So how do we stay confident about farming? How do we sell less for more?
Provocations 01 - 04
01. There are no route maps for change.
The Agricultural Industry is full of recipes for change but very few route maps. There is no vision for the future or our meat industry, long-term game plans in the wool industry, dairy seems to be obsessed with doing more of the same. Where are the transformation strategies, who are the people to lead them, where is the cross-sector alignment to foster cross-pollination of ideas? How might we design these journeys better, articulate them, then resource them with the appropriate people and capital?
Greater consortium thinking and doing.
At present collaboration is limited because of long traditions where entities are well dug in with intergenerational mandates. From Federated Farmers to breed societies it seems that everyone is in their respective corners. Working together with shared agendas is so rare. Most engagements across the sector are either simply informative or adversarial. This will only happen where it makes sense to share intelligence, logistics and pursue profitable opportunities. What fires this up will be new bold ideas and out of the box strategies across all sectors.
Deep experts but few strategists.
How might we encourage philosophically aligned businesses to work collectively?
It seems we have many single-sided experts, but few well informed strategists that can stand back far enough with influence and make change. How might Federated Farmers move from being advocacy and issues focused to becoming a major strategic influence in the industry with compelling future route maps.
Create a new understanding of the business we are in.
How might we attract top thinkers into the industry with greater focus on strategy?
Unquestionably the Food and Beverage Industries have been talking about it for so long, yet we are not organised with a set of complementary visions sector by sector species by species to deliver into niche markets at higher price points. If we can turn a nation of farmers into a nation of foodies all of our problems would disappear within 10 years.
How might we broaden our agribusinesses horizons and better educate all those involved equipping them with the knowledge of the opportunities and the route map to get there?
02. Myopic siloed leadership caught in time warps.
We are recognised leaders in agricultural excellence and producers of high quality products with integrity. We understand that consumers want products that deliver an experience and are customised to their needs and philosophical beliefs. We seem to have most of the ingredients for success but lack the informed leadership, where should the discussion be focused, and actions shaped.
Agribusiness is currently starved of visionary leadership there’s plenty of scientists and field experience but few strategists with charisma, emotional intelligence able to engage with and understand consumers. We need a deep understanding of markets by key leaders and reverse engineering, working back from the markets to develop product solutions which are truly innovative.
More well-informed and experienced governance.
How might we redefine the future of our agribusiness industry and embed this new knowledge in the leadership of our industry?
Industry ownership as opposed to value chain experience dominates the skill sets in our boardrooms. We lack the courage to attract and appoint the right skill sets and experience to our boards, so necessary in the agribusiness industry.
Redefine agribusiness from customer perspective.
How might we improve the governance of our industry with a better mix of value chain experience?
Many of the organisations are species or breed specific and have little to do with a complementary food basket offering. It’s time to look at these carefully going into the future what are the appropriate eco-systems in which endeavours should be planned and managed.
For example, Federated Farmers presently does not include horticulture, Fonterra doesn’t include sheep or goats milk. Salmon farming is stand-alone yet a few feet along the shelf from our spring lamb. The lists of contradictions are significant and over time we have created many bureaucracies managed by farmers with back to front myopia.
How might we put together a new more market-driven set of agribusiness entities to develop and support these new value chains from fork to farm?
03. We have no over-arching New Zealand agribusiness story or umbrella brand.
Certainly nothing has ever been registered in the agribusiness sector. In years gone by,we once had Canterbury Lamb, but no one bothered to register it. There is no single clear and cohesive primary sector brand supported by the New Zealand story. Nothing to the equivalent of 100% pure in the tourism industry which has been so successful in attracting $115 million of taxpayer funding per annum. Currently there is no universal accreditation symbol linked to the New Zealand primary sector.
Turning our farmers into foodies.
Accreditation would offer many benefits in provenance stories of origin and authenticity which would support a price premium from New Zealand. Sadly, we retreated from the International Woolmark some 20 years ago and have never managed to recover from the value and status it gave us. At present we enjoy a bucolic status as a clean green country, it’s probably worth around 15% price premium at retail yet to be realised. Creating an overarching story is the responsibility of MPI although it seems they do not know it yet. Their mandate is not simply to protect our borders it’s also to grow the primary sector. Marketing it seems is a strange word for a Ministry.
