This week on the podcast Matt sits down with Marc de Beer, President of Aviagen North America. They begin by diving into how Marc got involved with animal science and nutrition and how Aviagen uses genetics in the boiler breeding business to supply the best breeding stock to poultry companies around the world. They continue by discussing Marc’s journey from scientist to president of the North America division of the company and how he approaches changes and challenges, such as the rise of artificial intelligence and the ongoing issue of Avian Influenza. The conversation concludes with Marc elaborating on the mission of Aviagen and their efforts toward efficiency and sustainability.
Episode Transcript
Marc de Beer 0:04
So our mission is pretty clear, we want to provide the very best breeding stock to
our customers so that they can grow chickens to keep people safe, affordable, abundant
protein. And that's it, you know, we weren't and we want to be the very, very, of
course, like anybody would tell you, we want to be the best at it. But that is what
we do. And that's what we will do.
Matt Waller 0:26
Excellence, professionalism, in.novation and collegiality. These are the values the
Sam M. Walton College of Business explores in education, business and the lives of
people we meet every day. I'm Matt Waller, Dean of the Walton College and welcome
to the Be EPIC podcast. I have with me today, Marc de Beer, President of Aviagen North
America. Thank you so much for joining me today, Marc.
Marc de Beer 0:52
Hey, thanks for having me.
Matt Waller 0:54
And, Marc, you have such an interesting career. You're from South Africa. You came
to the University of Arkansas and you got a PhD in Animal Nutrition. You went to work
for Aviagen back in 2008. And then you went to DSM, Elanco. And you moved up the ranks
in Elanco fairly quickly. And now you're President of Aviagen North America. So let's
start our conversation by talking about Aviagen. What do they do?
Marc de Beer 1:27
Sure, yeah, Aviagen is a is a company in the industry, we call ourselves a primary
breeder. So if you're buying chicken, to eat from someone, we're the guys who supply
the breeding stock to the people you buy your chicken from. So what we do is, really
the core of what we do is genetics, we're trying to select the very best of all of
our lands, put them together and ultimately create the breeding stock that gets gets
bought by our customers that then produces the chicken that you eat. So yeah, we're
a breeding company, a genetics company at our core. Yep.
Matt Waller 2:03
How did you get interested in animal science and animal nutrition? What I know, that's
what brought you to the United States. But where does your interests stem from?
Marc de Beer 2:16
So you know, I grew up on the East coast of South Africa, we grew up in a fairly rural
area along the East coast, lots of sugar cane. But you know, we were always sort of
exposed to the natural world. And I was fascinated with wild animals. You know, we
were lucky to be in an area where, you know, there was lots of wild animals, all the
traditional stuff you see with the African game. And so actually, I ultimately studied
animal science, because I wanted to become a Game Ranger. And I wanted to to learn
about leopards, and lions and elephants. And after a little while, in university,
I had the courage eventually to ask one of our professors when we might start learning
about, you know, lions and leopards and the like. And basically got the surprise to
find out that animal sciences really production agriculture, right. And so my interest
really was in wild animals. And then, after spending a little while in college, I
realized, well, I'm actually studying agriculture and production. And so yeah, and
I had started I kind of enjoyed it and got into the nutrition side of it. It just
it was it was a discipline that interested me, I guess more than some of the others.
And so, yeah, so it was actually a little bit of ignorance I guess that got me into
into the the area. Yeah.
Matt Waller 3:35
After you went to work for Aviagen, by the way, where's Aviagen out of what, where's
the headquarters?
Marc de Beer 3:45
Our global headquarters are in Huntsville, Alabama. That's North Alabama. Yeah.
Matt Waller 3:50
And what types of livestock do you focus on?
Marc de Beer 3:55
At Aviagen it's exclusively poultry. Right? So we're focused on we have a broiler
breeding business. So those are chickens. So we're producing again, the breeding stock
that ultimately produces the chicken you eat. And then we also have a division that
focuses on turkeys. And so we have Aviagen turkeys, which, you know, of course, they
do the same type of work, the genetic selection, etc, to produce the turkey that goes
into the into the market.
Matt Waller 4:22
Well, you know, it's, it's interesting. The turkey is, is most of the turkey consumed
in North America, or is it? Because I know you know, we lived in China for a while
and it was not easy to find turkey at any time there.
