craig wichner - investing in sustainable agriculture
TRANSCRIPT
1Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Farmland LP
ROI of Sustainable Agriculture
2Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
• Farmland LP converts conventional farmland to sustainable, certified organic farmland
• Founded in 2009 • Own 10,000 acres, $110 million in assets• 50-person team includes farm and finance professionals
Farmland LP OverviewAttractive returns and a positive impact on our food system and the world
World’s 50 Most Innovative Companies
Fast Company, 2014
Best for the World B Corp
2013, 2014 & 2015
Top 50 Asset Managers Worldwide
ImpactAssets2013, 2014 & 2015
3Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Farmland LP Adds Value
• Price premiums for products grown using organic and sustainable practices
• Livestock and crop rotations increase revenue, soil fertility and land values
• Diversity of crops improves resiliency of farmland and reduces crop risk
• Economies of scale by aggregating farmland acreage
• Strategic relationships with processors, producers and distributors
Scaling up sustainable agriculture
PASTURE CROP
Multi-tenant crop and livestock rotations
PASTURE VEGETABLES
GRAINS & SEEDS
4Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Organic Demand Far Exceeds Supply
“We cannot get enough organics to stay in business day in and day out”
- CEO Craig Jelinek, 2016 shareholder meeting
5Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Demand for Organic Cropland Far Exceeds Supply
• Organic food sales = $43 billion (5% of all US food sales)
• Shortfall in organic farmland = $80 billion opportunity
Certified organic cropland required to grow certified organic food
Source: Goldman Sachs Conference – Sprouts Farmers Market; Market Nutrition Business Journal, Organic Trade Association, US Dept. of Agriculture ERS 2009
Growth of Organic Market Exceeds Farmland Conversion Rate
19971999
20012003
20052007
20092011
20132015
0%
1%
2%
3%
4%
5%
6%5.5%
1.2%M
arke
t Sha
reSupply of U.S. organic cropland
growing at only 6% per year
Demand for o
rganic food
growing at 15% per y
ear
6Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Farmland Market Size$2.4 trillion market size is comparable to other classes of commercial real estate
Farmlan
dReta
il
Multi-Family
Health
CareOffice
Industrial
Hospitality
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$2.4
$3.0
$2.4 $2.2
$2.1
$1.8
$0.4
Tota
l Mar
ket V
alue
($ T
rillio
ns)
Source: USDA ERS, CoStar Group, Green Street Advisors Commercial Property Price Index (CPPI), and World Bank. 2013 value of CRE calculated by Farmland LP from Costar and CPPI.
Total Market Value of US Commercial Real Estate
$25 Billion (1%) Institutionally Owned
$240 Billion - $1 TrillionChanging Hands Over
Next 10 Years
$2.4 Trillion Farmland Market
7Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
Benefits of Sustainable AgricultureCertified organic cropland required to grow certified organic food
Source: USDA Agricultural Marketing Service, Rodale Institute
Aspara
gus
Blueberr
ies
Butternut S
quash
Green Bean
s
Spinach
Yello
w Corn
141% 154%
263%302%
503%
234%
Organic foods command significant price premiums
• Organic foods command a 50% to 200+% price premium
• Increased financial results
• ~3x more jobs created per
acre
• Environmental benefits
• Enhanced society
8Confidential and Proprietary | © 2016 Vital Farmland Fund II, LLC
For more information:
Craig WichnerManaging [email protected](415) 465.2400www.FarmlandLP.com
Thank ewe