Corporatisation journey of food production

Corporatisation is one of the largest mega trends in Australian food and agriculture. Managing Partner Brad Mytton and Partner Frank Barillaro discuss what this trend means for the sector as well as the growing opportunity from an investment perspective from both local and offshore investors.

Frank Barillaro: Brad, the corporatisation of the Australian food sector has made significant gain, particularly in the last ten years, and certainly the last five. How do you see that trend continuing and what do you think it means from an investment perspective as we look at food and agriculture here in Australia?

Brad Mytton: Yeah, I think corporatisation is one of the largest mega trends we have in our sector. So, what we're seeing is those successful small family operations acquiring their neighbours, that journey then becomes more of a corporatisation journey. And those small corporates then sort of morph into large corporates. I think our, our investment capital really facilitates that journey. There's a lot of people that talk a lot about succession, there's sort of generational change and often there's external capital needed for those journeys. So, a core part of our strategy is really looking to find those best partners, the best operating partners, the best management team in that a given sector. And that corporatization journey plays into that very well. So, I expect that'll continue at pace during 2024, it's something that needs to happen, there's an increasing population and there's constraints on land and being more efficient having an uptake of technology to support that more intensive production. All of those things lend themselves to more of a corporatized model rather than a family farmer model. So, a lot more of that to come, it's a global trend, it's happening everywhere, and it presents opportunities for our investment dollars.

Frank Barillaro: I read a report recently from Abares that ninety percent of corporate profits in the farming sector come from the top twenty-five percent of farms. How do you see that play as an opportunity for people like ourselves to invest into the agriculture sector and take advantage of that ability to corporatize family farming?

Brad Mytton: Yeah, it's a core tenant to our strategy, right? We want to be investi