growth in plant-based alternatives to animal proteins. The Plant Based Foods Association stated that plant-based food sales were up by 27 percent in 2020, to surpass $7 billion – reflecting a consistent growth of more than 25 percent in every U.S. census region. That same year, 57 percent of all U.S. households (71 million households) purchased plant-based foods, up from 53 percent in 2019.

And it does not look like this growth is showing any signs of slowing, according to the report, Plant-Based Foods Poised for Explosive Growth released by Bloomberg Intelligence in October 2021, which concluded that the plant-based food market will exceed a value of $162 billion within the next decade. 

To meet these protein demands with sustainable and affordable products that have beneficial nutritional profiles and great taste, food companies are rapidly innovating. 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. This includes LDC, which just announced the creation of a new Plant Proteins business and the inauguration of a new R&D facility dedicated to the sector in the San Francisco Bay area. 

“As part of our strategic growth plans to move further downstream and diversify revenue through more value-added products, we see an opportunity to participate in the rapidly-growing plant-based foods market through plant protein extraction and food & beverage application formulation, leveraging our existing origination and industrial capabilities,” said Michael Gelchie, CEO, LDC.

Having hired a dedicated team of business developers, researchers, and engineers in 2021, the new business plans focus on the North American market with the release of a line of non-GMO plant protein isolates by the end of this year, according to Thomas Couteaudier, chief strategy officer, LDC.

“LDC’s Plant Proteins business aspires to be the partner of choice for food companies and innovative brands who wish to incorporate more sustainable proteins in their products,” noted Couteaudier. “We will enter the market with a first range of non-GMO plant protein isolates by the end of 2022, with an initial focus on North America, aiming ultimately to offer global customers a multipurpose portfolio of products and application solutions.”

The launch of this new initiative seems like the next logical move, following LDC’s official launch of LDC Innovations in mid-2020 –  a corporate venture capital unit tasked with investing in food and farming companies as part of its strategic plan to cement its position as a key player in global value chains. 

Commenting on the launch of LDC Innovations, Ian McIntosh, CEO of Louis Dreyfus, said in June 2020, “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.”

Supervising this team of experts at the San Francisco facility will be Dr. Manoj Kumar, vice president for plant proteins, LDC.

“The facility inaugurated today is a critical foundation for the new business, supporting its R&D and commercial program,” said Dr. Kumar. “It will serve as a laboratory and pilot plant to develop products, validate their technical and commercial value, and build know-how for future applications.”

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– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.