So how do we stay confident about farming? How do we sell less for more?
Provocations 09 - 12
09. Collaboration seems a no-brainer, yet we don’t get it.
We need economies of scale and working together will deliver this, so why is it so hard? Across the agribusiness sector each discipline has a different distribution process and costs, they do their own R&D, the degree of repetition is considerable. It’s likely that in each part or player in the sectors there could exist gem’s of brilliance. Putting together and creating revised business models would benefit the entire sector.
Redesigning the value chain model form fork to farm.
Providing significant reduction in costs and increasing efficiencies. At present the sector is disaggregated and very fragmented. Organising shared freight logistics, creating repurposed processing plants, shifting processing into the markets will all require genuine collaboration. The smart term is co-opetition.
When you sit down and do this you see the inequities, dislocated logistics, excessive margins and the costly adversarial behaviours. There is no current work being done amongst these disparate players to take a look carefully at such models in redefining their value and purpose. Digital technologies, blockchain commerce, now will fast make many of the traditional behaviours obsolete, it’s a big prize but worth fighting for.
How might we organise a team of experts to seriously engaged in redefining the right pathways to market and the best business model to deliver them?
10. Growing products in the market.
Growing products in the market is now very possible in being able to shift genetics and practices to offshore markets rather than actual product from New Zealand. We’ve been doing this for many years with success across some products. We already grow Kiwifruit under license around the world. How could this model be replicated?
Placing the product for growth in the markets that consume it.
This is an attractive idea in that we would be strategically placing the product for growth into the very markets that consume it. Intellectual property risk would exist, but there are ways to help mitigate that. Already in China we have more Manuka honey sold than New Zealand actually produces, which is illuminating given we are the only producers. If we develop the systems to authenticate the product, ensuring traceability of genetics and the production practices, then why wouldn’t this be an opportunity for us? The honey industry for one is already beginning to utilise a far more advanced level of technology to make this possible.
A good logical option is to follow the Zespri model, which shares similar price points even when grown in another country. We are seeing similar developments in global well branded apple production, with licensed growing activities in other countries, using New Zealand plant material marketing under a single brand across seasons.
A wealth of ideas.
There is a wealth of ideas in these labs, glass houses, and experimental growing fields. The organisations responsible are so often guilty of licensing the wrong people with insufficient resources to realise the opportunity. Somehow there is a dislocation between the science community and commercial operators, a gap which needs to be closed.
How might we develop unique intellectual property in the agribusiness sector and look carefully for the opportunities to shape new business models and market these gems of science more actively?
11. The growing divide between urban and rural.
86% of New Zealanders now live in urban locations in a recent survey taken by MPI. The weight of opinion remains more positive than negative toward rural agriculture, the greatest criticisms are in dairying and issues of water. However, “a better lifestyle” was the strongest reason for a more positive view of rural New Zealand.
Is farming ready to open its gates to the public?
Farmers feel they are being singled out on issues in the media reporting less than a balanced representation in capturing public sentiment. There was virtually no real knowledge of what goes on inside the farm gate. Farmers on the other hand so often don’t do themselves any favours in how they react or how they fail to utilise media platforms to make sure the right story is delivered. For instance, how many firms have their own websites, Facebook pages or PR strategies? If you communicate well and show the good they are doing with their farming practices it makes for an interesting story. The question is, is farming ready to open its gates to the viewing public? Farmers do need to do more proactively about articulating their value to New Zealand’s urban population. They need to be far savvier about showcasing what they are doing right, they need to take their farms to town and embrace the various new platforms.
How might we develop a more positive nationwide image towards farming and its contribution to New Zealand?
12. At present there is no universal farm certification system.
There is no alternative going forward, we as New Zealand farmers must support branded goods with all of the appropriate accreditation standards inside the farm gate. Ireland already has an initiative of their own known as Origin Green which gives a level of formality to support the clean green brand of their agricultural products.
Certification will give farming greater credibility as an industry.
This initiative helps present a single brand vision and expectation to the consumer. If farmers do not start preparing today, they risk producing something that no one will process. Without certification you will not only lose the right to farm, you will also lose the right to sell, and the right for your products to be collected for processing. Ultimately, those who do not have certification will be pushed out of the market. To achieve these high standards there must be no tolerance for lack of willingness to participate. It’s going to take some hard conversations to get rid of Granddad’s viewpoints on the farm, but these are the modern realities of positioning food at the high end which is our destiny, if we want it? There is going to be a shakedown coming which may push some out of the industry. However, it will give greater credibility to farming as a career and make the industry more attractive. When farming is viewed as a prestigious well-run credible industry, it will finally earn a well-deserved label of a profession and no longer be a way of life.
Connecting the farmer with the consumer.
The movement of this momentum will connect the farmer closely with the consumer and they will learn how consumers have significantly changed. It seems the technology is there already, but the will isn’t, and farmers have not yet realized the premium opportunity it represents in collaboration with processes and exporters.
How might we develop a farm certification program to underpin value chains and link them to brands in the marketplace?