Understanding what is Agribusiness, and the 4 Best Agribusiness Examples

Agribusinesses are attracting considerable attention from investors as companies like ICL Group, Bunge, Archer Daniels Midland, and John Deere harness revolutionary technologies to transform the global farming and food production industries. Their bold approach to innovation, and relentless investment in R&D, is creating profitable new markets and making food security for the entire human race an achievable reality.

Agribusinesses are immensely important to the global economy and operate across the entire spectrum of farming, agronomy, food processing, and food distribution. Without agribusinesses, our sophisticated modern societies would immediately suffer. At the very least, we’d see huge rises in food prices, a reduction in consumer choices, and a dangerously reduced ability to adapt to the effects of climate change.

This article will give a broad overview of the agribusiness sector, the new technologies that are driving innovation, and the products and services that are making a practical difference to billions of lives. We’ll also feature four leading companies that are some of the best agribusiness examples for investors who want to explore this exciting - and potentially profitable - sector.

What is an Agribusiness?

There’s no standard definition of exactly what is an agribusiness, but for investor purposes, an agribusiness is any company that operates, or provides products and services, in certain key sectors that cover the “field to fork” journey of everything that we eat or drink.

• Production
• Processing
• Distribution
• Marketing

The farm to fork process covers a vast spectrum of economic activity that includes everything from the manufacture of farm vehicles and machinery, fertilizers and biostimulants, biocides and pesticides, apps and software platforms that connect farmers to big data, chemical products to extend the shelf life of citrus fruits, and phosphate products to improve the taste and texture of alternative proteins.

The full list of products and services is almost endless and, thanks to high tech research and development, and the application of technologies (such as big data, robotics, and the Internet of Things) from other sectors, is constantly growing.

Agribusiness 2024

• Agricultural Production: Fields, Plantations, Urban Farms, and Smallholdings
• Agricultural Inputs: Seeds and Seedlings
• Food Processing: Grain Milling, Fruit & Vegetable and Meat Processing.
• Distribution, Marketing, and Supply Chain Optimization
• Support Services: Agricultural Finance and Insurance
• Field Trials and Testing
• Regulatory and Policy Compliance

Understanding the Importance of Agribusiness

The origins of farming are lost deep in prehistory, but a convenient ballpark figure for the first major development of agriculture is around 10,000 BCE. Twelve thousand years later, our harvests are still vulnerable to climate fluctuation and extreme weather events, as well as to pests and predation, disease, soil exhaustion, desertification, and disruption to supply chains.

Agribusinesses are innovating to shift the odds in the favor of food producers (and ultimately consumers) by giving them the tools to improve crop health, increase yields, and reduce loss and wastage. Crucially, agribusinesses enable adaptation, whether it's through improved seeds, or data-driven solutions that facilitate new crops and experimental planting strategies. Agribusinesses are also driving the development of alternative vegetable-based proteins, hybrid meats, and new superfoods.

In recent years, the commodities and cost of living crises, major droughts, regional wars, and the COVID-19 lockdowns drove up the price of food and exposed weaknesses in supply and distribution chains. Our complacent Western societies, that had taken a superabundance of food for granted, suddenly focused on the (highly interconnected) concepts of food security and sustainability. Agribusinesses are providing the technological solutions to both these urgent requirements.

4 of the Best Agribusiness Examples

1. ICL Group

ICL (NYSE: ICL) (TASE: ICL) is a leading global specialty minerals company and one of the largest fertilizer manufacturers in the world. The company is a leading innovator in the agribusiness sector with a particular interest in plant-based meat alternatives, operating a 10,000 square foot alternative protein production facility in Missouri.

ICL also promotes agribusiness innovation through its Planet Startup Hub, a multi-tier Foodtech and Agtech accelerator for startups. In 2021, ICL acquired the Brazilian Compass Minerals América do Sul S.A. for a reported $420 million. The acquisition included the company’s South American Plant Nutrition business, giving ICL a strong presence in the lucrative South American agricultural market.

