MIA Focus: Opportunity opening in changing world

Napier Conference Centre
Napier Convention Centre, the venue for this year's red meat sector gathering.

The red meat sector was updated on the brave new world it will face in coming years at the eighth Red Meat Sector Conference, held this year at the Napier Convention Centre in Hawke’s Bay on 29 and 30 July.

Delegates were presented with a big picture view of the future by a range of high quality speakers, challenging and provoking the 250 delegates from farming, processing, marketing, research, government and service companies.

The annual event has been co-organised by the Meat Industry Association (MIA) and Beef + Lamb NZ (B+LNZ) since 2011 and aims to build on the blueprint of the Red Meat Sector Strategy released that year.

John Loughlin at RMSC 2018
John Loughlin, speaking at the Hamburg-Sue Welcome Cocktail function.

Conference goers were challenged, at the opening night’s Hamburg-Sud Welcome Cocktail function, by B+LNZ chairman Andrew Morrison to come up with an alternative word for the over-used and fashionable term ‘disruption’. Co-host MIA chairman John Loughlin was pleased to see the word ‘opportunity’ coming up so often in response, he said in his own concluding comments at the Maersk Gala Dinner on the Monday night.

“There are opportunities in a changing world, but we can only take them when we genuinely embrace change as an opportunity,” he said.

The conference highlighted to him that the red meat sector’s leadership and those who care passionately about the industry, “are focusing on finding our way in a rapidly changing world,” he said.

In his closing comments at the dinner he remarked he sensed industry giving a mandate to its leaders to continue to lead positively.

“That’s a pretty powerful outcome and it’s a big responsibility,” he said.

“We face big challenges but those who have been before us have faced huge challenges. It’s all about a quality game plan, attitude, passion and execution,” he said. “I personally believe that we defend the challenges by taking the opportunities decisively and well.”

He said the red meat sector should lead where it suits and where it can be made to count. “I’m of the view that we should be smart leaders. In part this should be done collectively and part by individual players.

“I think this industry is better than many give us credit for, like the seafood industry we need to admit we are not as good as we will need to be,” he said, adding that honesty is the best platform for improvement.

Success or failure based on how we react

Minister of Agriculture Damien O’Connor speaking at the Maersk Gala Dinner
Minister of Agriculture Damien O’Connor speaking at the Maersk Gala Dinner.

Minister of Agriculture Damien O’Connor followed, telling guests at the Gala dinner that in his view whether alternative proteins are viewed as a threat or an opportunity depends on how industry reacts to them. The challenge will be when a discerning customer will have to decide whether they want a product processed from plants, that is kinder on the environment or “a natural bit of protein from the world’s finest country,” he said.

Warning: daunting new world ahead

The rapidly evolving and daunting new world at home, with a new coalition Government, and change out in New Zealand’s red meat markets around the world was dissected by four speakers, chaired by Silver Fern Farms chief executive Simon Limmer.

Given the world’s currently turbulent trading waters, the session highlight was an excellent and topical speech from one of New Zealand’s most experienced trade negotiators, Ministry of Foreign Affairs’ (MFAT) deputy secretary trade and economic Vangelis Vitalis.

The previous chief negotiator for the recently concluded Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) amongst others, talked about the past six months which have featured the highest ever number of trade barriers in place at one time, alongside a spike in tariffs and a reappearance of agricultural subsidies, alongside a break down in multilateral trade norms.

New Zealand's secret trade weapon, MFAT deputy secretary trade and economic Vangelis Vitalis. Photo BLNZ
Simon Limmer (left) fielding questions for New Zealand’s secret trade weapon, MFAT deputy secretary trade and economic Vangelis Vitalis. Photo BLNZ

Even so, he still believes the sector still has a bright future, “There are clouds on the horizon and things will get more difficult, but you’re not alone,” he said. MFAT is working alongside the Ministry for Business, Innovation and Employment (MBIE) and New Zealand Trade & Enterprise to help New Zealand red meat exporters selling to markets around the world.

That help is coming with the CPTPP – three countries have already signed up and New Zealand is aiming to be in the first six bringing the trade deal to reality later this year. Also on Vitalis’ negotiating team’s to-do list are ASEAN, the upgrade of the China free trade agreement (FTA), the EU-NZ FTA and negotiations with the UK as they withdraw from the EU.

Fifty three percent of New Zealand’s trade is already covered by free trade agreements with different countries, he noted. CPTPP will lift that to 64 percent and the EU-NZ FTA to 72 percent.

On talks with the EU and UK, he sees no reason to move in the direction the UK and EU are proposing with their proposal to split the World Trade Organisation quotas for New Zealand sheepmeat and beef to the region.

“We are absolutely focused on ensuring no erosion in the New Zealand red meat sector access into the EU and UK as a result of Brexit. It is a serious degradation of what was originally agreed,” he said. A complaint has already been laid with the WTO.

