News

INCAE wins the Best Teaching Case award at IFAMA 2022 for the presentation of the Cacao Oro case

13 July 2022
Institutional comunication

There were plenty of reasons to celebrate during the 32nd Conference of the International Food and Agribusiness Management Association (IFAMA). First, because it was held for the first time in Central America. Second, because it was the association's first face-to-face meeting after two years, due to the COVID-19 pandemic. And third, because INCAE Business School, its Faculty and its students won several awards and recognitions.

He spoke about that and the role of agribusiness in a post-pandemic world in an interview Luciano Ciravegna, co-author and associate professor at INCAE.

Agribusiness in a post-pandemic world

Luciano Ciravegna was one of the participants during the panel Agribusiness Strategy: pursuing sustainable growth after the pandemic XNUMX. Agribusiness Strategy: Seeking Sustainable Growth After the Pandemic. 

"It was a very varied panel," says the professor in an interview. “The topic was to analyze what implications the current context has for business. And we define that context: it was mainly discussed that there is a challenge that is governed by three axes. 

"Agribusinesses have always had strong pressure to be efficient so that they buy from them," he points out, referring to the first axis. There is and prevails a pressure to be the most efficient in the value chain, find the best supplier, reduce inefficiencies. 

Panel Agribusiness Strategy: Pursuing sustainable growth after the pandemic. Moderator: Luciano Ciravegna. Panelists: Augusto Bauer, CEO, AJE Group, Peru; Pablo E. Vargas, Executive Chairman, Grupo Britt, Latin America; José Guillermo López Cordón of Aseguradora Rural, Guatemala and Adrián Alonso, Vice President of Operations, Auto Mercado, Costa Rica

“This idea of ​​efficiency goes against the business response to the pandemic, which has been the search for resilience,” indicates the academic, and now speaking of the second axis, he continues: “And how do you acquire resilience? With some kind of redundancy in the chain. Having multiple supply routes, two or three providers of the same product; more flexibility and more inventory. Now they are looking at geographic providers, because that way there are fewer inefficiencies. And that allows you to continue if you close a border, ”he points out. 

The INCAE professor emphasizes that agribusiness companies are managing the balance in the new ways of operating within the post-pandemic context, seeking to be more resilient to social and environmental changes, trying not to affect their efficiency and not to raise their costs. 

Added to this is a third axis, perhaps the most important at the moment: environmental sustainability. “Companies –suggests Professor Ciravegna– are trying to reduce the distance of production. Large companies with a complete value chain are looking for local or nearby suppliers. And when there isn't, they invest or give incentives to providers to relocate closer. Not in the same country, but in a strategic place like Mexico, instead of Asia. This allows having two suppliers and better resilience, in case one of them has to close operations. 


“A case of this type occurs in Walmart Latin America, where they seek to acquire more fruits and vegetables from nearby suppliers at strategic points for distribution. The initiative, he says, seems interesting to me, especially in agribusiness, because in Latin America we are exporters of agricultural products, but in the supermarket we find imported products. That, at an environmental level, does not make sense.” 

On the other hand, he points out that “the discussions within the IFAMA Conference at INCAE allowed students to explore various case studies to find the best solutions within their contexts. I noticed a lot of knowledge and passion in the students who participated.”

He says that one of the added values ​​of this edition was the reflection on the future of agronomy, because “there are those who think that agriculture is for the poor. The truth is that it goes a different way, it is super technological and combines different scientific fields. It is also key, because if not, who is going to give food to the entire population? On an ethical level, we have to train prepared young people to help modernize agriculture in Latin America.” 

INCAE and the Cocoa Gold case

INCAE Business School also participated by presenting the Cacao Oro case study, which received the award for Best Teaching Case thanks to the work of teachers and researchers Octavio Martinez, Esteban R. Brenes, Maria Fernanda Lopez, Luciano Ciravegna and Caleb A. Pichardo. This case was presented at the Walter Kissling Gam campus in front of more than 300 participants from 30 countries, in a live class.

"It is an innovative project from its geographical location," says Professor Ciravegna. “It is an investment in an area of ​​Nicaragua that is one of the least developed, with poor infrastructure and with indigenous communities that historically speak a lot of Spanish, located towards the Atlantic,” he explains. 

“The project is interesting because of its simple nature: attempting a large-scale cocoa production in an area where there was no production, but maintaining parameters of environmental sustainability. Not only the social is interesting, the environmental is also interesting”, says Luciano Ciravegna.


Presentation of the Cocoa Gold Case during the Conference by Prof. Octavio Martínez, at the INCAE Walter Kissling Gam Campus

 

“The case of cocoa is one of the classic dilemmas of agribusiness in Latin America –says the specialist–, since, on the one hand, the easiest thing is to try to be efficient in producing something, especially when prices go up. And cocoa is in high demand, especially quality cocoa. Quality cocoa can be produced in these regions, there is a lot of demand and so the companies invest."

The dilemma arises when these products become established brands, pointing towards a more “premium” approach, which is the goal in many of these products. This is how Professor Ciravegna explains it: “There are certified countries of origin that can give extra added value to their products, such as Colombia with coffee, but that is not the case of Nicaragua with cocoa. This project is expected to contribute to obtaining the premium value of an area of ​​origin that is regularly generated for its quality, the brand-country relationship”.

For Luciano Ciravegna, this case makes us reflect on the relationship of the State with the development of its agriculture and the need to support small producers to create high-end products that can position themselves worldwide. “The government, associations of producers and exporters are required. But, above all, continuity is necessary, because if a country manages to position itself with a product, but in 10 years it is not marketed, the strategy does not work. Political instability doesn't help if you change every four years."


Prof. Ciravegna receiving the Best Teaching Case award from his teammates

The IFAMA conference took place from June 18 to 23 in Costa Rica. The next edition is confirmed to take place in New Zealand in 2023.