Dive Summary:

• In a survey of 350 food industry executives, Rabobank found that the number one concern in both the food and agribusiness industries was climate change and weather volatility, coming in at 68%.
• This came as a surprise to many who believed, and still do, that consumer demand should be the biggest concern, however it ranked second at 13% with government policies in third at 10%.
• Other responses were slightly less dramatic, concluding that China was the most important emerging market, followed by India and Africa.

From the article:

While many of Food Product Design readers are focused on product development issues ,they know that wider-ranging topics can affect not just formulation, processing and product development but the food and beverage industry as a whole. That’s why a recent survey provided some interesting insight into the future of the industry.

Food and agribusiness bank, Rabobank, conducted a poll of over 350 executives from “leading companies" in the North American food, beverage and agribusiness industry at its Markets Forum held in New York City. The most important issue? The changing weather patterns and its effect on crops. The most important global economic influence? China.

When attendees at the Rabobank forum were asked to name the single biggest factor affecting North American food and agribusiness in 2013, 68% said weather extremes and/or volatility. In this end of the business, we commonly think of consumer demand as the driving force, but only 13% of the execs said that was their biggest concern, followed up by 10% who were most concerned about government policy and regulation.

China came out on top (61%) when asked to name the country or region that will have the greatest impact on global agricultural commodity demand over the next 10 years. That greatly outnumbered any other area including , India (14%) or Africa (10%). What’s more, 41% believed China would drive the global economy for between five and 10 more years, while 40% said China will remain a growth engine for 50 years. Bill Cordingley , Head of Food & Agribusiness Research and Advisory for Rabobank in the Americas, said, “These results are not surprising and reflect the significant impact that China has had on the food and agribusiness industry over the past 10 years, globally as well as in North America. China today has the second largest middle class in the world at 157 million, which will surpass the U.S.'s middle class in the next ten years, so China's demand for agricultural commodities is going to continue to grow."

With lean finely textured beef (LFTB) and Starbuck’s cochineal use as issues in the past year, Rabobank asked how social media is causing the food and ag executives to adopt different business approaches. Just over half (51%) said that the growing influence of social media is changing the way they handle brand and reputation management and business communications and 9% said it is affecting how they handle vendor/customer/supply chain management. However, 37% indicated they are not changing the way they do business in light of the rise of social media.

More than 90% expect U.S. corn yields to exceed 170 bushels per acre by 2025, partly as a result of the use of GMO crops. Given the continuing issue of GMO labeling and a vocal anti-GMO segment, they were asked about the factors that would most encourage increased global uptake of GMO technology in agriculture over the next decade. High commodity prices were the choice of, 56% of respondents but others (34%) believed that greater consumer acceptance will be key to higher adoption. Only 7 % said they believe global GMO uptake will slow.

Several additional questions were asked, but these are the questions—and answers—that will shape the food industry and, with it, product development for 2013 and beyond. Whether it’s alternate ingredient sources to bypass the GMO controversy, formulation cost-cutting, new technology and more efficient processing to battle higher ingredient prices and tight supplies, changing products for the Chinese market or better communication with consumers about the risks and benefits of ingredients and technology, these issues don’t just affect the business—they affect the bench. And savvy product developers always keep an eye on the business.