Agribusiness leaders concentrate on understanding why consumers buy their product, aiming to lift rural exports to 40% of GDP

By Allan Barber

My readers may be pleasantly surprised that I have decided to return to less contentious topics than my last piece about overseas investment.

The downside is that this will be far less provocative and may not give readers the chance to question my intellect, political leanings and status in society or to accuse me of treason for having the gall to support overseas investment in land.

The outcome of the Boot Camp which was held two weeks ago at Stanford University has not for obvious reasons been widely trumpeted. After all the objective was never to produce yet another sector strategy, long on analysis of the problem and short on achievable actions to produce a state of nirvana.

Bill Falconer, Chairman of the Meat Industry Association, was chosen as the spokesperson for the Boot Camp because he did not represent a single company, but an industry body.

The senior executives who attended did not see the merit of or justification for purporting to speak on behalf of their peers from a wide range of rural sector businesses. Therefore Falconer was the obvious person to speak on their behalf.

The Boot Camp’s objectives, simply stated, were seen as:

1. To allow the attendees to learn from the professors and to visit US companies in different industries which would enable them to see how to become consumer driven,

2. To take six days out of day-to-day business and examine their business from a different perspective,

3. To see how or whether individual companies could collaborate to their mutual advantage.

He told me that it was one of the most stimulating and encouraging gatherings he had attended, with 20 CEOs and top managers from across the agricultural sector learning from six outstanding marketing professors how to lift their game for the benefit of their companies, industry sectors and agribusiness as a whole.

The conclusions from the Boot Camp can be looked at against the backdrop of the Government’s growth agenda to double exports or otherwise expressed as lifting exports from 30% to 40% of GDP by 2025.

The visits to companies near Stanford were immensely helpful in gaining an understanding of how the export target might be achieved.

The first important conclusion is that there is no point in increasing production on farm, or in any other environment for that matter, unless you can sell it.

In order to start working out how to sell the extra production, an understanding of consumer demand is necessary, becoming market not production driven and planning how to lift performance accordingly.

A major insight was the scale of social media use by all the companies visited, a country mile ahead of any New Zealand company, including Icebreaker which is seen as a leader in the New Zealand context.

I suspect, although Bill Falconer didn’t say so, that tangible results from the Boot Camp will of necessity be slow to eventuate. Nor is it likely that companies will feel the need to make a lot of noise about any specific programmes they develop, either in collaboration or on their own, until there is something concrete to report.

However if the Boot Camp has achieved a change in attitude about the nature of the task and provided a blueprint of how to go about lifting sales and marketing performance, this will prove to be the best outcome.

There has been too much navel gazing analysis of the size of the problem and the same old strategies to solve it, without any real change in behaviour.

Ideally agribusiness needs a Messiah to preach the new marketing gospel until the sector as a whole becomes customer or consumer driven.

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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or read his blog here »