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Multinational Corporations Invest In Emerging Markets

Jan 18 2012


Image by thegreenpages via Flickr

As the world's population rises, food prices slowly follow the trend. It's a fairly simple equation: more people require more food, but also take up more space and this limits the land available for farming. Some of the worlds largest food producing companies have therefore been looking into new ways to boost their production whilst keeping prices competitive. This has taken two forms; improve production from current land, and move into new markets where space is more free (and labor usually cheaper). Two of the main exponents of this are Pepsi Co (who oversee such brands as Tropicana, Scotts Porridge Oats and Doritos) and Nestle (who own hundreds of cereal, ice cream, yoghurt and chocolate brands), as they require vast amounts of naturally produced products to run their businesses. Both of them have started interesting projects aimed at combating these problems:

Pepsi i-Crop
Pepsi have long been exponents of farming technology, and are a surprisingly forward thinking company. In 2009 they began a project in association with the University of Cambridge, UK, in order to build a more efficient irrigation system. The biggest factor for successful crop growth in difficult areas is water supply, and making this efficient as possible is a must if you plan to invest serious money. The final product of this unlikely partnership was the i-Crop, a sophisticated irrigation rig that is computer controlled. Probes are utilized at set intervals in the field to measure water levels, and the i-Crop links in to local weather and satellite information to deliver the perfect amount of water. This close control can save up to 50% over standard irrigation systems, and in turn this can save a lot of money.

Nestle Dairy Farms
Nestle, along with many other brands, have targeted China as a market to aggressively expand into, even at a time when the ruling party is trying to crack down on this. They currently work with over 11,000 farmers around the country who help to supply all of the milk for that domestic market, and some overflow used for others. However, they plan to invest over $400 million to build a 'dairy farming institute' in order to properly train the farmers in all aspects of dairy farming and cow-care. This is expected to transform many of the farms into operations several times the size, as well as boosting efficiency for the company. As well as this Nestle will set up 'cow bases' where farmers can receive professional cattle care, as well as making interest free loans readily available to buy more cows. This initiative comes on the back of a very successful push on it's coffee production, mainly based in South America. This was along the same lines, providing cheap finance and good education for aspiring farmers, and proved a huge success in boosting production with very little effort.

Sarah is a trainee farming scientist working for vegetable processing specialist RJ Herbert. She loves keeping up to date with all the latest technology, and works in her spare time as a writer for various farming publications.

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