Marc de Beer 4:40
Yeah, turkey is definitely a US dominated phenomenon, right. There's definitely pockets
of turkey consumption around the world but the US is for sure the majority of the
turkey market around the world so it's a far less global business, I guess than the
chicken business, which obviously is essentially ubiquitous now around the world,
but you have chicken, local chicken industries. But turkey is definitely more localized
certainly in the US. And obviously, we have turkey sandwiches, which is a big driver.
And then of course Thanksgiving is, which is a huge driver of demand for turkey in
the US. Yeah.
Matt Waller 5:18
But you're focused on the breeding stock both for chicken and turkey. Correct?
Marc de Beer 5:25
The company is. I myself focused on my part of the business is exclusively focused
on the chicken side. Yeah.
Matt Waller 5:30
So how, how does that, I would think that there wouldn't be a lot of difference between
the breeding chickens and the others. What is the difference there?
Marc de Beer 5:44
Yeah, I think you'd be surprised that at the level of diversity in the gene pool,
right, it's really fascinating. We've got, of course, a whole host of lines, you know,
which are, we have pure lines, which which have kind of, you've been perpetuated through
through a long period of time. And within those lines, you know, there's there's traits
or characteristics that we can measure and select for. And there's, there's still
a lot of genetic variation within those lines. And so you can find, you know, individuals
who are, you know, uniquely competent in certain traits, and then select, obviously,
you know, ideally more and more of those individuals, depending on what you're looking
for. So, of course, because we're growing chickens, you know, we're looking for birds
that are efficient, we're looking for birds that are strong, have very healthy immune
systems can manage in difficult conditions. So there's a whole host of traits. But
yeah, you they might, a lot of them might look the same to the untrained eye. But
the rate at which they grow and eat, the degree to which they feather these kind,
there's a whole host of things, probably, you know, approaching 50 different things
that we're measuring very, very accurately and trying to, again, combine those traits
and find out the best individuals who have the best overall breeding value within
a given line.
Matt Waller 7:02
So do you have, I would guess you've got a lot of expertise in your company around
genetics, probably.
Marc de Beer 7:12
Sure sure absolutely yeah. We do.
Matt Waller 7:15
And, I would think, I had seen a presentation on genetics, and chicken, or just in
general, but they use chicken as an example, a few years ago, and it was quite interesting.
You know, this presentation made by a company that does genetics for for chicken,
I can't remember. I think they're in Northwest Arkansas, actually.
Marc de Beer 7:42
Yeah, most likely is Cobb.
Matt Waller 7:45
Yes.
Marc de Beer 7:46
Yes. They are based out of Northwest Arkansas so that with Cobb would be our primary
competitor. Yeah.
Matt Waller 7:51
Okay. So I have a great idea then, of what you do. But they showed a presentation
where they showed what chicken looked like, I don't know, 50-60 years ago, and the
evolution of the chicken over that time, and it was it was really interesting,
Marc de Beer 8:10
Fascinating how they, how they've been selected. And, yeah, they're just, of course,
you know, you get a picture of a bird that the you know, comes from genetic stock
that's 50 or 60 or 70 years that it's gone unselected, yeah you're gonna see really
meaningful differences in that individual relative to its peers from today.
Matt Waller 8:29
Well in this picture, they had, like, they had like, on one side a picture of the
chicken standing there. And then how much feed it took them next to it to get to wherever
it was ready. And then they had one today. So the chicken on the left was smaller,
but had a bigger pile of food. It was pretty interesting.
Marc de Beer 8:54
Yeah, I mean, that's been a huge part of the progress, right? Finding finding individuals,
or families that are very efficient at converting feed into meat. Because ultimately,
that's what our industry does, right? We we take different plant proteins, grains
and other goodies, and, you know, run them through a chicken that then converts that
into a, you know, an attractive protein for humans to consume. So that's the efficiency
with which they do that it's one of the biggest drivers of obviously profitability,
but you know you sort of got the knock on effects of, you know, what that does to
utilization of resources, right? If it takes a lot less to do what we used to do,
and we get more out of it, then obviously, we're kind of contributing to doing things
more efficiently and sustainably as well. So, yeah, it's remarkable when you see it
visually, visually, like that, the impact of 50, 60, 70 years of selection, it's stunning
what what's been achieved.
Matt Waller 9:48
So as president, you know, obviously, you have a PhD. You understand science well,
but now you're President so you're having to lead the company, you're having to set
the direction of the company, get people aligned, motivate people, invent a path forward,
solve problems, et cetera, et cetera. So that's a big shift. You know, really, basically,
for you from your PhD till now, you know, we're talking, what, 15 years?
Marc de Beer 10:25
About 15 years. Yeah.
