ADM’s Luciano talks COVID’s impact on global food supply chain
The coronavirus pandemic has forced companies worldwide to recalibrate on the fly—with those in supply-chain-sensitive sectors especially feeling the virus’s disruptive impact.
As one of the largest food and agricultural processing corporations, Archer Daniels Midland—also known as ADM—has experienced these dynamics firsthand, chairman and CEO Juan R. Luciano said during this year’s virtual edition of the Fortune Global Forum on Monday.
But as Luciano noted, the Chicago-based company can rely on more than a century’s worth of experience to know that such issues are part and parcel of doing business in an unpredictable, evolving world—and that it must be prepared to manage such hurdles accordingly.
“Most people take for granted that food will show up,” Luciano told Fortune senior editor Beth Kowitt. “We can’t, and we have that responsibility. We have been doing that for 118 years.”
As Luciano put it, ADM regularly has to account for developments as varied as weather-related events and political regime changes—and a global pandemic, while far less common, is no exception. “That’s what our company does: It adjusts constantly,” he said. “That’s why we can be around for 118 years.”
Of course, the pandemic has offered a unique set of challenges for ADM to navigate. “There were a lot of realignments,” Luciano recalled of COVID-19’s initial impact this past spring, when huge swaths of the global economy were forced into lockdown. He noted how food supply demand “shifted so dramatically,” from food services operators, like restaurants and caterers, to retail outlets, like grocery stores.
But ADM was able to benefit from its position as a multinational operator—parlaying what it saw and learned from the virus’s earliest hot zones in Asia to inform its response once it spread to Europe and the Americas. “Because we’re a global company, we saw the [spread] of the virus from east to west,” Luciano said. “We already knew a lot of the things we had to do in Europe, given the experience in Asia.”
Looking to the future, Luciano talked of the potential that scientific developments in food and agriculture—partially spurred by heightened consumer demand for products that promote health and wellness—will have on ADM’s industry.
“It’s brought about an era of transformation in food and beverage,” he said, citing the emergence of plant-based proteins as a substitute for meat. He also talked up the “potential of microbial fermentation” as a transformative alternative to traditional means of agriculture that are more time- and cost-intensive.
“It takes about four hours for a microbe to double in size,” Luciano noted. “The potential of those technologies to increase the carrying capacity of our planet is immense, and I think it deserves much more research dollars.”