Brian Richards

So how do we stay confident about farming? How do we sell less for more?
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I love this land and what it does for my spirit, my palate and my waistline. It is the most beautiful place on earth to live work and play, why wouldn't you want a piece of paradise to share with those you love. However, this beautiful paradise will be lost unless we do something major in the primary sector.

Over the next few weeks, I would like to enter the agribusiness debate with a series of provocations. With an apology for length, each provocation is intended to be a challenge for those involved in the primary sector. It's the biggest business we have as a nation and we simply can't do more of the same. We have to change.

The future of our primary sector.

The future of our primary sector does not rest in feeding the complete diet to any 60 million in the future. The answer is better understood by seeing us dividing into 1.5 billion people and providing only 2% of our offerings. But these products will be significantly different from those of today. Markets prepared to pay premiums for status foods from New Zealand which appeal to their aspirations and lifestyles.

There is a global citizen like me in every part of the world more particularly in cities of course. They need that dairy protein drink to offset their stressful lives. A grass-fed hormone free beef sirloin at their business lunch. Some gold kiwifruit to relax their nervous colons. Premium New Zealand deer velvet to help them in the bedroom, the list of opportunities is endless, but only seen if you know where and how to look at a changing world. 

Exceed expectations. Solve problems. Enhance lifestyles.

Our future lies in growing and delivering guilt free food and beverage products from New Zealand which exceed the expectations of consumers, solve problems they face and ultimately enhance their lives. This is the food business we need to play in yes, but it’s not mainstream. We don’t want more than 2% of the UK market in wine because any more means retailing at under 12 quid a bottle and we’ll lose our shirts to the Spanish, South Americans, or those dodgy Australians. Our own wine industry has successfully gone elsewhere for its additional 2% market share with the knowledge of what it cost to get. They work together as an industry sharing war stories and triumphs. When you’re only after 2% anywhere there’s no point in cutting the ground from under your New Zealand counterpart for that premium rack of lamb. Sadly, at present many do. We are absolutely useless at working together to find and exploit opportunities in most fields.

A world of niche markets.

Building a new perception of New Zealand’s food and beverage offerings requires a significant mindset change throughout the entire industry. Its ecosystem of understanding has to move on from the utilitarian approach of beasts in boxes to understanding lifestyles, cultures, health, well-being and the world’s many different cuisine offerings. With this knowledge we will find a world of niche markets we can divide into and barely be noticed. Louis Vuitton doesn’t have competitors it’s scared of, it’s simply and unashamedly so proud of its niche and how they got there they apologise to no one. They never have a sale, in fact they return and incinerate product lines which do not sell.

Changes in the food sector – dining and special taste experiences.

Recently, the way that much of the Western world perceives and approaches food has undergone a dramatic revolution. For decades the emphasis was placed on speed and convenience, taste was important but not paramount. Because of this our demands for foods changed, preservatives took over, and the impact on health and well-being has been significant. Now, however, consumers have become tired of manufactured tastes from processed foods and globally the beliefs that guide global consumption habits is transforming. The new demand is for fresh authentic flavours delivered through unique dining experiences and special food moments. 

An equally important part of this cultural shift is the vehicle that has been used to mobilize it. The Internet now sees online communities increasing as communication becomes more open and inclusive. Recipes are no longer guarded fiercely, instead they are to be shared freely between enthusiastic amateurs. Cooking meals is no longer so intimidating, it’s an opportunity for everyone and a form of recreation. 

The final ingredient in this change is the notion of authenticity. As global borders have come down and people are increasingly familiar with international flavours, consumers are no longer satisfied with the token flavours that have been peddled commercially. Instead they want real tastes and flavours, as if they were in the exotic locations that dishes originate from. The result of these changes is the shift in approaches and attitudes towards foods. Taste has taken precedence and the experience involved in attaining it is something to be shared and enjoyed.

My personal vision for our agribusiness sector is just this. 

It’s to bring a new, yet unheard of pleasure to the world’s palates and lifestyles carefully locking the door behind us by way of brands and unique quality intellectual property. It’s going to require great farmers, great exporters, great marketers to stand head and shoulders above our competitors delivering all the attributes consumers expect and desire. It’s a major challenge of course and one which will see most of us here out. It’s probably 30 to 50 years we’re talking about, but what a wonderful thought that we could become a Tuscany in the South Pacific without the folklore and conservative behaviour of Italy within two generations. Unfortunately, at present we have recipes for change but no journeys of any substance. 

How do we sell less for more?

Our institutions, entities and organisations including this one is almost certainly going to be being caught in a time warp unless they turn this corner I speak of.

How do we sell less for more is a simple question yet hard to answer if you are steeped in traditions of doing more of the same? Agribusiness throughout New Zealand has been doing the reverse since our early colonial days, we are masters at producing more and selling it for less. Our environmental footprint has been so generous it’s been the easy equation. Wealth no longer comes off the hoof but rather from between the ears. Selling less begins as a learning process no longer requiring more muscle but rather different mindsets. 

Imagining a collective vision for agribusiness.

Bringing like-minded people together to agree on this vision and doing something about it with real actions means recognition of the respective positions in the value chain, their relationships and connectivity with customers, visionary leadership and can-do cultures with purpose.

Wellington is littered with cabinets full of reports in the agribusiness sector which have in my view gone nowhere. So often commissioned by entities when questioned by ministers and others they’ve been devoid of fresh thinking and have simply ended up producing consensus for their members who at best restructure with a new suit of clothes but unfortunately, it’s the same people inside delivering another version of the status quo. We’ve seen a number of reincarnations in the agribusiness sector. Most of the mergers and acquisitions in meat, wool and dairy have been driven by thinking size matters most. Strengthening balance sheets of course is a good thing but it has not resulted in true innovation and better margins across the sector.

Fonterra's revenue has fallen by 3.2% over the past 5 years and its payments to farmers declined by 7.5%. Its remuneration and staff numbers have grown by just over 27.0% none of whom have any skin in the game. Over these same 5 years these figures resulted in a decline in annual payments to farmers of $764 million. Over a seven-year stint its retiring CEO’s remuneration it's assumed will be paid more than $35 million it’s a huge figure considering the cooperative’s lacklustre performance.

Inside out thinking and steady governance worked for a long time when we had few competitors, now the world is different. Transformational change is coming at us so fast now, if we fail to recognize the speed of change we will become completely irrelevant to our customers. Just another vast grazing Uruguay living on its outdated Gaucho story. 

The subsequent parts to this piece will list 19 provocations.

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