ICL’s digital portfolio includes both Agmatix and Growers whose platforms are taking field-level agriculture into the digital age. The company also markets its own range of advanced Bioz biostimulants. ICL is a major company with a global presence and reach. The group is making a significant contribution to the agribusiness sector and is a great starting point for investors who want to learn more about how successful international agribusinesses function.

2. Bunge Global SA

Bunge (NYSE: BG) is an excellent example of a diversified agribusiness that operates in multiple agronomical sectors. The company is possibly best known as a soybean exporter, but it also sells fertilizer, is a major food processor and grain trader, and runs profitable food oil, sugar, and ethanol production businesses.

Bunge is a truly global company with a presence in over 40 countries. Its operational headquarters is situated in the US, but Bunge is legally domiciled in Switzerland and can trace its origins to Amsterdam where it was founded in 1818 as an agricultural trading house.

Although Bunge hasn’t traditionally been a major innovator, it is increasingly focusing on food science (particularly advanced plant proteins and lecithins) as well as biofuel technologies. The bulk of Bunge’s agribusiness is still based around key food commodities and staples and it invests heavily in the development of sustainable solutions and the optimization of transport, logistics, and supply chains.

3. Archer Daniels Midland

Archer-Daniels-Midland (NYSE: ADM) is an example of an agribusiness giant that has continually adapted and diversified during its 122 year history. The company produces oils and meals from a range of core agricultural commodities sourced from around the world. ADM supplies food products for both human and animal (including pet) consumption and manufactures a variety of specialist ingredients for food production.

ADM products depend on the company’s continued investment in research and development and its ability to identify and integrate new technologies. ADM Ventures builds strategic partnerships with new startups and founders across the agribusiness spectrum. The company is also active in promoting sustainability - one of the cornerstones of modern agribusiness - through investment in habitat protection and regenerative agriculture.

From a straightforward investment perspective, ADM is one of the largest companies in the world by revenue, bringing in $102 billion in 2022. It has an enviable track record of having paid dividends for 91 consecutive years and has raised its dividend every year for 50 years.

4. John Deere

John Deere (NYSE: DE) is a truly iconic American brand and a massive global company with over a dozen subsidiaries. John Deere is primarily a vehicle manufacturer, serving the agricultural, forestry, and construction industries, as well as a small number of additional specialist sectors. John Deere’s range of agricultural vehicles covers almost every aspect of farming and food production, from basic tractors to seed drills, field sprayers, and cotton pickers.

John Deere was founded 187 years ago and prospered through its commitment to quality and ability to make new technologies affordable for farmers and producers. The company is currently investing in the development of next-generation farm vehicles that can transform productivity for users. John Deere is focused on manufacturing new electric vehicles that integrate advanced sensors and drones, through the Internet of Things, and AI and robotics.

Although it’s a global company with extensive worldwide operations, John Deere can claim to be a part of American industrial heritage and maintains its corporate

Headquarters in Moline, Illinois. JD reported revenues of 61.25 billion in 2023. The company is an example of how a renowned vehicle manufacturer is also a leading example of a vital agribusiness.

What is Agribusiness - Looking a Decade Ahead

There are currently five key factors that will shape the agribusiness sector over the next decade.

1. Climate change and related extreme weather events
2. Geopolitical events such as wars and conflicts
3. Population growth and increasing demand for food
4. The transition to sustainable agriculture
5. The emergence of new technologies

The essence of agribusiness is adaptability and technological innovation, as well as the ability to manage field trials and negotiate regulatory hurdles. One trend we expect to see is a greater emphasis on improving productivity on existing land through the implementation of sustainable practices and precision agriculture.

We also expect to see a greater diversification in farming methods with both the regeneration of marginal lands and high tech urban farming. The other big advance may be in the adoption of eclectic and driverless agricultural vehicles and wider (integrated) use of drones, sensors, and robotics.

Companies that can deliver effective and cost-effective solutions can expect to expand their market share and profits. Investors who want to add agribusinesses to their portfolios will be exploring potential growth sectors and the companies that are currently operating in them.