Friday, March 29, 2024

Celebrating our New Zealandness

Avatar photo
New Zealand needs to change from being a low-cost producer to a high-value producer, Dr Caroline Saunders, director of the Agribusiness and Economics Research Unit (AERU) at Lincoln University, says.
Reading Time: 3 minutes

Speaking at this year’s DairyNZ Farmers Forum she discussed research projects undertaken by AERU that investigate what overseas customers want and what they are willing to pay.

NZ has many special and world-class attributes and ways we produce things that could earn a premium in the market, but we often miss out on those premiums and that needs to change, Saunders says.

“I think there are some opportunities out there that would be magic for us to get hold of, and that’s really what’s behind the research we have been doing.”

NZ’s early economic prosperity grew out of exporting commodities to the United Kingdom, one of the world’s richest markets, and as a result we developed good food safety and quality systems.

“However we didn’t actually think too much about what the customers thought because they were very similar to us.”

Saunders says we haven’t been good enough at “getting out there and seeing what the rest of the world is up to”.

“NZ’s land-based export products should be marketed to international consumers as more valuable than basic commodities. We should be the highest value in the world through our environmental quality, the way we look after our people, our cows and each other and our other attributes that we are not celebrating enough in the market.”

Zespri have already achieved this in the kiwifruit sector, gaining twice the world price for kiwifruit. They have a very sophisticated value chain and market NZ’s best qualities, and also recognise they have to stay ahead of the game.

NZ already has many attributes consumers are willing to pay for. The AERU funded their own pilot surveys in 2012 of middle- to high-income consumers in three countries – China, India and the United Kingdom – that looked into the importance of food attributes and what they were willing to pay for them.

The results showed consumers in the UK were slightly less concerned with things such as food freshness, certified food safety and country of origin, not surprising given the relative safety of their supply chains. Chinese and Indian consumers, however, did rate these as being items of importance and they were willing to pay a premium to get those attributes.

“We know that China likes foreign food and they are willing to pay a 26% premium for foreign origin, and 48% if it’s from NZ.”

The research scope widened to include Indonesia and Japan. The results reflected the pilot survey with the developing countries continually finding things like food safety, animal welfare and environmental conditions more important than Japan and the UK.

“That shows us that these new markets need to be thought about more as they may require something different to the markets we are used to operating in.”

The underpinning factors for things like food safety, environmental conditions and animal welfare were looked at.

“For developing countries environmental condition was really important in conveying food safety and you only have to look at what some of these countries are like to understand why.”

Air and water quality came out consistently as most important in conveying environmental conditions.

“Air quality is something we have in spades. I’m trying to get them to measure, on another project, air quality in rural areas. People are saying ‘we don’t need that because we know it’s good’. But that’s the whole point, we need to be showing that to the international markets and celebrate it and get a premium for it.”

Although water quality is a sticking point, there are steps being made to improve this, like the Water Accord, and Saunders says we should be celebrating these as well.

In many countries it is becoming the norm to use smart technology to purchase food and have it delivered to your home by simply scanning bar codes.

“It really shows there is a different world out there. There are vertical cities where people don’t go to the supermarket, they have it delivered. It’s a way of getting into markets that we are already in and getting into emerging ones.”

Saunders says we need to have a more strategic approach to exporting NZ products, build on the current attributes of NZ and its production systems, and construct value chains that get the premium countries are willing to pay back into the pockets of farmers.

Total
0
Shares
People are also reading