“We’re not shy of taking these things up,” he said, adding a case against Indonesia had recently been settled with Indonesia bringing down a barrier for New Zealand’s beef exports to that market and will be brought in over the next two years.

Vitalis pointed to a range of new tools being offered by to help companies manage their business in the current environment. Among these are a new non-tariff barrier portal, with a guaranteed 48-hour response time, a tariff finder and a services portal – a world-first, he believes.

A new vision for NZ Inc

Lain Jager
Lain Jager.

New Primary Sector Council chair and former Zespri chief executive Lain Jager talked about how the Minister of Agriculture’s new think tank is approaching a new vision for New Zealand’s primary produce. Five workstreams are looking at an analysis of the situation, the vision itself, sustainability, value-add and national capability.

Ruminant protein accounts for 17.8 percent of the world’s protein supply, said Jager, and only a small amount of that can be presented as premium product. He believes that sustainable production is going to get stronger, but he doesn’t believe the discourse that natural ruminant protein will be replaced with alternative is true.

“It may decline per person but the amount of protein needed will grow,” he said.

Pointing to New Zealand’s “tiny” market share – only 6.9 percent of internationally traded protein – he said, “We’re never going to be strong in the commodity space. The opportunity is in the value-added space,” he said.

Challenging the sector to decide if it wanted to be positioned as a leader, fast follower or laggard, he suggested developing the value chain so the challenges can be managed as an opportunity and to partner with government to ensure the capability is there.

“If you do that you can align for the next 30 years,” he said.

A stalwart of RMSC’s, political journalist Colin James, who has recently published a new book ‘Unquiet Time’, returned to enlighten delegates on his view of New Zealand’s current political environment. His predictions included a second term coalition government.

How to do business effectively in China was covered by Tim Hunt, Rabobank’s general manager food and agribusiness research and advisory, whose co-operative bank has a team of eight researchers working in China. He looked at the opportunities for animal protein in China, what the red meat sector might learn from dairy’s experience in the market and what he believed was the winning formula for success in the market. This includes: market access, considerable due diligence, partnerships with carefully selected local players; high quality differentiated product; and appropriate capital.

Disruption

Three excellent speakers looked at the environment and opportunities presented by disruption and how it will impact on the red meat sector.

How to reduce domestic emissions while continuing to grow New Zealanders’ incomes and well-being was explored by the chair of the New Zealand Productivity Commission (NZPC) Murray Sherwin, who is also a member of the Prime Minister’s advisory group.  He explained this country’s challenge to get to net zero emissions by 2050 has been brought forward by the current government.

Extensive modelling has been carried out by Vivid Consulting with Motu Economic and Concept. It is very likely agriculture will be brought into the emissions trading scheme, but with different treatments for the short-lived greenhouse gas (GHG), methane – where the aim is to stabilise the amount in the atmosphere – and the long-lived GHG carbon dioxide and nitrous oxide which must be reduced, he noted.

Sherwin advised two enquiries will begin later this year, the first on technological change, disruption and the future of work and the second on local government funding and financing.

An entertaining and thought-provoking presentation from Kaila Colbin, chief executive of Missing Link Consultants and a New Zealand Ambassador for Silicon Valley’s Singularity University gave her insights into ‘riding the exponential wave of change’. This explored the concept of linear growth of days just gone by, “which takes you right out the door”, compared to the explosive exponential doubling of growth afforded by new technologies and their convergence.

“You can’t use the past as a means of predicting the future,” she concludes.

In the only mention of the Impossible Burger during all of this year’s conference presentations, she picks that alternative proteins are “ages and ages” away from producing steak meat so the sector can either choose to embrace the products and be a source for cultured meats, or “go hard out in the other direction where you have to live and breathe the premium value story,” she said.

Naturally raised is where she thinks the future lies. “And, I’m excited to see where it leads.”

Blockchain technology that could offer a pathway to a secure and more efficient value chain for red meat was explored by University of Auckland research scientist and bioengineering specialist Mahyar Osanlouy.

Supporting RMSC 2018 were: Gala Dinner – Maersk Line Oceania; Welcome Cocktail function – Hamburg Sud; Pre-dinner Networking Drinks – Risk Management Group; Gold – AgResearch, Milmeq; Silver Rezare Systems, Eurofins, QCONZ; Bronze – Port of Tauranga, Rabobank, Marel, University of Auckland and Primary ITO; morning tea – AsureQuality; afternoon tea – Napier Port; coffee carts – Hally Labels Pty Ltd; name tags – Aus-Meat Ltd; speaker thank you gifts – Ovation New Zealand Ltd; and Ambassador Chef – B+LNZ Inc.

Copies of presentations will be available in due course at www.redmeatsector.co.nz.

This article appeared in Food NZ magazine (August/September 2018) and is reproduced here with permission.

 

 

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