Sprouts Farmers Markets (Sprouts) is a Phoenix, Arizona-based chain of 400-plus natural foods stores in 23 U.S. states and $6.4 billion in sales as of 2022. In its product assortment, brand image, and store environment, Sprouts emphasizes freshness, health, innovation, and differentiation. A large majority of the items it offers have one or more attributes tied to health, local sourcing, specific production or ingredient standards, dietary needs, sustainability, etc. In 2023, under CEO Jack Sinclair, a 35-year industry veteran who joined Sprouts in 2019, Sprouts is implementing a strategy aimed at sharpening its identity as a specialty natural foods retailer and achieving 10% store growth per year. Rather than competing head-to-head with conventional supermarkets, Sprouts is positioning as a complementary grocer-a destination where customers can find differentiated, healthy products and brands that are often unavailable elsewhere. The multi-pronged strategy includes (among other measures) redefining the retailer's target customer, eliminating its prior practice of aggressive promotions, embracing a smaller store format, and renewing its focus on innovation and emerging brands. Sinclair and his team are confident that Sprouts has a strong strategy, one authentically rooted in its history and attuned to current and future trends around health. The business has improved its earnings before interest and taxes (EBIT) margin considerably since 2019 and is on track to grow revenues 6.5% and open 30 stores in 2023. But the cost of expansion has risen in recent years, and finding new locations has been difficult at times. There are questions about whether to focus growth on markets where the brand is well known or in new markets, where it is more difficult to communicate what separates Sprouts from other retailers.

Founded by CEO Steve Barnard in 1983, California-based Mission Produce was a leading supplier of Hass avocados with a global sourcing, marketing, and distribution network and $892 million in 2021 sales. Barnard had been influential in the global avocado trade's transformation in recent decades. For instance, Mission's use of ethylene gas ripening for avocados had allowed it to supply consistently ripe avocados to the U.S. market for the first time. Moreover, Mission had established an early presence in key avocado-growing countries, including Mexico and Peru, as they were on the cusp of gaining access to the U.S. and other key import markets. Barnard believed Mission's scale, global presence, value-added offerings, and vertically integrated model gave it many advantages in the maturing avocado market. Yet, he recognized the challenges Mission would face in the years to come. In its supply network, these included political instability, declining cost advantages, and the high cost of land in California. Perhaps most of all, water scarcity and cost were mounting concerns with no obvious fix. Mission recently entered the mango category, which, in the U.S., shared notable traits with the 1990s avocados market: mangos were a relatively minor U.S. product that many consumers did not know how to prepare, and their ripeness was variable at retail. Like avocados, mangos could be ripened with ethylene gas in destination markets, but they were more easily damaged during handling and had a shorter shelf life post-harvest.

As one of the world's largest healthcare companies, Philips sought to reach beyond the walls of the hospital and expand its hospital-to-home program to gain future competitive advantage through technology solutions combining predictive analytics with care delivery. By its estimation, 40% of hospital admissions could be avoided, and its variety of home-based resources could be delivered at 30% less cost than the same level of care in a hospital. This tremendous potential left the chief executives at Philips wondering how best to commercialize these solutions. Should they position themselves as a technology-commercializer relying on clinical partnerships to capture value through data insights; or should they own the patient care experience as a clinical enterprise or as a cost-reducer?

In 2020, Luke Minion and the leadership team at Riverstone, a hog producer founded in 2013 in Shandong, China, were evaluating Riverstone's strategy as it rebounded from outbreaks of African Swine Fever (ASF) in two of its three farm complexes. Riverstone was a joint venture between Minnesota-based private equity firm Proterra Investment Partners and agricultural services firm Pipestone Holdings, the third-largest U.S. pork company by sows managed. The vision for Riverstone was to apply Western hog production systems in China, where-despite being the world's top hog producer and consumer-most production was fragmented and inefficient. Just as Riverstone was ramping up capacity in 2018, China's hog industry faced a devastating ASF epidemic that wiped out tens of millions of hogs and bankrupted countless small producers. Riverstone had been able to recover by implementing strict biosecurity practices, and as it rebounded, it was benefiting from surging pork prices. From March 2019 to March 2020, Riverstone's profit per weaned pig rose from $80 to $250. In late 2020, Minion and the Proterra team were considering options for the exit of Proterra's Food Fund 1, which owned 70% of Riverstone. There was the possibility of an all-out sale, an IPO, or as Minion hoped, selling some portion of the Fund's equity to the U.S. farmers who were shareholders in Pipestone's U.S. operations. What was the best option?

