French Field Crop players currently produce €18 billion in market value. However, these actors have the potential, if the right strategies are adopted, to achieve a 50% increase in added value, new research by Roland Berger shows. One of these winning strategies is the development of green chemistries. Whatever strategy the actors choose, they need to think, prioritise, decide and act quickly before competitors get too far ahead.
Roland Berger Strategy Consultants, in cooperation with Capitalmind, recently published a new report on global field crops, titled ‘Field Crops: global perspectives for French Companies in a volatile market’. In this report, the two consulting firms analyse the key features of the French Field Crops market and review strategic positioning options for actors in this market in light of global market considerations. The overall conclusion of the report: French Field Crops added value has the potential to increase by 50%.
France is the number one producer of wheat, corn, rapeseed, sunflower and sugar beet in Europe. France holds a strong position, as the country’s crops players are well-positioned in the context of worldwide growing demand for cereals. However, these crops players are increasingly facing market, product and supply chain issues, as well as strong international competition, from for instance China and the US.
In the report, the researchers indicate that while the French farmers currently produce €18 billion of Field Crops in market value, transformation would create 27% of added value, translating to an additional €7 billion. Of this additional €7 billion, more than a third would come from sugar beet alone. Added value from rapeseed would form a strong second.
The researchers go even further and suggest that the French Field Crops added value could even be increased by 50% and thereby reaching €10 billion. To realise this growth, €5 billion of additional added value is needed to compensate the €2 billion of subsidy reduction, international competition and additional regulations. The report lists several winning strategies that the French agri-business industrials could adopt to achieve this additional added value, including enhanced control of their value chain, adopting disruptive innovations, diversifying to resist the rising volatility, and expanding internationally.
One strategy is the development of green chemistry. Green chemistry aims at drastically reducing the environmental impact of chemistry and enables high profit production with low energy use and minimal waste generation. The consultants estimate that the development and adoption of green chemistries by French Field Crops producers could increase their added value by €2 billion. The development of these green chemistries is expected to increase significantly, with especially the Asia-Pacific, Western Europe and the US to invest in this strategy.
The research concludes with three recommendations for the French Field Crops actors. The first is to move and expand quickly before their competitors achieve advantages on prices and added value products. The second is to make choices and prioritise between where and how to consolidate, innovate, diversify and expand. The last recommendation is to act and to mobilise the entire organisation and rigorously stick to the winning strategy.