Good morning. I’m pleased to be here among so many friends. At GMA, we have always considered the seed industry to be the beginning of the food chain, and have looked to the American Seed Trade Association as an important ally in the public policy arena. Thank you for giving me this opportunity to talk about some of our common issues, and how we might work together more effectively. I am especially honored to be sharing the podium this morning with Dr. Crawford.

Decisions regarding what foods to produce and market are more critical today than ever. The globalization of our economy and the nearly instantaneous availability of information means that consumer trends and food preferences can go from “unheard of” to “global phenomenon” seemingly overnight. The current deluge of low carbohydrate foods provides a case in point. According to Productscan Online, during the first five months of this year, 62 "low-carb" ice creams were introduced, and the number likely will top 100 before the year ends. In 2003, there were 19. In 2000, there were none. So in essence, an entire category was introduced and populated in less than three years.

The swiftness with which consumers exercise their will in the markeplace presents a challenge for our industry. As the low-carb boom demonstrates, we can move quickly to take meet the demand.

But it may not be fast enough.

The reality is that while consumer preferences can shift as quickly as it takes to send an e-mail, we have yet to figure out a way to harvest a crop overnight.

To further challenge our industry, American consumers aren’t satisfied with the status quo. They want foods that are customized to enhance their lifestyles. They want time-saving, convenient foods that have added health benefits. And they want high-quality foods that taste better than ever.

A casual observer might have the impression that satisfying consumer demand is an issue for food and beverage manufacturers alone. That couldn’t be farther from the truth.

As you are well aware, new research about the negative impact of trans fat on health has led food companies to seek out alternative ingredients for partially hydrogenated oils that contain trans fat.

Already, we have seen seed companies launch research projects that will create a soybean with a better fat profile. And as manufacturers identify other ingredients to use in reformulated products, they will rely on you to provide them with the crops and ingredients needed to make the best products possible.

I firmly believe that together we are on track to developing an industry partnership that is capable of exceeding consumer expectation from seed to table. But there are challenges on the road ahead.

Industry consolidation continues. And it has impacted the way trading partners do business. Over the last five years (1999-2003) the top five mergers and acquisitions in the retail and manufacturer industries have led to over $110 billion changing hands. The reasons vary – from fueling top line growth or gaining entry to new markets or product categories, to creating synergies and economies of scale.

Whatever the reasons, it has led to a more concentrated industry where big companies are getting bigger and more global, smaller companies are retreating to or occupying niches, and mid-size players are getting squeezed.

Liberalization of international borders will also fuel global growth for retailers and manufacturers. As industry consolidation becomes more pronounced, a few global retailers will extend their reach, channel distinctions will become all but obliterated, and manufacturers will have to become best-in-class category consultants in order to drive their brands and market share.

Read the speech in its entirety: Seeds of Partnership: Fulfilling a New Generation of Consumer Demand Remarks before the American Seed Trade Association Annual Convention

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