This case, a follow-on to "Luvo" (517-049), provides a brief look at changes that have occured at Luvo, now called Performance Kitchen, since the timing of the first case (mid 2016). Set in January 2020, Luvo (B) touches on developments such as the company's purchase of a small food retail chain and its "food-is-medicine" strategic positioning, which includes selling to health insurers and other firms in the health care industry.

This note, written in late March 2020 and mainly U.S. focused, looks at the unfolding impact of the coronavirus pandemic on food retailers and their suppliers. It allows student to consider the challenges facing food retail executives as they navigate urgent supply chain challenges amid rapidly changing information and circumstances. It touches on developments in various segments of the supply chain, including farms, manufacturers, the trucking industry, warehouse operators, and store operations, as well as home delivery. The note is "set" as the outbreak is accelerating in the U.S., where the first "hot spots" include cities such as Seattle and New York City. Officials in many states have ordered or advised residents to stay home, exempting those employed in industries designated "essential," including food. The food industry is contending with a massive surge in demand for staple goods, as consumers worry about product shortages, seek to minimize store visits, and anticipate long stretches of time at home. Stock-outs and rationing in some categories in stores are widespread. Demand for online food shopping and delivery has skyrocketed well beyond the current capacity of retailers in many markets. As they scramble to respond, players up and down the food supply chain are changing how they source, make, move, and stock products. While U.S. officials have asserted that the food system remains reliable, anecdotal news is emerging of problems facing individual players, industry segments, and geographies. With the crisis expected to continue for weeks or months, all are bracing for even greater challenges.

Brazilian logistics company Rumo operated 13,500 km in railway networks, port terminals, and inland transshipment terminals, connecting major Brazilian ports to the agriculture hubs of Mato Grosso and São Paulo state. Controlled by Cosan, Brazil's leading sugar and ethanol producer, Rumo had been through a turnaround over the last 3 years, including heavy investment in operational improvements, financial deleverage, and taking cash flow generation from a negative $278 million in 2015 to positive $15.3 million in 2018. In 2019, as the company planned its new expansion cycle ($3.4 billion would be invested from 2019 to 2023), Rumo's executives had to find the best way to continue to capture the value created, while preserving its relations with customers and other stakeholders.

Chicago-based CME Group is the world's largest futures and options marketplace, with annual trading volume of over 4.8 billion contracts in 2018. This case is set in late 2019, as heightened perceptions of risk stemming from the U.S.-China trade war are driving record trading volumes of agricultural futures. CME Group leads the agricultural futures market, but changing global dynamics are raising new questions about the security of its competitive position. With roots dating to the 1850s, CME Group became the market leader by developing liquid markets for reliable products tied to U.S. agricultural production. But the U.S. no longer dominates global grain and oilseed production and trade, raising questions about whether U.S.-domiciled futures and options will remain relevant globally. Other pressures on CME Group include the U.S. political environment-there is talk of taxing futures trades-and potential competition from Chinese futures exchanges. How should the management team adjust their strategy? While this case focuses on CME Group's agricultural products business, some of the questions at play-e.g., about the role of speculators, the usefulness of a financial transactions tax, and the positioning of price discovery in commodity source markets versus destination markets-apply to other lines of business such as foreign exchange or precious metals.

