In the agrifood industry, which relies heavily on capital-intensive investments, each CAPEX
decision made today will impact the next decade. Given external challenges like sustainability
demands and technological advancements, strategic alignment between CAPEX and
transformation initiatives is crucial for achieving sustainable growth and resilience. By
aligning CAPEX with transformation goals and financing structures, agrifood companies can
ensure optimal resource use, team cohesion, and adaptability in a competitive market. A 5- to
7-year CAPEX blueprint positions companies not just to meet immediate needs but also to set
the foundation for long-term industry leadership.

Key Factors Driving the Need for Strategic CAPEX Alignment

Several critical factors make strategic CAPEX alignment essential in the agrifood sector:

1. Long-Term Impact of Capital-Intensive Investments : The agrifood sector’s
   reliance on high-capital investments means today’s choices will shape capabilities and
   operations for the next decade. Missteps can be costly and hard to reverse, making a
   comprehensive, forward-looking CAPEX blueprint indispensable for aligning
   investments with both current needs and anticipated shifts in the industry.
2. Transformation Imperatives : Driven by climate change, consumer expectations for
   sustainability, and technological advances, the agrifood industry faces a significant
   transformation. Companies must adopt sustainable practices and innovative processes
   to remain competitive. CAPEX strategies that align with transformation goals enable
   organizations to navigate these shifts effectively, securing the future of their business
   and the broader industry.
3. Integrating Financing with Strategic Goals : Strategic CAPEX alignment requires
   more than just funding allocation; it demands that financing structures also support
   transformative goals. Every CAPEX project – whether for growth or maintenance –
   should have a clear financial rationale, such as a positive internal rate of return (IRR).
   By rigorously assessing both growth and maintenance investments, companies can
   ensure every euro spent delivers value and strengthens financial resilience.
4. Responding to External Pressures : Agrifood companies face various external
   pressures, including resource scarcity, regulatory demands, and evolving consumer
   preferences. A well-defined CAPEX blueprint, incorporating insights from both
   internal priorities and external conditions, allows companies to proactively adapt,
   build resilience, and preserve resources amid these challenges.
5. The Blueprint as a Unifying Strategy : A well-structured CAPEX blueprint aligns
   teams around a shared vision, fostering cohesion across departments and clarifying
   investment priorities. This unified approach enhances engagement and innovation by
   aligning leadership and operational teams toward common goals.
6. Competitive Advantage through Resilience : Aligning CAPEX with transformative
   objectives strengthens a company’s resilience to industry challenges and enhances its
   competitive position. Investments aligned with strategic goals prepare companies to
   seize new opportunities, adapt to market shifts, and cultivate a foundation for
   sustainable growth and industry leadership.

Key Steps to Align CAPEX with Transformation Needs

To effectively align CAPEX with transformation objectives, agrifood companies can follow these structured steps:

1. Define Strategic Priorities : Start by defining the company’s overarching
   transformation goals – such as sustainability, operational efficiency, or digital
   innovation. These priorities serve as the foundation for evaluating CAPEX projects,
   ensuring that each investment supports long-term resilience and growth.
2. Conduct a Comprehensive Needs Assessment : Analyze both internal and external
   factors that could shape CAPEX requirements, including operational gaps, asset
   performance, regulatory demands, and technological advancements. This assessment
   provides insight into where resources will have the most significant impact.
3. Develop a Long-Term CAPEX Blueprint : Create a CAPEX blueprint, typically
   covering a 5- to 7-year period, to outline investment priorities and expected returns.
   This plan should include timelines, budgets, and key performance indicators (KPIs)
   aligned with transformation goals, establishing a roadmap for sustained, strategic
   growth.
4. Implement Rigorous Financial Evaluation : Perform a detailed financial analysis for
   each CAPEX initiative, evaluating IRR and potential long-term value, including
   maintenance investments. Financial rigor ensures that all CAPEX decisions are both
   strategically and economically sound.
5. Engage Cross-Functional Teams : Involve stakeholders from finance, operations,
   sustainability, and other relevant areas in CAPEX planning. Cross-functional
   collaboration fosters alignment, strengthens commitment to the blueprint, and
   increases agility in executing investment plans.
6. Monitor Progress and Adapt : Regularly track CAPEX projects against established
   KPIs, adjusting strategies as needed to address new challenges or shifts in market
   conditions. This adaptability ensures that CAPEX efforts remain in sync with the
   company’s transformation goals.

Conclusion and Call to Action

For C-suite leaders and Boards, aligning CAPEX and financing structures with transformation
goals is crucial to achieving sustainable growth. As the industry faces mounting challenges,
strategic CAPEX alignment can yield substantial benefits, not only for profitability but also
for long-term industry resilience.
How is your company aligning its CAPEX and financing strategies with transformation
goals? Share your insights in the comments, and let’s work together to build a resilient,
forward-thinking agrifood industry.

For a CEO, purchasing is a subject he is confronted with every day. For most of the actors of the purchasing ecosystem, they directly affect the operations of the company. When we start our activity from scratch, purchasing questions do not come on the top of the priority list. Why worry about buying badly if the product or service we are going to offer isn’t working anyway? The priority is the Product. Next comes the commercial start-up to win over “Customers”. It is only when success begins to arrive, that one enters the phase of hyper-growth that one then begins, sometimes, to ask oneself this type of question.

