EY Advisory has hired three executives from ag-focused consultancy The Context Network to bolster its agribusiness practice amid what its principal said has been an increase in client inquiries about the sector.
Rob Dongoski, a Chicago-based EY partner who has lead EY’s global agribusiness practice since 2014, told Agri Investor the timing of EY’s expansion is driven by the transformation taking place across the food and ag value chain and the resulting attention from investors and corporate clients.
“The amount of inquiries we get globally from private equity, large investment, big insurance and family offices saying, ‘Hey, we see lots of opportunities in the ag sector, where should we focus?’ That’s driving us to say we have to invest more and be ready to answer these questions, not just for our corporate clients on where they want to play in the future, but also our investment community has asked similar questions.”
EY’s primary client base in agriculture has been large companies that service growers and producers such as Cargill, Bunge and Monsanto. In addition, EY has also worked with agtech-focused venture capital firms, as well as large private equity firms and pension funds searching for opportunities in the sector.
“It’s more about the category of investment versus some of the characteristics around the programs,” he added.
Dongoski said The Context Networks customers have included a combination of large input suppliers, trade organizations, animal health companies and a variety of others across the value chain. He added that EY hopes to encourage existing clients of The Context Network that have hired the firm to develop strategy to consider working with EY to implement those strategies. The two firms are currently exploring how they can jointly service the market.
Directions through a dust storm
Technology is a key focus of EY’s agribusiness practice, according to Lundal and Dongoski, who mentioned blockchain, the internet-of-things and precision ag as among the areas where the firm’s work has focused.
Dongoski said EY already has a strategic alliance with Microsoft that includes collaboration aiming to apply technologies like cloud computing, artificial intelligence and others to agriculture. Among those efforts have been initiatives designed to strengthen connectivity in rural areas.
“Technology will never move slower than it’s moving today,” said Dongoski. “That’s creating a bit of dust-storm in the industry around how are we all going to do this, who’s going to win and who’s going to lose, in some cases.”
Lundal described EY’s work for clients as, in part, helping them adjust to the growing role considerations of identity and values play in driving consumer demands for more supply chain transparency.
“What do those demands mean relative to what food companies and food company investors need to do to respond?” asked Lundal. “You have a lot of things happening in the traditional supply chains that are different than they were before – with virtual marketplaces, and disintermediation and closed-loop systems – that are producing additional opportunities for growers.”