In 2019, Nigerian entrepreneur Dr. Ayoola (Ayo) Oduntan is accelerating distribution of Noiler, a genetically optimized breed of poultry, to smallholder farmers across Nigeria. The bird was bred to be productive as a source of both meat and eggs and to thrive in the rural Nigerian context-e.g., living in harsh outdoor conditions and relying on forage and kitchen scraps for food. The Noiler breed was developed by Oduntan's poultry business, called natnudO Group, which operates feed mills and hatcheries, processes broilers and layers, and sells poultry products to Nigerian restaurants and retailers. The Group had revenue of about $64 million in 2019. Oduntan wants to get Noilers into millions of poor households in Nigeria and other West African countries as fast as possible. His mission is to tackle protein-related malnutrition in Nigeria, which afflicts millions of children. He has devised a unique value chain model to build sustainable markets for Noilers, with a focus on creating economic opportunity for poor farmers, empowering women, and most of all getting protein to children who need it. In late 2019, he is considering next steps for the Noiler enterprise. Should it remain within a commercial entity or be spun off as a not-for-profit? What would that look like? Should he sell the genetics? How important is it for this to remain a Nigerian enterprise versus bringing in multinational partners? What could reinforce or threaten the model's scalability and sustainability?

In 2019, CEO Jim Snee is weighing how to shape the image of Hormel Foods, one of the largest U.S. meat and food companies, at a time when the industry faces unprecedented scrutiny. Based in the small town of Austin, Minnesota, the nearly 130-year-old firm is best known for its legacy meat-based brands such as Hormel Pepperoni and Spam. It also owns brands (many acquired recently) that consumers might not associate with Hormel, such as Wholly Guacamole, Justin's nut butters, and Applegate Farms deli meats. This diversity of products reflects Snee's effort to reduce Hormel's commodity exposure and balance its portfolio across raw materials, consumer segments, price points, food trends, and channels. In pork, for example, Hormel's range extends from low-price Hormel-brand products made from conventionally raised animals to pricier Applegate Farms-brand products made from animals raised in organic and humane-centric conditions. To Snee, these differences embody Hormel's strategy of offering choices to consumers. Hormel is 48% owned by a foundation created by the founding family, which has allowed its leadership to manage with a long-term view and worry less about Wall Street scrutiny. Indeed, for such a large firm-$10 billion in sales, penetration in 80% of U.S. households-Hormel has historically been relatively "under the radar." But in the social media era, Snee knows how quickly companies can lose control over their reputations, and that the animal protein space is particularly sensitive. What risks does Hormel face, and how can Snee preserve and convey the qualities that set the company apart?

In mid-2019, a year after German conglomerate Bayer Group closed its acquisition of U.S.-based seeds giant Monsanto, the leadership of Bayer's Crop Science division (which absorbed Monsanto) is reflecting on the opportunities ahead. Some observers have questioned Bayer's decision to buy Monsanto, citing potential reputational and financial liabilities; in the last year, Bayer's stock price has suffered. However, the leadership team expects the combination of Monsanto's and Bayer Crop Science's seed, crop protection, and digital agriculture technologies and expertise to deliver huge value to farmers and shareholders. A key focus is The Climate Corporation, Monsanto's (and now Bayer's) digital agriculture unit, which collects data from farmer-customers' operations and uses it to provide tailored farming advice and to inform internal research and development. Bayer Crop Science is digitizing its entire R&D operation in order to fast-track innovation, with the goal of producing the game-changing products needed to feed the growing global population while protecting the environment. The Bayer team aspires to lead the digital transformation of agriculture. Is this achievable, and is Bayer the right firm to lead it? Will farmer distrust, competition, merger-related challenges, or other hurdles prove insurmountable?

In October 2018, LIU Chang (Angela), chairman of Beijing-based New Hope Liuhe (NHL), was considering the strategy of the firm. With $9 billion in sales and a presence in nearly 20 countries, NHL was China's largest animal feed producer and a major pork and poultry producer and processor. The firm also marketed a range of food products to consumers. This case describes NHL's entrepreneurial beginnings, growth, and recent efforts to transform from a feed producer into an integrated agri-food company with an active presence throughout the chicken, duck, and pig value chains. Considerable context is provided on the structure and evolution of these livestock industries in China, the food processing industry, and important issues such as food safety. This background is helpful in enabling students to assess NHL's evolution in scale and scope and consider what (if any) changes should be made to the firm's strategy in the context of this critically important market.