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Prioritizing Investment Decisions in Food & Agribusiness: Agamya Capital ReportCHICAGO --(Business Wire)-- Agamya Capital has published a report on its proprietary "Innovation-Enablement-Scale (IES)" framework aimed at helping prioritize investment opportunities in food & agribusiness. The framework was informed by Agamya Capital's extensive client work and proprietary database containing nearly 45,000 related companies. Private equity investors and executives in the food industry are confronted with the daunting challenge of sifting through numerous ideas to identify long-term winners and support those ideas with significant capital and resources. By some estimates, failure rate for new products can be as high as 50%, which further exacerbates this issue. The IES framework helps identify investment opportunities with increased likelihood of success, by emphasizing market positioning and product development capabilities that best incorporate the following principles: 1. Understanding demographic shifts will immensely help identify long-term winners 2. The role of government in food safety and cross border trade is a critical determinant of success 3. Declining information asymmetry among manufacturers and consumers will make it increasingly difficult for companies to differentiate The IES framework should be viewed as a precursor to assessing execution risks and organizational capabilities, such as manufacturing efficiency, co-packing reationships, distribution and supply chain, organizational structure, and marketing & sales. The IES framework utilizes "Means to an End" approach (Figure 1) as a mechanism to predict ROI on Innovation ("I" in IES). To use an abbreviated example, Gluten-free and All-natural are ubiquitous nowadays. The IES framework considers Gluten-free as the Means, and Health & Wellness as the End. The framework further links Health & Wellness to demographic shifts (e.g., increasing lifespan and increasing healthcare costs) and government influence (e.g., Nutrition Labeling and Education Act). After making such compelling yet subtle linkages, the framework recommends assessing relative weightage of organizational capabilities between Means (Gluten-free) and End (Health & Wellness) - the greater the emphasis on the End, the higher the staying power. Simply put, Means can have short shelf life (e.g., Atkins, South Beach) while Ends have transcendental appeal - companies who are in tune with underlying themes and have requisite adaptability can thrive. Furthermore, the framework provides a powerful lens to view innovation (Figure 2). The Innovation Models (Product vs. Business Model vs. Process Innovation) provide pragmatic tools to assess competitive landscape and relative differentiation. "The IES framework has been inspired by and instrumental in our work with clients in food, packaging and consumer industries. Also, several elements of the framework are applicable to other industries," said Praful Mittal, President of Agamya Capital. To learn more, please contact [email protected]. About Agamya Capital Agamya Capital is a private equity investment advisory firm, and its clients include leading private equity firms and the largest family offices in the US. The firm develops unique, data driven insights by utilizing its proprietary knowledge base and expertise to help private equity clients make new investments, conduct operational due diligence, and improve portfolio companies' performance.
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