Outsiders commentating on the New Zealand meat industry often confidently pronounce the sector needs to ‘add value’ to the products, but what exactly is added-value, who are you adding value for and who is getting the value? It depends who you talk to.
Meat is a nutritious, and most would say essential, base ingredient in a modern healthy diet – to be eaten in moderation – for end-users around the world.
To get maximum prices, the base material – the meat – needs to be consistently tender, juicy, sized and available all year round. Meeting those demands – producing healthy animals on pasture to precise specification – adds value for a red meat farmer, who earns more money for a premium product.
The consumer might say added-value is something that helps daily life, so increasing the speed of preparation, recipe choice, and portion control might all feature in the added-value mix they will pay more for.
Responding to that, retailers, especially in Europe and the US, have moved to include ready-to-eat or ready-to-cook preparation. This means manufacturers in overseas markets have worked with New Zealand meat exporters, using their high chemical lean value meat as an ingredient, to produce high quality ready-to eat products. Increasingly, New Zealand processors, such as Silver Fern Farms, are working to manufacture those products here. But, it is worth noting here that because of its inherent fat characteristics, New Zealand lamb is not the easiest product to incorporate into ready meals – if it was, it would be everywhere by now.
For foodservice – hotels, restaurants, institutions, added value means providing a consistent quality meal ingredient, a great eating experience and year-round supply.
For a meat processor/exporter bringing all of this together, adding value focuses on advances in meat quality and the production of a superb looking and tasting food for a great consumer experience. The definition has definitely moved on from three decades ago, where added-value might have meant simply cutting a leg of lamb in a different way or moving from a frozen to chilled format, says Meat Industry Association (MIA) innovation manager Richard McColl.
He describes added-value these days as: “Taking a commodity product and giving it additional functionality, so you can sell it at a premium.”
MIA partnership manager Kaylene Larking takes it one step further. “It also means changing the quality of the raw material and finding alternative uses for raw materials,” she says.
There is plenty of evidence of on-going added-value work behind the scenes to meet the demands of the market.
Nowadays, adding value might mean adding a proven health claim such as Alliance Group’s Pure South Te Mana Lamb, produced in the Omega Lamb Project – one of five red meat sector Primary Growth Partnerships (PGPs) currently underway. Part of ANZCO’s FoodPlus PGP project is looking at extracting more valuable elements from lower value parts of the carcase, such as new stocks for soups. Others might be looking at cuts ready for hot pot rolls used in Asian cuisine. Or it could mean targeting current consumer demand for dry-aged product, use in a ready-to-eat meal, or prepared ready-to-cook. Alternatively, it might mean the extraction of certain protein elements, like bioactive peptides, that might potentially have uses in other products.
To add to individual exporters’ own innovation and new product development teams, New Zealand has a team of meat scientists and researchers working on the matter whose work will be further focused in the new Food Science Centre in Palmerston North from early 2020. Some of the breadth of work – there are currently 65 meat projects on the go by the 20-strong AgResearch team alone – was showcased in the recent Meat Industry Workshops in Hamilton.
Add value by losing less
Then we come to packaging – but all plastics are not equal. Meat quite often uses sophisticated technology to ensure shelf-life is optimised and the product is kept fresh and safe to the point the consumer opens it. Smart plastics, including bio-plastics, have been and are being developed with the potential to more add value to a product.
Sealed Air market manager Brent Baird spoke to the AgResearch Meat Industry Workshop on 14 March about the pros and cons of plastics in perishable fresh meat applications. His presentation in the food safety session, was timely, given current consumer concerns about single-use plastics and packaging and food waste.
While water shortage and pollution are amongst the top three environmental concerns for consumers, he pointed to a significant change in mindset in consumers about food waste. Around three-quarters of European consumers questioned in a 2016 Harris Poll said they were concerned about food wasted in their own country and 40 percent were concerned about the amount of food wasted in their own households.
Baird mentioned concern about the potential for a knee-jerk “greenwash” of all plastics. He argued new generation plastics are essential for extending the shelf-life of meat products, improving food safety, for protection, enhancing presentation and avoiding food waste.
The main causes for the €7.9 billion Euros lost by European retailers in 2017 from ‘retail shrink’ of exported protein products are expiration, spoilage, damage and markdown, all of which can all be addressed with packaging. This represents a relatively small proportion, under four percent, of a food product’s total carbon footprint.
“It’s not a big evil,” he said. “It’s an essential tool.”
Sealed Air has a circular economy approach, he said, and is working on making materials thinner, and so lighter. It is also “chasing the EU standard” and raising the code for all its plastics to grade one, so they can be recycled back into food packaging.
Baird sees as key retailer and consumer education about plastic food wrap and the role smart packaging plastics play in avoiding waste of food.
Traditionally, retail presentation of fresh red meats has been in modified atmosphere packaging (MAP) – a foam tray covered with film wrap. However, using Sealed Air’s Cryovac® Darfresh® skin packaging onto board, for example, halves the quantity of packaging, doubles the shelf-life, increases food safety, enhances the presentation of the product, enables better portion control by the consumer and is lighter to transport, said Baird.
Bottom line is rising …
In terms of adding value for the nation, however, the bottom line is that overall export values for the New Zealand red meat sector are rising.
The latest B+LNZ Economic Service Mid-Season Report, predicts both lamb and beef exports will exceed $3 billion for the meat export season in the year to end September 2018 – lamb for the first time.
The Ministry for Primary Industries’ latest Situation and Outlook for Primary Industries (SOPI) report for March 2018 presents a forecast of 9.16 percent to $9.2 billion for red meat, including beef/veal, lamb, mutton and venison, and wool exports in the year to end June 2018. This is up significantly from the previous report, but very nearly matching record export value for the 2016 year ($9.2 billion). This is expected to be nearly matched in the June 2019 year too.
The SOPI report shows prices across the sector remain strong, with 2018 red meat prices forecast to increase by 14.2 percent for lamb, 20.5 percent for mutton, two percent for beef and 11.7 percent for venison.
Flock rebuilding in Australia, following a 2016 drought, is influencing the increase in New Zealand lamb prices as supply has tightened globally, but these are expected to fall back in 2019 when Australian supply comes back on stream.
For beef, the report shows total cattle numbers have risen for the first time since 2006, following several years of strong beef prices, supporting the trend towards cattle away from sheep. Once the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is fully implemented. New Zealand should start to see the benefits of the multi-lateral free trade agreement, particularly in Japan on exports of beef to that market.
Venison prices hit $18 per kg during the peak of the chilled export season in September and October and prices remain well ahead of last year’s peak, SOPI shows. Chilled prices and increased trade to the US have boosted the sector’s outlook.
So, it seems, simply adding value is not that simple. But, it is evident that what the industry is doing is already having results on the bottom line.
This will continue.