The future for New Zealand’s red meat sector will include dealing with disrupted trade in markets around the world – including the rise of alternative meats and synthetic proteins – earning a social licence to operate from consumers and understanding the future for food. The sector needs to take nothing for granted in these uncertain times delegates learned at this year’s Red Meat Sector Conference (RMSC).
Around 190 delegates from all over the country have just attended the seventh RMSC, staged in Dunedin’s Town Hall on 30/31 July, to consider the topics and hear from a range of impressive and thought-provoking speakers. Delegates were drawn from meat processing, farming, government and the wide range of service organisations to the event, organised by the Meat Industry Association (MIA) and Beef + Lamb NZ Ltd (B+LNZ).
Warmly welcomed by Dunedin’s deputy mayor Chris Staynes, who was standing in for a sick mayor Dave Cull, delegates were reminded that Dunedin is the “spiritual home of the meat trade.” He referred to the first shipment of frozen carcases of New Zealand sheepmeat in stockingette on the SS Dunedin in 1882 and the importance of the red meat sector to the Otago region today.
“Looking from the outside I can see how much your industry has changed,” he said, noting the move towards shipments of cuts and chilled meat in refrigerated transport from Dunedin today.
He pointed to AgResearch’s Invermay campus, the University of Otago with its track record in genomic research, AbacusBio, together with meat processing engineers Milmeq and Scott Technology.
“All are growing leading-edge companies playing an important role in growing Dunedin,” said Staynes.
Dealing with uncertain and disrupted trade
Discussions roved around the challenges and opportunities in the current uncertain global trading environment for New Zealand’s exports in the Trade Matters session, chaired by ANZCO chief executive Peter Conley.
Rabobank animal proteins and sustainability analyst Blake Holgate opened by setting the scene for maximising the value for the New Zealand red meat sector. The “winning formula”, he maintains, includes a continuing focus on investment in value-add. It’s not about “one size fits all”, it’s all about margin gain, he said. While the NZ red meat story won’t be quick and easy, aligning farmers, processors and consumers is necessary, and accreditation schemes are “incredibly important.”
His presentation was followed by presentations and a panel discussion exploring how New Zealand’s role in a disrupted trade environment would deliver challenges, but also open opportunities for the red meat sector. This featured the Ministry of Foreign Affairs and Trade (MFAT)’s divisional manager for trade negotiations Clare Kelly, NZ special agricultural trade envoy Mike Petersen, MPI deputy director-general/chief operations officer Roger Smith and also former Minister of Agriculture and Trade, Speaker of the House and New Zealand High Commissioner to the UK Sir Lockwood Smith.
Other disrupters for the red meat sector, identified by Petersen, include synthetic and alternative meats, new technologies such as 3-D printing of food, new online pathways to market and also climate change.
He says the sector needs to keep ahead and be vigilant and proactive. “We also need to be much more active about telling our story.”
From Roger Smith’s perspective, the challenges for the entire primary sector are traceability and social licence: “How we remain relevant, how we protect our market share and how we continue to grow even though we’ve got plant-based proteins and other things happening.”
“The problem we’ve had over the past few years is that traceability was the new black,” he noted. This led to the development of a plethora of labelling systems, QR Codes and apps, which have all confused consumers in the market and they’re walking away,” he explained.
His experience of time spent in China, as MPI’s deputy-director general China relations based in Beijing, is behind his suggestion that New Zealand needs to develop a consumer-level traceability system. This will allow consumers in China, for example, to find information on a New Zealand smartphone app about all types of New Zealand horticulture, fisheries or meat.
The primary sector also needs to get together with urban counterparts to think long-term about its social licence to operate.
“We need to get people to understand that primary industries are important to New Zealand, the primary industries are going to be here for a long time and that we do things well,” he said, suggesting MPI has a role to play in that through Biosecurity 2025.
“We need to get our urban population back on board and to support us. We need 4.7 million ambassadors,” said Smith. “We need to think about how we get that conversation to start.”
Earning our ‘social licence’
Starting the conversation entails earning the ‘social licence to operate’ from consumers. This topic was explored in two excellent presentations in a session chaired by James Parsons.
The University of Auckland’s senior lecturer of marketing Dr Michael Lee gave a fascinating presentation about the very topical matters of anti-consumption and consumer resistance, while the outgoing Parliamentary Commissioner for the Environment, Dr Jan Wright, covered environmental matters.
Anti-consumption research by Lee, in conjunction with London’s Royal Holloway College, has suggested there are two logical reasons some consumers use against meat purchase – the environment and ethics – which have no logical opposite.
“Nobody who eats meat, none of your current consumers, will eat meat because they want to harm the environment or kill animals,” he said, adding these two reasons should be the top priority for further research to improve on those two fronts.
He encouraged engagement with consumers.
“To sugar-coat is frankly quite disrespectful of the animal,” said Lee. “Be clear [about production], be kind – the ethical issue is a big one – we need to be clean, that’s on the environmental issues and waste management, and finally we need to be courageous in striving for value not volume.”
Lee believes New Zealand, with very few feedlots which are really the focus of US anti-consumption campaigns, has an opportunity to become a world leader in the production of natural, high quality meat products. In order to fully leverage its strategic position, New Zealand must focus on high value, not volume and needs to champion the role of the wider system.
“Wouldn’t it be fantastic if we could give them New Zealand meat that was the mirror opposite of why they were not eating other meat … because it did the least possible damage to the environment, compared to meat grown elsewhere, and the ethics of our meat practices are better than elsewhere?”
What does the future hold for food?
Speakers explored what the future holds for food in two concurrent sessions, held after lunch.