Anointing and supporting New Zealand’s best in the same way 100% pure has been doing since 1999. These days in a digital era our farmers could reach into the right kitchens anywhere on the planet.
Develop regional provenance stories.
How might we put together an overarching program or food and beverage excellence which is sufficiently well-funded to become embedded for the long term?
Develop regional provenance stories to celebrate the points of difference in food and beverages. Work together to leverage local food values create appellation behaviours between growers.
Create a Fellowship of the Willing.
How might we better romance the regions supporting their food and beverage values?
Create a Fellowship of the Willing prepared to support and deliver on a special point of difference help build unique IP then form vertical partnerships to build protect and defend the difference, work together in the category in a complementary way.
Build modern e-commerce platforms and hubs.
How might we create vertical relationships into the marketplace from farm to fork upholding an agreed operating charter all the way to the supermarket shelf or kitchen?
Consider that tomorrow’s customer may well want to buy food direct for convenience reasons and from known and trusted sources. Presently there is no New Zealand Inc. consortium, the opportunity is significant in particular for small exporters.
How might we create these digital platforms and in-market hubs across the globe?
04. The primary sector does not know how to sell less for more.
New Zealand is almost at capacity. Under the current model there is little room left to expand agricultural and horticultural production without risking our national food brand. So how will New Zealand double primary sector exports to $64 billion in 2025? There are plenty of reasons to be optimistic about New Zealand’s food industry. Historically important industries like dairy, apples, and kiwifruit are adding hundreds of millions of dollars of export revenue to the New Zealand economy each year. Export revenues in the innovative foods category were $500 million higher in January 2017 than 5 years earlier in 2012. However, volume’s not the problem, it’s value. Our price points are too low, our products are too generic and lack that competitive edge. We sell too much milk and not enough nutrition, too much meat and not enough cuisine.
Our products lack that competitive edge.
Positioning our products, packaged well with the accompanying stories into niche markets is still a long road for most of our exporters. We enjoy seasonal replacement markets alongside our competitors so few of our products are trans-seasonal in the chilled space.
Shifting behaviours can only happen with the right in-market knowledge, supportive management teams, careful investment and patience. New businesses are opening up multi-million dollar categories that did not exist ten years ago. Added value sheep milk products for Asia, branded protein smoothies conquering US retail and new apple varieties being sold in airtight containers to guarantee their integrity, businesses are continuously adding value to traditional industries alongside innovative new products.
Our ordinary is extraordinary.
We forget that our ordinary is extraordinary in many parts of the world. The purity of our food and environment remains unobtainable for many nations and we need to nurture it as a core strategic pillar of our food brand. If the provenance of your offer is its strongest benefit, work out how to support it. Competition is fierce so be clear about how you are differentiating from others in your target market. For example, did you know The Netherlands is the number one supplier of infant formula to China? And Ireland has just overtaken New Zealand for the number two spot. Many countries in the world claim clean and green status, so to add value New Zealand food products need to meet a specific need or demand as well as being pure, safe and traceable.
Whether it is building key account management programmes for international B2B customers or investing in integrated consumer marketing campaigns, directing customers to your business and retaining their loyalty never stops.
All agriculture education is behind the farm gate.
Tertiary institutions need to develop specific programs on international food and beverage marketing. At present there are none to speak of in the marketing space virtually all agricultural education is behind the farm gate and even that is suffering.
How might we increase this focus creating the right academies and learning institutions delivering work ready graduates with new knowledge all the way along the value chain?
From A2 milk to grass fed beef so many of our great innovations have been plagiarised within a short period of time and we have failed to lock the IP gate behind us. The French would never do this, why should we?
Becoming a food and environmental leisure nation.
How might we better understand these strategies ring fence excellence and protect it into the future?
Becoming a food and environmental leisure nation will take another carefully planned 20 years to arrive at the status. It is a combination of thinking from nutritionists to hotel keepers, from hotel management schools to restaurant guilds and foodie recognition programs. At present most of these elements are dislocated.
How might we put a master plan together and pursue a long-term plan connected to health and leisure?