So how do we stay confident about farming? How do we sell less for more?
Provocations 05 - 08
05. The primary sector currently has no clear strategy on genetic modification.
Given we understand this better and segment consumers, knowing the target markets of those who will be more aligned to products genetically modified or not. It’s a clear crossroads we stand at currently and we are losing valuable time. Leaders at present in the industry need to educate our communities on what genetic modification means, and how the use of it impacts food production practices and ultimately the food we eat.
A call for New Zealand and the primary sector to immediately engage.
Currently there is confusion among the public with different levels of knowledge, and varying perspectives on the acceptability of genetic modification in different applications. Are consumers aware of and happy to accept that genetic modification is commonly used in research and diagnostic laboratories that support our primary sector? Is the use of genetic modification in veterinary medicines more acceptable than genetic modification in the development of new products? Is cisgenics more palatable than transgenics?
There is a strong call for New Zealand and the primary sector to immediately engage in a transparent and meaningful debate. A decision should be taken quickly on genetic modification, so that the primary sector can position itself appropriately for the future.
How might we conclude a GM view as an integrated agribusiness for the long-term future of New Zealand’s food and beverage strategies?
Opinions are divided on whether we should or whether we shouldn’t. Some believe that genetic modification will allow us to stay competitive by increasing yields or producing products with traits consumers are willing to pay a premium for.
Others think that being free of genetic modification will continue to build on New Zealand’s clean green image allowing us to differentiate our products and practices from other countries.
GM will be used more in the future globally.
How might we better understand this debate, do we as yet have enough information to make the call?
Regardless of the differing views GM will be used more in the future globally. Consumers will be informed about its uses advantages and disadvantages as the technology becomes more prominent and more information is available, it is likely that consumers will be divided.
How might we see the divided future and take sides?
06. As yet we have not recognised the positioning of food as a health product.
Within 20 years the concept of foods as health products will be a key trend. Functional foods are already happening which are perceived to have positive health benefits. They currently enjoy a high valued position in some markets. However, as a sector we are not exploiting this opportunity to its full potential. At present there are government initiatives and controls on the use of foods that are likely to be implemented in the future.
Health benefits for food will be a key player in the New Zealand primary sector.
This will contribute to consumers perceptions on food as a method of treating certain illnesses and conditions or best deliver preventative measures to maintain wellness for all ages. It is a likelihood that individual genetic mapping will become accessible for many. Linking individual genetic maps to the risk of developing diseases or intolerances, or how individual people’s metabolism will react to certain foods, presents exciting markets in hypo allergenic consumers. As the world increasingly urbanises now over 50% of people live in cities, their disconnection from nature becomes the norm. In order for New Zealand to become credible and competitive in an environment where functional foods are prominent, it will be critical to have access to robust research to support the claimed health benefits. Verified health benefits for food will play an integral part in the New Zealand primary sector brand story.
Pharmaceutical companies are actively engaging.
Global pharmaceutical companies are already actively engaging in going beyond antibiotics research and launching products based on nature’s own biotics. We’ve seen the enormous premiums possible in Manuka honey and its natural antiseptic qualities. This is only the beginning of a new pathway for New Zealand in functional foods.
At present we have the backdrop in terms of clean green but as, yet our foreground has still not yet seen major farmed products in the pharmacy with few exceptions.
We are a sports nation passionate about performance.
How might we accelerate the knowledge in the space and seek new partnerships and value chains from farms to pharmacy in these new premium markets?
It seems that nutrition is slowly entering the sector and our super athletes and teams on the world stage have the potential to become significant ambassadors, what might it take to replace Nike and Addidas on the All Black Jersey with branded New Zealand Deer Velvet and Manuka Honey?
Potential for the homeopathic remedies industry to develop.
How might we better connect functional foods to healthy endeavours undertaken by exemplary lifestyles worldwide on product endorsement basis?
From almost hippie beginnings we have the potential for a significant industry to develop in homeopathic natural remedies. The knowledge exists, the price points are high, what’s missing is sufficient scale businesses to take advantage of these opportunities, putting together the appropriate formulas and brands, and being able to go the marketing distance.
