Tracking of United States consumer trends reveals opportunities for New Zealand farmers to bridge the gap between their farms and the American consumer.
But first NZ needs to develop the capabilities and embed the technologies to make this possible.
This is according to Beef and Lamb New Zealand (BLNZ), whose monitoring found that sustainability is not just a moral compass, it is a strong driver for profitability in the consumer-packaged goods space.
BLNZ’s global market intelligence and research manager Hugh Good said it is significant to see evidence that people will pay for products labelled as sustainable.
The discovery is a beacon for NZ farmers, signalling that embracing sustainable practices may not only align with ethical considerations but also translate into increased market share and profitability.
“For NZ farmers, this shows real potential for increased market share and profitability through the use of sustainable production credentials for our red meat products.
“It underlines the importance of programmes like the NZ Farm Assurance Programme and NZ Farm Assurance Programme Plus, which will allow us to produce to a higher sustainability standard and allow us to capture value in the market.”
A recent McKinsey study conducted a meta-analysis covering five years of US sales data, from 2017 to June 2022.
The study analysed 600,000 product Stock Keeping Units and $400 billion in retail revenues across 44,000 brands.
The focus of the analysis was on 93 distinct environmental social and governance (ESG) related claims, including terms like cage-free and eco-friendly, categorised into six classifications.
Products making ESG-related claims experienced an average cumulative growth of 28% over the past five years, outperforming products without such claims, which achieved 20%.
The study found products labelled as vegan or carbon zero demonstrated an 8.5% advantage over their counterparts without those labels.
In contrast, products with more common claims such as sustainable packaging or plant-based, showed a 4.7% advantage.
The BLNZ market development team monitors global consumer markets, analysing data to see how the NZ red meat industry might take advantage of trends.
Market insights show TikTok has emerged as the advertising channel of choice for Generation Z, ahead of Instagram and YouTube.
In a November 2022 survey of 1,000 US TikTok users, Gen Z respondents said they trusted influencers on TikTok most, compared with those on other platforms.
The platform’s short-form videos have captured the attention of young consumers, presenting an avenue for NZ farmers to connect with the next generation.
Other insights from the latest report include the rise of livestreaming in the US market.
As consumers increasingly seek authentic connections with the origin of their products, livestreaming provides a platform for sellers and producers to showcase their practices, tell their stories, and engage with a wider audience.
The market is projected to reach $31.7 billion by the end of the year, nearly tripling its size from 2021, and is anticipated to grow to $67.8 billion by 2026.
“This presents an opportunity for NZ farmers to leverage technology to bridge the gap between their farms and the American consumer,” Good said.
“We have such a great story to tell, but we need to develop the capabilities and embed the technologies to make this possible.”