In-market strategies used to market and distribute New Zealand-produced food will need to be increasingly agile during the next few years, Melissa Clark-Reynolds says.
With food service overseas under pressure due to lockdowns, the emphasis has gone back on retail sales and she predicts traditional markets will be disrupted until at least 2022.
However, the current importance of retail avenues does not mean outlets such as supermarkets are going to have it all their way, with direct-to-consumer products gaining an increasingly strong foothold.
Hawke’s Bay-based Firstlight Foods last year launched a high-end subscriber service in the United States and Clark-Reynolds says that type of model has a lot going for it.
There are two parts of the retail market that offer growth potential for NZ companies – but those avenues won’t suit everyone.
The first is ready-to-eat meals in supermarkets.
She says in the US many peoples’ idea of cooking is getting something out of a bag, putting it in the microwave and then adding a bit of garnish at the end.
It might not be what is considered cooking here, but it’s a big market and it makes sense for some NZ companies, which will need suppliers, to target it, although she says it makes sense to focus on the premium end of it, as those are the consumers who will pay for a quality product.
The other area food producers should consider aligning themselves to is subscription food delivery services, where they supply particular ingredients, with again more money to be made at the premium end of the market.
Distributors in other parts of the world will increasingly look to establish subscriber delivery services, similar to My Food Bag in NZ, and they offer considerable potential reliability for NZ food producers.
Clark-Reynolds is a firm believer in producing for value, rather than volume.
She’s an alumni of agribusiness leadership group Te Hono, which is focused on translating volume-based commodity products into value-based premium ones.
“It doesn’t matter whether it’s red meat, dairy, avocados or seafood, the same principle applies,” she said.
“By doing that you move from being price takers to becoming price makers.”
Not only are there better financial returns, there are also benefits for the environment and climate.
She says it won’t work for every farmer, but that is where she sees the future for many.
What NZ food producers should not be doing is wasting time and energy trying to compete against cloned or plant-based meat products, as the real opportunities are in producing artisan food at scale, with cloned and plant-based meat products more likely to be competing against commodity meat products, rather than top-end products.
“We want to own the market for phenomenally farmed, delicious meat that’s good for the planet,” she said.
People will either want meat or dairy milk, or not, and NZ meat and dairy producers need to accept that and get on with what they do best.
“We have to make sure that when they want and buy meat, they want ours. And they’re prepared to pay for it, even if it is more expensive,” she said.
One of the biggest barriers faced by farmers who want to cash in on that market is the lack of reliable high-speed broadband.
Data-driven farming practices like those involved in precision agriculture need superfast broadband access on-farm and that’s not readily available across rural NZ.
“Farmers can’t do data-driven farming until they have access to modern tools, accessed through the internet of things,” she said.
“For instance, farmers should be able to monitor milk in vats on their farms but a lot of that is still happening in the tanker, or even later in the process.
“Farmers are having to operate with one foot nailed to the floor and one hand tied behind their backs.
“They need better connectivity.”
Having access to data, through better broadband coverage, will not only help improve farming practices, it will also provide reliable information to support the stories behind claims that food produced by NZ farmers uses some of the most ethical and environmentally-friendly practices in the world.
She says covid has thrown up many challenges for the primary sector but it’s also delivered an opportunity: the way NZ has dealt with has given the country an international reputation as a safe and healthy place.
“It’s given us a halo for our food,” she said.
She says the entire food processing, supply and distribution chain has done very well during the covid disruption, adding that NZ meat processors outperformed their overseas counterparts.
“With US clusters now, meat processors are about number three in the most common places (to get covid through work). In the first four or five months they were the biggest.”
It was a similar situation in Europe,” she said.
“Our processors have done us proud. Part of that is because our plants are more modern, so workers aren’t so close together.
“We haven’t seen lines shut. We haven’t seen distribution break down.”
Clark-Reynolds may be stepping down from her role at Beef + Lamb NZ (B+LNZ) but she is maintaining her connection with the red meat sector, having taken on an independent director role at Atkins Ranch, the Hawke’s Bay company that prides itself on supplying tasty, ethically-farmed, healthy lamb to the United States.
She was the first independent director at B+LNZ and thoroughly enjoyed the experience.
“I’m really going to miss it. It has been a privilege to work for NZ farmers,” she said.
She says she was deeply moved about how the farming community got behind wider NZ when others were struggling during lockdown.
“What farmers and the meat industry have done for their fellow New Zealanders, well, they should be proud with how they stepped up,” she says, highlighting farmer-led initiatives like Meat the Need, which supplies meat to families hardest hit by the economic fallout from the pandemic.
“They’ve done a huge amount to restore their social licence but that’s not why they did it,” she said.
“They did it because they are good human beings.”