How might we give birth to these kinds of businesses and encourage them more actively linking them back to our farming interests and investments?
07. As yet we are still not using sufficient consumer insights to drive food strategies.
It’s key to understand what the consumers want into the future and not market research into what they want today. We as New Zealand food producers and farmers cannot wait for consumers to tell us what they want. We need to present consumers with ideas they will immediately connect with and wish to purchase.
Companies no longer invest heavily in new products.
Primary sector companies do not understand the psychology of consumers in different markets yet. There are no anthropologists in the food sector to bring knowledge of past and present populations to market insights. There are no rapid prototyping programs going on where new products can bedistributed to markets to gather data on the accuracy of consumer insights. Companies no longer invest heavily in the production of new products and marketing strategies based on market research or current consumer trends.
Food technology is not an exalted career unfortunately, yet so critical in terms of engineering new foods. New products and strategies need to be far more targeted and companies need to be willing to test the feasibility of new products more frequently. We are seeing a change in portion size, growing demands for organic food, the trend to buy local, concerns about environmental impact of food, demands for products with extended shelf life, greater availability of out-of-season products the list of new intriguing insights grows by the day, yet we seem reluctant to pick up on these things. In our own backyard we have seen a significant growth in food that is easy to eat on the go but is also a healthy choice.
Design thinking should be embedded in our companies.
Design thinking and rapid innovation techniques should be actively embedded in our companies along every aspect of evaluation. Matched with customer journeys, these would produce new insights and provide the ingredients for product innovation at present lacking inside many of our companies who seem obsessed with doing more of the same.
Lack of the resources and focus in food innovation.
How might we introduce design thinking more actively across the food and beverage sector from fork to farm?
They are obsessed with delivering work ready students like a production line, simply trying to better deliver the foods of today. There are virtually no major research initiatives going on in food innovation which are sufficiently funded and connected to companies who can commercialise the IP outcomes. Tokenism in this sector is well fêted with earnest intentions and often celebrity chefs, but there’s little outcomes whichever hit supermarket shelves or restaurants on any scale.
How might we completely change the academic learning and research institutions to better deliver real commercial food and beverage innovation for New Zealand?
08. Why is it we have no New Zealand owned distribution hubs across the world in key markets?
Intrepid exporters find great difficulty in establishing footholds in countries. It’s expensive and time-consuming and in many cases defeats smaller companies. Stand alone distributors are always willing to step in of course which can dilute the product message when one becomes part of someone else’s catalogue.
Off-shore New Zealand hubs valuable for market research.
Giving intermediary margins to distributors can also kill the price point and resulting margins back to producers. Creating hubs in each major market which can be used by the best of breed in New Zealand primary sector businesses would deliver critical mass, e-commerce platforms and modern warehousing techniques, in some sort of collective ownership model. If we can establish successful cooperative business models on shore, there is no reason we can’t create them offshore. Supported by an overarching story behind these products. New Zealand Inc. owned hubs would be valuable in market learning points where exporters can better understand local market conditions and gain valuable customer insights. Of course, there are considerable headwinds to work through, however, the opportunity would be immense and help penetrate niche markets at high price points. These facilities could offer hot desk services and house on the ground company specialists. For a small country like ours working together to compete in markets would be very new.
Beyond Trade Commissioners.
Going beyond trade commissioners to hands-on marketers, it’s possible to create a distribution model delivering self-sustaining margins. Modern inventory management would allow each participant to manage its own stock in real time. Almost like VSA it would be an ideal breeding and training ground for young food and beverage marketers.
Targeting of particular cities collaboratively.
How might we design these business models and who would fund them as potential investors?
The possible targeting of particular cities collaboratively, both within and across product lines. If organisations could effectively do this at a strategic level, there would also be an opportunity to investigate other channels of distribution which could potentially help to keep premiums high and make airfreight more feasible.
Non-existent collaboration between exporting parties.
How might we develop these new business models and attract best-of-breed exporters?
Logistical collaboration between exporting parties is non-existent as fierce patch protection applies and the shippers benefit at the expense of the producer and exporter.