Bunge Limited, together with its subsidiaries, operates as an agribusiness and food company worldwide. It operates through five segments: Agribusiness, Edible Oil Products, Milling Products, Sugar and Bioenergy, and Fertilizer. The Agribusiness segment is involved in the purchase, storage, transport, processing, and sale of agricultural commodities and commodity products, including oilseeds and grains comprising soybeans, rapeseed, canola, sunflower seeds, wheat, and corn to animal feed manufacturers, livestock producers, wheat and corn millers, and other oilseed processors, as well as third-party edible oil processing companies, and biodiesel industries. The Edible Oil Products segment provides packaged and bulk oils, shortenings, margarines, mayonnaise, sauces, condiments, and seasonings to baked goods companies, snack food producers, restaurant chains, food service distributors, and other food manufacturers, as well as grocery chains, wholesalers, distributors, and other retailers. The Milling Products segment produces and sells various wheat flours and bakery mixes; and corn milling products, such as dry-milled corn meals, flours, flaking and brewer's grits, soy-fortified corn meals, corn-soy blend products, and other products, as well as sells rice products. The Sugar and Bioenergy segment produces sugar and ethanol; trades in and merchandises sugar; and generates electricity from burning sugarcane bagasse. As of December 31, 2016, this segment had a total installed cogeneration capacity of approximately 322 megawatts. The Fertilizer segment produces, blends, and distributes nitrogen, phosphate, and potassium fertilizers consisting of phosphate-based liquid and solid nitrogen fertilizers; single super phosphate; and ammonia, urea, ammonium thiosulfate, monoammonium phosphate, diammonium phosphate, triple supersphosphate, UAN, ammonium sulfate, and potassium chloride products. Bunge Limited was founded in 1818 and is headquartered in White Plains, New York.
Business Analysis of Bunge
The Consumer Goods Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Bunge compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Bunge to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Bunge with an interactive chart.
- Revenue Growth: Bunge reported a revenue growth of -1.8% year-on-year during 2016. Food Products Industry grew at -5.4% in the same period
- COGS share of Revenues: As a percentage of revenue, Bunge spent 94.4% of its total revenues on COGS. Food Products industry average (COGS share of revenue) in the same period was 79.3%
- R&D share of Revenues: Bunge R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Bunge spent 3.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Food Products industry average SG&A spending in the same period was 11.6%
- Inventory share of Revenues: As a percentage of revenue, Bunge spent 11.2% of its total revenues on Inventories. Food Products industry average Inventory spending in the same period was 10.7%
- Accounts Payable share of Revenues: As a percentage of revenue, Bunge invested 8.2% of its total revenues on Accounts Payable (A/P) Food Products industry average Accounts Payable investment in the same period was 12.5%
- Accounts Receivable share of Revenues: As a percentage of revenue, Bunge invested 3.9% of its total revenues on Accounts Receivable (A/R). Food Products industry average Accounts Receivable investment in the same period was 7.5%
- PP&E share of Revenues: As a percentage of revenue, Bunge invested 11.9% of its total revenues on Property, Plants, and Equipments (PP&E). Food Products industry average PPE investment in the same period was 18.6%
- Intangibles share of Revenues: As a percentage of revenue, Bunge invested 1.7% of its total revenues on Intangibles. Food Products industry average Intangibles investment in the same period was 29.4%
- Net Margins: Bunge Net Margins in the year 2016 were 1.7%. Food Products industry average Net Margins in the same period were 4.1%
Sector and Industry Association of Bunge
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Bunge is associated with Consumer Goods Sector and Food Products Industry.
Consumer Goods sector is comprised of the following industries: Beverages; Personal Goods; Food Products; Diversified Food; Household Goods & Home Construction; Food Distribution; Tobacco; Toys and Games. The definitions for each of the industries is as follows:
- Beverages industry consists of: Brewing Companies - manufacturers of cider or malt products such as beer, ale and stout; Distillers and Vintners Companies - blenders and shippers of wine and spirits such as whisky, brandy, rum, gin or liqueurs; and Soft Drinks Companies - manufacturers, bottlers and distributors of nonalcoholic beverages, such as soda, fruit juices, tea, coffee and bottled water.
- Personal Goods industry includes: Clothing & Accessories Companies - manufacturers and distributors of all types of clothing, jewellery, watches or textiles, sportswear, sunglasses, eyeglass frames, leather clothing and goods, and processors of hides and skins; Footwear Companies - manufacturers and distributors of shoes, boots, sandals, sneakers and other types of footwear; and Consumer Packaged Goods Companies - makers and distributors of cosmetics, toiletries and personal-care and hygiene products, including deodorants, soaps, toothpaste, perfumes, diapers, shampoos, razors and feminine hygiene products.
- Food Products industry includes: Farming & Fishing companies - companies that grow crops or raise livestock, operate sherries or own non-tobacco plantation; Food Products Companies - food producers, including meatpacking, snacks, fruits, vegetables, dairy products and frozen seafood. It also includes producers of pet food and manufacturers of dietary supplements, vitamins and related items.
- Diversified Food industry includes companies that offer a diverse portfolio of food products across agricultural, animal and dairy product categories.
- Household Goods & Home Construction industry includes companies that offer: Durable Household Products - Manufacturers and distributors of domestic appliances, lighting, hand tools and power tools, hardware, cutlery, tableware, garden equipment, luggage, towels and linens; Nondurable Household Products - Producers and distributors of pens, paper goods, batteries, light bulbs, tissues, toilet paper and cleaning products such as soaps and polishes; Furnishings - Manufacturers and distributors of furniture, including chairs, tables, desks, carpeting, wallpaper and office furniture; Home Construction - constructors of residential homes, including manufacturers of mobile and prefabricated homes intended for use in one place.
- Food Distribution industry includes companies that distribute food, beverage and consumer goods to restaurants, healthcare, educational facilities, lodging establishments; equipment and supplies for the foodservice and hospitality industries.
- Tobacco industry includes Manufacturers and distributors of cigarettes, cigars and other tobacco products. It also includes tobacco plantations.
- Toys and Games industry consists of manufacturers and distributors of toys and video/computer games, including such toys and games as playing cards, board games, stuffed animals and dolls.
Industry Ranking of Bunge
With $42.7 billion revenues, Bunge ranked number 2 of all the companies in the US Food Products industry. There were a total of 46 public companies in the US Food Products industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Food Products industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.