Matt Waller 10:27
So you've had to go from scientist to leader, manager. How has that transition been?
Has it been challenging for you or what do you say?
Marc de Beer 10:38
Yeah, it's a it's a good question. I, you know, I, you know, part of the story starts
with where I fell into the science of it by mistake, like I described in the beginning,
right. So I wasn't, I came to be very passionate about it, and I love it. But it wasn't
necessarily you know, where I wanted to be in my whole career. So I think it was within
a week of starting at at Aviagen, I sort of naively told my boss that although you
hired me as a nutritionist, I really hope I'm not a nutritionist 10 years from now,
and I kind of, you know, made that that happen, you know, I was when I, when I left
Aviagen, I went into a marketing role at DSM. And that was kind of the first step,
you know, evolving into a more general management or business management type role.
So, yeah, it's, you know, to the question of whether it's been challenging? For sure,
I think it's, but it's a lot of fun, right? Your learning all the time and kind of
seeing things and I'm fortunate, I guess, to ask a lot of questions. You know, I'm
not afraid to wander a little bit about, you know, what it would take to do something
different. And, you know, when I, when I took on a broader business management role
of DSM, I had to obviously, I interviewed with the board over in Switzerland, and
my boss at that time suggested that I brush up my understanding of finance a little
bit, which was very good advice, considering I had very little understanding of it.
And so just started reading books. And you know, on the plane over for my interview,
reading Finance for Dummies, at least trying to get some of the terminology down.
So yeah, I guess just the curiosity for learning. And so yeah, it's been challenging,
but it's been fun, right, and you get to see a more broadly look at the business as
opposed to purely from a scientific perspective. So yeah, that's, that's kind of what
I like, and probably why I've gravitated a little bit in that direction.
Matt Waller 12:26
I would imagine in your organization, you're also having to lead a lot of scientists,
is that right?
Marc de Beer 12:34
Sure. Yeah, yeah, we have a lot of technically minded people, for sure. Yep.
Matt Waller 12:39
So what do you see as the biggest challenges, for a technical company like yours,
going forward? And specifically, one of the things I'd like to ask you about is artificial
intelligence, not just our particularly generative AI, because, you know, they're
we're finding applications of generative AI in computer programming, in marketing,
in all areas of business. So how about your business? How do you see generative AI
having an impact, if at all?
Marc de Beer 13:18
Sure, yeah. You know, we obviously, you know, that I guess the whole world is sort
of recognizing and learning and adapting to, to, not just AI, but a whole host of
different technologies that, that are emerging. And, you know, obviously, we're also
at the front end, like probably most, sort of not yet, people who aren't in the midst
of developing it, I think the rest of us all feel like we're learning on the fly a
little bit, I think there's a, there's a lot of things that that humans do, that become
very repetitive, and I'm not, I'm not suggesting that the only things but you know,
just observing, you know, we also, of course, in order to produce our product, we
have a large number of flocks of birds that, you know, historically, people, you know,
husbandry was was based on a lot of observation, right, spending a lot of time watching
animals, understanding their behavior, seeing their habits, how environmental factors
impact them, doing it, over the amount of time and the scale that we do it at, it's
become more and more difficult to get human beings who can have that level of detail
and continued focus so that our husbandry is as effective as it always has been. So
there's an area for example, where, you know, with computer vision, we can observe
behaviors at a large scale, over extended periods of time, that can inform us about
many things as it relates to the flock and the flock health, flock behavior, fertility,
you know, interactions between individuals, welfare. So there's one example I think
of how we could use that and which we are we actively doing that right now including
visual monitoring, but sound monitoring. And, you know, again, having a human being
sit there observing these things is incredibly inefficient and not nearly as accurate
as what a machine can do it right. And we're learning that pretty quickly. I think
learning the full scale application of that we're getting there, right, I think it
would be premature to suggest we've sort of said, well, great, we've turned over the
entire functions. But that's an area where I think we can be a lot more effective.
And then one I'm, you know, personally fascinated by is planning, right, because when
you've got a biological product, a live product, we're not just talking about a perishable
product, we're talking about a living animal that we're potentially shipping across
the world, you know, we could be shipping day old chicks to China, we could be shipping
them down, you know, essentially across the world. Our ability to plan and make the
most efficient supply chain possible, when you've got a whole host of variable biological
inputs. It's extremely difficult for for a group of humans to do it. And so maybe
that's an area as well, where where we could benefit a lot from from essentially having
it done by a machine with with the right inputs and learning along the way. So, again,
we're at the front end of that,
Matt Waller 16:14
I know that your mission, the mission of the company, is to ensure that the company,
it's about having food on every table, how do you how do you make sure your company
stays focused on that mission and doesn't get sidetracked by things that come along?