As such, without being too obsessed by purchasing at the start of the project, it does not hurt to acquire upstream a minimum background on the fundamental concepts of purchasing: categorization, negotiation, supplier relationship, regulations, etc. When it becomes essential to install a robust purchasing organization, this minimum background allows for an easier transition: from both a human and organizational point of view.

Therefore, how to think about the purchasing function within your company and succeed in purchasing? By appropriating yourself its human capital and by modifying its organization.

We have to change corporate governance. No effective action to improve procurement management can be negotiated without governance reform.

The question of purchasing is a multifaceted, complex and transverse subject for all companies and all organizations. If a person from the management committee must necessarily be THE person responsible for purchasing, he/she cannot act alone. The omniscience of a single person, a big “IKE” (I Know Everything) in purchasing and related risks’ management is an illusion.

On the other hand, in the organization chart of the management committee, a person shall appear as being “The Referent”, in this case the Purchasing Director. HE/She will be responsible for the overall purchases of the organization. But not the only one. It is the first building block of better procurement governance. It is recognition of the following fact: managing purchases and a fortiori the risks linked to these responsible purchases is a subject in its own right.

Purchasing Ownership, therefore. More generally, responsible purchasing must have action levers:

• technology, supervised by the IT department in order to manage purchasing tools and secure data (suppliers, contract, specifications, payments, etc.)
• human resources to provide training for employees in order to explain and make them aware of the criticality of buying on behalf of the company, explain the risks inherent in an act of purchase.
• relays of these “purchasing” subjects in each of the company’s entities. The leadership must empower these relays so that they can transmit the same messages as it. It must ensure that all employees recognize purchasing as a discipline in its own right, essential for profitability and therefore the future of the company.

The second building block of healthy governance in responsible purchasing comes with the creation of a “Purchasing Committee” (multidisciplinary team including business buyers) which reports to the company’s Executive Committee.
This committee must be entrusted with several missions:

• Regularly assess the state of the company on its purchasing management with a clear and refined vision of the purchasing perimeter to be monitored.
• Manage purchasing risks and above all analyze incidents by putting them into perspective.
• Define precisely, then pilot, analyze, evaluate and above all regularly update the responsible purchasing strategy.

With such an overall vision, this committee is then able to defend budgets and above all, to justify investments.

Most of the time, my experience in companies of all sizes, in various sectors has shown that there is a severe lack of funds for this whole topic of sustainable purchasing.
Money (as always) it is one of the nerves of war.
If the Executive Committee of the company does not recognize the necessity to start by devoting a budgetary envelope to purchasing policy in order to improve good practices, then the maturity has very good chances to remain weak.

On this question, I could observe a real schizophrenia of companies which all think that purchasing is both a challenge (the famous “savings”) and which, however, are under-investing in the field.
You just have to ask a manager “who is for you the main constituent parts of your business.” Few will spontaneously put suppliers there…

Likewise, if there is a budget and it is not known how much one spends and what the purchasing expenses relate to precisely, then it is almost certain experience that the company manages and controls its purchases badly.

So, managing purchases is a metier, it is one of the actions that will allow companies to be more efficient tomorrow. Even better, by managing its suppliers ecosystem, the company takes care of one of its most precious assets (and no longer liabilities or charges).
Obviously, doing this comes at a cost.

It remains to be seen how to better organize the whole company to ensure that the model I defend for responsible purchasing can irrigate the whole company and its constituent parts.

Vertical, top-down governance, called into question in the various management models offered today, has proven to be largely ineffective in terms of managing sustainable purchasing. As we have seen, if a purchasing manager is recommended, he/she must in no case be alone. Above all, he/she must not assert a vertical truth which would not take into account the feedback of the teams on the initiatives implemented and on the actual state of the company’s purchases.

Exit therefore the verticality! We naturally lean towards a horizontal organization of people and purchases. The latter has the merit of empowering the teams, increasing their motivation and promoting living together.
However, this is not the one I would recommend for purchasing management, I would go beyond established patterns and tend to break the codes.

To properly manage purchases and the risks that go with it, I propose an approach that takes a step aside. From the various lessons I have learned from my meetings with companies that have drawn on my expertise in managing their purchases, it emerges that in terms of governance, the most effective is what I would called the P.C.G. : Purchasing Circular Governance.

What is P.C.G.? In order to be truly shared by all, the purchasing committee becomes the first link in the chain, and it will irrigate to the other entities: finance, human resources, sales, marketing, communication, production, supply chain, social responsibility of company. Each of the entities applying an identical purchasing process and each of the departments sharing its experience with the others with the aim of improving the entity’s purchasing system as a whole.

Furthermore, circular purchasing management allows significant flexibility as to the purchasing categories to be favored, the choice of categories of purchases to be secured and finally to the crucial elements to be protected (contracts, supplier data, patents, etc.).

Correctly managing your purchases involves a disruptive and participatory approach. It is high time for Companies to evolve their vision of investing to be better equipped and therefore more efficient in terms of sustainable purchasing.