Collaboration: complex and trust required

Red Meat Sector Conference 2013Collaboration is complex and trust is required, Red Meat Sector Conference delegates heard.

Heads of the Big Four meat processors – AFFCO, Alliance, ANZCO and Silver Fern Farms currently in closed door discussions about collaboration – all attended the conference, mingling amongst their colleagues from every other export meat processor in the country.

The Big Four’s discussions are said, by industry insiders, “to be very close” to a solution but nothing is final yet and nothing has been revealed of the detail.

“We shouldn’t be surprised that any discussions between processors are not played out in the media and we should expect them to take time commensurate with the issues,” remarked Meat Industry Association chairman Bill Falconer in his opening comments, reminding delegates that it took years to bring Fonterra to reality and the meat industry is considerably more complex.

Delegates heard later that deciding what is to be collaborated on by commercial entities is both complex and hard.

Sealord Group CEO Graham Stuart outlines the benefits and pitfalls of industry collaboration. Photo B+LNZSealord Group chief executive office Graham Stuart brought the example – “not role model”, it was stressed – of the fishing industry’s travails along a similar road. He commented that in his research for the presentation, he could see that the meat industry “is an industry suffering from low self-esteem,” and he urged the sector to “manage its press a bit better” and to celebrate its many successes.

Stuart noted that the introduction of quota 25 years ago to the fishing industry brought a far more disciplined approach to procurement. “The people catching fish had an incentive to look long-term.”

He highlighted a number of good examples of industry-good collaboration in the fishing industry, such as working with the regulator the Ministry of Primary Industries, improving global sustainability credentials through initiatives such as the Marine Stewardship Council, and innovation ventures being addressed through joint ventures like the Primary Growth Partnerships. There were only a few commercial collaborative projects and these are mainly in-market like Pure NZ GreenShell™ Mussels and moving into China. Like ANZCO, Sealord is part of a collaborative group of companies all owned in at least part by a Japanese food industry giant Nippon Suisan Kaisha, which offers opportunities on things like cadetships for graduates within the group.

As a Stanford University Boot Camp participant, along with Keith Cooper of Silver Fern Farms, Stuart said members are now working on a number of collaborative ventures. These include a new cadetship scheme, a China hub to facilitate market access, thoughts around country of origin labelling, initiatives to provide assistance to Māori-owned businesses to maximise their potential and also  Kotahi Freight, the company jointly owned by Silver Fern Farms, Fonterra and others, which seeks to buy the best freight arrangements for its members.

Stuart commented that collaboration “is not a natural phenomena” and highlighted the fact that collaboration on commercial matters is “one of the hardest things to do.”  There is a trust issue, “when, on one hand, you ask companies to collaborate and on the other to compete against each other.”

His suggested points for successful collaboration are: “To be clear about the goals, develop around areas of mutual interest, know when to lead and when to follow and to encourage information sharing.”

He was very clear, however, that collaboration should not be used “in order to gang up on suppliers.”

He also advised those considering collaboration to, “Think outside the box about who you might collaborate with.”

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