Marc de Beer 16:39
So we have a few things, our own as we were owned by a family, the Erich Wesjohann
and his family own our company. And one thing that our owners, I think have been exceptional
at is ensuring focus. So it's very tempting, when you have a strong company like ours,
and you have you know, we're in a very strong position. And we work with a lot of
customers. And there's a lot of adjacent, you know, opportunities that come along
and can be very distracting, they can be very lucrative or very interesting. They've
done an exceptional job of saying Aviagen will focus on broiler breeding and genetics,
you know, if there's interest, because we have a customer who has nutritional needs,
or vaccine needs, or diagnostic needs, etc, we might ultimately enter into that, but
it will be through a separate entity, it won't be through Aviagen. So we've, we've
been very, very focused on it. And I don't think, you know, whether we tried or not
our owners, I think are pretty disciplined about making sure we stay focused on that.
So our mission is pretty clear, we want to provide the very best breeding stock to
our customers so that they can grow chickens to keep people safe, affordable, abundant
protein. And that's it, you know, we weren't and we want to be the very, very, of
course, like anybody would tell you, we want to be the best at it. But that is what
we do. And that's what we will do, we will not deviate from that. So it's not hard
to stay focused in our in our world, it won't take long to get redirected if we if
we get off track.
Matt Waller 18:09
What are some current trends or challenges in the poultry breeding industry? And how
are you staying ahead of these changes to remain competitive.
Marc de Beer 18:21
So obviously, the issues that our industry faces are the ones that are most interesting
to us, right? So we're trying to ensure that whatever we send our customer gives them
the best chance to succeed. Important to realize that, and I don't have a picture
for you, but it'd be good if I had a picture to show you. Our most valuable, you know,
the pedigree level are very, very best birds, their offspring will eventually reach
the market, somewhere between four and five years from now. So all of the decisions
we're making the selections, the genetic progress we make, you know, once we've made
those selections at the pedigree level, we've essentially locked in what's coming
for the next 4 to 5 years, right. So we do spend a lot of time thinking about what
the sort of the medium term future holds. And we get a lot of time from our customers,
and we end so you know, things that obviously, efficiency and the ability to produce,
as always, you know, produce efficiently is always going to be a challenge. So, you
know, commodity prices have, you know, the input costs of our customers are very high.
Meat prices today are not super high. They've been pretty volatile. So those things
will always be big drivers as a sort of foundational drivers of our customers business
and we won't lose focus on those. Something very topical right now. And it's it's
virtually a global phenomenon at this point is Avian Influenza. And so, you know,
it's probably, you know, people in the United States would have picked up on that
in that context of egg prices, you know, looking at the cost of an egg in a grocery
store. And so we've had a sort of an ongoing Avian Influenza challenge. Europe has
been particularly hard hit by that. And then of course, here in the US, we've also
had our challenges. So, and many countries around the world for that matter, as a
breeding, there's export limitations if you if you run into AI or Avian Influenza
in a particular area, it creates export limitations and creates, you know, other challenges
for the business. So, redundancy and security of supply is a huge part of our sort
of, you know, challenge looking forward, you know, how do our customers feel certain
they can get our products, whatever the disease challenges might be in a given part
of the world. So, that'd be a big one. And obviously, we do that through biosecurity
through, you know, redundant supply bases, hopefully, we can have, you know, if one
place gets locked down, we've got somewhere else to bring birds from. So those, and
then I think, you know, it's a little bit of a what, even if it's a buzzword anymore,
but our customers are challenged more and more, I think with questions about their
sustainability initiatives, their footprint, you know, we've done a lot of work, being
more efficient, inherently helps you be more sustainable, right? So, but we've also
got a lot of work going on and how we ourselves can be more more efficient and sustainable
and then sort of pass that on to our customers down the road.
Matt Waller 21:08
That's terrific. Well, Marc, thank you so much for joining us today. And also, congratulations
on your remarkable career. Very impressive.
Marc de Beer 21:19
Thank you much. Appreciate it. Enjoy being here.
Matt Waller 21:23
On behalf of the Sam M. Walton College of Business, I want to thank everyone for spending
time with us for another engaging conversation. You can subscribe by going to your
favorite podcast service and searching Be Epic. B E E P I C
