Be an innovator, not a fast follower

Dairy and beef prices are likely to start dropping again in six to 12 months, he says, a personal view based on changes in the US (see sidebar).

New Zealand needs to be an innovator, not a fast follower, he says.

Trends and warning signals for the primary sector published mid-2017 in the KPMG Agribusiness Agenda are now “starting to become apparent,” he told Dairy News.

“We’ve significantly more awareness of the role the consumer plays in the value chain. Every organisation in the primary sector is starting to think a lot more about ultimately who will eat the food and the actions they take or the role they play in the value chain.

“So whether you are the seed producer, the fertiliser supplier, the farmer, the processor – everybody has to be thinking about the consumer and we think that is becoming more of an established trend that is really positive.”

But the challenge is that everybody around the world is coming to this awareness.

“As a consequence we question whether we are moving as fast. The recovery in the dairy price – along with lamb prices and beef prices being reasonably good recently – all those prices tend to take away the incentive for change.”

We need to make sure we don’t become complacent and “to be alert to the fact we are playing in a global market that is changing very very quickly”.

“The only thing that will keep us relevant in that market is changing as fast as, if not faster than, the market. I always come back to what I have said for a very long time: NZ is the only developed country that relies on growing products and selling them to people to pay for most of its schools, roads and hospitals.

“So it is critically important we are on the edge of innovation and not a fast follower; we can’t afford to be a fast follower.”

NZ must think about the evolution of alternative proteins, how they will be used together with traditional proteins, how they will fit into people’s diets and when people will eat different foods. Innovative healthy new products are being created in Europe on this basis.

“We have to be alert to what is going on around us. If you are complacent the focus on what is going on around you is lower.

“Every time I go offshore I find something that blows my mind in terms of innovation, entrepreneurs and governments taking action.”

We are doing some great work in NZ but we need to do as much as possible in all areas, he says.

The election campaign is emphasising “New Zealanders’ fundamental expectations that we will manage and respect the land, and we can’t ignore that. We’ve got to respond [by doing] what they expect otherwise the ability to farm will be significantly constrained,” he says.

Consumers in NZ have exactly the same expectations as those worldwide. On taste our expectations are different but we generally have premium consumers here in NZ because we are an affluent country.

“They want to eat food produced sustainably, where the environment is respected, where water is not compromised, where animals are treated and respected properly, where people are kept safe and go home every day. All these are important to our consumers here as well.”

While every country has slightly different expectations, we produce such a small amount for the total global food system – less than 1% – that we need to sell it to the people with the most money.

“They are the premium consumers with the highest expectations, who put the highest requirements on our farmers and on all parts of our industry.”