Developing international markets need to offset increased farm input costs

If a farm based emissions levy incentivises better environmental outcomes on farm, shouldn’t key international markets be paying a premium for New Zealand products?

Certain areas of international markets are increasingly demanding a deeper understanding of where their food comes from, origin and sustainability are high on the list for the “conscious foodie” so can programs like Taste Pure Nature tap into this market and ultimately improve farmgate returns. This week on Factum-Agri I talk with Nick Beeby from Beef+Lamb to discuss.

I asked Beeby how the market development is going and what the indicators were?

“The job that we've got at hand is to grow the awareness of grass-fed beef and lamb from New Zealand and to create preference or aspiration to buy our products, so basically we're wanting to grow the number of consumers who are actually out there seeking out New Zealand red meat brands. We then need to point these consumers to where they can go and buy the product."

"And we've seen that since we launched in California a couple of years ago, the awareness of grass-fed beef and lamb is now 62%. And that's up 19%. From when we launched it, the aspiration to buy grass-fed New Zealand beef is at 47%, and that's up 18% since 2019. The aspiration to buy grass fed New Zealand lamb is at 72%, which is up 10% since 2019. So we are absolutely growing the number of consumers who are actively out there seeking out our products."

"To us what it shows is that the consumers really want to hear our story, and that they value our story, and when we link that to products that are visible and available at retail, we do demonstrate increases in sales. That's primarily the role of the meat processor, but when we work effectively together this program does demonstrate those results, which is pleasing hopefully for farmers because they can see that their story is valued by their consumer in these markets and it's pleasing for meat processes knowing that working well together we can create an impact.”

So if we are asking more of our farmers in terms of environmental improvement and with increased increased policy demands, and in particular the looming farm level emissions levy, can programs like this help to offset increased input costs?

“Absolutely this is one of the jobs that we've got it at hand is to look at the value proposition behind Taste Pure Nature. When we started the program it was very much around grass-fed because we could see this trend in the marketplace, and it was almost like we just wanted to piggyback this trend to try and create an impact. But as we look out into the future and you look at the additional things that farmers are being asked to do, we absolutely have to look at our value proposition and look at, is there an opportunity to actually create a market where there probably isn't one right at the moment. Because if you think about it from a farmer's perspective at the moment there is just cost being added into their system, and if we don't do the work in the marketplace then it's just cost. So, we absolutely have to look out into the future to see if we can create this market, and if it is something that consumers are going to be willing to pay more for.”

If the market signalling is there and driving the conscious consumer demand towards lower carbon food products and if farmers can prove they meet a sustainability standard, then great two ticks there. There will be a percentage of that conscious consumer market that will pay a premium for a brand that demonstrates leadership in this area. New Zealand has to develop this market which will help to offset rising farm input costs. Not all farmers or businesses are born equal so shouldn’t better performing farmers in the environmental space also benefit from a better return at the farmgate? 

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Angus Kebbell is the Producer at Tailwind Media. You can contact him here.