One of these, The Future of Food, was chaired by Dean Hamilton, chief executive of Silver Fern Farms.
Global consumer food trends and genetic preference were covered by Australian CSIRO research scientist Dr Nicholas Archer. He looked at the megatrends impacting agriculture and food, digging deeper to look at the consumer trends of convenience, health and wellness, provenance and traceability, food safety, sustainability and premium interaction that are being disrupted by digital consumption and the sharing economy.
He believes the latter will impact on the supply chain too, particularly – shortening it between producer and consumer – and are being driven by the marketplace, as well as by sustainability and traceability.
He was one of several speakers who referenced alternative meats and synthetic proteins, and their attendant challenges and opportunities, and also talked of a trend towards personalisation, which includes tailoring products according to genetic profiles.
“We are at the beginning of a genomic revolution,” he said, predicting by 2025 a quarter of the world’s population will have sequenced their genome and will be making decisions based on those results to guide their lifestyle choices.
He also talked about CSIRO Future Science Platform work he is involved with around novel food processing, including 3-D printing and others, functional foods and emerging genetic research into food liking and consumption.
Not much research has been done on red meat liking and consumption to date, he said, and it needs to be explored further. However, twin studies have shown genetics does seem to have a significant effect, with genetics associated with 44 percent of the variance for meat consumption and 49 percent for red meat liking. The environment also has an impact.
“Genetics provides a benchmark, modified by the strength of the extrinsic factors that come into play,” said Archer.
Understanding consumers and differences between populations is important in delivering products that meet their requirements, he concluded.
Callaghan Innovation’s Katy Bluett followed with a presentation catchily entitled ‘Talking with cows on the internet of things (IoT)’ looking at connecting farms and plants in the burgeoning industrial technology 4.0 revolution.
The second concurrent session, chaired by B+LNZ director George Tatham, explored work already underway to position New Zealand beef and sheepmeat for the future. B+LNZ general manager market development Nick Beeby, gave the latest updates on the developing New Zealand Red Meat Story, while work in the field of genetics and breeding for consumer preferences was also covered by AgResearch’s Dr Cameron Craigie and AbacusBio’s Neville Jopson.
Opportunities for the red meat sector in the new global environment were explored by two powerful speakers in the final session of the day after afternoon tea, sponsored by Kotahi and chaired by B+LNZ director Andrew Morrison.
Futurist Craig Rispin of the Future Trends Group looked into demand and the future, which have two relevant ‘Rs’ – Relevance and Return on Investment (ROIs) – at their heart, he maintained.
His presentation suggested the next billionaires will be people who can manipulate life code, rather than data code.
“Did you know one gram of DNA can store one billion terrabytes of data for 1,000 years?” he asked.
He pointed to 167 “unicorn” startups valued at US$1 billion, one of which is New Zealand company Xero. Others include Uber and its Chinese equivalent Did Chuxing, which have shares in each other, drone company DJI “which didn’t exist five years ago”, Airbnb “which let rooms in 1.8 million homes around the world last night” and Elon Musk who launched his latest electric Tesla vehicle, costing US$35,000 the week before RMSC 2017 and “already has 500,000 orders”.
Rispin pointed to Amazon’s Blue Apron prepared meal delivery service – the New Zealand equivalent is My Food Bag – pitching to consumers that your food system is broken.
He suggests the red meat sector needs to create more demand online through sites like Instagram, which had 129 million images using the hashtag #foodporn, or by employing food stylists solely to create Instagram-ready dishes, as some restaurants overseas already do.
The company producing the Impossible Burger, mentioned time and time again throughout the conference and currently selling only into foodservice in the US, will be one of the US$1 billion unicorns within three years, Rispin predicted. “Take a look on You Tube,” he urged.
His thoughts were echoed by the closing speaker, self-professed geek, serial entrepreneur and popular speaker Melissa Clark-Reynolds. Her new role as B+LNZ’s first independent director was announced that afternoon via Morrison’s introduction.
Clark-Reynolds threw out some provocative thoughts for the sector, noting established business Blockbuster laughed at Netflix’s business model when it first emerged, but they “figured out how to monetise their business,” she said. She also pointed to the inventors of the digital camera, Kodak, who thought it wouldn’t work and it was Sony who picked up the technology and ran with it.
“I want you to be worried about those who have found a way to crack the way the money flows from the producer to the consumer,” she said.
She believes the worst thing to do is regulate so you can’t sell non-meat as meat, “it’s a complete waste of money,” she said. “There are only two routes after suing, buy the company or run.”
She advocated the red meat sector getting closer to the consumer and maybe thinking of other business models, such as subscription. Also, think about food, rather than meat, which is all about celebration and family. She was among several speakers to urge the sector to use social media to “sell the love” and the experience.
“We have a chance to build a wonderful future”
In closing, MIA chairman John Loughlin noted the sector had always been aspirational. “When the UK joined the Common Market, New Zealand went off and we had to make our way in the world. The world is changing again, for everybody,” he noted.
The only way to get to consumers is through trade access, along with gaining a social licence to operate.
Admitting to being more optimistic at the end of the day than he was at the beginning, he advised delegates: “We need to take nothing for granted, proactively manage our risks, we have to innovate faster than we ever have in every aspect of our business, we need to tell our stories well, we need to work together as teams within our sector, with our government and beyond our sector and we need to make our opportunities – and take them.
“If we do some of those things and go away and reflect on the messages today, I think we have a chance to build a wonderful future for ourselves in these interesting and challenging times.”
Copies of most of the presentations are now available at www.redmeatsector.co.nz.
Scene at conference
This article appeared in Food NZ magazine (August/September 2017) and is reproduced here with permission.